New Delhi: Air travel may soon get more expensive as jet fuel prices went up again on Wednesday – third time in a month The latest 6.7 % hike (an average of Rs 2,100 per kilolitre) means that aviation turbine fuel (ATF) has become almost 18 % more expensive in past one month. The only reason airlines are ‘studying’ the impact and not announcing a fare hike is that planes are flying just over half full at current fare levels. Any hike may make the situation even more grim for them.

ATF in Delhi will now cost Rs 31,926 per kilolitre now, up from previous Rs 29,925.9. In Mumbai, the price has gone up from Rs 30,784 to Rs 32.855. Oil companies hiked prices as international crude prices have been rising since March.

 

These hikes come after 11 successive falls in ATF prices since September last after it touched an all time high in August. Since airlines had not passed on this benefit to passengers, they are finding it difficult to hike fares now. “On top of that the load factors are very poor and as it is very few people are flying at current fares. Any hike may mean further erosion in passenger numbers. We will have to reassess the demand and supply and a reduction in capacity looks imminent,” said an airline official.

 

Domestic traffic falls by 12% in Q4

 

New Delhi: With the economic slowdown impacting both corporate and personal travel plans, domestic air traffic in the January-March quarter has fallen by 12% this year when compared to the same period last year. While in 2008, 1.13 crore people flew within the country in first three months, this time the figure has fallen to 99.82 lakh. On a month-to-month basis, March has witnessed a sharp 14% fall from 37.48 lakh flyers last year to 32.21 lakh now.

 

In fact, airlines recorded a sharp fall in load factors in March over February – the only month this year that saw decent occupancies due to low fares. But with airlines hiking fares again, flights are only booked just over half full in March. Among airlines with countrywide networks, Air India (domestic) recorded load factors of 57% with Jet and Kingfisher just over 60%. Low cost carriers like IndiGo and SpiceJet managed better occupancies of 70% and 67.5%.

 

“Personal travel is down due to people either losing jobs or facing salary cuts. As a result, leisure travel is the first expense to be cut. Companies are also cutting down travel expenses…So full service airlines are worst hit,” said an airline CEO.