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| Travel portals see a drop in sales after the fuel surcharge hike | | Airlines may soon come up with offers to garner traffic |
| BS Reporter / Mumbai Jun 25, 2009, 17:56 IST |
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The recent hike in fuel surcharge by prominent airlines of the country have led to a drop in bookings by about 10 to 15 per cent according to major travel portals.
While MakeMytrip.com has reported a 15 per cent drop in bookings after more than a week of the hike in fuel surcharge, Cleartrip.com has witnessed approximately 5 per cent drop in the bookings. Leading travel portal Yatra.com also reported an overall drop in the bookings after the increase in fuel surcharge.
"We have seen a 15 per cent drop after the airlines declared the hike in fuel surcharge. But the drop is been there historically. Whenever there is some increase in fares, customers react like this for the first few days. Generally the customers take some time to accept the fare hike," said Mohit Srivastava, Head of On-line sales at MakeMyTrip.com.
"Some airlines may again come up with some offers in a couple of days to draw the passengers in July and August which are considered the poor months in terms of passenger traffic," Srivastava added. He also added the information that they have received clear hints from one low cost carrier and one full service carrier about some upcoming offers which will help the bookings to go up again.
"Just prior to the hike most of the airlines were show-casing some amazing monsoon offers which had boosted the bookings by 30 to 35 per cent. But as soon as they came up with the increase in fare the bookings dampened and they came back to normal. And now we can see around 5 per cent of drop in the bookings," said Noel Swain, Vice President, Marketing Cleartrip.com.
Airline officials, however, claim that the latest hike in fuel surcharge does not mean that air fares have increased.
“If one were to compare prevailing domestic air fares with what they were in July last year, then the current fare levels are almost 25 per cent lower,” said a SpiceJet official.
"The hikes are not substantial enough to bring a huge impact on the amount of bookings. Travel agents across the country are reporting a 3 to 5 per cent of drop in bookings but it is negligible. If you look at the air fare for the same period of the previous year then the current fares are still lower. And Indian customers are resilient to all these factors.," said Rajji Rai, President of Travel Agent's Association of India.
Aviation Turbine Fuel prices have risen by 33 per cent since March.
The two major private full service carriers, Jet Airways and Kingfisher Airlines increased their fuel surcharge by Rs 400 effecting from 17 June as a result of successive increase in the prices of Aviation Turbine Fuel.
State-run carrier Air India and budget air carrier SpiceJet also followed suit by increasing their fuel surcharge by Rs 400 from 18 June, a day after Jet Airways and Kingfisher Airlines announced their decision.
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