Domestic air-carriers? party time seems to be over with advance airfare coming down up to 30% due to weakening demand since January 15. The average tariff has fallen across networks in spite of aviation turbine fuel (ATF) price, the key input cost of airlines, rising on recovery in the West and ongoing unrest in Egypt through which the world?s 4% liquid fuel gets transported.
?Airfares have come down in the range of 30-35% as demand has fallen since January 15. It has happened at a time when fuel price has increased 10-12%,? a senior executive of a private airline said. Jet fuel contributes nearly 35% to an airline?s total operating cost.
An Air India official said the airline?s monthly ticket revenue had come down from Rs 28 crore to Rs 25-26 crore.
The average tariff had jumped several folds starting the festive season of November and remained high till mid-January. The spot fare in December shot up to the extent that the government had to step in to rein in the carriers.
As per industry estimate, the demand during January increased just 2-3% compared to same month the previous year.
If the share price of the BSE-listed airline companies is any indication, the scrip has reflected the industry?s performance. In the last one month the share price of Jet Airways has tumbled to Rs 444.85 from its high of Rs 776.30.
Share price of another aviation company Kingfisher Airlines has fallen to Rs 39.55 from its monthly high of Rs 62.50.
The domestic air traffic had recorded its first negative growth in 2008-09 after several years of boom as a result of downturn in the world economy. It, however, bounced back beginning second quarter of 2009-10 and has continued the double-digit growth till the end of 2010.
