Faced with the situation of skyrocketing prices of the air tickets, what would be your immediate reaction? Quite naturally, your reaction will be to look into the alternative modes of transportation provided the end-to-end connectivity by these alternative transportation modes does exist. To an extent the people do trade-off the time and the money factor to decide on which mode to use for traveling but a rapid decline in the air traffic is a clear pointer that the prices were too dearer to override the quick travel time factor.
The first and foremost consequence is that the travelers will wean away from air travel and would instead opt for the other transportation medium. Railway is the next fastest medium of traveling and, therefore, the people would prefer to commute using this mode. So, there will be a decline in the flight booking statistics and an increase in the railway bookings. If the distance of commutation is not too long, there might even be more demand for the bus services or the cabs. These alternative modes hold the advantage of better point-to-point connectivity than the air travel and hence, the people can easily book these provided they are willing to spend more time in travel.
Once this shifting happens, it makes the carriers fly on schedule with less load factor and also puts a brake on their growth plans. The profitability of carriers does take a hit. A prolonged spell of high fares might mean that some of these carriers might not be able to bear the burden of costs due to reduced bookings and might have to shut out. However, the ramifications are even bigger for the pace of economic development of the country. High fares of domestic or international flights would mean that the business sector might well advice its employees to either travel less or use a different mode. The leisure travelers might also find it better to make changes in their travel plans. Rather than going on vacations at distant places, people might prefer some other location close by or might even be satisfied vacationing in the country. Loss of revenue, decline in inflow of foreign exchange and laggardness in growth are the direct consequences of high fares.