Low-cost flying era may be over

NEW DELHI/MUMBAI/BANGALORE: Though industry sources were saying that it was aviation minister Praful Patel who was bringing Jet and Kinfisher together, he did not admit. "I didn't get into this. I just cautioned the entire industry and did not ask any one in particular to shake hands. This (Jet-Kingfisher alliance) is born out of necessity and adversity. Airlines have to first be able to survive for a later-day fight (for market leadership)," Patel told TOI.
The two tied up for what Patel called the "writing on wall"__huge losses and no early sign of recovery from the current turmoil. And just when high oil prices__that triggered their troubles__started to cool off, the global meltdown has led to twin troubles for cash-strapped airlines: further drop in traffic and banks not willing to lend money to the 'risky' aviation business. Attempts like cutting flights and laying off staffers hasn't helped pull theairlines out of the woods so far. Now they are again willing to take unthinkable steps like Jet and Kingfisher's coming together.
Said an airline owner, "Talks between Goyal and Mallya started basically to evolve a consensus on two things — route rationalisation (read cutting flights) and hiking fares in the hope that others will also be forced to do so."
And, for passengers, the era of low cost flying could be over after this operational alliance. Both Mallya and Goyal have in the past scoffed at the concept of low cost carrier (LCC) in India as all carriers have to pay same charges.
14/10/08 Times of India

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Categories: Low Cost General Oct 2008