The new year is likely to prove happier for travellers who book their air tickets much in advance, with fares expected to drop by almost a fifth as airlines plan more discounts to lure railway passengers.
The industry expects domestic air travel to become more affordable in 2013, after fares shot up by 30-50% in 2012, compared with the previous year, following significant removal of capacity from the market due to the gradual grounding of Kingfisher Airlines.
"The industry is maturing and we expect to see airlines competing with railways by offering more 30-60 day advance purchase schemes, causing 10-20% reduction in advance ticket prices," said Keyur Joshi, chief operating officer of Makemytrip.com, India's biggest travel portal.
As a study by aviation regulator DGCA shows, fares soared this year due to the rise in operating costs for airlines on various counts, including fuel prices, rupee devaluation and airport charges.
But passengers may soon get to savour some discounts.
"January to March will be very interesting months as airfares are expected to soften," said Sunny Sodhi, V-P (air product) at Yatra.com, a leading travel portal. "Fares will dip also because some capacity will be added to IndiGo, Air India and Jet that will need to be filled up. 2013 will see exciting offers, new deals and several short-term discounts in our assessment," Sodhi added.
An executive with a budget carrier said uncertainty over Kingfisher had also led to some distortion in airfares. "Whenever there is a weak airline in a market, it causes price chaos because of underpricing. Now the weak airline is not around and all others are on an equal footing, leading to competitive fares," said the executive, who did not wish to be named.
Makemytrip.com's Joshi, however, pointed out that cheaper advance fares would spell costlier last-minute ticket purchases. "Airfare is a factor of how much one can pay. If an airline can't sell a few tickets for 15,000-20,000 for many others sold at one fifth that price, it's a recipe for disaster. Spot fares, therefore, should rise by 5-10% in 2013," said Joshi.
State-run carrier Air India, which was the first airline to offer discounts on advance bookings this year, plans to continue with its strategy.
"The strategy for airlines going forward will be to offer more inventory at the lower end of the fare bucket. The response to our previous scheme shows that people like to buy in advance, so be it," a top executive at Air India told ET.
Air India's 'Jaldi Jaldi' scheme launched in September was aped by private carrier Jet Airways, which launched a similar scheme just two days after the state-run airline. Indigo also followed suit soon thereafter.
The latest government data shows that domestic carriers recorded a negative growth of 3% at 53.41 million passengers between Jan and Nov.