Indian Aviation Market Remains Healthy And Price Sensitive, Says IndiGo Chief Elbers

According to travel platform Cleartrip, airfares are estimated to remain elevated in the short term and further surge up to 15 per cent till May, against the same period a year earlier

Earlier this year in February, a Parliamentary panel recommended imposing route-specific thresholds on airfares and establishing a separate body to oversee air ticket prices in the country

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Indian market has healthy and tough competition, said Pieter Elbers, CEO, IndiGo, while emphasising that the demand for travel is huge in the country. The chief of the largest carrier in India said that the domestic market in the country is very sensitive on the price end. 

Commenting on the domestic aviation market, Elbers noted that the prices in the Indian market remained ‘very, very competitive’ and in the face of increasing air traffic and connectivity, concerns about high airfares remain, specially in the peak seasons. “Air ticket prices in the country are deregulated, and fares are mostly a function of supply and demand. There is healthy and tough competition in the Indian market. Indian consumers are really eager to travel, but it is also a price-sensitive market,” the airline head said in an interview with PTI. 

“What I see is that whenever a new route is announced, there is enormous demand from consumers to travel,” he added. Notably, India stands among the fastest growing civil aviation markets in the world. On an average, the daily domestic air traffic stands at nearly 4.3-4.5 lakh, while domestic carriers flew over 15.20 crore passengers in 2023.

“India is indeed a price sensitive market, and we see some fluctuations in the prices... the natural fluctuation of fares, we see it for hotels, we see it for other businesses and airlines as well. If you look at the overall price level in India, it is very very competitive, if not low, compared to some other parts of the world. I think you should take it as part of the change in India itself and the diversity of India,” Elbers noted. 

According to the data provided by travel platform, Cleartrip, airfares are estimated to remain elevated in the short term and further surge up to 15 per cent till May, against the same period a year earlier. The capacity addition outlook for the industry remains dampened due to current supply chain and engine issues. This will further end up in rising the fares for domestic travel. 

Ayyappan Rajagopal, CEO, Cleartrip, added, “We're running at 15 per cent higher fares than last year in March. A similar trend is expected in April. Both are compared to last year.”

Notably, earlier this year in February, a Parliamentary panel recommended imposing route-specific thresholds on airfares and establishing a separate body to oversee air ticket prices in the country, with concerns surrounding the increase in fares.