Airlines warn of hike in fares

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Shivani
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Airlines warn of hike in fares

#1 Postby Shivani » Mon Jul 01, 2013 10:00 am

The continuous slide in rupee is now going to effect the airlines industry also..almost all airlines have warned that an increase in dollar has added to their costs and now they have no other option with them instead of increasing the charges.In the time period of July-September quarter is low travel season when airlines lower charges to attract passengers, fares in the October to mid-January period would be 'adjusted' significantly upwards to make up for the falling rupee's impact.

Although the fares during July-September would not be that much low as they were last year,the fall will be limited to 10-15% instead of previous years when it was as high as 25%.And then the airlines will have to do a price hike in the next quarter i.e. October-mid January, the same can result in huge advance booking from the tourists to get the advantage of lesser prices..

The low cost Indian airlines Go-air also estimates an additional expense of Rs.30 Cr. per annum..so the impact on the big brands like Air India, Jet and IndiGo is very much predictable.Almost 70% of an airline's expenses is in dollar terms, be it salaries, leasing, aircraft and engine maintenance contracts..so this silding rupee is effecting the Airlines industry a lot..

Whats your opinion..Share your comments & suggestions..

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