Yogesh Sarkar
Administrator
This is something I have been wondering for a while, why are domestic flights in India more expensive than flights to some of the South-Asian countries or for that matter, even Middle-Eastern countries?
Why Are Domestic Flights More Expensive Than International Ones?
- Thread starter Yogesh Sarkar
- Start date
cat
Senior Billi
I don't know, I'd like to know, more, without getting too technical.
However,...
The market in India is big, high traffic. So far I know, it is not so expensive, relatively, as in SA. Why Johannesburg-Nairobi is almost as much as flights to India and Thailand, when it's about 1/4 of the distance.
Flights to/from Thailand are inexpensive and there seems to be no state subsidising. UAE, I don't know, never heard of any subsidising.
However,...
The market in India is big, high traffic. So far I know, it is not so expensive, relatively, as in SA. Why Johannesburg-Nairobi is almost as much as flights to India and Thailand, when it's about 1/4 of the distance.
Flights to/from Thailand are inexpensive and there seems to be no state subsidising. UAE, I don't know, never heard of any subsidising.
Yogesh Sarkar
Administrator
Because Indians cannot solve complex problems. The way airline companies keep their costs low is they get into futures oil price contracts. This is risky business and those who do well generally do well. Second, airline companies in India have not still realized that one way you can make money is by imposing baggage restrictions/charging fees. There is money to be made in cargo space. You can use cargo space to move time-sensitive mail, pets or even transport dead bodies to generate extra revenue and lower ticket costs. Third, dynamic pricing is not used to its fullest. It is possible that airline companies have provided low capacity (1 plane available when there should be 2 planes to serve real demand). By providing low capacity you create a monopoly where the companies are not competing and these companies can charge a lot of money. Govenment taxations are also there. The cost of jet fuel will be generally higher in India. Indian airline companies may be providing lavish food for travelers. Many international airline companies do not provide anything for short flights. Asset utilization may be low. The airline only makes money when the plane is flying. The number of aircraft flights per plane may be low in India. This means you may have to get more money from each flight to match revenue generated per plane for foreign planes.
Yogesh Sarkar
Administrator
1. Baggage allowance is being enforced, now that airlines are charging Rs. 400 + taxes for each additional kilogram of luggage. There are also tickets without any check-in luggage to capitalise on this factor.
2. Only the full price carriers in India serve food on flights, else you just get a small 100 ml cup of water on the flight.
2. Only the full price carriers in India serve food on flights, else you just get a small 100 ml cup of water on the flight.
I think airport operations can also be improved for asset utilization and improvement in efficiency. It is always better to have gates open for a landing flight. You do not want the airplane to sit on tarmac because another flight is boarding. A lot of takeoff, landing, staff scheduling, flight scheduling decisions have to be taken with safety in mind.
Look at the beauty of good decision making in small airports like US aircraft carriers. Everyone exactly knows what their job is and does it with confidence. Improve asset (airport, aircraft, staff) utilization and cost savings will happen as efficiency improves.
https://www.youtube.com/watch?v=uj9uPfCFuCI
Look at the beauty of good decision making in small airports like US aircraft carriers. Everyone exactly knows what their job is and does it with confidence. Improve asset (airport, aircraft, staff) utilization and cost savings will happen as efficiency improves.
https://www.youtube.com/watch?v=uj9uPfCFuCI
Yogesh Sarkar
Administrator
Airports in India are pretty good and are getting better. In fact, Delhi airport was among the 20 busiest airports in the world and even won an award last year Delhi's IGIA adjudged best airport in the world - Times of India.
Rohit Kothari
Super User
One of the major facts is that despite the increasing number of passengers the competition has not grown at an equal rate.
India aviation market share has been mostly monopolized. First Air India, then Jet and now Indigo. Couple that with the high rates for aviation fuel in India.
Fuel is the biggest operational cost in India for airlines. And airlines in India keep failing from Kingfisher, to Spicejet(almost failed) to Jet airways ( which has now reduced no of flights). This further adds to the gap between demand and supply.
To bring down fares we need something similar to Jio happening in aviation sector. Jio brought down the data rates by its competitive offerings.
May be Indian aviation companies need to look at Southwest of US(long time fuel contracts ultimately reducing fuel costs) and Ryan Air of europe(sticking to single type of airplane to reduce overheads) to be profitable.
India aviation market share has been mostly monopolized. First Air India, then Jet and now Indigo. Couple that with the high rates for aviation fuel in India.
Fuel is the biggest operational cost in India for airlines. And airlines in India keep failing from Kingfisher, to Spicejet(almost failed) to Jet airways ( which has now reduced no of flights). This further adds to the gap between demand and supply.
To bring down fares we need something similar to Jio happening in aviation sector. Jio brought down the data rates by its competitive offerings.
May be Indian aviation companies need to look at Southwest of US(long time fuel contracts ultimately reducing fuel costs) and Ryan Air of europe(sticking to single type of airplane to reduce overheads) to be profitable.
Yogesh Sarkar
Administrator
You are right. When Kingfisher went bankrupt, ticket prices soared.
However, even though planes were not flying at their maximum capacity, ticket price never came down to same level.