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Rediff.com  » Business » Flying to get costlier by up to 30%

Flying to get costlier by up to 30%

September 04, 2013 10:18 IST

Flying to get costlier by up to 30%

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BS Reporter in Mumbai

Domestic airlines have hiked fares barely a day after aviation turbine prices shot up 7 per cent to a record high level.

Facing twin challenges of slack passenger demand and worsening operating environment domestic airlines decided to hike the fares by an average 20-30% hike in all economy class fares across the entire network from Tuesday.

Sources in Jet Airways and SpiceJet confirmed that ticket rates were hiked due to spike in fuel costs.

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Image: An Air India aircraft.
Photographs: Reuters

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Executives from GoAir and IndiGo did not respond to calls and text messages but travel industry sources said all the airlines except Air India had effected a fare hike.

"All the airlines have increased fares.

“For some time now the airlines were caught between devil and deep sea.

“A fare hike it was feared would lead to further drop in demand.

“On the other hand, operating costs have been rising. Finally, the airlines have decided to bite the bullet,'' said Sharat Dhall, chief operating officer of online portal Yatra.com.

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Image: A passenger walks past the nose of an Indigo Airlines A320 aircraft before boarding it on the tarmac at Bengaluru International Airport.
Photographs: Vivek Prakash/Reuters

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"It is about time the airlines took the action.

“The costs have been going up through the roof,'' said online portal MakemyTrip's co-founder Keyur Joshi.

Fare hike has been effected both closer to date of travel and for later dates.

The lowest priced tickets on Mumbai-Delhi route which were being sold a day for around Rs 6,000-7,000 two days before travel in August.

Now, the lowest available seats are available for over Rs 9,500.

Airlines have been under pressure to increase fares as operating costs have been swelling.

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Photographs: Reuters

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The 20 per cent rupee depreciation and rise of ATF prices to a record high of Rs 75,000 per kilolitre in Delhi airline gave the airlines little elbow room to manage costs.

But the airlines were wary of raising fares as demand for travel has been slow and loads between 60-70 per cent.

Below cost pricing and rapid rise in expenses will result in domestic airlines posting a loss of $400-450 million for the second quarter FY14, according to Centre for Asia Pacific Aviation.


Image: Passengers speak to ticketing staff through the only open counter at the Air India ticket office at the domestic airport in Mumbai.
Photographs: Vivek Prakash/Reuters

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