Search the Internet          Tips  Sites: Finance, Investment

Flying abroad? It's cheaper from India

Surajeet Das Gupta
& Parul Gupta

Next time you travel abroad, don't ask your relative overseas to buy the tickets. It doesn't work out cheaper anymore. Instead, next time be ready to see the lot falling on you- the relative could well ask you to buy the ticket for his trip to India.

Till last year, a round-trip ticket bought to any international destination was costlier if bought in India than if purchased abroad. This has changed now.

With more seat capacities being added on international routes and travel demand stagnant, cut throat competition has forced airlines to go in for heavy discounting, ranging from 40-50 per cent, on the original fare to woo customers.

And in the last few months, air fares from India have been on a crash course.

For instance, a round trip Delhi-London economy class ticket costs Rs 22,000 if purchased in India. The same ticket, if purchased in the UK, will cost at least 18 per cent more.

Of course, the discounted rates are based on conditions like travel on restricted days in the month, number of days stay amongst others.

Airfare from Delhi to Dubai at Rs 14,700 is over 26 per cent cheaper than a round-trip ticket bought in the Gulf state to the Capital. Similarly, a Singapore-Delhi ticket is priced 66 per cent lower if you purchase it in Delhi.

Round-trip airfare from Delhi to New York is again 28 per cent cheaper than a similar ticket bought in the US.

So what explains the dramatic fall in air fares from India?

Says Subhash Goyal, chairman of Stic Travels which represents 10 international airline companies: "This is a new phenomenon.

Return tickets bought in India were earlier 33 per cent more expensive than those bought abroad on the same route. Today, the situation has dramatically changed and they are 40 per cent cheaper than tickets bought abroad."

Goyal points out that the main reason for this change is that the total number of outbound international seats from India this year has gone up from 5.5 million to 6 million.

The extra capacity has coincided with the economic slowdown, leading to a stagnant demand for air travel.

"The earthquake in Gujarat, the stock market fall and the financial crises have all adversely impacted demand and airlines have had no option but to discount fares heavily."

Most of the new capacity has come because the government has signed a series of bilateral agreements (at least 60 were pending in the last one-and-a-half years) between various countries this year.

Avers Vijay Thakur, chairman of IndiaVision Travels and secretary, Indian Association of Tour Operators: "While capacity has increased, demand has gone down and there are surplus seats available in the market.

The Gujarat earthquake was a key factor. Besides, traffic from a key market like Maharashtra has slumped, partly because of the stock market crisis."

Travel agents expect the depressed prices to continue till the first week of September after which fares in India are expected to go up due to demand from students going abroad. But they also expect prices to fall again in January next year and continue at the same rates for the next few months as there are few signs of an early end to the economic slump.

Powered by

YOU MAY ALSO WANT TO READ:
The Rediff-Business Standard Special
The Budget 2001-2002 Special
Money
Business News

Tell us what you think of this report