NEW DELHI: Post demonetisation of Rs 500 and Rs 1,000 notes, domestic air fares have dipped to an all-time low and advance booking have also hit rock bottom. Air fares are now down to 2004-05 rates when Air Deccan entered the market offering lower fares thus changing the market dynamics.
Travel agents said there has been a reduction of at least 30 per cent in domestic airfares since the announcement of demonetisation and international airfares are slowly inching downwards.
Ticket fares for Delhi-Bengaluru and Delhi-Mumbai flights when checked in October-end were at Rs 4,500 and Rs 3,800 for travel in early December. The fares dropped to Rs 2,750 and Rs 2,100 inclusive of taxes since the announcement of demonetisation. Rates to other cities too have dropped.
Several domestic airlines this week announced special discounted fares in order to cope with the low airline bookings. The demonetisation move has come at peak tourist season.
On Wednesday, Jet Airways announced its winter sale with all-inclusive fares starting at Rs 1,099 on select sectors across its domestic network. Similarly, low cost carrier AirAsia India announced “end-of-year big sale” from November 14 to 20 for travel on its domestic and international network.
A senior official of a private carrier said airlines are witnessing short-term drop in ticket sales after the announcement of demonetisation. Lower air fares and discounts are aimed at creating demand, he added.
Airlines are expecting an increase in bookings over the next few days. An Air India official said there is an uncertainty on how demonetisation will affect the aviation industry.
“With tickets being booked at lower fares, airlines will be able to reserve cash in hand for next few months in case there is a dip in air travel,” the AI official pointed out.