Airlines see cancellations by inbound travellers

New Delhi: The aftermath of Mumbai's terror attack is proving to be much worse than initially feared on travel and tourism sector. A leading Indian airline has witnessed as many as 2,200 cancellations of inbound travellers in first three days following the attack. While the industry remains tightlipped, travel agents point out that hotels have already got about 20-25% cancellation from international tourists who were booked to visit over the next one year.
In the backdrop of this severe setback, the news of yet another cut in aviation turbine fuel (ATF) price on Saturday, the sixth since August, got muted response from airlines. Now ATF will be cheaper by about Rs 2,480 per kilolitre from Monday. In Delhi, for instance, ATF will now be about Rs 37,000 per kl, down from the August high of Rs 71,028.
Airlines like low cost carriers and Air India were expected to lower their fares by 10-12% to pass on the benefit of lower fuel prices and stimulate the dipping demand. "In the changed circumstances, the government's priorities are bound to change. Now it remains to be seen if the Centre is able to move a bill in Parliament's coming session to amend the Central Sales Tax Act for notifying ATF as a declared good so it attracts a low 4% sales tax across the country," said an airline CEO.
The uncertainty over declared good status and further fall in traffic could either delay or affect the quantum of the expected 10-12% farecuts. Kingfisher chief Vijay Mallya had already clearly stated that his airline would lower fares when ATF becomes a declared good. AI spokesperson J Bhargava said the airline could take some decision this week.
01/12/08 Saurabh Sinha/Times of India

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Categories: Foreign Dec 2008, Indian Aviation- In General Dec 2008