Airlines say they have accepted the directive, though many feel this would give away competitive information on the number of seats at each price point, which could have an adverse impact on business.
Anticipating a weak demand in the traditionally lean January-March period, most domestic airlines on Tuesday reduced fares massively after no-frills carrier SpiceJet announced a steep 50 per cent discount on base fares and fuel surcharges across sectors.
Asserting that the government can't remain a mute spectator to the move by the air carriers, Civil Aviation Minister Praful Patel said there can be 'no justification' for airlines to hike fares in an 'arbitrary manner'.
The income earned from such activities is crucial for the domestic airline industry, which had accumulated losses of over Rs 2,200 crore in 2007. These losses are expected to rise to Rs 2,800 crore in 2008.
The worldwide softness in the sector has ensured there are few takers for these aircraft; those who had leased the aircraft to Indian carriers will invoke a hefty penalty if the machines are sent back to them.
Airfares on major domestic routes from Chennai surged as flight operations at the airport were disrupted due to strong winds and torrential rain that lashed the city in the wake of Cyclone Michaung on Monday. According to ixigo data, on December 5, one-way spot airfares from Chennai to cities like Mumbai, New Delhi, Hyderabad, Bengaluru, and Kolkata rose between 52 per cent and 171 per cent compared to prices three to seven days prior. The Chennai-Mumbai route, the busiest flight route from Chennai airport, saw airfares surge 68.6 per cent from Rs 3,728 to Rs 6,286 in the aforementioned period.
Jet fuel or ATF prices were on Thursday were cut by a steep 4.5 per cent, the first reduction in rates in six months.
In a major relief to cash-strapped airlines, jet fuel (ATF) prices were today reduced by a massive 5 per cent, the steepest reduction in rates since February 2010.
In an unprecedented show of solidarity on Friday in Mumbai, India's cash-strapped, loss-making private airlines -- including Kingfisher Airlines, Jet Airways, and others -- have demanded a bailout package from the government or they 'will have to suspend their operations indefinitely'.
Airlines in India have suffered a staggering loss of Rs 4,000 crore (Rs 40 billion) in 2007-08, and it could double in the current fiscal depending on which way fuel prices are headed, Civil Aviation Secretary Ashok Chawla said.
The practice of charging for such facilities was launched in 2008.
According to sources in the aviation ministry, only State-owned Air India and private carrier AirAsia India have agreed to pay the surcharge.
This issue was recently decided by the South Mumbai Forum.
Industry sources and certain airline executives revealed this was done after the LCCs hammered out their differences with full-service carriers on certain contentious issues related to pricing. Industry source said the fares had been lowered as a protest against the full-service carriers' sale of coupons worth Rs 300 crore (Rs 3 billion) and valid for six months to travel agents across the country at prices that were 20-30 per cent less than those available on their websites.
Wadia Group-owned Go First Airways' (Go First) insolvency plea could trigger a 'momentum rally' in shares of rival airlines, Interglobe Aviation (parent company of IndiGo) and SpiceJet, as they look to gain bankrupt airline's market share, said analysts. On the bourses, shares of InterGlobe Aviation hit a 52-week high of Rs 2,235.95, surging 8 per cent on the BSE in Wednesday's intra-day trade, before settling 4.5 per cent higher at Rs 2,164 apiece. Those of SpiceJet and Jet Airways, meanwhile, rallied up to 6 per cent in the intra-day trade, and ended 1 per cent and 5 per cent higher, respectively, following the development, which was announced post market hours on Tuesday.
In a bid to offset a major increase in the price of aviation turbine fuel, Indian Airlines on Saturday announced an across the board 12 per cent hike in fares with effect from April 15.
After Air India and Jet slashed ticket prices, low-cost carriers respond with 5-20 per cent cuts; likely to spur air travel market's sluggish growth.
Private carrier Kingfisher Airlines plans to raise up to $175 million (about Rs 840 crore) before March next year through rights issue and global depository receipts (GDR).
On Thursday, all airlines (except for Air India) reduced fares on key domestic routes such as Delhi-Mumbai, Delhi-Bengaluru, Mumbai-Bengaluru, among others.
Capa lauded govt's efforts in rescuing SpiceJet.
In India, the aviation industry contributes five per cent of gross domestic product, around Rs 291 crore (Rs 2.91 billion) in tax contributions, provides four million jobs and another seven million jobs through tourism and related activities.
British Airways, Lufthansa, Etihad and Singapore Airlines are scouting for an Indian partner that meets the net worth criterion
VRL investors have punished the stock for his move, but Sankeshwar is defiant.
In December 2010, the price of the fuel in Delhi was Rs 45,240 a kilolitre.
After being hit by a fuel price hike and capacity cut, it may be happy times again for the airline industry this festive season. While Kingfisher is looking at adding at least 15 new flights in the winter season, competitors Jet Airways, SpiceJet, IndiGo and Paramount are adding over 30 new flights together (arrivals and departures); they will do this through a combination of better utilisation of existing aircraft and inducting new fleet.
The demand for reduction in air fares echoed at a meeting of a Parliamentary Committee, with several MPs demanding that airlines should pass on the benefits of the drastic cut in oil prices to their customers.
IDBI Trusteeship Services, in its capacity as the lenders' trustee to Kingfisher Airlines, has invoked a little over 4.93 mn shares worth Rs 1,300 crore.
Currency depreciation also hits earnings of all domestic carriers
Aviation regulators says airlines are free to fix fares.
'We emphasise the importance of not basing investment decisions solely on electoral outcomes.' 'Instead, focusing on investing in high-quality businesses capable of prospering regardless of the political landscape is paramount.'
For passengers booking a return ticket between India and Singapore from Tuesday, they would be charged $100 as fuel surcharge instead of the present $110 per sector. As a result, they would gain a total of $20 for their onward and return journeys, an airline spokesperson said.
Jet fuel constitutes over 40 per cent of an airline's operating costs and the price cut will bring relief to the cash-strapped carriers.
As Prabhakaran was leaving his house, Rajiv Gandhi called his son Rahul and asked him to fetch his (Gandhi's) bulletproof jacket. He put the jacket on Prabhakaran's back and remarked with his usual charming smile: "Take care of yourself."
'The funds were arranged from multiple banks at a very competitive rate and converted into dollars at the best rates.'
Full service carrier Vistara expects to add a total of 10 planes as well as hire more than 1,000 people in the current financial year and has shelved plans to fly to the US, according to a top executive. Currently, Vistara, which is set to be merged with Air India, has a fleet of 61 aircraft and a staff strength of over 5,200. During an interaction in Istanbul this week, Vistara CEO Vinod Kannan said there has been a ready pool of talent, especially pilots and cabin crew members, with the collapse of Go First.
Airlines are also said to be cashing in on the Jat agitation which has virtually disconnected Delhi-Lucknow with many trains being cancelled.
Iraq war to hurt Indian airline industry.With war clouds looming large over Iraq, the Indian airline industry is bracing itself against an increase in insurance premium and an additional burden of an estimated 25 per cent hike in ATF.
