Domestic airfares in India need to move northward to align themselves with what passengers pay for travelling the same distance globally.
In China, for instance, an air traveller pays about Rs 17,300 to travel the same distance as say between Delhi and Mumbai.
Currently, the Delhi-Mumbai journey can be done for as little as Rs 4,156.
In Brazil, a flight for a similar distance, on an average, costs Rs 7,600.
Similarly, for distances of more than 2,000 km, which means for travel between Chennai and Delhi, an air traveller on an average will have to pay Rs 23,186 in China and Rs 11,400 in Brazil.
But, in India, a flight ticket between Chennai-Delhi can be purchased for as little as Rs 4,555. Analysts feel domestic airfares in India need to rise by at least 30 per cent for airlines to make money.
Survey
Interestingly, a recent survey by American Express shows that domestic airfares went up by 18 per cent in the quarter ended December 2011 largely on account of disruption in flights and high inflation.
So it would seem that the market can stomach an increase in fares provided airlines can get their act together and not run after market share disregarding their costs, analysts maintain.
ashphadnis@thehindu.co.in