Sahara, Jet May Increase Fares

Sahara Airlines and Jet Airways are considering to raise air fare by 15 to 20 per cent following hike in fuel costs over the past few months. The two airlines are likely to wait for Indian Airlines to take the lead in announcing the increase. Sahara chief general manager for sales and marketing Kapil Kaul told lContinued on Page 10 Business Standard that an increase in air tarrifs was long over due and in fact should have happened around three months back. However, on being asked when will the increase materialise, he said that Sahara will wait for Indian Airlines to take the lead in announcing air tarrifs. Indian Airlines officials however, could not be contacted. "Owing to rising fuel costs an increase of around 15 to 20 per cent air tarrifs are bound to rise sooner or later," Kaul said. Over the past few months, fuel costs have increased continuosly. Jet Airways officials when contacted said "an increase in air tarriffs is a possibility", following the rising fuel costs. But they refused to confirm that air price hikes were imminent. Significantly, these confirmations are in agreement with the conclusions arrived at by a survey conducted to arrive at the American Express airfare index. Conclusions for the Indian market arrived at on the basis of the index are that "in keeping with region wide trends, airfares in India rose substantially during the last quarter-up 6.2 per cent for business class and by 6.6 per cent in economy." "The airfare index foresees a further rise in the next quarter. Fuel costs have risen continuously for almost a year to March, and since then they have remained high. At the same time high load factors and strong demand, which is allowing airlines to increase fares, passing along their increased costs for fuel. This picture is consistent around the region." Calculation of the index has revealed "rising fuel costs,high load factors and strong demand have allowed airlines to pass on their increasing costs of fuels-resulting in an upward surge in airfares across the Asia Pacific region." The fairly comprehensive index is based on a survey of 947 published airfares.