Any hopes of lower airfares, raised by the cutting of jet fuel prices by oil marketing companies, have been ruined by the Kingfisher crisis.
The private carrier, which has announced a partial lockout, has stopped taking bookings till Thursday.
According to travel companies, even though the carrier has a market share of just 3.2%, the reduced domestic capacity ? especially on metro routes like Mumbai-Delhi and Delhi-Bangalore ? will allow other carriers to cash in.
?Airfares will not go down at all. We were expecting them to remain at the same level for 2-3 weeks, but with the Kingfisher capacity out of the market, we will have to watch the situation,? Sabina Chopra, co-founder and executive vice-president (operations), of travel portal yatra.com, said.
Meanwhile, the directorate general of civil aviation (DGCA), which met Kingfisher officials on Tuesday to discuss the closure of their operations for four days, said that it would send a letter to all airlines, asking them not to take advantage of the situation.
Airfares in the domestic sector are almost at their peak. Both Kingfisher and Air India have reduced capacity in the domestic market over the last few months.
While Kingfisher has brought down the number of flights from 68 to a mere 10, the national carrier, too, is struggling to maintain operations due to staff unrest.
Domestic airlines carried 398.21 lakh passengers during January-August 2012 against 396.31 lakh during the same period of the previous year, registering a passenger traffic growth of 0.5%. Though the growth rate is slow, there has not been any major capacity addition either by domestic carriers, except IndiGo.
Domestic carriers, including Air India, Jet Airways, IndiGo and SpiceJet, have been experimenting with some discounted offers to woo passengers. Such offers were expected to increase with the ATF price cut. However, the travel companies don?t see that happening now. ?There is no reason for airlines to go for a fare cut. There is sufficient demand and lower capacity,? said an official from travel company.
Aviation turbine fuel (ATF) prices were reduced 4.33% on Monday for the first time in three months.
ATF in Delhi would now cost R70,515.97 per kl\ltr against R73,710.69 earlier. However, ATF prices are still higher compared to R61,169.08 per kl\ltr in July.