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International air fares to rise 25% this summer

By P R Sanjai in Mumbai
Last updated on: March 28, 2007 09:08 IST

International fares are expected to increase by 20 to 25 per cent for the peak summer season (May to July), over last summer. They had witnessed an increase of 10 per cent and 5 per cent in 2006 and 2005, respectively.

Limited capacity addition this year despite burgeoning growth in international travel, easier visa norms for Europe and the US and huge cancellation charges have all led to an unprecedented seat shortage and an increase in ticket prices.

For instance, a British Airways business class return ticket for Mumbai-London will cost Rs 2.2 lakh (plus 12.24 per cent service tax), against just Rs 1.8 lakh last summer.

A first class return ticket on the same airline would come for Rs 2.8 lakh, against Rs 2.4 lakh last summer.

Similarly, on an average, an economy class ticket on Air India for Mumbai-New York is for Rs 50,000 (including taxes), compared with Rs 42,000 last summer.

Even tickets for the traditional low-cost destinations in south-east Asia are getting expensive. A return ticket on Singapore Airlines for Mumbai-Singapore is available for Rs 21,000, against Rs 17,000 last summer.

Industry estimates that while there has been an increase of around 5 per cent in seat capacity in Europe and the US since last summer, the number of passengers has grown by around 20 per cent.

Worse, European airlines are imposing stiff cancellation charges, which is 25 per cent of the fare, compared with only Rs 300 earlier.

"The flights are full. The main rush is in key sectors such as Europe, Far East and the US," says Sachin Rampal, senior manager with leading tour operator Thomas Cook.

Also, countries in Europe and the US have been more liberal in granting visas. Regi Philip, an IATA accredited travel agent who runs Cosmos Agencies, says visas are easily available for the US and Europe.

"Earlier, visa rejections stood at 50 per cent. Now, almost 75 per cent are managing to secure visas to the US and Europe," he said.

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P R Sanjai in Mumbai
Source: source