Thursday, August 09, 2018

Fliers abound, but higher yields still elude airlines

Conventional economic wisdom suggests that extraordinary growth begets extraordinary pricing power. But India’s aviation industry appears to have upended the maxim.
India’s civil aviation industry has had double-digit passenger traffic growth for long, but local carriers have failed to raise airfares in kilter with either their rising input costs or industry growth. This has stumped seasoned analysts who are unable to understand this peculiar situation. Given these circumstances, analysts believe that the anomaly would correct and that airlines would raise fares in the next one or two quarters.
09/08/18 Jwalit Vyas/Rajesh Naidu/Economic Times