Opinion
Flying’s new high: Raise a toast to it?
Summary
- India could celebrate robust demand for airline services as the single-day count of domestic passengers rose above half a million for the first time. The flip-side, however, is that supply is a major constraint and air-fares might also stay high as too many flyers chase too few seats.
It’s ironic that airlines in India aren’t in the best of shape, but demand for air travel in the country is touching new peaks. Going by the number of passengers flown within India on any single day, Sunday was the best on record ever.
Domestic air passenger traffic went above the half-million mark for the first time. The festive season tends to lift demand for everything from goods to services.
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Surprisingly, though, a new record has been scaled weeks after Diwali, which suggests durable strength in this market, with its pandemic slump now a fading memory.
The constraint on growth has been supply.
While capacity has expanded a bit, a long expected wait for new aircraft to join the fleets of India’s two big players, Indigo and the Tata Group, indicates that upward pressure on air-fares might continue for a while, as we can expect to see too many flyers chasing too few seats.
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Jet Airways has folded up and Air India’s merger with Vistara means air-passengers have little choice of carriers.
This was not what an open-sky policy was meant to achieve. Airport infrastructure also needs to expand faster.
And overcrowded routes with sky-high fares need rapid capacity scale-ups. In general, ticket prices need to ease.
