You are here: Rediff Home » India » Business » Business Headline » Report
Search: The Web
  Discuss this Article   |      Email this Article   |      Print this Article

Chartered flights to hike tariff by 20%
Anirban Chowdhury in New Delhi
 · My Portfolio  · Live market report  · MF Selector  · Broker tips
Get Business updates:What's this?
July 10, 2008 09:48 IST
Even as growth in traffic on chartered flights has fallen 6 to 8 per cent over the past year, rising fuel prices are forcing private charter operators to raise tariffs a substantial 20 per cent from September 1.

This follows an 18 per cent increase in the last 12 months.

India has more than 50 non-scheduled operators, which include helicopter operators like Global Vectra, aircraft operators like Ran Air and Taj Air and companies like Deccan Aviation Ltd [Get Quote] that fly both helicopters and aircraft.

A chartered flight costs Rs 50,000 to Rs 2 lakh an hour, depending on the aircraft capacity and the services offered.

"Fuel rates are such that we have had to increase our rates by as much as 18 per cent of the last one year. Of this, an increase of 7 per cent took place in June and will be valid till September, after which there might be further increase," a chartered operator added.

Aviation turbine fuel (ATF) accounts for around 35 per cent of the total costs of a private charter operator against around 25 per cent last year.

"Also, most charter operators are now shifting from turbo prop aircraft to jet aircraft which are less fuel efficient on short-haul routes. That is another reason for a significant increase in costs," said an industry expert.

Demand for charters has slowed for two reasons. First, because airlines have cut fares (though these have also increased drastically in the past three months), and increased the number of flights. As a result, corporate travellers find flights to suit their schedules.

Second, many companies are now buying their own jets that they use in preferences to charter services. Around 40 private aircraft were inducted between the start of 2007 and now, of which around 20 have been bought by charter operators and the rest by private companies for their own use.

Helicopter operators have also been severely affected by the fuel price rise.

"The fuel price rise has affected us when helicopter operations are at their lowest. We have been absorbing the prices for long, but we will resort to an increase in charter rates from September," said Ajay Sareen, chief operating officer of helicopter operators Venture Aviation.

Powered by

 Email this Article      Print this Article

© 2008 India Limited. All Rights Reserved. Disclaimer | Feedback