Airfares Likely to Moderate in Coming Months

Reported by Datchanapriya Thamizharasu July 2nd, 2022 at 06:23 pm

Currently, the government controls airfares via lower and maximum fare caps that apply to bookings made 15 days in advance.

Highlights

Airlines are unlikely to maintain the current high fare levels, and fares are anticipated to drastically moderate in the following months - CAPA
CAPA said that the impact of higher fares on demand has become visible in the past three months with traffic recovery slowing down.
When domestic air traffic resumed in May 2020 following a two-month Covid-led lockdown, the fare caps were put in place.

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According to aviation consulting organisation Centre for Asia Pacific Aviation, airlines are unlikely to maintain the current high fare levels, and fares are anticipated to drastically moderate in the following months. In its outlook for FY 2023, CAPA said that the impact of higher fares on demand has become visible in the past three months with traffic recovery slowing down. “Domestic traffic is expected to reach 130-140 million passengers, perhaps remaining slightly lower than the FY2020 levels. International traffic is expected to reach 55-60 million passengers, around 20 % below pre-Covid,” said CAPA report. Currently, the government controls airfares via lower and maximum fare caps that apply to bookings made 15 days in advance. When domestic air traffic resumed in May 2020 following a two-month Covid-led lockdown, the fare caps were put in place.