Airlines won’t cut fare even as fuel prices at 5-year low

While Jet fuel prices are at a five-year low, Airlines say prices have already hit rock bottom with the lean July-September travel season. They are not slashing fares any further.

"Domestic fares are up to 20% lower than same time last year. Airlines are very aggressive with promotional offers to drive up occupancy levels in the lean travel season. Due to the low fares, we are again witnessing a resurgent domestic passenger growth", Sharat Dhall, President, Yatra told ET.

The main reasons for these low fares in the lean season are the addition of new competition like Vistara and AirAsia India. There is also SpiceJet adding new planes to its existing fleet.

A senior official of a leading Indian airline said, "Airfares are very low these days. Delhi-Mumbai and Delhi-Bengaluru one-way tickets are coming for Rs 3,400 and Rs 4,000-5,000, respectively. The current low oil prices will help airlines reduce their losses. Also, the low fuel price is a cushion for airlines against low aircraft occupancy that is recorded in lean travel months."

Image credit: Indiatimes