Indian airlines operated fewer flights this Diwali; here’s why

Indian airlines operated fewer flights during the peak Diwali travel season for the first time since the Covid-19 pandemic, as rising costs and operational disruptions put pressure on the aviation sector and dampened capacity growth.

According to a report in Bloomberg citing aviation analytics firm Cirium, airlines scheduled about 6% fewer flights across October and November than a year earlier. The decline marks the first annual capacity reduction since 2020, when carriers cut services by nearly 45% amid the collapse in travel demand caused by the pandemic.

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The pullback comes as the sector faces mounting financial pressure, with reduced capacity pushing up airfares. Domestic passenger traffic had already fallen 6.5% in September, while festive-season fares on some routes climbed to levels where one-way tickets cost as much as round-trip journeys had a year earlier, making air travel less affordable for consumers.

The pressure on airlines stems from higher fuel prices, a weaker rupee and longer international flight paths caused by airspace restrictions.

IndiGo, the country’s largest carrier, also reduced capacity by 1% and carried 4.5% fewer passengers in the quarter ended September. Despite a more than 34% increase in passenger yields, it reported a loss of Rs 18.8 billion during the period, as its fuel bill surged 67%.

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Speaking on an earnings call last month, IndiGo Chief Executive Officer Willie Walsh said demand had held up “reasonably well”, but acknowledged the challenge of balancing affordable fares with financial stability.

While airlines maintain that demand remains resilient, passengers are increasingly bearing the cost of the sector’s rising expenses.