Due to the Indian rupee depreciation, travel companies in India are facing a hike in airfares, as the fuel prices have surged. Under these circumstances, travel companies are worried about the sentiments of consumers, who are already affected due to weak currency. There is a high possibility that the rise in ticket fares will give affect travel demand during the upcoming festive season.
The increase in ticket fares came at the beginning of the festive season in India and the cost of flying from Delhi to Mumbai has gone up to Rs. 10,000, from the previous level of Rs. 6,000 to Rs. 7,000. Meanwhile, travel companies are claiming that they will be able to balance this situation by offering cheaper deals on hotels.
The short period promotions offered by Spice Jet, Jet Airways and Air India have helped these airlines to block their tickets in advance. Due to low airfares, domestic air traffic is slowly being able to pick up after many months of decline.
However, in the current situation, travel companies do not have any other choice except to pass on the price rise to consumers. Last weekend, the public sector companies increased the ATF prices by 7%.
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