Airfares to rise as AI sheds below-cost tag

NEW DELHI: Get ready to shell out more for flying as cash-strapped Air India – which has been accused of charging below-cost fares in the last few months to show higher aircraft occupancy – has finally decided to do “course correction”. Private domestic airlines, both full service and low-cost carriers (LCC), which were also forced to cap their fares due to market compulsions, are also likely to go for hikes in the coming days. While no airline was willing to give an estimate of the increase, industry sources said a 10%-15% increase in basic fares was on the cards.

While the aviation ministry said it would not interfere in fares – unless airlines gang up to exploit a situation by hiking fares exorbitantly like last Diwali – it is monitoring AI’s cash flow very closely. Aviation minister Vayalar Ravi has ordered a twice-daily monitoring of AI that is conducted by aviation secretary Nasim Zaidi and the new CMD Rohit Nandan.

“In the past few months, AI was offering very low fares and there has to be a correction as the airline needs a strong cash flow to survive. As oil companies have put us off the cash-and-carry list, we now have a flexibility of Rs 225 crore every month, from which we’ll pay salaries,” said a senior official.

Some fare ‘correction’ has already started happening in the last few weeks that has led a slight improvement in collections for the virtually bankrupt Maharaja. “Comparing August 2010 with same month this year, AI has carried 12,000 more passengers with revenue rising by Rs 110 crore. This 12% increase in yield is expected to strengthen with peak travel season coming and fare correction on the anvil,” said the official.

Instead of the earlier daily payment of Rs 15-16 crore to oil companies, AI is now putting Rs 7.5 crore daily in a special account to pay for oil dues every two months. AI has total dues of over Rs 2,300 crore to oil companies. “August’s basic pay to the over 30,000 employees has been dispatched and their performance-linked incentives could be paid next week,” said sources.

Working in close cooperation after a virtual cold war in the past two years, the ministry-management duo is trying to get AI’s grounded planes back in air. A substantial chunk of AI’s Airbus (A-320) fleet is on the ground due to maintenance requirements. Sources in Delhi airport said at any given time, six to seven A-320s remain grounded at IGI alone. Nandan has released some funds towards this end so that the planes can get back in air.

Source: The Times of India

Delhi, Hyd airports get top rankings of a global body

New Delhi, Feb 16 (PTI) The airports of Delhi and Hyderabad have been ranked among the top airports of the world in the airport services quality (ASQ) by the global body, Airports Council International (ACI).

While Hyderabad”s Rajiv Gandhi Airport retained the number one position for the second year in a row among 49 airports handling 5-15 million passengers per annum (mppa), Indira Gandhi International Airport came fourth in a group of 19 airports in the 25-40 mppa category.

Mumbai”s CST International Airport, run by GVK-led consortium, ranked in the 15-25 mppa category, the ACI said.

While the Indian airports ranked among the top in different categories, the ACI declared Incheon in Seoul, Changi in Singapore, airports in Hong Kong, Beijing and Shanghai Pudong as the overall top ”best airports worldwide”.

The rankings were done on the basis of a global ASQ survey by the ACI of 153 airports, including 6 Indian ones.

The survey, which gets a representative sample of flights, destinations and passenger groups served by the airport, is intended to get feedback from users on a range of service delivery parameters. ACI audits the process to ensure compliance and validates the results.

The awards will be formally presented in April at the ACI”s Asia-Pacific Regional Conference to be held here.

This was announced by P S Nair, who has been promoted as CEO (Corporate Airport Sector) of the GMR Group which leads the Delhi International Airport Limited (DIAL) consortium. Till last month, he was the DIAL CEO.

In DIAL, Nair was replaced by I P Rao while the Hyderabad airport, also run by GMR-led joint venture, now has Vikram Jaisinghani as its CEO.

Nair said the Hyderabad airport has improved on its ASQ rating which now stands at 4.51 and retained the top slot in its category consecutively for the second year.

On the IGI airport, he said the ASQ ratings improved “immensely” after the plush new Terminal-3 became operational last year.

To questions, he said a few areas on which the Delhi airport was lacking included value for money, inadequate shopping facilities and the ease of reaching the airport. “We are looking to improve these areas,” Nair said.

ACI Director General Angela Gittens said airports in the Asia Pacific “made clean sweep” in the category of ”best airports worldwide” as they did last year.

Airlines in India to set fare based on distance

Domestic airlines on Wednesday proposed to make public a range of fares for every month, with four different distance bands in place—up to 750 km; 750 to 1,000 km; 1,000 to 1,400 km and above 1,400 km. If the airlines’ proposal is accepted, the distance band will remain in these four zones, while the range of fares will keep changing every month

According to a report in The Times of India, in December 2010, the maximum economy fares on Delhi-Mumbai and Delhi-Chennai has been capped at Rs 17,000 and Rs 22,000 for low cost carriers (LCCs). For full service carriers, the maximum is Rs 25,000 and Rs 35,000, respectively. The average price is much lower if tickets are bought in advance and fares would reach their peak if purchased on the day of travel or just a day before.

Nasim Zaidi, Chief, Directorate General of Civil Aviation (DGCA) and also the Aviation Secretary, who cracked the whip on airlines as the DGCA chief last month when fares on some routes like Delhi-Mumbai shot up by 300 per cent due to massive demand supply crunch, also asked airlines to submit a route wise tariff range every month.

Zaidi said, “Airlines have filed their replies and the same are being examined.” After studying the proposals and fine tuning them and if needed to be made more consumer-friendly, the Ministry of Civil Aviation is likely to implement the new system ‘very soon’. The Ministry of Civil Aviation wants these ranges to be made public on the first of every month so that people planning air travel that month must know they are not being charged more than the maximum limit.

All Inclusive fares (In Rs)
(In Km)
Maxx LCC
Average LOC
Up to 750
EG OF CITY PAIRS: Delhi to Lucknow, Jaipur, Chd
EG: Delhi to Mumbai, Ahmedabad
Over 1,400
EG: Delhi to Chennai, Bangalore
Source: Airline, LCC: low cost carriers FSC: full service carriers, Average FSC fares expected to be in 30%-60% range, LCC avg fig for buying at least a week in advance


Cloudbursts claim 59 lives in Leh

Friday August 6th, 2010 in Travel News | 6 Comments »

At least 59 people were killed and many others went missing after heavy downpour triggered flash floods devastating Leh in the Ladakh region.

59 bodies have been recovered from the flooded areas, J and K Director General of Police Kuldeep Khoda said. Among the dead were three jawans of the Army Service Corps.

He said a massive rescue operation was underway involving the state police, paramilitary forces and the army in Leh town.

50 CRPF jawans were rescued from the flooded areas, Khoda said.The BSNL network was completely damaged, besides the runway of the Leh airport, cutting off the town from the rest of the country.

The district hospital and two buildings housing offices of the Union Home Ministry were also affected.

Five villages have been hit in the sudden downpour and flashfloods. These included Choglumsar and Shapoo. Old Leh city was among the worst affected. The main bus stand was flattened.

Leh is located at a height of 11,500 feet above sea level, 424 kilometres from Srinagar. The worst hit was Choglumsar area, 13 kms from here, where 14 bodies were recovered, officials said.

Khoda said the toll may go up. “The actual damage will be known only after the water receded,” another senior official said.

Chief Minister Omar Abdullah, while expressing grief over the tragedy, has directed the civil and police administration to undertake relief and rescue work on a war footing.

All flights from Delhi to Leh have been cancelled.