Flying to become expensive by up to Rs 2,000

Mumbai: Just a few days after announcing fare cuts on select sectors, domestic carriers have taken a U-turn. Air fares will now increase by Rs 1,000 to Rs 2,000 per ticket with most airlines withdrawing their promotional offers.
And surprisingly, Jet Airways, Kingfisher Airlines, Air India and budget airlines like SpiceJet, IndiGo and GoAir seem to have acted simultaneously. This has never happened before in the industry. After the “hikes”, a Mumbai-Delhi ticket will cost in the range of Rs 5,000 to Rs 6,000, as against Rs 4,000 last week. Also, all promotional Re 1 and Rs 99 fares have been withdrawn by airlines from Tuesday.
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Airshow News: Aero India 2009
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The country’s second-largest private carrier, Kingfisher Airlines, and largest airline, Jet Airways, will see there fares go up by Rs 1,000 to Rs 1,500 on metro routes. National carrier, Air India, has also withdrawn promotional fares citing no demand from passengers. On the other hand, fares of budget airlines, SpiceJet, IndiGo and GoAir, will increase by up to Rs 2,000 per ticket on the Mumbai-Delhi sector. According to SpiceJet, the steep hike is required to reduce the break-even time period and due to the low load factor. However, the sudden increase in fares by all carriers on the same day hints at a possible arrangement between them, said industry experts. Airlines, generally, first observe competition fare structure and then take a call. But, this time, fare hikes have happened simultaneously, which is a surprising move, said analysts and industry experts. Till recently, the carriers had gone in for aggressive pricing to gain market share. But that move seems to have brought little benefits. 11/02/09 Economic Times

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Categories: Indian Aviation- In General Feb 2009