Airlines hike domestic fares by up to 50%

The cash-strapped airlines are likely to increase fares further,said sources.

Domestic airlines,reeling under losses and severe cash crunch,have jacked up their fares by up to 40 per cent on key metro routes across both on the economy and business class. The airlines have hiked spot fares by 50 per cent and are likely to increase it further,said industry sources.

Advance fares in metro routes have been increased by 30-40 per cent and 10-20 per cent on the non-metro routes. Last-minute fares prices of tickets booked seven days in advance too have gone up by almost 50 per cent.

The fare-hike frenzy was started by a Mumbai-based budget carrier on last Saturday,and soon all airlines,including the state-owned Air India followed suit,said sources.

A one-way Mumbai-Delhi airfare,which cost Rs 3,000 on March 16 when purchased at least a fortnight in advance,now costs Rs 4,500 or more on most airlines,including budget carriers such as IndiGo,GoAir and SpiceJet.

Similarly,one-way fares on Delhi-Kolkata,Delhi-Bangalore and Delhi-Chennai have seen an upwards revision of almost 30-40 per cent. The fares have been hiked by a similar quantum on business class.

Industry sources said that airlines had been undercutting fares by at least 25-30 per cent,making it difficult to sustain lower fares.

What is wrong with it?, asked a senior airline executive,admitting that the airlines have hiked the fares in last two days. He said that following two successive hikes in jet fuel in the last two month,it costs nearly Rs 1,000 per passenger for an hour-long flight on a Boeing aircraft. What is the choice left with us? He denied any charges of collaboration or cartelisation.

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Crude oil has increased five times,so have staff salaries. The airport charges are likely to go up too. Domestic airlines losses have crossed billion dollars. Kingfisher is struggling and has virtually gone out of the market,which means nearly 20-22 per cent capacity is out of the market. Railway fares have picked up. There had to be a more realistic view of pricing, said KU Joshi,co-founder and COO of makemytrip.com. The last-minute economy fares are likely to shoot up to Rs 15,000 for a one-way Delhi-Mumbai ticket,he added. Another source said,It is unfortunate that they took advantage of the precarious situation Kingfisher is in,and waited to hike fares when one airline is already in a critical state. They should have done it much earlier.

The operating environment has turned ridiculous because of heavy taxation. Unfortunately,the government doesnt care about the Indian airline industry and there is extremely poor management in the airlines, Joshi added.