Air India, Jet Airways, Kingfisher Airlines and even budget carriers planning to raise fares by 25% in January 2010

Prominent airlines in India – including Air India, Jet Airways and Kingfisher Airlines – and even budget carriers are considering increasing the fares by as much as 25% in January 2010. The move has been prompted by a rise in air travel as well as a higher passenger load factor recently.

There has been a growth in passenger traffic since November 2009. Besides, the airlines are trying to take advantage of the peak travel season, especially for the New Year holidays.

There has been an increase by 30%, on an average, in passenger load for most airlines in India.

The passenger load factor for the aviation sector in India as a whole for the fourth quarter has been estimated at about 75% – and, in certain sectors, the passenger load factor touched 90%.

Some carriers based in India already have increased fares on some profitable routes, according to sources connected with the aviation industry.

Air India, the national airline of India, has announced that 90% of its seats in most routes have already been booked and the rest will would be sold at rates higher than the existing price bracket.

A spokesman for Jet Airways, the privately owned airline based in Mumbai, India, said there could be, on an average, an increase by 25% in fares within the next few weeks across the country.

According to Jet Airways, one of the biggest India-based airlines, a hike in fares by as much as 40% has already been implemented in sectors such as Goa.

Kingfisher Airlines, owned by Vijay Mallya, has announced that it is “actively evaluating” an increase in fares. A spokesman of Kingfisher Airlines was quoted as saying that though the airline aims at being “competitively priced,” it will, however, consider chances of improving revenues.

It has been estimated that, once the airlines raise their fares, while an air ticket for a full-service carrier on the Mumbai-Delhi route will cost Rs 9,000-Rs 14,000, the low-cost airlines will charge about 8,000 (including taxes) for a Mumbai-Delhi flight during non-peak hours.

Some low-fare airlines already have jacked up fares. A ticket for a budget carrier on the Mumbai-Kolkata route, which was available for Rs 4,000 a month ago, now costs as much as Rs 6,000.

The media quoted Ajay Prakash, general secretary of the Travel Agents Federation of India, as saying that air fares have already been hiked in some sectors, and the indications are that there will be another increase in fares by 20%. Currently, while flights are full, there is a shortage of seats, according to Ajay Prakash.

Airlines in India, like airlines elsewhere, have been keen on jacking up fares after having suffered huge losses on account cutting prices drastically to attract passengers. The exorbitant prices of oil in 2007, the various charges levied by airports which were privatized, and many passengers opting for rail travel had hit the profitability of airlines in India.