THE HINDU BUSINESS LINE       Published on : Jul 09 2012
11TH JUNE, 2012 -Mumbai edition

Domestic air fares have risen "significantly" between April and May this year compared with the same period last year, senior officials of the Directorate General of Civil Aviation (DGCA) said on Saturday. The DGCA, which has come to this conclusion by looking at domestic air fares on specific days of the month, will now broad base its analysis over a longer period of time to see if any trend is discernible on the sudden spurt in fares. “There has been a spurt in fares in the last few months but they have not breached the upper levels mandated by the DGCA,” officials said. Officials indicated that the rise in air fares was largely due to Kingfisher reducing the number of aircraft that it operates. Due to financial stress, the airline has seen its fleet reduce from 64 aircraft earlier this year to 16 aircraft now. The airline is now about 100 daily flights, down from more than 400.

While the peak summer rush normally leads to an increase in demand for air travel and consequently higher fares, the sources said it was also being analysed whether the average costs for the airlines have also gone up during the period. Travel agents point out that there has been a 20-30 per cent increase in domestic air fares in the past few months. And what is compounding the situation is that air travel demand has increased 10-15 per cent year-on-year. The President, Travel Agents Association of India, Mr Iqbal Mulla, felt in the past couple of years domestic fares had gone completely haywire. “Airlines are becoming opportunistic. Neither are they doing anything good for the customer or for the industry. If the fares are unreasonably high you lose a passenger forever,” Mr Mulla said. He suggests that there should be a regulatory authority to ensure that domestic air fares are “viable for airlines and beneficial for the passengers.”


11th June, 2012 Mumbai Edition

What comes as major relief Tor the Travel Agents Association of India (TAA1), airlines have defer red the weekly payment settlement scheme for the next five months after hectic negotiations between opera tors, TAAI officials and the International Air Transport Association (IATA). According to the TAAI. the scheme will severely affect travel agents' business and if implemented, will force them to demand advance payments from their regular customers. The proposed plan included making payments to the airlines for tickets booked in a week, rather than the earlier practice of paying for the tickets booked in a fortnight.

For instance, for the tickets booked between tbe 1st and the 15th of every month, airlines sent a list of bills to agents on the 25th of the same month. Likewise for tickets booked between 16th and 10th, the payment to the airlines will have to be made by 10th of the next month. "A fortnight's time was sufficient for us to collect the payment from our regular customers. In tbe new plan, they wanted payments on a weekly basis. The industry is already reeling under severe pressure and we can't generate so much money is such a short time We are thankful airlines for agreeing to our demands," explained TAAI president Iqbal Mulla.


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