Source: Times of India, Dec 16, 2016
New Delhi: Demonetisation may have slowed down most businesses but not domestic air travel— at least for now. November saw almost 90 lakh people (89.6 lakh) flying within the country — highest ever number in a single month. “Allaying all growth fears, domestic passenger traffic has again clocked record growth of 22.4% YoY in the demonetisation month of November 2016,” aviation minister A G Raju tweeted on Thursday. In November 2015, 73.2 lakh people flew within the country.
Some airlines say the government move to allow people to buy tickets from airport counters using old Rs 500 and Rs 1000 notes till December 2 contributed significantly to this number. People had also made advance bookings from October to mid-January to attend marriages and festivals.
But officials across airlines say domestic business will dip from mid-January when lean season kicks in. “The mood is very subdued and expense on travel is the first to be cut in such times. We are not seeing encouraging advance sales for post January 10 period,” said a senior airline official.Explaining the surge in November, a senior Air India official said: “We had serpentine queues at our airport counters across India with people using old Rs 500 and Rs 1,000 notes to buy tickets. The airport sales went completely haywire.” Almost all airlines had a similar experience. The aviation ministry had to make these tickets non-refundable as it felt that people were booking tickets to cancel them later and get refund in new notes.
However, a private airline official said airport sales did not count that much in overall sales as advance sales are healthy till mid-January due to low fares. “Like every other business post-demonetization, domestic air travel will slow down from January 10 when ongoing travel season ends. Till then most bookings (for reasons like travelling, marriages, festivals and visiting friends and relatives) had already happened at record low fares,” said a senior official.
“Two things have happened that will negatively impact travel in a month. First, ticket costs are likely to rise as fuel prices are going northward with a barrel of crude now touching $55 and exchange rate of $ rising to Rs 68 from Rs 66 earlier. These two cost factors will have to be passed on (to flyers) if airlines want to avoid a Kingfisher-type fate,” the official added.
If ticket prices rise in the lean travel season that begins from mid-January and lasts till start of summer holidays in May, then air travel would be hit like all other businesses in demonetized India. The detailed domestic air traffic data that government issues every month will be out for November in a day or two, said a senior aviation ministry official.