Soaring airfares pushing travelers back to trains?

The low cost party seems to be getting over, at least for now, both for air passengers and for airlines. Domestic airfares this season are up 10-15% and so demand is down by almost 5%.
Increased airfares seem to be forcing some to go back to the trains. Low cost airlines have seen a dip of over 5% in demand this September over last year. The advance bookings for October are also down about 4% so far. This is a result of consolidation in the industry and a consequent 10% plus increase in airfares.
Ashwini Kakkar, Vice Chairman, Mercury Travels said, "Fuel prices are up, surcharges are almost Rs 1600, so there is no ticket less than Rs 2000."
The over 20% growth in air travel in the last two years prompted airlines to order over 300 aircraft. This led to overcapacity and a dip in airfares. Experts say a substantial increase in air travel was because of airfares that matched rail fares or were just marginally higher. Now that fares are over 20% higher than rail fares, within a matter of three months they are beginning to impact demand.
10/10/07 Moneycontrol.com

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Categories: General Aviation Oct 2007