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India has seen highest international airfare surge in Asia Pacific region: ACI – Times of India

NEW DELHI: India has seen the highest jump in international airfares in Asia Pacific, according to Airports Council International (ACI). ACI Asia-Pacific’s says its study on airfare trends in the region “examined around 36,000 routes in the top 10 aviation markets in Asia-Pacific and the Middle East, reveals an alarming increase in international airfares by up to 50%, while domestic routes went up by less than 10%. The markets that saw highest airfare increase are India (41%), United Arab Emirates (34%), Singapore (30%) and Australia (23%).”
“…in the first quarter of 2023, despite a progressive increase in traffic, domestic airfares have continued to increase in several of these markets, including India, Indonesia, Saudi Arabia, South Korea and Japan, only decreasing marginally on international routes,” ACI says. India has seen the highest recovery in air traffic post Covid, with many international airlines seeing a surge ind demand here.
“..several major international airlines recently announced record profits for the year 2022 financial year. However, airport operators have been reporting negative EBITDA margins for the last 10 consecutive quarters, particularly in China, Japan, Thailand and India,” it says. The global body of airport operators conducted this in collaboration with Flare Aviation Consulting and “shows “airfares (globally) have soared above pre-pandemic levels as major airlines reap record profits hampering the aviation industry recovery.”
While international airfares globally have skyrocketed since 2021 when travel started reopening, recent weeks have seen domestic airfares in India also go through the roof after the collapse of Go First. While 60-aircraft-strong Go stopped flying on May 2, before that almost 40 planes of IndiGo have been on ground for many months due to Pratt & Whitney’s inability to supply replacement engines. Cash-strapped SpiceJet is operating way below its approved schedule.
Airlines are “capitalising on low competition and pent-up demand to increase profits and recover losses incurred during the pandemic, while airports continue to provide enhanced services to passengers despite incurring heavy operational and capital expenditures,” ACI says while expressing concern that “airport charges have remained steady since the pandemic.” Fuel prices and inflation are responsible for a significant portion of airfare increase. Fuel prices went up 76% in 2022 compared to 2019. Airlines’ costs increased as the consumer price index saw an average 10% increase over the same period.
ACI Asia Pacific DG Stefano Baronci said: “These excessive airfares threaten the industry’s long-term recovery and may have a far-reaching influence on the associated industry by reducing demand for air travel and increasing the financial burden on the already stressed sector. Airlines should exercise fair pricing that supports recovery and safeguards consumers’ interests. A supply-demand imbalance should not be exploited by airlines at the expense of customers by restricting the capacity, especially international one which is a key driver of social and economic growth and a major source of revenues for the airport sector. We urge airlines to carefully consider the long-term impacts of their pricing decisions. At the same time, Governments must consider liberalising markets through policies such as open skies, which will allow competition while keeping airfares under control,’ Mr. Baronci Hong Kong-based ACI Asia-Pacific represents 132 airport members, operating 623 airports across 47 countries/territories in Asia-Pacific and Middle East. Asia-Pacific is the largest civil aviation market in the world in terms of traffic volumes.

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