Ia Board Clears Minimum Fare Increase Of 10%

The Indian Airlines (IA) board has approved a minimum fare increase of 10 per cent from October 1, 1997. The fare hike is expected to fetch the airline an additional Rs 200 crore per year.

If the government increases the prices of petroleum products or the airlines other input costs rise dramatically, IA will further increase its fares proportionately.

The national carrier had last hiked its fares by 16.3 per cent in September 1996, earning an additional annual yield of Rs 250 crore.

In the past three years, the airline has increased its fares thrice. Fares were increased by 15 per cent in July 1994, fetching the airline an additional annual amount of Rs 180 crore. In October 1995, the airline again raised fares by 20 per cent, gaining around Rs 200 crore per year in the process.

IA has attributed the periodic increase in fares to hikes in aviation turbine fuel prices, mounting engine costs, and a steep rise in its salary bills after it signed new agreements with different unions, including the Indian Commercial Pilots Association.

The board also approved the 1997-98 budget estimates, which see IAs operating profit at Rs 314.3 crore. The airline is expected to make a net profit of Rs 95.3 crore compared with a net loss of Rs 24.45 crore in 1996-97.

The operating revenue has been estimated at Rs 3,258.5 crore compared with the revised estimate of 2,782.25 crore for 1996-97. Operating expenses have been pegged at 2,944.2 crore compared with the revised estimate of Rs 2,651.7 crore, while the operating profit has been projected at Rs 314.3 crore compared with the revised estimate of Rs 130.55 crore.

The budget estimate for total revenue is Rs 3,264.5 crore, an increase of 14.6 per cent over the revised estimate of Rs 2,849.25 crore for 1996-97. Total expenses have been projected at Rs 3,169.2 crore, compared with Rs 2,873.7 crore.

The airline expects to increase its passenger load factor from 69.8 per cent in 1996-97 to 70.6 per cent in 1997-98, while the overall load factor has been projected to increase from 65.2 per cent to 65.8 per cent over the same period. IA has also projected a 1.1 per cent increase in the number of passengers carried, from 7.085 million to 7.165 million.