The Jet Airways-Etihad deal is expected to intensify competition in the aviation sector. But will it impact air fares dramatically? Aviation analysts and online travel agents (OTA) see interesting times ahead for air passengers.
According to Sanjay Bhasin, Managing Director of online travel aggregator Goibibo.com, the Jet-Etihad deal will bring in more competition in international sectors and this will cool fares. Jet Airways will have an advantage of getting cheaper fuel from Abu Dhabi which, in turn, will have an impact on fares on certain international routes, he said.
According to analysts, the Jet deal will add to the supply seats on to international routes and, thus, bring down fares by 10-15 per cent.
With the revision of air capacity between India and Abu Dhabi, Jet plans to give 23 cities direct access to an expanded global network of 368 destinations. “There will be rationalisation of fares on the US, Africa and South America sectors,” Bhasin added. The Gulf and South-East Asia together account for over 65 per cent of international bookings for the Online Travel Aggregators like Goibibo. “If fares to places like South Africa drop by 10-15 per cent, the demand will shift from Hong Kong and Indonesia to Africa as there may be no fare advantage,” Bhasin said.
The Jet-Etihad partnership will not only bring in attractive pricing and but also give tough competition to Dubai’s national carrier Emirates, say aviation experts.
“The deal will give a boost to air connectivity from tier II and tier III cities through code-shares,” says Sharan Lillaney, aviation analyst, Angel Stock Broking.
Domestic sector fares
However, in the domestic sector, air fares are expected to remain at the same levels for the rest of the year. The entry of Tata-Air Asia joint venture (JV) is expected in the second half of 2013-14. “At the onset, the JV is expected to focus on tier I and tier II cities with three-four aircraft and will account for only four per cent of the overall industry capacity. We believe AirAsia will ramp up its capacity gradually from 2014-15 onwards. As a result, its entry will not have a significant bearing on key operating parameters, such as average ticket prices in 2013-14,” says Ajay D’Souza, Director, CRISIL Research.
CRISIL expects the domestic passenger traffic to grow by 2-4 per cent year-on-year to reach around 60 million in 2013-14.
“We expect the international passenger traffic to continue its steady growth trajectory of 5 per cent in 2013-14 to reach over 41 million. In the long term, growth will be driven by Jet Airways and IndiGo, which are likely to expand their fleet on international routes aggressively over the next two-four years,” D’Souza added.
http://www.thehindubusinessline.com/todays-paper/tp-logistics/and-for-passengers-with-lower-fares/article4664156.ece
According to Sanjay Bhasin, Managing Director of online travel aggregator Goibibo.com, the Jet-Etihad deal will bring in more competition in international sectors and this will cool fares. Jet Airways will have an advantage of getting cheaper fuel from Abu Dhabi which, in turn, will have an impact on fares on certain international routes, he said.
According to analysts, the Jet deal will add to the supply seats on to international routes and, thus, bring down fares by 10-15 per cent.
With the revision of air capacity between India and Abu Dhabi, Jet plans to give 23 cities direct access to an expanded global network of 368 destinations. “There will be rationalisation of fares on the US, Africa and South America sectors,” Bhasin added. The Gulf and South-East Asia together account for over 65 per cent of international bookings for the Online Travel Aggregators like Goibibo. “If fares to places like South Africa drop by 10-15 per cent, the demand will shift from Hong Kong and Indonesia to Africa as there may be no fare advantage,” Bhasin said.
The Jet-Etihad partnership will not only bring in attractive pricing and but also give tough competition to Dubai’s national carrier Emirates, say aviation experts.
“The deal will give a boost to air connectivity from tier II and tier III cities through code-shares,” says Sharan Lillaney, aviation analyst, Angel Stock Broking.
Domestic sector fares
However, in the domestic sector, air fares are expected to remain at the same levels for the rest of the year. The entry of Tata-Air Asia joint venture (JV) is expected in the second half of 2013-14. “At the onset, the JV is expected to focus on tier I and tier II cities with three-four aircraft and will account for only four per cent of the overall industry capacity. We believe AirAsia will ramp up its capacity gradually from 2014-15 onwards. As a result, its entry will not have a significant bearing on key operating parameters, such as average ticket prices in 2013-14,” says Ajay D’Souza, Director, CRISIL Research.
CRISIL expects the domestic passenger traffic to grow by 2-4 per cent year-on-year to reach around 60 million in 2013-14.
“We expect the international passenger traffic to continue its steady growth trajectory of 5 per cent in 2013-14 to reach over 41 million. In the long term, growth will be driven by Jet Airways and IndiGo, which are likely to expand their fleet on international routes aggressively over the next two-four years,” D’Souza added.
http://www.thehindubusinessline.com/todays-paper/tp-logistics/and-for-passengers-with-lower-fares/article4664156.ece
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