Less cash burn, cent-per-cent booking lure airlines to fly Gulf

Written by Shaheen Mansuri | Mumbai, Sep 16 | Updated: Sep 17 2007, 04:51am hrs
What makes major airlines queue up to the Directorate General of Civil Aviation to get traffic rights to the Gulf destinations The answer is simple. Less cash burn and 100% passenger load factors (PLF) on this sector. With Jet Airways getting government approval to fly on the gulf routes and the Kingfisher-Air Deccan combo is also positive on getting the permission. The very fact that a whopping 30 million Indians reside there, is reason enough for all airlines to gear up to fight it out on the Gulf sector.

Explaining why Gulf is a lucrative option, a senior Jet Airways official said, The fares for a UK bound flight from India are anything between Rs 26,000-Rs 35,000 for a nine hour journey. But in the case of destinations like Muscat, Dubai, UAE and Bahrain, the fares are Rs 10,000 onwards for a mere two hours of travel from Mumbai or Delhi. Routes between Delhi and Mumbai that are for similar durations command a price of anything between Rs 3,000-Rs 5,000 depending on the availability of seats. Naturally, Gulf poses to be a much better proposition.

Mohan Kumar consultant to Air Deccan says, Even short haul flights can be deployed on the route. Short haul aircraft means the airline has to pay lesser for landing and parking charges at the airports.

Though the government is yet to take a call on allowing private carriers (Except for Jet Airways which got permission on Thursday) to fly to the Middle East on a case-by-case basis, airlines are hopeful of flying to the sector.

Generally there is 100% occupancy on any destination in the Middle East throughout the year. In the Rs 1,200 crore Gulf market, national carrier Air India currently enjoys a market share of 40% while the rest is being served by international airline companies. Little wonder then that all domestic airlines have made a beeline for flying the sector.