Get ready for more air fare increases

New Delhi/Mumbai: Leading Indian carriers said more air fare increases are possible soon because airlines have still not been able to sell tickets at a fare that meets their costs.
Sources in SpiceJet said the increase in basic air fares announced yesterday would meet only half the increase in cost per seat so the airline has to look at ways to increase fares, especially if oil prices went up again.
"We have not been able to make an assessment of how much our yields will exactly increase as a result of these fare increases. We will be able to take a firm decision only after the fares are in the market for sometime," said Samyukth Sridharan, chief commercial officer, SpiceJet.
"But going by the current situation, we might increase our fares as soon as next month if further increase in oil prices are announced by the end of this month," he added.
According to Jet Airways CEO Wolfgang Prock-Schauer, "The last increases in ATF prices from March till June have added $100 million a month to out costs, amounting to $1.2 billion annual costs for the industry as a whole just on this one head."
Airlines are finding it difficult to make good or compensate this cost from revenues, he added.
State-owned carrier Air India, which too raised fares yesterday, is also worried.
21/06/08 Business Standard

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Categories: Indian Aviation- In General Jun 2008