Costlier air travel round the corner

Times of Re. 1 ticket and surprise offerings of Rs. 99 per ticket by low-cost domestic carriers are fast becoming relics of the past.
With all major airlines bleeding and operating in losses, the estimated cumulative losses of all the carriers during the year can mount to Rs. 10,000 crore.
With increasing air fares due to high prices of aviation jet fuel dealing a fatal blow to the profitability of Indian carriers which were till the other day singing songs of impressive growth, the overall scenario in the civil aviation sector is ‘grim’ to say the least.
Industry sources said that the situation might offer very little respite in 2008-09, making matters tough for the carriers as well as airport operators who would have to put up with lesser growth in passenger traffic.
All major carriers have shutdown their short-haul operations, cut down expenses and are finding newer ways of cutting costs by doing away with freebies, rationalising several routes and withdrawing flights from non-profitable sectors.
Airlines are suffering not only due to high international prices of aviation turbine fuel (ATF) but also due to fall in passenger traffic and high maintenance costs.
Industry insiders estimate that combined daily loss of all major airlines, including Air India, Jet Airways, SpiceJet, IndiGo and Kingfisher, could be about Rs. 25 crore.
With major metro airports in for renovation, modernisation and upgradation, even airport operators are said to be an anxious lot. The new Hyderabad airport has already imposed User Development Fee (UDF) on every departing domestic and international passenger.
Aviation industry watchers say that full-fledged service carriers such as Air India and private Jet Airways may feel the impact of slowdown more than the low-fare, budget carriers as many of the companies would still want to save on time and money by asking their executives to fly no-frills carriers.
01/08/08 The Hindu

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Categories: Indian Aviation- In General Sep 2008