India Has Cheaper Domestic Air Fares, Says IATA

Wednesday, 4th July 2012 at 02:28am

According to the data collected based on the International Air Transport Association (IATA) study, Indian air fares, on average, are much lower than in other major markets in the world, including the Britain and the United States.

The revelation came on the heels of the DGCA's call on the country's carriers to lower their ticket prices down which would make it more affordable to air travelers after major carriers announced fare hike on their domestic service.

By comparison, China's average domestic ticket costs 87 percent higher than India's average. Other major domestic air fare rates which are higher than India are United States, at 119 percent; Canada, 162 percent; Australia, 182 percent.

The above fare comparison from among major markets was the result of analysis based on the PAX-IS collected by IATA as complied by global airlines from the tickets they sold. To get a clearer picture of how India's domestic ticket prices compared against the ticket prices in other major markets in the world, let's take a look at India's average air fare based on the distance traveled by a passenger. The prevailing rate of one dollar to rupee is Rs55. If a passenger flies up to 750 km from point A to point B, the average fair is $60 (Rs3,300); if distance covered is up to 751 km but not more than 1,000 km, it's $81 (Rs4,455); if 1,001 km but not more than 1,400 km traveled, it's $108 (Rs5,940); if over 1,400 km up to 2,000 km flown, $120 (Rs6,600) and if distance flown exceeds 2,000 km, the price is $130 (Rs7,150).

If compared to Australia, India's passengers flying on domestic routes pay their tickets 2.5 times lower on average. So that based on the samples demonstrated above, Australians flying the same distances would pay the following rate: $186, $195, $248, $290 and $367.

Air travel in China, certainly, not the world's cheapest, but if compared to India, flying between domestic points in China still costs more than in India as shown in the following rate: $104, $129, $156, $191 and $243. Australia's domestic air fares, as shown above, are the most expensive among major markets studied, followed by Canada and the U.S.

While it is true that India's domestic ticket average cost is the lowest among major markets, its operating cost is much higher than most of these countries as it is more burdened with higher jet fuel taxes, in addition to high airport charges and rupee depreciation which make it easy to see why Indian airlines pile up losses.

Bharat Bhushan, DGCA chief, was concerned about the recent increase in the country's domestic air fares. As a result, he is seeking satisfactory explanation from the major airlines for the increase.

By: Pete Lee.