Cost-fare divide haunts airlines

New Delhi: Domestic flyers may rejoice but the Indian airline industry's loss-making spree is unlikely to end in a hurry. According to a new study by the Directorate General of Civil Aviation (DGCA), in November 2011, the average fare per kilometre had dropped over November 2010 by Rs 2 to Rs 12 in 23 city pairs like Delhi-Port Blair. It remained flat in two pairs and rose by a marginal Re 1 to Rs 6 in 22 city pairs like Mumbai-Bhuj.
The first-of-its-kind study compared the average fare per kilometre of 47 domestic city pairs.
ATF today accounts for over half of an airline's operating cost and a 42% hike in the same - along with the rupee's recent free fall against the US dollar - only means that losses would mount this quarter.
Boeing India head Dinesh Keskar said: "While airfares have risen, they are still less than what they were at the same time a year ago. Airlines are not making money and the average gap in pricing and cost per domestic passengers is about Rs 900 per passenger."
27/12/11 Saurabh Sinha/Times of India

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Categories: Indian Aviation- In General Dec 2011