NEW DELHI: With airfares defying gravity, the
holiday season has failed to arrest the free fall in domestic air travel this
year. October 2012 saw the highest ever year-on-year fall in domestic air
travel with a 15.7% drop over the same period last year. The slide is
accelerating as it is higher than the 12.4% recorded in the lean travel month
of September 2012, over the same month last year.
However, October (which marks opening of peak travel season) saw 45.4 lakh people flying within the country, which is higher than in September and August.
Apart from the economic slowdown, October saw less traffic over the same month last year for one more reason. Diwali this time was in mid-November and so the festive season travel shifted to this month, say travel agents.
However, October (which marks opening of peak travel season) saw 45.4 lakh people flying within the country, which is higher than in September and August.
Apart from the economic slowdown, October saw less traffic over the same month last year for one more reason. Diwali this time was in mid-November and so the festive season travel shifted to this month, say travel agents.
But the biggest reason for constant fall in year-on-year
domestic flyers in 2012 is that private airlines have decided to hike fares by
30-50% to recover costs to stay alive even if it means sending price-sensitive
passengers back to trains. The decision comes after they saw the fate of
near-bankrupt Kingfisher, which has been grounded since October 1.
A senior official of a private airline said: "We don't have an option to recover costs. India remains the most cost-hostile place for an airline to operate. Jet fuel for domestic flights is the most expensive here globally. Airport charges are exorbitant. For instance, Delhi, which was allowed a 347% hike in landing and parking charges in one-go, is among the most expensive airports in the world. The fares are reflecting the costs and not fully recovering them. Listed airlines lost money in the July-September quarter despite higher fares as the costs are sky-high. Kingfisher is shut and AI is on life support."
Unless the aviation ministry's promise to review airport charges and user fee for passengers translates into something real, domestic air travel is in for serious trouble with flying fast getting out of the reach of the middle class that once fuelled the boom. On their part, airlines point to their losses as the compulsion to hike fares. The Centre for Asia Pacific Aviation puts Indian carriers' combine debt-cum-losses at Rs 1.4 lakh crore, with AI accounting for a lion's share of this figure.
Meanwhile, the aviation ministry - which runs Air India - said the airline's market share and aircraft occupancy has constantly risen in past six months. "Aviation minister Ajit Singh has asked AI to further improve its passenger load factor and on-time performance, while aggressively implementing various customer friendly initiatives," a ministry statement said.
A senior official of a private airline said: "We don't have an option to recover costs. India remains the most cost-hostile place for an airline to operate. Jet fuel for domestic flights is the most expensive here globally. Airport charges are exorbitant. For instance, Delhi, which was allowed a 347% hike in landing and parking charges in one-go, is among the most expensive airports in the world. The fares are reflecting the costs and not fully recovering them. Listed airlines lost money in the July-September quarter despite higher fares as the costs are sky-high. Kingfisher is shut and AI is on life support."
Unless the aviation ministry's promise to review airport charges and user fee for passengers translates into something real, domestic air travel is in for serious trouble with flying fast getting out of the reach of the middle class that once fuelled the boom. On their part, airlines point to their losses as the compulsion to hike fares. The Centre for Asia Pacific Aviation puts Indian carriers' combine debt-cum-losses at Rs 1.4 lakh crore, with AI accounting for a lion's share of this figure.
Meanwhile, the aviation ministry - which runs Air India - said the airline's market share and aircraft occupancy has constantly risen in past six months. "Aviation minister Ajit Singh has asked AI to further improve its passenger load factor and on-time performance, while aggressively implementing various customer friendly initiatives," a ministry statement said.
http://www.indiaeveryday.in/finance/fullnews-air-travel-sees-steepest-slide-of-16-in-oct-1023-4720783.htm
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