Domestic airfares skyrocketed 41% in India, most among APAC, Middle East nations.

India followed by United Arab Emirates, Singapore and Australia saw the highest surge in the Asia Pacific region even though airport charges have remained steady since the Covid-19 pandemic, a report by the Airports Council International (ACI Asia-Pacific) revealed.

According to the report, the markets that saw the highest rise in airfares were India (41%), United Arab Emirates (34%), Singapore (30%) and Australia (23%).

“Fuel prices and inflation were responsible for a significant portion of airfare increase and fuel prices went up 76% in 2022 compared to 2019. The airlines’ costs increased as the Consumer Price Index saw an average 10% increase over the same period. It revealed an increase in international airfares by up to 50%, while domestic routes went up by less than 10%”, the report added.

Urging the government’s intervention for liberalising markets through policies (such as open skies) which will allow competition while keeping airfares under control, director general of ACI Asia-Pacific Stefano Baronci said, “These excessive airfares threaten the industry’s long-term recovery and may have a far-reaching influence on the associated industry by reducing demand for air travel and increasing the financial burden on the already stressed sector. Airlines should exercise fair pricing that supports recovery and safeguards consumers’ interests.”

“A supply-demand imbalance should not be exploited by airlines at the expense of customers by restricting the capacity, especially internationally, which is a key driver of social and economic growth and a major source of revenues for the airport sector. We urge airlines to carefully consider the long-term impacts of their pricing decisions”, he added.

“The report notes that several major international airlines recently announced record profits for the 2022 financial year. However, airport operators have been reporting negative EBITDA margins for the last 10 consecutive quarters, particularly in China, Japan, Thailand and India. ACI states that despite a decrease in passengers and continuous financial losses, airports have made considerable efforts to support airline partners during the crisis. This is despite the fact that airports have made significant investments in capital expansion and technology during this period to ensure a secure and smooth airport experience,” an official statement by the ACI-Asia Pacific read.

Source- Hindustan Times.

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