Airfares up 40 per cent and still rising

Sanjay Singh   New Delhi     Last Updated: November 7, 2013  | 00:00 IST
Airfares up 40 per cent and still rising

Airfares have already gone up by as much as 35 to 40 per cent during the current festive season over the same period last year and are expected to go up further in the coming days till the peak season ends in mid-January.

A top DGCA official pointed out that airlines have been able to add only around 16 aircraft to meet the increased demand for air travel since Kingfisher Airlines' fleet of 64 planes was grounded in October last year.

The official said this has resulted in reducing excess capacity in the airlines industry that was exerting a downward pressure on prices. Of the 16 planes added to the fleets of Indian carriers since October last year, seven Boeing 787 Dreamliners alone were added to Air India's fleet which mainly fly on overseas routes. "This has helped domestic airlines in increasing their passenger load over last year," the official explained.

While fares for Delhi- Mumbai this week range between Rs  8,891 - Rs  10,098, it was around Rs  6,000 to Rs  7,700 during the same week last year. Similarly, for New Delhi- Chennai, the current weekly fares range between Rs  9,888 - Rs  11,147 while they were Rs  7,000 - Rs  9,000 in the same period last year.

Aviation expert with KPMG, Amber Dubey said domestic air traffic during the current fiscal would increase by 1- 2 per cent which would help to keep the demand buoyant. While domestic passenger air traffic during 2011- 12 was 121.5 million, it had slowed to 116.3 during 2012- 13 when airfares had crashed.

A top airline official said high jet fuel prices and hefty airport fees especially at airports operated by private developers at Delhi, Hyderabad and Bangalore will continue to impart a cost- push effect to prices.

Private airport developers have increased navigational and airport charges by up to 400 per cent over last year and jet fuel accounts for 40 per cent of operational costs. " From July to October, jet fuel price has gone up 21 per cent. The latest reduction by 4 per cent will hardly make any difference," an airline official said.

Listed airlines are expected to report record losses for the July-September quarter.

Courtesy: Mail Today 

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