International air fares to drop by 50% as India lifts travel ban after two years

International air tickets are expected to get as much as 40% cheaper with increased flights after the government lifted the ban on international commercial flights after two years. Swiss International Air Lines (SWISS), which is part of the Lufthansa Group, is expected to almost double flights in the coming months while Singapore Airlines plans to add 17% to capacity.

Homegrown carrier IndiGo Airlines is also expected to resume over 100 international flights in the months ahead.
As part of air bubble agreements signed with various countries to operate flights during the pandemic-induced travel restrictions, carriers were allowed to operate a limited number of flights.
Airfares increased as much as 100% due to the restrictions on the number of flights due to a supply-demand mismatch during the pandemic.

“With capacity coming back and with an increase in connectivity and more routes, we can expect international fares returning to pre-Covid levels,” said Aloke Bajpai, group Chief Executive of travel portal Ixigo. .

The increased capacity will also help ease the impact of high aviation turbine fuel (ATF) on airlines amid a spike in global crude oil prices. ATF prices have rallied over and above the 100% hike witnessed last year.

Prices would have escalated even further amid the reduced number of US carriers to India and other destinations, had it not been for bubble arrangements, said Rajesh Magow, group chief executive, Makemytrip.

“However, with the decision to allow regular international flights and a resultant increase in capacity, prices will stabilise,” he added.

But industry insiders warn that a sustained hike in ATF prices would reduce the possibility of a significant reduction in airfares.

Others do not see a significant reduction in travel costs as increased capacity will be offset by rising fuel prices.
“We are optimistic that this move, coupled with the expansion of Singapore’s Vaccinated Travel Lanes across India, will offer better and more convenient opt ions for Indian customers, for whom Singapore is a key destination and transit hub for international travel,” said Sy Yen Chen, general manager India at Singapore Airlines.

(Source: The Economic Times)