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Costly jet fuel grounds first-time fliers

india Updated: Jun 17, 2008 22:14 IST
Samiran Saha
Samiran Saha
Hindustan Times
Highlight Story

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.

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.

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.