Doubts over the rise in air fares in view of rising crude oil prices

Mumbai, Ta. 13 February 2021, Saturday

Despite the approval of up to 50 per cent increase in air fares, the airlines are unlikely to reap the benefits. The continued rise in crude oil prices will limit the benefit of the fare hike for airlines, aviation sources said.

However, the benefit of the fare hike will be available only when airlines continue to operate at 50 per cent of capacity. If this percentage is raised to 50 or 100 per cent, it will push for a reduction in fares as the number of passengers is still low.

Currently running the fourth quarter of the financial year which is usually a weak period. The average daily number of passengers landed at 7.5 lakh on the weekend of February 8, as against 6.5 lakh on the weekend of January 30.

On the other hand, the number of departures was a daily average of 311 in the week of January 30, which was a modest increase to 215 in the week of February 8. At present most of the passengers in the airline are friends or relatives, there is a huge flexibility in air fares as corporate traffic has not increased yet, the sources added.