Rising ATF prices may force airlines to hike fares

The airline industry in India is all set to spread its wings across the country. In the last few months, almost all airlines have added new destinations on their route map. However, all airlines are also struggling to book profits, and with rising fuel prices, a hike in the fares also looks imminent.
“The reality is that all airlines are under huge operating loses. The industry hasn’t yet capitalised on the alternate source of revenues. They have no option except to raise the fares in order to sustain themselves,” says Jayesh Desai, national director, transaction advisory services, E&Y.
According to traffic results for September 2007 by International Air Transport Association (IATA), the demand in the Asia-Pacific region continued its brisk growth of recent months, rising 9.7% in September due to strong economic expansion and fast-developing markets in China and India.
This also reflects that all airlines have added new destinations both in the country and across the globe. So if Air India has started its operations on Mumbai-New York, Chennai-Dammam, Mumbai-Singapore, Amritsar-London-New York routes, Kingfisher is all set to reach out to cities such as Aurangabad, Udaipur, Jodhpur, Jaisalmer, Khajuraho, Jammu, Lucknow. And it’s not just Indian carriers but international airlines such as KLM, Emirates and British Airways have also increased their frequency to different destinations in India.
04/11/07 Raja Awasthi & Dheeraj Tiwari/Economic Times

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Categories: General Aviation Nov 2007