India’s Airlines Did Something at Diwali They Hadn’t Done Since 2020

Indian airlines flew fewer flights during this year’s Diwali travel peak, the first such cut since the pandemic. Business Today, citing a Bloomberg report based on data from aviation analytics firm Cirium, says carriers scheduled about 6% fewer flights in October and November than a year earlier. It is the first annual capacity reduction since 2020, when airlines slashed services by nearly 45%. For a market that has been one of the world’s fastest-growing aviation stories, the pullback during its busiest holiday season is a notable shift.

The airlines are responding to rising costs. Higher fuel prices, a weaker rupee and longer international routes caused by airspace restrictions have all pushed expenses up. Demand has softened at the same time, with domestic passenger traffic falling 6.5% in September. Some festive-season one-way fares reportedly reached levels that matched last year’s round-trip prices, a sign that tighter capacity is feeding directly into what travelers pay. In other words, airlines chose to fly fewer, fuller planes at higher prices rather than chase volume at a loss.

IndiGo, the country’s largest carrier, illustrates the squeeze. It cut capacity by 1% and carried 4.5% fewer passengers in the quarter ended September. Its passenger yields rose by more than 34%, yet it still reported a loss of Rs 18.8 billion as its fuel bill climbed 67%. Chief executive Willie Walsh said on an earnings call last month that demand had held up reasonably well, while acknowledging the challenge of balancing affordable fares with financial stability.

For travelers in India, the message is that the era of cheap last-minute festive fares may be on pause. With fewer seats available and costs still high, booking early for the next holiday peaks, including the end-of-year school break and wedding season, is likely to pay off. Flexible travelers can save by flying on the holiday itself or midweek rather than on the busiest departure days, and by comparing nearby airports where competition may keep fares lower.

Sources: Business Today, Bloomberg