Fares may dip as air passenger numbers grow slow

Mumbai: After two years of growing at possibly the fastest rate in the world, the number of domestic air travelers in India has fallen significantly in the past two months of December and January.
Average growth in the past eight months has been above 30%, but December recorded a 14.8% growth in year-on-year terms. Though the Directorate General of Civil Aviation (DGCA) figures are not available, industry estimates are that growth is likely to be muted in January, too.
Airlines, whose load factors have started falling as a result of the slowdown, are beginning to see the writing on the wall. Falling load factors have forced them to offer cheaper fares by opening their lowest fare-categories. Airfares are bunched in various fare-classes, and airlines typically try to sell at the higher classes, offering lower fare categories only if the demand is slow.
12/02/08 Cuckoo Paul/Economic Times

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Categories: Indian Aviation- In General Feb 2008