Airlines to rework schedules on account of fuel hike

Move over leisure and holiday travellers, budget airlines are now eyeing the corporate segment. Rising fuel prices have made them rethink their schedules and rework their customer loyalties.
Flying may not quite be the simple, smart or mass experience that budget airlines like Deccan, GoAir or Spice jet wanted it to be. The rising fuel prices have pushed air ticket fares up by 15% to 18% this year. But that hike in fares does not cover the 30% - 43 % rise in Jet Airways fuel prices. Airlines have been taking a hit of upto 25% on their own books. Many believe it's time to do something about this impossible situation.
Apart from pulling back from shorter routes all the airlines are also trying to ensure they run a packed house on key city routes. Besides juggling routes, budget airlines like Deccan and JetLite for the first time are introducing loyalty programs. While SpiceJet and GoAir have special corporate packages with flexible schedule and cancellation policies.
There would be an added emphasis on the customer because holiday and leisure passenger growth is likely to trend into negative territory if air-fares continue to rise this year, according to the latest Citigroup analyst report. Therefore the airlines will do all they can to capture business traffic from one another.
So far, business travelers accounted for 25% to 30% of the total passengers of budget airlines while 42% were holiday travellers. But number of corporate travellers has already risen to 38% now and is expected to touch 45%. That increase experts say is because many business travelers are now migrating from full service airlines to budget airlines.
30/05/08 Shivani Muthanna/CNBC-TV18/Moneycontrol.com

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Categories: Indian Aviation- In General May 2008