Coronavirus Impact and the Case for an Airline Industry Bailout

After a tough day at work you find yourself searching for destinations you can go to for a long weekend. A friend who is amongst the 93 million users in the 25-34 year demographic on Instagram in India recently posted photos of his vacation and you’re keen to experience something similar. In looking at the prices, you are amongst 1 in 740,000 users that the online travel site will get that day.

These searches are made possible as the website links to the airline inventories via a linkage called the application programing interface (API). At the airline, there is a team of analysts consistently analysing demand in conjunction with algorithms that run on expensive systems and updating the prices and inventory for the airline.

They have compared data from the past and once the next five seats for this route sell, the pricing will be revised upwards.

Having found a great fare, you think once again and then go ahead and book the ticket. You’re the last person to get the discounted ticket. Even so, the ticket seems a bit on the higher side. It highlights a fare breakdown which includes INR 177 as an aviation security fee, INR 150 in various fees that are due to the airport operator, INR 50 that goes as a fee to subsidise airline operations to unserved and underserved markets, INR 750 in taxes (central and state GST) and a INR 250 convenience fee that you’re yet to understand.

But it’s done and you’re all set. Luckily, the same website also enables you to book hotels which you do but only after making the flight ticket purchase. The holiday is coming together.

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