Lack of clarity on air fares hits advance bookings

Mumbai: Advance air ticket bookings have fallen by 20% over the past three days, as consumers wait for clear trends on air fares to emerge.
Airline companies had first raised fares and then reduced them after the civil aviation ministry came down heavily on frequent fare revisions.
According to a senior industry executive, agents expect their business to drop sharply next week. “We have seen a 15% fall in advance bookings in the past three days, and this is likely to go up further,” said Rajinder Rai, president of Travel Agents Association of India (TAAI). Agents are expecting a 15% fall in their businesses from next week as the lean period starts February 15.
Travel agents and online portals account for more than 85% of the airlines’ ticket sales, while the remaining 15% are sold directly by the carriers.
Passengers have stopped flying and are preferring train over air transport at a time when train fares are coming down. Rail minister Lalu Prasad on Friday cut train fares by 2%. Moreover, the air traffic declined by 5% in January, compared to December last year, and if the trend continues, it could affect the airlines, said experts. Early this week, air fares went up by Rs 2,000 per ticket with most carriers withdrawing their promotional offers. And surprisingly, full-service carriers and budget airlines have acted in unison.
Corporate travellers, who account for about 60% of the airline traffic, have reduced their travel budgets and general passengers avoid travelling by air due to expensive ticket prices.
14/02/09 Mithun Roy/Economic Times

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Categories: Indian Aviation- In General Feb 2009