Over the next two weeks or so, ticket rates on UAE to India destinations are running at their peak. Even as airlines operate at optimum frequency and capacity. Image Credit: Bloomberg

Dubai: Are UAE’s expat Indians better off flying home by the end of the month for their summer holidays? Because the current high rates could drop, on some routes significantly, if they are booking for flights end July or early August.

Let’s take a look at some indicative rates. Tickets to Bengaluru currently cost between Dh2,000-Dh4,000, but will become a lot cheaper by towards the end of the month, with fares available for Dh600-Dh700. A one-way flight ticket from Dubai to destinations Delhi and Mumbai in the next few days can be between Dh2,000-Dh3,000. According to booking websites, the same will drop to Dh400-Dh500 in just a couple of weeks.

A one-way ticket to Kochi will drop from Dh1,000-2,000 - with some airlines charging more than Dh3,000 - to Dh400-Dh500.

“Apart from an increase in bookings, (higher) airfares can also be due to the changes in ATF (aviation turbine fuel) prices, the depreciation of the rupee, and airlines still not operating at full capacity,” said Sabina Chopra, co-founder and COO of the Indian booking portal

Air India is adding more

One airline sure is busy getting back into full operational mode, especially on the UAE sector. Air India, reinvigorated under Tata Sons’ ownership, is having a smooth buildup of fleet capacity and of route networks. The airline is operating 69 weekly flights to Dubai and of these 35 are the larger Boeing 787 Dreamliners. The airline was operating only 39 flights to Dubai prior to the resumption of normal international flights from India on March 27. All the additional seats will add its weight to bringing rates down, even with continued high traffic.

It will be interesting to see how another revitalised Indian carrier, Jet Airways, makes a return to international routes, especially to the UAE and Gulf.

Cut fuel tax

Even with so much in their favour, India’s airlines still have cost issues to deal with. They have urged authorities to further reduce taxes on fuel prices, which constitute around 50 per cent of a carrier’s fixed operating costs. Last week, a whole new issue came into focus when Indigo, India’s largest carrier, saw hundreds of flight cancellations and massive delays across its domestic network due to staff shortages.

The tussle for the best talent will only intensify with Air India, Jet Airways and soon-to-be-launched Akasa Air conducting recruitment drives.

India’s domestic services still have issues During the peak of the pandemic, the Indian government had placed certain restrictions on airline capacity and fares. The Ministry of Civil Aviation (MoCA) lifted the restrictions on domestic capacity in October last, but it only tweaked the fare cap to prices within 15 days from the date of travel.

“Airlines are unlikely to continue with current fare levels (within India), especially in the second quarter,” said CAPA India in its 2023 outlook. “Fares are expected to moderate significantly in Q2 and going forward - the removal of price regulation will see the return of pre-Covid competitive intensity”

The report said that domestic traffic will reach 130 million to 140 million passengers in FY2022-23, remaining slightly lower than FY2020-21. “The impact of higher fares on demand is becoming visible in Q2 with traffic recovery slowing down.”

A one-way flight ticket from Delhi to Mumbai – the country’s busiest air route - can cost more than Dh300 right now compared to normal rates of Dh220-Dh240. A flight from Delhi to Kochi costs about Dh500 compared to Dh400 or so. Overall, Indian airlines will cut their losses this year to around $1.4 billion to $1.7 billion in FY23, from around $3 billion in FY22, according to the report.