According to industry watchers, the increase in ticket prices for no-frills carriers like SpiceJet, IndiGo or Deccan as well as full-fledged service providers like Kingfisher or Jet, have been in the same range of around 30 per cent. “Compared to last year, there has been a 30 per cent rise in fuel costs for all airlines this year. Since fuel constitutes almost 40-50 per cent of the overall operating costs for all airlines, that’s a straight jump of 15 per cent in input costs for these airlines,” says Kapil Kaul, chief executive officer (Indian subcontinent and Middle East) at the Center for Asia Pacific Aviation.

The sharp spike in air ticket prices are likely to further slacken the pace of growth of the Indian aviation industry, which is already deep in the red and likely to face cumulative losses of $1 billion this year. In the January-March period of 2008, the domestic air passenger segment grew by just 11-12 per cent over the year-ago quarter. This is the lowest growth witnessed at any point in the last four years, which have seen some quarters showing robust growth of up to 45 per cent.

“We expect the growth to fall more in the coming few months. To deal with this capacity-demand mismatch, we are looking at giving about three of our soon-to-be-inducted aircraft on wet lease. So, our net capacity addition this year will be only three aircraft, even though we have ordered for six,” says Sridharan.

Jet’s chief executive Wolfgang Prock-Schauer had also said, “If we are not able to reduce input costs and reduce capacity, the result would be reduced growth and the financial viability will be jeopardised.”