Fresh out of ‘air bubble’, Indian aviation pins hopes on pent-up demand
Headwinds may come from Ukraine crisis, high fares due to fuel price surge, and Omicron resurgence in select pockets
Five months ago, tour operators in India were gearing up for what looked like a promising winter season for tourist arrivals before Omicron disrupted things. Now, as international flights are set to resume this Sunday (March 27), the travel industry is again hoping for a revival in business after a two-year slump.
Currently, leisure travel enquiries for the summer are picking up but there is still an overhang of the war in Ukraine, COVID surges in some parts of the world and high air fares.
Scheduled international commercial passenger services had been suspended in March 2020 and since then flights have been operating under special arrangements – at last count, India had ‘air bubble’ arrangements with 35 countries.
“After a period of nearly two years, globally Indian tourists are being welcomed. India being the most potential and sought-after market, global tourism boards are scouting for Indian arrivals,” Jay Bhatia, Vice President of the Travel Agents Association of India (TAAI), told The Federal. The pent-up demand for outbound travel from India, he said, is significant.
The summer is typically when Indian tourists travel abroad while the inbound leisure travel season picks up from September, said Rajiv Mehra, president of the Indian Association of Tour Operators (IATO). “At least in the summer months, about 40 per cent business will be restored,” he told The Federal.
“I’m quite hopeful that when the flights resume the air fares will come down because that is a major problem for foreign tourists to come to India — the fares are very high,” said Mehra. Through the past year, the air fare from the UK to India was about 1,200 pounds, twice the normal price, he pointed out. “Once fares stabilise, both inbound and outbound (travel) will start.”
Air fares have remained high owing to limited flights and rising fuel prices.
”We have seen a jump of around 20 per cent in air fares starting from the Holi weekend,” said Himank Tripathi, president of external communications and investor relations at online travel platform EaseMyTrip. “We believe this increase in air fares is a temporary phenomenon and we hope in the next couple of months it will come down,” he told The Federal.
Domestic travel, meanwhile, has rebounded after a minor dip during the Omicron wave earlier this year, he added. “The impact was not much when it came to domestic travel. Of course, there was a minor dip because cases were going up in a very short span of time. But domestically we didn’t see much of a problem.”
Revenge travel phenomenon
The revenge travel phenomenon in the domestic segment, he reckons, will continue for the rest of the year. “Last-minute bookings have actually also gone up. People don’t want to plan in advance for long,” he said. “Long weekends have actually seen greater traction. In fact, last year itself, for all the weekends, we saw a jump of at least 30 per cent. We want to believe that this trend will continue for this year as well.”
Currently, enquiries for inbound international leisure travel are coming in but an exact scenario on bookings will only be known once international flights resume, said Tripathi.
Generally, inbound travel is expected around Goa, Kerala and the North-East, said TAAI’s Bhatia. “Tourism growth shall also depend on the war crisis in Russia and Ukraine. Flights over Russia have stopped and airlines like United Airlines have cancelled their flights ex-India,” he said.
“Enquiries are coming in. But if there are 10 enquiries, only 2 are being converted into bookings at the moment. There are various reasons for that, whether it is the war or the high airfares,” said IATO’s Mehra. He pointed out that airlines are currently in the process of scheduling flights.
“Let the flights come. The airlines are still uploading flights in the system so it will take another two weeks to know what the situation is,” he said.