Travel budget set to take hit as flying becomes expensive; Here’s why

Travelling is back and how! Countries across the globe are lifting travel restrictions and relaxing their borders. The United States recently announced that it is not required to have a Covid-19 test to enter the country. Germany, China have also relaxed the norms. The global tourism industry is now on track to recover fully after two years of pandemic-induced restrictions. It is not just Maldives or Bangkok, people are again looking to travel far abroad for their next holiday destination. While the pandemic has changed many things associated with travel, one thing that remains constant is the factor of affordability. People like to visit places which are well within their budget. They want to keep costs down while taking a vacation but one trend is surely rubbing them the wrong way. Air fares have increased recently and are impacting the budget of travellers.

There is surely increased demand in travel as Himank Tripathi, President- External Affairs, EaseMyTrip told FinancialExpress.com, “There is a huge pent-up demand which is enabling the travel industry and pushing it towards revival sooner than anticipated. People after being locked up in their houses for almost two years have been craving to travel again, and because of it, revenge tourism is considered one of the biggest reasons behind this growth.” Talking to FinancialExpress.com, a spokesperson at MakeMyTrip reflected the same sentiment and said, “Consumer travel sentiment, especially leisure travel, continues to remain strong and is expected to grow further in the coming months. May witnessed a significant surge in bookings for hotels and homestays across the country.”

When asked where is everyone going, Himank Tripathi informed, “We are seeing more people travelling internationally to the routes such as Dubai, Maldives, Thailand and UK. There is also a rise in domestic travel where destinations like Jaipur, Goa, and Himachal are the top most preferred destinations.” 

Himank Tripathi, President- External Affairs, EaseMyTrip

Spokesperson at MakeMyTrip said that on the domestic front, “travellers were seen vacationing in Goa, Mysore, Rishikesh, Leh, Srinagar and Manali. On the international travel front, Dubai, Phuket, Bangkok and Maldives remain a perennial favorite for leisure travel bookers this summer season.” When asked about the reasons for the increase in air fare, EaseMyTrip’s Himank Tripathi said, “It is mainly due to an increased fuel cost along with increased demand. However, we are hopeful that the prices will come down once there is a reduction in the fuel prices.” 

Recent hike in Aviation Turbine Fuel (ATF) by the Oil Marketing Companies back Tripathi’s claims. On Thursday June 16th ATF prices were increased by 16.3%. Jet fuel prices have now reached a record high of Rs 1.41 lakh per kilolitre in Delhi. These factors like massive hike in ATF prices, together with plummeting rupee against dollar are set to raise the cost of airlines operations in turn increasing the air fares by up to 15%.

Yatra.com’s Co-Founder & COO, Corporate Travel & Head Industry Relations Sabina Chopra said in statement, “The rise in aviation turbine fuel (ATF) brings in one of the biggest challenge for the aviation sector, as it is one of the major factors impacting the operational costs for airlines. There is a pent-up demand for summer vacations domestically and to international locations and with ATF prices going up, this has a direct impact on the airfares across markets. We  have witnessed a 30-40% rise in airfares in the last two months with demand subdued for the month of June. On the International travel front, since airlines are not operating at full capacity on all routes, the fares have continued to rise. It is also important to understand that apart from ATF prices, airfares are being impacted by the depreciation of the rupee, moderate market recovery, and airlines not operating to the fullest of their capacity.”

How are travel agencies planning to mitigate the impact of high air fare on travel? MakeMyTrip said that it plans to make travelling lucrative. “We recently rolled out the Great Summer Travel Sale with various deals and value-adds across our wide range of travel offerings. We hope to see an increase in family travel in June as people will head out for holidays with children and larger groups due the summer school break.” Will it help travel soar the height it is vying for? It will be interesting to keep an eye on the travel trends for the next couple of weeks.  

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