Indian airlines must hike fares to offset costs, Boeing says

Indian airlines need to raise fares in the next six to eight weeks to cut losses as fuel prices climb and the depreciation of the rupee increases costs, according to Dinesh Keskar, president of Boeing Co’s local unit.
“There’s a gap between break-even fares and actual fares the airlines are charging,” Keskar said in an interview yesterday in Mumbai. “Airlines need to reduce costs and increase fares.”
Jet Airways (India) Ltd, the nation’s biggest carrier, posted a bigger-than-expected loss in the second quarter, while SpiceJet Ltd, India’s only listed discount carrier, reported a loss of 2.4 billion rupees (US$48 million) in the same period, as higher fuel prices eroded gains from carrying more passengers.
“Airlines are unable to pass through costs including fuel price increases and airport charges due to competitive dynamics and any increase in fares will surely impact growth,” said Kapil Kaul, the New Delhi-based CEO for South Asia at the Centre for Asia Pacific Aviation, an industry consultant. “A cost-plus pricing strategy seems to be the only way out.”
14/11/11 Bloomberg/Taipei Times

To Read the News in full at Source, Click the Headline

Categories: Indian Aviation- In General Nov 2011