After nearly six months, the United Kingdom decided last week to move India from its “red” to “amber list", opening up the possibility of Indians to travel to the UK without a mandatory 10-day hotel quarantine.
This created a sudden rush for flights, which helped airfares between the two countries shoot up in the past few days from about Rs 50,000-Rs 70,000 before August 8 to between Rs 95,000 to Rs 3,00,000 currently, data from travel agency Yatra.com showed.
It showed that prices of flights from Delhi to destinations such as Manchester, Birmingham, Edinburgh and Heathrow have risen by an average of around 35 percent in the past month. The cheapest flights operating between Delhi and the UK now stands at around Rs 47,000, data from the website showed.
The astronomical rise in airfares between India and the UK can be mainly attributed to pent-up demand from students who have enrolled in colleges in the UK, businessmen looking to travel for work and customers looking to travel after the second lockdown in India, market experts and analysts said.
"Pricing is always a function of supply and demand. There are only 15 flights a week allowed currently on India - UK route for Indian carriers and when there is relaxation and more capacity allowed, it will automatically bring down prices," executives from Tata SIA Airlines run full-service airline Vistara said. Vistara currently operates flights to London from Delhi and Mumbai.
"With the fall session of universities starting from September, students who have enrolled this year or even last year make up around 50 percent of the bookings for flights to the UK," an expert from PWC told Moneycontrol.
He said limited seating or shortfalls in seat availability and rising fuel costs are the primary reasons for the increase in airfares as students are looking to travel to the UK to complete their quarantine period before their semesters begin.
In April, the UK had placed India under its Red list, banning Indians from traveling to the UK due to the outbreak of the second wave of COVID-19 in India.
Last week the UK moved India to the Amber list, thus allowing Indians to travel to the UK. However, despite being allowed to travel to the UK even fully vaccinated Indians will have to follow the home quarantine guidelines even if they are fully vaccinated as neither Covishield nor Covaxin is recognized by the UK authorities.
The Directorate General of Civil Aviation on Sunday also asked airlines that operate flights between India and the UK to submit details about the airfares they have been charging.
However, despite the astronomical rise in airfares, market experts expect prices to fall to earlier levels by the end of the month as they expect more flights to start operating between the two countries soon.
"While airfares have risen to very high levels on the back of low availability, most customers have completed bookings at prices lower than the current rates," a market expert from Goldman Sachs said. He added that the current rates are applicable for the last few seats available on flights.
Furthermore, he said that the current airfares are very unsustainable for customers as bookings are unlikely to be completed at the current rates.
"International airlines like Emirates, Etihad Airways, etc will also start operating more flights from India to the UK soon once they get clearances from the DGCA and (Civil Aviation) ministry and then prices will fall back to earlier levels," he said.
Furthermore, market experts do not see a large demand for customers looking to travel to the UK once college sessions in the UK begin.
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