Fares Skyrocket in Fast-Growing India on Boeing 737 Max Ban
(Bloomberg) -- Average airfares in India soared after the nation joined others in grounding Boeing Co.'s 737 Max jets, shrinking capacity in the world's fastest-growing aviation market, where carriers have traditionally lured first-time flyers with ultra-cheap fares.
Average fares on 14 main routes jumped more than 65 percent on Thursday, compared with a year ago, data from online travel agent Yatra.com showed. In contrast, fares on average were up just about 30 percent on Feb. 12, when India was yet to decide on grounding the Boeing jets, the data showed.
Tickets from the technology hub of Bengaluru to the financial capital of Mumbai -- a distance of just over 500 miles -- were selling for 12,748 rupees ($180) on Thursday, compared with 8,643 rupees two days ago, according to Yatra.
Global regulators from China to the U.S. have grounded the best-selling Boeing plane after a 737 Max jet flown by Ethiopian Airlines Group crashed minutes after take off, five months after a Lion Air jet of the same type plunged off the coast of Indonesia. More than a quarter of Indian budget carrier SpiceJet Ltd.'s narrow body fleet was idled after the ban. SpiceJet is one the biggest customers for Boeing with as many as 205 of the Max jets on order.
“The DGCA's decision to ground 737 Max aircraft has resulted in a fairly significant impact on the airfares for immediate travel on certain key routes,” said Sharat Dhall, chief operating officer of the business-to-consumer segment at Yatra Online Pvt. “With current increase in load factors and this reduction in capacity, we expect airfares to rise further in the short to medium term.”
India's Directorate General of Civil Aviation, the regulator, has asked airlines to keep fares at regular levels, and all airlines agreed not to indulge in “predatory pricing,” B.S. Bhullar, the head of the agency said on Wednesday.
To contact the reporter on this story: Anurag Kotoky in New Delhi at akotoky@bloomberg.net
To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, Unni Krishnan, Karthikeyan Sundaram
©2019 Bloomberg L.P.
-
High US Salaries, No Green Card Certainty: The Financial Calculation Facing Indian H-1B Families
The suspension of PERM processing at eight technology employers does not cancel existing H-1B visas. What it does is force a question many Indian families have been avoiding: is the US salary worth tying your career and family plans to one employer?
-
Swiggy vs Eternal: Food Delivery's Two Rivals Are No Longer In The Same Race
Eternal is building a private AI assistant, dark.ai. Swiggy is still working out how to make Instamart pay, with an operating loss of Rs 895 crore in the July-September quarter while Blinkit stayed profitable.
-
Where You Live Shapes How You Get To Work | The Reason Why
Two-wheelers are the most popular way to get to work in India, accounting for nearly 43% of workplace commutes.
-
Unhedged Position: Can India See An Indonesia-Style Time Correction?
The Nifty is trading below levels it first clocked in 2024. Is there, then, as I have suggested in the headline, potential that the current time correction drags on painfully for the next three-five, even ten years?
-
Navigating Friction And Energy Realities: An Analysis Of Marco Rubio's October Visit To India
Occurring at a critical juncture marked by stalled trade negotiations and escalating geopolitical pressures over global energy supplies, the visit offers a profound window into modern US-India relations.
-
India Exports Capital. Why Not Export Trusteeship?
The big question, then, is whether India can build an institution that global borrowers, investors, banks, and lawyers can trust, even without an Indian connection.
-
France's Economy & Politics Are In Crisis | The Reason Why
Let's look at how the French economy and politics evolved under Nicolas Sarkozy, Franois Hollande and Emmanuel Macron.
-
You May Inherit The Business. You Must Earn Its Credibility.
Succession tests the founder's ability to share authority as much as it tests the next generation's readiness to assume it.
-
Signing Deals Is One Thing; Making Them Work Is Another | The Week In Whys
Sometimes, things don't turn out as planned. Indian companies have lost some bids to rivals, some projects won't produce until 2030.
-
FOMC Wall, PERM Suspension, Hospital Stocks | Talking Points This Week
A PERM suspension would directly affect green-card sponsorship rather than H-1B visas, so the near-term earnings impact could remain relatively limited. The key question is whether this marks a new phase in US scrutiny of Indian IT.
