AI finds villain in slowdown as Jet fills up its planes
The national carrier Air India, which took the lead in lowering airfare by slashing fuel surcharge by Rs 400 and then cutting base fare across its network to pass on the benefits of low jet fuel prices, is yet to see passengers filling its vacant seats.india Updated: Jan 16, 2009 21:10 IST
The national carrier Air India, which took the lead in lowering airfare by slashing fuel surcharge by Rs 400 and then cutting base fare across its network to pass on the benefits of low jet fuel prices, is yet to see passengers filling its vacant seats.
Since base fares were lowered nearly three weeks back, the national carrier has not seen any improvement in load factor.
“We thought people would fly with low fares,” said Jitender Bhargava, executive director (Corporate Communications), Air India. “But that has not happened. Now we realised that high airfare was not the reason that kept people away from flying, it was economic slowdown.”
He said that one should be optimistic but the ground reality says something else. With regular passengers now buying tickets at cheaper prices, it would ultimately affect the airline’s revenue earnings.
However, Jet Airways by doing a judicious use of revenue management and offloading unsold seats at cheaper rates has seen improvement in load factor.
“In the past few months our load factor had come down and nearly 40 per cent of the seats were empty,” said Raj Shivkumar, vice president (revenue management) Jet Airways. “We lowed fares at attract passengers for a particular number of seats in every flight and it has worked for us. Load has improved in every flight and there is 10 point growth in load.”
Jet’s low-cost subsidiary JetLite has helped a lot in improving the load for the full service airline. This has become possible due to the integration of operations between the two carriers which together offer exciting fares for low-fare seekers.
Jet airways said capacity addition in the domestic sector would be flat in the next few months and with increase in traffic the industry seat load factor will trend up. However, the incremental traffic will be at lower yields.
Other airlines could not be reached for a check.