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    Brief On Airfare For MoCA1306

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    Republic World
    Airfares are determined by dynamic pricing strategies and guidelines from IATA. Fares are generally lowest for advance bookings 90+ days out, and increase as the travel date approaches. Key factors driving airfares in India include seasonal demand patterns, holidays, festivals, events, market forces like fuel prices and competition. Fares may also be higher on routes with operational constraints. Currently, airfares in India are de-regulated but airlines must establish reasonable fares. The Ministry has intervened to advise self-regulation and monitor fares on certain routes following recent surge pricing incidents.

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    Brief On Airfare For MoCA1306

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    Republic World
    648 views6 pages
    Airfares are determined by dynamic pricing strategies and guidelines from IATA. Fares are generally lowest for advance bookings 90+ days out, and increase as the travel date approaches. Key factors driving airfares in India include seasonal demand patterns, holidays, festivals, events, market forces like fuel prices and competition. Fares may also be higher on routes with operational constraints. Currently, airfares in India are de-regulated but airlines must establish reasonable fares. The Ministry has intervened to advise self-regulation and monitor fares on certain routes following recent surge pricing incidents.

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    Brief on Airfare for MoCA1306 (1)

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    Brief on Airfare for MoCA1306 (1)

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    Airfares are determined by dynamic pricing strategies and guidelines from IATA. Fares are generally lowest for advance bookings 90+ days out, and increase as the travel date approaches. Key factors driving airfares in India include seasonal demand patterns, holidays, festivals, events, market forces like fuel prices and competition. Fares may also be higher on routes with operational constraints. Currently, airfares in India are de-regulated but airlines must establish reasonable fares. The Ministry has intervened to advise self-regulation and monitor fares on certain routes following recent surge pricing incidents.

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    © All Rights Reserved
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    Download as pdf or txt
    648 views6 pages

    Brief On Airfare For MoCA1306

    Uploaded by

    Republic World
    Airfares are determined by dynamic pricing strategies and guidelines from IATA. Fares are generally lowest for advance bookings 90+ days out, and increase as the travel date approaches. Key factors driving airfares in India include seasonal demand patterns, holidays, festivals, events, market forces like fuel prices and competition. Fares may also be higher on routes with operational constraints. Currently, airfares in India are de-regulated but airlines must establish reasonable fares. The Ministry has intervened to advise self-regulation and monitor fares on certain routes following recent surge pricing incidents.

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    BRIEF ON AIRFARES

    How fares are decided globally


    Dynamic pricing is a pricing strategy in which highly flexible prices for products or services are based on current market
    demands. Business are able to stay competitive by changing prices based on algorithms that take into account competitor
    pricing, supply and demand, and other external factors. Airlines world over follow IATA guidelines which contains
    information on various booking classes referred to as Reservation Booking Designator (RBD). The lower fare in the fare
    bucket is available for advance booking much earlier. As time lapses and date of journey approaches closer, the fare in higher
    side of fare bucket is made available as per the respective airline policy.

    Low fares are offered when tickets are booked 90 days, 60 days, 30 days, 15 days & 7 days prior to departure. Under
    the immediate purchase, fares move to higher buckets as the lower ones get filled.

    Factors driving air fare


    India has a highly seasonal market. Traffic is usually high in the months of May and June, thru mid-July the international
    traffic flows are high, thus contributing to the domestic feed as well. July through September is traditionally leaner period
    as travelis restricted due to monsoon and other religious reasons. In October, with the festive season starting Dussera, traffic
    picks up again and by middle of January the demand diminishes. Till about the last week of April, this trend of softening of
    demand continuesand again, due to summer holidays, the demand increases. The main drivers of airfares are as follows:

    • Season
    • Holidays
    • Festivals
    • Long weekends
    • Events (sports, fairs, contests, etc
    • Market forces viz. competition, value of INR against US dollar, ATF prices, etc.
    • Competition on route
    • Distance of route
    • Seat demand

    The airfares are also dependent on the operational constraints at an airport. High demand sectors like Srinagar, Leh, Port Blair,
    etc. are constrained by the terrain, weather and operating hours allowed by MoD. Hence, due to low capacity deployment and
    high demand, the fares are higher on such sectors owing to operational constraints and capacity restrictions (load penalty).

    Existing rules
    As per prevailing regulation, airfares are not regulated by the Government. With the repeal of Air Corporations Act in March
    1994, the Indian domestic aviation was totally deregulated. Airlines were free to induct capacity with any aircraft type, free to
    select whatever markets and network they wish to service and operate and also free to fixany fares they want.

    Under the provision of Rule 135 of the Aircraft Rules, 1937, every air transport undertaking engaged in scheduled air services
    require to establish tariff having regard to all relevant factors, including cost of operation, characteristic of services, reasonable
    profit and the generally prevailing tariff. Airlines are free to charge reasonable air fares as per their operation viabilities
    subject to compliance to above said rule. The airline pricing system runs in multiple levels (buckets or RBDs) which are in
    line with practice being followed globally.

    DGCA is an aviation safety regulatory body, responsible for the enforcement of civil air regulations, air safety and
    airworthiness standards. DGCA has not been empowered with the economic regulation of civil aviation and air transport

    Further, Hon’ble Delhi High Court in Federation of Indian Airlines Vs DGCA & Anr. (2017) has directed that DGCA cannot
    determine the tariff for airlines or their products.

    International airfares
    Globally, most countries have de-regulated their aviation sector, i.e. removing government-imposed entry and price restrictions
    on airlines. U.S. deregulated its aviation industry in 1978 and E.U. started deregulating its aviation industry in 1987. Deregulation
    has led to increased competition between airline carriers, leading to decrease in airfare. As a result of deregulation, entry into
    the airlines industry for a potential new airline has become easier, resulting in many new airlines entering the market, thus
    increasing competition. The direct impact of de-regulation is that a passenger in a lower-income group can afford to travel by
    air.

    Reasons for rise in fares


    The airfares internationally have remained firm on account of various factors like opening of markets after COVID pandemic
    and the resultant surge in demand, rise in ATF prices globally, supply chain disruptions on account of both COVID and Ukraine-
    Russia conflict etc.
    In a de-regulated environment, introducing fare caps on various sectors will lead to market distortion. The benefits
    of market competition will not be available to passengers at large.

    Ministry’s Intervention
    Rise in air fares has been mostly seen on select routes that were earlier being serviced by GoFirst. A meeting with the airlines was
    held on June 5, 2023 where airlines were strictly advised to self-regulate fares on certain select routes that have seen considerable
    surge pricing of late. A mechanism for ensuring reasonable pricing within the high RBDs (Reservation Booking Designator) will
    be devised by airlines. This is being monitored by the DGCA.
    - During any calamity, airlines need to keep a tight check on the pricing of Air Tickets in view of the humanitarian situation
    and monitor and control any surge in ticket prices to/from that region.
    - In case of the unfortunate Odisha tragedy, airlines were advised to provide free carriage (cargo) services to the families of
    the deceased.
    As a result of this intervention, prices have seen up to 60% decline.This is being monitored daily by the Minister himself.

    Here’s a detailed view of fares compared for different intervals:


    Fares as on > 05-Jun 13-Jun Variation%

    Days ahead> 1 1 1

    Travel Date> 06-Jun 14-Jun 6-June vs. 13-June

    Sector ↓ Avg. Avg. Avg.

    Delhi-Srinagar 14155 11918 -16%

    Srinagar-Delhi 9483 8788 -7%

    Delhi-Leh 12128 8720 -28%

    Leh-Delhi 21050 14133 -33%

    Mumbai-Delhi 5712 7394 29%

    Delhi-Mumbai 22094 16290 -26%

    Delhi-Pune 21642 14763 -32%

    Pune-Delhi 7217 7110 -1%

    Ahmedabad-Delhi 4808 4411 -8%

    Delhi-Ahmedabad 18555 13441 -28%


    Fares as on > 05-Jun 13-Jun Variation%

    Days ahead> 7 7 7
    12-June vs. 19-
    Travel Date> 12-Jun 20-Jun
    June
    Sector ↓ Avg. Avg. Avg.

    Delhi-Srinagar 12881 10821 -16%

    Srinagar-Delhi 11878 9592 -19%

    Delhi-Leh 18400 8184 -56%

    Leh-Delhi 21339 13518 -37%

    Mumbai-Delhi 6008 6787 13%

    Delhi-Mumbai 7450 6383 -14%

    Delhi-Pune 11205 7665 -32%

    Pune-Delhi 6961 5787 -17%

    Ahmedabad-Delhi 4663 4188 -10%

    Delhi-Ahmedabad 8885 3896 -56%

    Fares as on > 06-Jun 13-Jun Variation%

    Days ahead> 14 14 14

    Travel Date> 20-Jun 27-Jun 20-June vs. 26-June

    Sector ↓ Avg. Avg. Avg.

    Delhi-Srinagar 10566 9376 -11%

    Srinagar-Delhi 10483 9127 -13%

    Delhi-Leh 14003 8848 -37%

    Leh-Delhi 19443 13706 -30%

    Mumbai-Delhi 5569 6146 10%

    Delhi-Mumbai 7320 5715 -22%

    Delhi-Pune 6806 6697 -2%

    Pune-Delhi 6938 5262 -24%

    Ahmedabad-Delhi 4234 3704 -13%

    Delhi-Ahmedabad 4639 3724 -20%


    Fares as on > 06-Jun 13-Jun Variation%

    Days ahead> 31 31 31

    Travel Date> 07-Jul 14-Jul 07-Jul vs.13-Jul

    Sector ↓ Avg. Avg. Avg.

    Delhi-Srinagar 10987 8372 -24%

    Srinagar-Delhi 7696 7491 -3%

    Delhi-Leh 17134 14750 -14%

    Leh-Delhi 21109 18907 -10%

    Mumbai-Delhi 5478 5958 9%

    Delhi-Mumbai 6274 5588 -11%

    Delhi-Pune 4764 4719 -1%

    Pune-Delhi 5227 4901 -6%

    Ahmedabad-Delhi 4022 3954 -2%

    Delhi-Ahmedabad 3696 3471 -6%

    To know more:
    ***************
    Minister’s response on air fares during a PC:
    https://drive.google.com/file/d/1BzklZKriJTb5iAvtDPgMO5JyVoLkoCyR/view?usp=drive_link

    Minister’s response to Sh KC Venugopal on fares:


    1. https://twitter.com/jm_scindia/status/1668213987111227392?s=46&t=c-nXjU2h4WNhKwbjyKkePA
    2. https://twitter.com/jm_scindia/status/1668213993906008067?s=46&t=c-nXjU2h4WNhKwbjyKkePA

    ****************

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