Airfares rise as competition fades on domestic routes

The number of domestic routes in India with no competition surged from 55.2 per cent in April 2019 to 69.2 per cent in April 2024.

- DEEPAK PATEL

This means by April this year, only 30.8 per cent of the 1,083 domestic routes had more than one airline operating, according to a report by aviation analytics firm Cirium reviewed by Business Standard.

With reduced competition, airlines have become more aggressive in raising airfares, particularly after the Covid-19 pandemic. For instance, on the Delhi-Mumbai route, average fares dropped by 20.5 per cent between April 2019 and April 2023 but soared by 34.6 per cent in the past year alone.

Similarly, on the Delhi-Bengaluru route, average economy fares increased 53.1 per cent in just the last year alone.

This shift in pricing strategy has primarily been driven by the bankruptcies of Jet Airways in 2019 and Go First in 2023, along with SpiceJet's substantial network reductions due to financial difficulties. By July 2024, IndiGo and the Air India Group controlled over 90 per cent of the domestic air passenger market, according to the Directorate General of Civil Aviation.