Barring the fares of flights to the Middle-East, those to the US and Canada are higher than the levels seen in January and November. Fares on the London route are sometimes even higher than the fixed rates
Ramesh Warrier's* plight had been documented before. He and his mother had gone to the US in February to visit his sister. In April, he as wondering, "Why can't the Indian government arrange a flight for us?"
Soon after, the government started flights — branded as Vande Bharat Mission in customary pomp — to repatriate Indians like Warrier. But Warrier and his mother are stuck in the US more than a month after the largest repatriation exercise in the world took off.
"It's the fare. I will need to pay over Rs 1 lakh for just one ticket. The flight to the US had cost Rs 84,000 for two tickets. Given my financial condition, I don't have any option but to wait out till government allows all the airlines to start operating international flights and fares get adjusted," said Warrier.
The Vande Bharat flights are almost exclusively run by government-owned Air India.
The Indian government suspended international flights in March, just before bringing to a halt all domestic operations. While domestic flights resumed on May 25, international flights may not restart before August or September.
Armaan Ahuja* is in a similar position as Warrier. He has been stranded in Lisbon for two months. He could take the Vande Bharat Mission flight from Amsterdam and get back to India. But he too finds the flight, back to Delhi, too expensive at 500 euro.
"The return tickets had cost me Rs 50,000. The flights were via Dubai. Now for just one way on the Air India flight, I have to pay that much," said Ahuja, who has already overshot his budget for the stay in Lisbon and is looking to save money.
Scores of Indians like Warrier and Ahuja have taken to Twitter to recount similar tales, with all them asking the government to resume international flights. Their accounts paint a vastly different picture from government claims that the Vande Bharat flights are affordable and all is hunky dory with the entire exercise. High fares apart, several passengers have complained about the awful experience of booking tickets on these flights.
In an earlier article, Moneycontrol had highlighted the debate that had erupted on Twitter over the fares. While some wondered why the fares were high and said Air India was twice charging for fuel costs, others had pointed out that the ticket rates were lower than that of charter flights, and were thus justified.
On June 8, Minister for Aviation Hardeep Singh Puri himself joined the debate and strongly defended decision to fix the fares. In a series of tweets, Puri emphasised that nearly one lakh Indians had benefited from the Vande Bharat flights. Moreover, he pointed out, some of the fares charged by Air India were one-third of that on charter flights.
Who is speaking the truth here? The issue with Air India flights concerns thousands of Indians who are marooned for months abroad. Away from their families, they are anxiously trying to return home. Moneycontrol reached out to several players in the industry, including a scrum of passengers such as Warrier and Ahuja, executives of Air India and other airlines as well as travel agents to make sense of the situation.
No one wanted to be named.
This is what we found out.Flights and fares
All the industry sources agreed with Puri that flights to destinations in the Middle-East were indeed fairly priced.
"Vande Bharat Mission charges Rs 13,000 per passenger on Gulf routes and planes fly empty on one leg. According to information in public domain private carriers/charters are charging upwards of Rs 20,000 for the same," Puri had tweeted.He had shared this:
On flights between India & Canada, our citizens pay ₹1.07 lakhs as compared to ₹1.62 lakhs to Toronto & ₹1.84 lakhs to Vancouver charged by charters organised by the concerned embassy. pic.twitter.com/YEYcmAKynb
— Hardeep Singh Puri (@HardeepSPuri) June 8, 2020
A senior industry executive pointed out that the lower fares have especially helped those Indians involved in blue-collar jobs, but had been laid off and were keen to get back home.
On the flights to Tel Aviv, Puri said, "Travelers paid Rs 82,500 on charters organised by the embassy concerned while Indian citizens paid Rs 51,938 on flights under Vande Bharat Mission."
The following is a fare table shared by travel firm Ixigo. The average one-way fare from India to Israel was over Rs 78,000 in January, much higher than the rate on Vande Bharat flights.
Executives at Air India told Moneycontrol that flights to these destinations in the Middle-East were indeed 'near empty.' One executive said: "Flights to the Gulf are going almost empty with just few passengers. The return flights are full."
But the picture radically changes when one looks at flights to the US, Canada and the UK. "Flights to these countries, from India, are almost full," said the Air India executive cited above.
Other executives from the industry said demand was high for tickets on these routes, with many non-resident Indians (NRIs) stuck in India looking to fly out. "Flights to London, Toronto and Chicago went light only in the initial days as they were opened for outbound sale only one day in advance," another industry executive pointed out.
If indeed the outbound flights had good passenger loads, is there a need to have a fare that was fixed — by the mandarins at aviation ministry —on the hypothesis that one leg of the journey will be empty?
While flights to the US and Canada cost over a lakh, those to the UK are fixed at Rs 50,000. These fares are actually much higher (see table above) when compared to the rates in January, or in November 2019.
For instance, an India-US one way flight cost about Rs 53,000 in November, and Rs 61,555 in January. Similarly, a Delhi-Toronto flight cost Rs 40,917 and Rs 66, 581, respectively.
In many cases, the actual fares were even higher than those fixed by Air India, passengers pointed out.
One Twitter user pointed out:
Not true, when I called AirIndia a few days back fares for Mumbai-London flight, I was told approx Rs.1,19,000 for 12th May, and Rs.3,99,000 for 14th May for Economy Class Fare, how can these ridiculous fares be One-Third....please explain. BA charged £591 for same in April....— Eliza Martin (@eliza_martin44) June 4, 2020
Another passenger pointed out that the Toronto-Delhi flight cost Rs 1.3 lakh.
Also, countering the argument that other countries arranged repatriation flights at higher fares than those charged under Vande Bharat Mission, some pointed out that the British government had charged 600 pounds, or Rs 57,000 for its flights from India to London. "Air India fares had gone up to 1,350 pounds," countered another user.
Industry executives point out that fares charged by foreign carriers undertaking repatriation flights will be lower if they are allowed to carry passengers both ways. "If they flights are allowed to bring back Indians, then the market itself will determine the fare," says a senior executive from an airline.
Executives also pointed out to the high fuel surcharge of over Rs 26,000 that Air India was charging on tickets. This despite aviation turbine fuel (ATF) rates falling by one-third by May from February levels.
A person familiar with the rationale behind the fares said that they were fixed to possibly dissuade a large number of people returning to India and potentially infecting people. The number of coronavirus cases in India has been steadily increasing.Air India's monopoly?In an earlier analysis, Moneycontrol found out that Air India was earning up to Rs 40 lakh on a single flight from Delhi to Dubai.
Another analysis shows that the cash profit made by the national carrier increases to over Rs 2 crore on a single flight between Delhi and San Francisco. And that's just one-way.
The third phase of Vande Bharat, beginning June 10, will have 75 additional flights to the US and Canada, each standing to gain at least Rs 2 crore. "This means that just through these flights alone, Air India could make up to Rs 300 crore," said a senior executive from the industry.
"The most pertinent question," he said, "is this: why not allow other international carriers on these longer routes? This will not only reduce the fares for customers, but will also ensure bookings and easier and better access to tickets."
In aviation, as it happens in other industries, fares are a function of demand and supply. In this instance, one airline has near monopoly, dictated by the government. Once all airlines are allowed, say industry executives, the market dynamics of demand and supply will automatically bear on fares.*Names changed to protect identity