Airfares in India set to rise by up to 8.7%, report finds
India is becoming one of the largest growing aviation markets worldwide, according to a recent report by The Travel Global Forecast 2018. Airfares in India are consequently set to increase by up to 8.7%, with the rise of domestic travel and consumer tourism, the highest fare for any region within Asia-Pacific. The number of passengers in India utilising air travel last year has increased by up to 20%, compared to the previous year.
With double-digit passenger growth over the last two years, prices within Asia-Pacific areas with huge tourist markets, such as mainland China and Hong Kong are set to see significant hikes in airfare costings and economic growth.
“India remains the healthiest of the major emerging Asia Pacific markets with robust growth anticipated given pro- market economic reforms," the report highlighted. It also added: "Last fall, India's government surprised many, cancelling 86 per cent of its circulating currency in an effort to rid its economy of black money and encourage a move towards a cashless, virtual payment society."
This is therefore placing huge pressures on Indian aviation companies. Jet Airways, one of the largest airlines in the region, has seen passenger growth at 9.9%, but is now is cutting the pay of junior pilots by up to 50% or resign in order to bring down costs. Reuters has recently reported that the move could affect up to 400 pilots, but is viewed as an attempt to remain competitive against other low-cost competitors which have sprung up in the region, besides current instabilities within the gulf region.
Additionally, Air India is set to become privatised to support the growth of the aviation industry, as the airline is currently in decline with an approximate debt of 500 billion rupees, according to The National. Indigo is currently looking into putting forth a lucrative deal by placing a significant stake in the company, as well as multinational conglomerate Tata, who currently has partnerships with Vistara, AirAsia and Singapore Airlines.
The price of hotels are also set to rise for travellers in response to growing demands by 3.5% across Asia-Pacific.