Jet Airways (India) Ltd., the nation’s biggest carrier, said state-owned Air India Ltd. is compounding a price war that has caused industrywide losses and prompted Kingfisher Airlines Ltd. (KAIR) to cut flights.
“Air India is discounting fares and that’s absolutely a problem,” M. Shivkumar, senior vice president of finance at the Mumbai-based carrier, said by phone yesterday. “Ideally, fares should go up when oil-import costs go up. That’s not happening and that’s why airlines are in this situation.”
Jet and Kingfisher, the nation’s two largest listed carriers, have lost a combined 63 billion rupees ($1.2 billion) in three years as low fares and rising fuel prices offset surging passenger numbers. Air India has also been unprofitable since a 2007 merger, causing it to win 32 billion rupees of state bailouts and seek another 65 billion rupees before the end of March.
“At the fare levels that Air India has in the market, the airline will continue to lose money and be an ongoing drain on public funds,” said Binit Somaia, a Sydney-based director at industry adviser CAPA Centre for Aviation. “Its low prices are also ‘‘destabilizing for the entire industry,’’ he said.
17/11/11 Karthikeyan Sundaram/Bloomberg
To Read the News in full at Source, Click the Headline
0 comments:
Post a Comment