Software-as-a-service (SaaS) company RateGain told Mint that outbound flight bookings from India for early December have surpassed the number for the entire month of November.

The company expects a 15-20% monthly increase in bookings for December. Similarly, inbound flights to India are showing a slight uptick, with expectations of a 5-10% month-on-month rise compared with November, Ankit Chaturvedi, vice-president and global head of marketing, RateGain said.

This heightened demand is reflected in the daily average of nearly 450,000 air travellers, as per government data, in December, surpassing the previous 2023 high of 430,000 passengers in May. However, constrained by limited aircraft and parts shortage, this demand spike has led to higher fares compared with October’s Navratri and Dussehra season.

Aloke Bajpai, ixigo’s CEO, highlighted a 20-25% rise in fares for December over October. Interestingly, fares for the year-end peak season are lower than the previous year, partly due to recent reductions in aviation turbine fuel (ATF) prices, he added.

Jet fuel prices in Delhi saw a 4.6% cut to ₹106,155.67 per kl on 1 December, marking the second reduction in a month after a nearly 6% decrease on 1 November. Despite these cuts, prices remain over 80% higher than in 2019. This consecutive reduction offers some respite to Indian airlines, which had added a fuel surcharge in October to offset the soaring costs. Jet fuel accounts for 40% of airlines’ expenses.

According to a survey conducted by the Airports Council International and Flare Aviation Consulting, India saw the biggest increase in airfares among the nations in the Asia Pacific area.

Nishant Pitti of EaseMyTrip said fares on key domestic routes for late December have risen up to 50%. “In fact, after covid, travel to and from India has continued to be substantially more expensive than it was before, on average by 30-40%. We have observed that airfares have seen a notable increase of up to 50% for the 24 December–1 January on major domestic routes such as Delhi-Mumbai, Mumbai-Bengaluru, and Mumbai-Chennai,” Pitti said.

For travel destinations, domestic hotspots Goa, Jaipur, Delhi, Mumbai, Pune, Puducherry remain popular. Travel portals have also witnessed a slight uptick in international travel. As per data from ixigo, Dubai, Bangkok, New York, Colombo, Bali and Male are the currently the top international destinations booked for travel in December.

RateGain’s forecasts for January 2024 indicate a sustained rise in outbound bookings and a notable surge in business travel arrivals. Specifically, outbound flights for January 2024 are tracking 12% higher than the same period last year. Additionally, while inbound flight bookings for leisure in January mirror last year’s figures, business travel arrivals show a substantial 33% year-on-year increase, according to RateGain.

Rating agency Icra Ltd has cited a positive trend in leisure travel demand, a rebound in corporate travel as business activities normalize, and a swift recovery in international passenger traffic fuelled by pent-up demand. However, it has warned that escalating airfares may dampen passenger travel.

Looking ahead, passenger demand trend is expected to remain steady over the next three months. RateGain’s data indicates that 58% of Indian travellers are opting for domestic destinations, closely aligning with the 57% observed in 2022. Notably, there’s a slight uptick in leisure international travel from India: While 47% of leisure bookings were international in 2022, this figure has risen to 50% currently.

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Published: 19 Dec 2023, 11:26 PM IST