Rupees 11 billion to be paid by Airlines to the Airport Operators

Airports Authority of India said that Airlines owe it Rupees 11 Billion, out of which Air India alone has to pay Rupees 7 Billion. Though airport has given airline operators an ample of time to clear dues but still they need money for upgrading the airports and government also approved the airports development fee for raising fund for the development of airports. Already 20 airports including Kolkata and Chennai are being upgraded by AAI by investing Rs 120 billion.

Delhi International Airport Ltd. (DIAL) has already started charging Rs 200 from domestic passengers and Rs 1300 from international passengers as development fee from March 1st onwards. The one upgrading the Chhatrapati Shivaji International Airport in Mumbai will charge Rs 100 per trip from domestic passengers and Rs 600 from international passengers April 1st onwards. Greenfield Airports at Hyderabad and Bangalore charges Rs 375 and Rs 260 from domestic passengers and Rs 1000 from international passengers on Airline Tickets.

UDF to be collected by Airlines at the time of selling tickets

User Development Fee (UDF) will now be collected from the passengers by the airlines, at the time of tickets selling. The charges will not be exceeding Rs 5 per passenger and will not be passed on to the passengers in any manner. Last month in February government approved charging UDF by DIAL at the rate of Rs 200 from each domestic passenger and Rs 1300 from international passenger. The UDF came into effect from March 1st for next 3 Years. This is really going to affect the prices of air tickets in India.

The following people will be exempted from paying UDF to the airlines:
- The persons travelling on infants tickets issued by the airlines.
- Diplomatic Passport Holders.
- Crew of Airlines on duty.
- Official duty persons on aircraft operated by Indian Armed forces.
- Transfer/Transit passengers (less then 6hrs stay at IGI Airport).
- The passengers departing from airport due to technical faults in plane or not suitable weather conditions for flying.

Airlines affected after Rupee hit a record low of Rs 51.92 per dollar

There has been seen a fall in Rupee, domestic airlines are likely to revise all their targets, as 30% of expenses of airlines are denominated in dollars. Airlines such as Jet Airways, Spice Jet, Air India and Kingfisher airlines usually make their payments in dollars towards the rentals of their leased aircrafts, maintenance, foreign crew and pilots. Rupee can touch 54 by the end of this month; this has been predicted by some financial firms.

Airlines pay a rental of Rs 40 Lac for the single aircraft, which has now increased to Rs 50 Lac due to the decrease in value of a rupee. This has affected many things including parking, employee costs and navigation charges. The fall in rupee is definitely going to play a major role in this year’s losses in airlines industry. The losses have been estimated for this year, it would be Rs 10,000 crores which is more than double of last year’s losses which was 4,000 crores.

Business Travellers never demands for a luxury travel

A survey has been done regarding what a business executive demands while travelling, and was found that it wasn’t the luxury extras but the good service and basic efficiency. They want the things that can help in their official work; proper internet connection is their main priority. Now a day’s business professionals want a proper Wi-Fi connectivity so that they can complete their pending tasks before they reach somewhere for their meeting.

According to the survey the business travelers will go for the basic facilities no matter what is the price of Airline Tickets. Proper internet connectivity is the main priority for worldwide business travellers rather than a peaceful room, good transport and central location. Economic pressure has let the business professionals to think more about the basic facilities rather than the luxury requirements. The same is for the hotels they stay in, hotels must have proper internet connectivity rather than the luxury. Corporate companies have started looking more closely into the travelling expenses which has made the business travellers specially in Asia-Pacific to look for Cheap Air Tickets with basic faculties rather than having luxury flight experience and spending too much on the tickets.

British Airway’s equity stake in Go Air

The British Airway’s chasing a 25% stake in Indian Go Air airlines. The officials have decided to have a meet in London for the further discussions sources says that British Airways has tried Last Year to reach a code sharing agreement with Go Air. Go Air spokesperson says that the airlines has 2.3% share in the market and would welcome such a change in policy and British Airways refuses what is said.

Foreign airlines will be allowed to invest in domestic airlines with a cap of nearly 26% with India’s changed policy plan. Though Go Air faced losses last year still it is a closely held company with its financial numbers not in the public. The decision to scale up the fleet by 35 aircrafts will be fulfilled till March 2011, recently added six and will add 20 by end of this year.

Oil companies strike affect airlines

The state-run oil companies proposed strike from 7th January’09. 55,000 officers of 14 Oil companies announced strike on 6th January’09 which is definitely going to affect the airlines. In response Jet airways said “Jet airways and JetLite flights will not be affected by the strike and flights will be operated as per normal schedule”, Kingfisher airlines said they were already prepared to deal with the situation, Air India too said this strike won’t affect their daily flight operations.

On the whole the airlines pretend that they are not being affected by the oil companies strike but somewhere an impact will be seen in the flight operations due to this strike as the time passes by.