Diwali Bonanza: Airfares see up to 9% decline on key domestic routes

Air fares on certain domestic routes have seen up to a 9 percent decline leading up to the Diwali weekend due to lower passenger demand despite the ongoing festival holiday season. 

One-way ticket prices have dipped six to nine per cent on domestic routes such as Delhi-Mumbai and Mumbai-Chennai for November 10 to 12 this year as compared to prices before 90 days, according to data from the travel website Ixigo. 

On the Mumbai-Ahmedabad route, ticket prices decreased marginally from Rs 3,700 to Rs 3,650 in the aforementioned period.   

Meanwhile, other domestic routes such as Delhi-Bengaluru and Delhi-Chennai recorded a marginal increase in airfares, Ixigo data showed.  

The average load factor (occupancy rate) for domestic carriers in the country has gone down for the first nine days of November as compared to the previous month reflecting lower passenger demand, according to data from the Ministry of Civil Aviation (MoCA).

“Airlines have not been able to price higher, and in some sectors, prices have dropped closer to travel,” said Ameya Joshi, founder of aviation blog Network Thoughts. 

Passengers have scaled-down expenses on air travel on the back of factors such as curbs on discretionary travel spending and an end to revenge travel.   

“The end of revenge travel and curbs on spending due to high interest rates are possible reasons for a slowdown in peak traffic. The traffic numbers during Diwali are better than last year. However, they are lower than pre-Covid,” Joshi added.

Prior to the COVID-19 pandemic, domestic carriers in the country ferried 1.23 crore passengers in October 2019 which was the Diwali month, according to data from the Directorate General of Civil Aviation (DGCA). In October 2022, 1.14 crore passengers flew with domestic Indian carriers.  

However, other market participants suggest that non-metro cities continue to see robust growth during Diwali. 

"Cities like Lucknow, Bhubaneswar, Guwahati, Varanasi, and Patna outperform the metros, marking a shift in travel patterns. Key routes, including Srinagar - New Delhi, Mumbai - Lucknow, New Delhi, New Delhi - Raipur, Lucknow - Bengaluru, and Guwahati - New Delhi have experienced significant spikes," said Aditya Agarwal, CFO, Cleartrip.

Agarwal added that metros – New Delhi, Mumbai, Bengaluru, Kolkata, and Hyderabad – continued to be among the top domestic destinations. 

Meanwhile, domestic airlines have offered discounts in the past few days to entice travellers and rein in passenger demand, despite a significant rise in aviation turbine fuel (ATF) prices. 

ATF costs represent the largest expenditure for Indian carriers, consuming about 45 per cent of their overall revenue. Between June 1 and November 1, ATF prices surged by around 25 per cent to reach Rs 1.11 lakh per kilolitre in Delhi.  

The Indian aviation sector experiences its peak travel season between October and December with festivals such as Durga Puja, Diwali, Christmas, and the New Year.