SpiceJet hikes air fares by 30-40 pct

SpiceJet has raised fares by 30-40 pct,as lower tariffs have failed to spur demand as expected.

Written by Reuters | Mumbai | Published: February 11, 2009 11:30:33 am

Low cost carrier SpiceJet has raised fares by 30-40 per cent,as unsustainable lower tariffs have failed to spur demand as expected,a spokeswoman said on Wednesday.

“The kind of fares seen in January would have required each airline to have a load factor of over 100 per cent for break-even,” Deepa Dey said over the telephone from Bangalore.

The move come alongside hikes and similar statements by larger peers like Kingfisher Airlines and Jet Airways,and less than two months after most carriers cut fares on cooling fuel prices and to attract more passengers.

But the fare cuts have failed to boost traffic,Dey said.

Analysts had said in December,when airlines announced a round of price cuts,that deep cuts would not be sustainable.

Kingfisher on Tuesday said it had eliminated the lower-end fares on flights that could “sustain higher revenue” and would focus on earning revenue and not increasing seat factors.

A Jet spokeswoman said the firm had raised fares on some domestic routes,but did not quantify the hikes.

“Jet Airways adjusts its fares on regular basis depending on market conditions. Recently fares have been adjusted on certain sectors and fare buckets,” the spokeswoman said.

“Full fare business and economy fares remain unchanged as well as the fuel surcharge,” she said.

State-run Air India has eliminated a 99-rupee concessional fare it earlier offered,a spokesman said.

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