Air fares to remain high in Q1: Survey

Bringing more bad news for the air passengers,already battling with flight cancellations due to the prevailing crisis at Kingfisher Airlines

Written by Agencies | New Delhi | Published: February 23, 2012 10:45:13 pm

Bringing more bad news for the air passengers,already battling with flight cancellations due to the prevailing crisis at Kingfisher Airlines,a survey today said that high inflation and network disruptions would keep airfares high in the current quarter.

According to the ‘American Express Business Travel Monitor’ which tracks and analyses published airfares on a quarterly basis,domestic airfare in India is likely to stay up in the first quarter of 2012.

“In India,with the current situation on supply and network,the fares are likely to stay up for domestic travel at least for the quarter,” Sandeep Shastri,Vice President and General Manager at Global Business Travel,India said.

Vijay Mallya-led UB group’s aviation venture Kingfisher Airlines has been battling a severe financial crisis for many months now and the matter has got aggravated in the past few days due to a number of its flights getting cancelled.

The American Express report said that overall fares in the country rose 4 per cent during the October-December period of 2011 from the preceding quarter,while domestic fares jumped by 18 per cent in last three months of 2011.

In comparison,overall fares in Asia Pacific region grew 2 per cent,fares within the region were up by 4 per cent.

“High inflation rates and network disruption narrowing supply in the market have increased fare types across the board. Economic pressures and supply variance has meant the LCCs have also increase airfares,which,has push the price of domestic travel up significantly,particularly during the last quarter,” Shastri said.

“Overall,the results of last quarter have demonstrated a shift in the way companies in India are doing business – their focus is on exploring domestic and regional opportunities and moving away from the uncertainty associated with doing business in Europe and the US,” he added.

Fares from India to Europe,the Middle East and Africa (EMEA) sector remained flat during the October-December quarter,though has seen a significant increase (9 per cent year-on-year in fares compared to the region’s 3 per cent).

This can be attributed to high inflation rates,as well as lack of supply and rising fuel costs.

In addition,the weakness of the US economy has contributed to fares from India to the Americas being flat in the fourth quarter. In India,the airfares to Americas grew marginally by 2 per cent compared to the same period in 2010 Airfare from India to Asia Pacific countries grew 2 per cent quarter-on-quarter but grew strongly at 10 per cent year-on year.

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