Air fares set to rise in 2008

Airfares are set to go up further in 2008 due to consolidation as well as rationalisation in capacity addition in the sector.
In the next 3-4 months, which is considered to be a lean period in the industry, fares could stabilise even though oil prices are expected to come down. Airline officials, however, feel that fares would start moving up by 5-7 per cent around April and May putting pressure on fliers.
The fuel surcharge that is now being charged as a tax would be included in the fare and the pressure on all airlines to improve their yields would prevent them from offering huge discounts on fares.
Now that Kingfisher Airlines and Jet Airways have acquired Deccan and Air Sahara respectively, there would be a constant endeavor by both airlines to harden fares to arrest losses. The exiting low cost carriers would also want make money and come out of losses as soon as possible.
The fall out of the consolidation process has already begun with most airline operators hiking their fares from August onwards.
01/01/08 Lalatendu Mishra/Hindustan Times

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Categories: Indian Aviation- In General Jan 2008