No more happy flying by flights
The short-lived honeymoon of
lower fares in January is over. In a shock reversal, major airlines Kingfisher,
Air
As a result, passengers have now have to pay, for example, Rs 5,075
(one-way) for a flight on the Delhi-Mumbai route, the country's busiest, from
Rs 1,950 last month. Some airlines dropped Delhi-Mumbai fares to Rs 1,600 in
certain special promotional schemes.
Last month, airlines took advantage of lower aviation turbine fuel (ATF) prices
to cut fares 50 per cent in a bid to raise dwindling passenger traffic, which
fell 5 per cent in calendar 2008.
“We confirm that on flights that can sustain higher revenue, we have closed low-fare buckets and are concentrating on selling higher-fare buckets. Kingfisher Airlines’ focus is on earned revenue and not higher seat factors,” said an official statement from Kingfisher.
“There is a slowdown anyway and we have calculated higher fares would give us higher revenue even as loads will be affected,” added Siva Ramachandran, VP, global sales for Kingfisher Airlines.
Agreed CEO of low-cost carrier SpiceJet, Sanjay Aggarwal, "Our revenues in December were better than what we got in January even though we got better load factors last month. I have always said these low fares are not sustainable. We needed 105 per cent loads to break-even on those fares. Now the break-even loads will come down to an achievable 60 to 70 per cent.”
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