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Air turbulence continues

Jet Airways has declared a large profit of Rs 143 crore for the first quarter ended June, but most of it is the result of the way it now depreciates its smaller Boeing 737 and ATR planes.

Print Edition: August 24, 2008

Jet Airways has declared a large profit of Rs 143 crore for the first quarter ended June, but most of it is the result of the way it now depreciates its smaller Boeing 737 and ATR planes.

The fact is that all airlines continue to bleed and so, are cutting costs and increasing revenues by raising fares. From August 1, all the leading carriers—Jet, Kingfisher-Deccan and Air India— have raised fares up to 10 per cent on all sectors. But Deccan reversed its decision within 24 hours as the other leading low cost carriers—JetLite and SpiceJet—retained their old fares.

Meanwhile, all airlines are rationalising routes and reducing capacities. Jet has cut back capacity even on some international sectors and Kingfisher is looking to sell two of its Airbus A340-500 aircraft even before delivery while re-evaluating its plans for non-stop services between India and the US. Air India officials privately concede that the 15-month delay in deliveries of Boeing 787 Dreamliner has actually “helped” them. But it doesn’t stop there. Airlines are also cutting back passenger amenities and reducing meal choices in a desperate bid to cut costs.

Kushan Mitra

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