Although passenger traffic has seen a fairly big increase over the past year — up by about 17% —, the keen competition in the sector together with a 15% additional capacity created has prevented airlines from raising fares. Capacity across airlines measured in available seat kilometres is now 130 billion kilometres. “Clearly with industry load factors in the high 80s or 90s, the industry is turning away passenger demand at current fare levels but we have no choice but to keep our fares competitive,” Rahul Bhatia, interim CEO, Interglobe Aviation, told analysts recently.
Consequently, yields have been under pressure as fares have stayed flat or even come down on some routes, Balu Ramachandran, head (distribution), Cleartrip, said. The average spot fare was down by over 10% in the three months to June while in the current quarter it is lower by about 20% year-on-year.

Although passenger traffic has seen a fairly big increase over the past year — up by about 17% —, the keen competition in the sector together with a 15% additional capacity created has prevented airlines from raising fares. Capacity across airlines measured in available seat kilometres is now 130 billion kilometres. “Clearly with industry load factors in the high 80s or 90s, the industry is turning away passenger demand at current fare levels but we have no choice but to keep our fares competitive,” Rahul Bhatia, interim CEO, Interglobe Aviation, told analysts recently.
Consequently, yields have been under pressure as fares have stayed flat or even come down on some routes, Balu Ramachandran, head (distribution), Cleartrip, said. The average spot fare was down by over 10% in the three months to June while in the current quarter it is lower by about 20% year-on-year.