Travel portals see sales drop after airline fuel surcharge hike

There has been a drop in bookings after the recent hike in fuel surcharge by prominent airlines, say major travel portals.

While MakeMytrip.com has reported a 15 per cent drop in bookings after more than a week of the hike, Cleartrip.com has seen a 5 per cent drop. Leading travel portal Yatra.com also reports an overall drop after the increase.

"We have seen a 15 per cent drop after the airlines declared the hike in fuel surcharge. But, historically, whenever there is some increase in fares, customers react like this for the first few days. Generally, they take some time to accept the fare hike," said Mohit Srivastava, head of online 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 passenger traffic," Srivastava added. He said they had clear hints from one low-cost carrier and one full service one about some coming offers which will help the bookings go up again.

"Just prior to the hike, most 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 the latest hike in fuel surcharge does not mean 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 3-5 per cent 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 from June 17 as a result of successive increase in ATF prices. State-run Air India and budget air carrier SpiceJet followed a day later, increasing their fuel surcharge by Rs 400.