With air fares already at an all-time high on domestic routes, airlines are likely to hold on to current fares in the January-March period, which is usually a lean season for them. Jet Airways, Kingfisher and Air India have raised fares in the region of 20% between October and December last year, as they cashed in on higher demand during the festival season.

Jet Airways, the largest private airlines in India which has a market share of 22%, does not see any immediate revision in its fares, according to a company spokesperson. An Air India official also said that the airline will maintain its competitive fare levels, although it expects a lot of corporate travel to happen.

Says Iqbal Mulla, treasurer, The Travel Agents Association Of India (TAAI), ?Fares on full service carriers on the Mumbai-Delhi sector since October 2009 are hovering between Rs 7,000-Rs 10,000 for early morning flights and ranges from Rs 5,000-7,500 for flights between 11 am-12 pm. However, the fares in August and September ranged between Rs 3,000-4,000. The fares have already peaked, it cannot go up further.?

Pradeep Lulla, president, Travel Agents Federation of India (TAFI), said, ?Until September last year, fares had gone down below a viable point. Airlines went by the demand-supply theory: the demand went down and hence the pricing was below sustainable levels. As the traffic surged nearly 30% in the October-December quarter, fares shot up and there is no scope for further hike in fares.?

He further argued that if the fares go up even 15%- 20%, passengers will shift to other modes of transport because consumer spend is price-sensitive in the country.

Explains an official from a full service carrier, ?Though ATF prices are heading southwards in the past few weeks, we cannot pass on the benefits to travellers.

?If we slash fares, we have to take into consideration factors like clearing dues with the airport authorities, oil companies and also have to manage our operating cost.?

He further added that slowly the sector is seeing a revival with airlines witnessing better loads, hence slashing fares is a distant dream. However, fares could be competitive on sectors which are not doing well. Last year, all airlines had made an announcement of reducing fares after the ATF cost went down, because travel demand had dipped almost 30%.