Domestic air fares are set to go up by Rs 300-Rs1000. After making heavy losses in the last two years by offering incredibly low fares, domestic airlines are building consensus to increase fares from October.
Kingfisher Airlines Chairman Vijay Mallya said: “Fares are bound to go up. No investor wants to lose money anymore.”
Jeh Wadia, managing director, Go Air, said: “Now airfares will be market driven. We will be happy to improve our yield by Rs 200 a seat.”
While fuel surcharge hikes have pushed up fares by Rs 1,100 in the past year, airlines have also been levying Rs 150 as congestion surcharge and Rs 225 as airport tax.
Airline executives say fare hikes have become imperative to arrest losses, while helping them raise funds for expansion.
SpiceJet director Ajay Singh, however, said: “Even after fares go up, these will be substantially cheaper than they were two years ago.”