Mumbai | New Delhi: Air India has slashed Vande Bharat repatriation flight tickets to and from North America by 25-45% in a move that will bring relief to Indians stranded in the US.
The economy class fare for a New York-Delhi flight is ₹75,461 compared with more than ₹107,000 in the earlier phases. A Toronto-Delhi economy ticket is listed at ₹75,321 on the Air India mobile application, compared with ₹1.37 lakh in June. India stopped all international flights on March 22 and domestic ones on March 25. While domestic services resumed on May 25, overseas flights haved not restarted, except for special ones such as the Vande Bharat flights.
Air India didn’t respond to queries. The Indian government sources do not see regular international flights restarting soon due to the rising number of Covid-19 cases in the country.
The reduction in Vande Bharat fares is despite the high demand and fewer flights in a shorter schedule than the earlier phases. The last one, phase-3, ran from June 10 to July 1. Phase-4 will last from July 3 to July 15. While the third phase saw more than 90 flights between India and US, it’s down to 30 in phase-4.
Operational Costs Reduced
The airline has cut prices as it has been able to reduce costs thanks to operational efficiency, said an official.
“Initially, there were too many impediments in terms of adjusting to new norms, leading to aircraft having to be parked at airports in the US for as long as 40 hours. All that has now been streamlined and there is a reduction in cost of operations that has been passed on to consumers,” the person said. He also said the high fares were used to subsidise the Middle East services.
“Our (Vande Bharat) fares on flights to the Gulf were about 40-45% cheaper than other charter flights and earnings from the US and Canada flights were being used to cross-subsidise those flights,” he said.
He warned that fares may go up again once the government decides to start more flights to the Middle East.
Indians needing to get back home from the US have been complaining about gouging by Air India on social media. Their plight hasn’t been helped by tickets running out and website glitches including transaction failures after payment. This also happened in some instances after buyers opted for pricier business and first class seats after economy class tickets were sold.
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Profitable Flights
Industry experts and airline executives have said Air India has operated some of its most profitable flights to the US in the last two months.
“The fixed one-way cost-plus for operating a Boeing 777-300 ER plane to the US is ₹1 crore and the variable cost is ₹50 lakh. Even if you add 20% of the total costs for additional cleaning, parking, crew and PPEs, and make the impossibly conservative assumption that everyone in the flight is paying ₹1 lakh for the seats and none of the business- and first-class seats are full, it still gave Air India the very high profit of ₹70 lakh per flight,” said a senior airline executive. This was in line with the estimates of several airline finance chiefs, revenue management heads and analysts.
The airline has been filling outbound seats on the Vande Bharat flights as well. Almost all flights from Delhi to destinations in the US are sold out, the Air India application showed.
