Costly jet fuel grounds first-time fliers | Latest News India - Hindustan Times
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Costly jet fuel grounds first-time fliers

Hindustan Times | BySamiran Saha, New Delhi
Jun 17, 2008 10:14 PM IST

The high-flying Indian budget air-traveler has become more down to earth, thanks to some cruel hike in airfares. Samiran Saha reports.

The high-flying Indian budget air-traveler has become more down to earth, thanks to some cruel hike in airfares. And the Indian Railways are laughing all the way to the bank.

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If industry statistics are to be believed, the number of first-time air travelers has gone down to mere 20 per cent of the total traffic in the first six months of this calendar year.

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When low-cost carriers started operation in India five years ago, the numbers had gone as high as 38-40 per cent.

With aviation turbine fuel (ATF) reaching touching all time high of Rs 69,227.08 per kilolitre this month — from Rs 45,495.84 per kl in January — airlines have been forced to re-look at their entire operating model.

An AC two-tier Delhi-Mumbai train ticket on Rajdhani Express costs Rs 1,975, while the lowest air fare is Rs 3,870. Even a few months ago, the price differentials were less than Rs 1,000.

“We are losing out on the first-time air traveller as they are choosing to travel by train,” said the top executive of a low-cost airline.

Airlines are not only revising fares, they are even eliminating flights on economically unviable routes. “We are cutting down operations short-haul and on not-so-viable routes and our break-even has also been pushed back by a year,” Siddhantha Sharma, executive chairman, SpiceJet told Hindustan Times.

Other airlines are engaged in a similar exercise. Air India’s head of corporate communications, Jitendra Bhargava, said: “We are taking a hard look at our flight schedules, with economic viability being a determining factor.” Jet Airways has already said it would put its overseas expansion plan on hold in view of the high ATF price.

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