Air travel prices soar nearly 32% in April-June quarter, highest among major services: Govt data

Air passenger service prices recorded an inflation of nearly 32% in the April-June quarter of the current fiscal, the highest rate of price rise among the seven major services for which the inflation data was released on Monday.

The provisional Service Producer Price Index (PPI) data released by the Ministry of Commerce and Industry showed air passenger services recorded a year-on-year inflation of 31.94% in the first quarter of 2026-27.

The index for air passenger services rose to 126.4 in the June quarter from 106.9 in the preceding quarter.

The government has released the air passenger service PPI for the first time in the latest data.

The high inflation recorded for air passenger services is largely due to the sharp jump in the crude oil prices linked to disruptions in the Strait of Hormuz.

Railway passenger service prices, meanwhile, recorded a 3.5% year-on-year inflation in the June quarter, unchanged from the previous quarter.

The Railway Service Price Index rose marginally to 103.4 in Q1 from 103.3 in Q4 of 2025-26. Railway freight service prices rose 0.1% year-on-year during the quarter.

The Service Producer Price Index measures changes in prices received by producers of services.

The banking service price index declined 3.35% year-on-year in the June quarter, while the banking service contribution index rose 6.9%.

Management of pension funds service prices rose 5.2%, while insurance service prices increased 0.98% during the quarter.

Telecom service prices rose 0.72% year-on-year.

Securities transaction service prices declined 1.32% during the quarter.

The government said weights have not been assigned to the seven services as they do not cover the entire services sector. However, sub-service level weights under each service have been computed using data for 2022-23 to arrive at the PPI for respective services.

The Service PPIs have been released with 2022-23 as the base year.

The government would eventually include more services in the Service PPI data.

The government had in June came out with the maiden PPI data for both goods and services to better reflect price movement at producer's level, paving the way for phasing out wholesale price index (WPI)-based inflation numbers in the next five years.

The shift from WPI to PPI follows the submission of the report of the working group under former NITI Aayog member Ramesh Chand in April. The group was set up on December 30, 2024, with the mandate to revise the base year of the WPI from 2011-12 to 2022-23, and compile the PPI with 2022-23 as the base year.

"Unlike WPI, the PPI-- comprising a set of indicators such as Output PPI (Goods) and Services PPI -- provides a more accurate measure of price changes from producers' perspective, thereby enhancing its suitability for use in National Accounts/GDP compilation and estimation of real value addition," Chand had said in the report.

The Service PPI for the second quarter of 2026-27 will be released on November 25, 2026, the ministry said.