Airfares have now reached an all time high with compared to what they were around six months ago thanks to increased taxes and crisis in two major airlines.
With Air India and Kingfisher Airlines curtailing operations owing to reasons of pilots strike and bankruptcy respectively, other airlines have capitalised on the shorter number of flights and have jacked up their prices. This is in addition to the 4.25 per cent service tax implemented in the recent budget that have led to airfares rising by 30 per cent compared to what they were a few months ago.
What is pertinent to note here is the fact that prices still remain high despite the holiday season getting over this May, with travel industry officials opining that the situation remaining the same for the next few months.
According to Iqbal Mulla, president of the Travel Agents Association of India (TAAI), a flight to Kolkata, which used to cost around `7,000 will now cost between `10,000 to `13,000. “Likewise, a flight to New Delhi, which cost `6,000 on an average will now cost between `10,000 to `11,000,” airfares have never been high in the country and the situation will persist for the coming months unless Air India and Kingfisher resume their regular operations. Almost 80 per cent of Kingfisher passengers have now moved to other airlines to GoAir, Indigo and Jet Airways, thereby increasing the “load factor” which essentially means the amount of passengers booked on a flight.
“The load factor of SpiceJet, Indigo and Jet airways has increased by 30 per cent. It is not as much the airlines that are increasing the prices but other factors like government taxes and rising cost of aviation turbine fuel (ATF). After the government’s option to airlines to directly import ATF, only SpiceJet has been allowed but it is still to work out certain infrastructural issues and modalities,” said Jay Bhatia of Tulsidas Khimji Holidays. ATF accounts for almost half of an airline’s operating cost with the current price after the recent hike being `65,949 per kilolitre. This is in addition to the hike in user development charges levied at Mumbai and Delhi airports for departing passengers. At Mumbai, domestic passengers will have to pay `100 while international passengers will have to pay `600 behind every ticket along with a similar increase at Delhi airport.