Carriers want to firm up yields on robust demand

Mumbai/Bangalore: In the past fortnight, two leading airlines have announced fare hikes. Legacy carrier Jet Airways is looking at raising its average fares by Rs 200 to Rs 500.
Budget airline Air Deccan, which is seeped in losses (Rs 213 crore in the March quarter), wants to increase it by Rs 500 to Rs 1,000.
Many industry observers are viewing this as an outcome of consolidation that is taking place in the industry. Is that really what it is?
Analysts and industry players do not think so. They say the rise in the average fare is a peak season (mid-September to December) phenomenon.
Low-cost carrier SpiceJet Ltd executive chairman and CEO Siddhanta Sharma is also emphatic that fares would be flying in the coming months only because of seasonal spurt in demand.
"Airlines are trying to strengthen their yields on peak season demand. Since they have moved from fixed fares to dynamic fares, they will be reducing capacity in the lower fare bucket." said Sharma.
31/08/07 Tanvi Shukla & Praveena Sharma/Daily News & Analysis

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Categories: General Aviation Aug 2007