5% rise in airfares found in quarter four last year

It was heard that Indian airlines claimed of slashing flights airfares after ATF prices came down but it has been revealed by an exclusive industry report that airfares actually risen by 5%. A report named The American Express Asia Pacific Business Travel Monitor report, revealed that due to reduction in competition and falling rupee has let airfares to increase quarter on quarter which is effective on selected categories only.

Moves have been made by domestic airlines in India to reduce fares and make it cheap flights, after ATF reduced by almost 50% last year due to fall in prices of crude. This reduction in airfares is effective only on certain categories, while in most of the segments it has been increased. Fares in India rose by 5% which is the highest quarterly rise of airfares across Asia Pacific region. Whereas full business class airfares shown 10% quarter –on-quarter increase in airfares. India published fares rose 15% on year, while they rose 26% in domestic and 13% in Intra Asia Pacific.

Economy class ticket in Just Rs 99 – Air India

Air India recently declared its economy class fare price which is Rs 99 and is valid for the month of February only. This offer will also continue after February for the one who books a ticket 21 days in advance. The Business class travelers can enjoy the scheme till February end under which the passenger’s spouse is allowed to travel by paying only the fuel surcharge and the airport user development charge. Air India was lead by Jet Airways and Kingfisher Airlines last year in flight bookings.

The civil aviation Ministry released its data depicting Jet Airways as India’s largest domestic air services handling a market share of 29.5 percent followed by Kingfisher Airlines handling a market share of 27.6 percent market share. Air India is only handling a market share of 16.3 percent after Jet and Kingfisher airlines which has immensely effected the business of Air India this is the reason why the airlines is introducing new schemes this month.

Airfares hike once again

Government has decided to put an additional charge for air travelers in Delhi and Mumbai, so stop expecting cheap air tickets from now. ADF charges may be effective from next month onwards; this will be an additional fee for outgoing passengers. The ADF will be for 2 years only to minimize the deficits for future which was about Rs 2,000 crores at the Delhi and Mumbai airports. Delhi Airports will be charging of about Rs 300 from outgoing domestic passengers and Rs 1000 from international passengers as additional flights airfares. These two airports handles 55 percent of flights in India and the reconstruction of the two airports can cost upto Rs 11,400 crores. This ADF will be charged for 2 years then it may be discontinued.

The Bangalore Government allowed it’s airports to charge UDF of Rs 260 from Jan 16. Here domestic passengers are already paying Rs 375 and International passengers have been paying Rs 1000 UDF early this month which is additional to cheap flights tickets. The sources are depicting that airports could be allowed to pay UDF or ADF from passengers but still no official talks have been done in this regards.

Fare Cuts by Jet Airways and Air India

Jet Airways and Air India has announced to cut their air fares and revised rates will be in effect from 1st January’09 in which Jet airways will cut the fare up to 40% on domestic routes. The air fares will go on like this Rs 2000 for Mumbai-Delhi flight, Rs 4065 for Mumbai-Kolkata route, Rs 1220 for Bangalore-Mumbai and as low as Rs 500 for Mumbai-Ahmadabad flight. Taxes of Rs 3,500 are also to be included on each ticket. This means that the total cost of an air ticket will be with taxes.

Another airline Kingfisher airline has also stated that fare cut will be implemented by New Year. The Indian air operators are reluctant to revise air fares despite the fall in fuel prices. The demand of aviation turbine fuel under the declared goods category by Indian air operators will bring down the sales tax from an average of 32% at other airports to a uniform 4% and due to this Indian aviation ministry has forced the major airline companies to go for fare cuts.