Air fares may head north in `07

Mumbai: Slower fleet expansion, fewer new flights could end cheap travel option.
Slower fleet expansion and fewer new flights on various routes as a result of growing airport congestion are expected to have a major impact on air fares in 2007.
In 2006, when the market was growing at 40 per cent, the growth of aircraft induction was 46 per cent. This is expected to slow to 20 to 25 per cent in 2007. Passenger growth, however, will continue at 35 to 40 per cent.
Sources say at least 6 to 7 new aircraft were inducted every month in 2006. This year, the monthly additions are not expected to cross two to three aircraft.
As a result, industry expects the passenger load factor to improve from the 55 per cent in 2006 to 65-70 per cent this year.
Indian carriers, which had posted losses of over Rs 1,800 crore owing to intense tariff competition, are now concentrating on improving margins.
27/03/07 P R Sanjai/Business Standard

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Categories: General Aviation Mar 2007