Jet, SpiceJet to drive fares still higher

Mumbai: Domestic airlines, pummelled by surging crude oil prices in the past two years, are planning to hike fares for the seventh time this year. The steady rise in jet fuel prices has made it tough for the airline industry to stay afloat without fare hikes.
Jet Airways, the country’s largest full-fledged carrier and low-cost airline SpiceJet, are considering fare hikes ahead of the start of the peak travel season in September-October.
“Existing fares are not justified: We need to increase fares by at least 20% over the next two months to minimise losses,” Jet Airways chief commercial officer Sudheer Raghavan told ET. “Jet will increase fares by 10% early next week and another 10% from October,” Mr Raghavan added.
On the Mumbai-Delhi sector, Jet’s economy fares may rise by Rs 350, while business class fares may climb by Rs 300. Crude oil’s strong surge to nearly $150 levels over the past two years has badly affected the profitability of airlines. Carriers have increased fares six times this year with hikes in fuel surcharge. But that has not been enough to wipe out the red ink from most balance sheets.
“We are planning to increase fares by 10-12% in the September-October period, the festival time, on a few sectors,” said SpiceJet chief financial officer Partha Sarathi Basu.
27/08/08 Mithun Roy/Economic Times

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Categories: Jet Airways Aug 2008, SpiceJet Aug 2008