Hike In Air Fares: Shell Out More If You Desire To Be Up In The Air

Posted on September 9, 2012 in Business and Economy

By Shaifali Agrawal:

The hike in the prices of air tickets is what is making the news recently. After an increase in prices of petrol, diesel and gas, major Indian air carriers hiked fuel surcharge on Tuesday, the 4th of August, increasing an amount of Rs. 150 to Rs. 250 for distances less than 1000 Km and USD 15 (Rs. 825) for international tickets, following an almost eight percent increase in jet fuel prices.

Owning an airline in India seems to be one of the most profitable businesses today. Airlines have hiked the prices wherever they could. Besides, thirty to forty percent rise in fares during the past six months, higher charges for cancellation of tickets, paper ticket printouts, extra baggage and extra charges for unaccompanied minors are pinching the passengers’ pockets. Ashoka Chawala, chairman of the Competition Commission of India feels that this could be a case of cartelisation that all airlines collectively decided to impose extra charges. If this is the case, then CCI would have to investigate. Many people are of the opinion that since airline carriers have been struggling from a very a long time in order to make profit, the price hike will probably encourage them to cut costs, which would adversely affect airline safety.

Moreover, the Indian airline sector is not an exclusive industry. The price hike is going to affect other industries as well. It will impact people’s holiday plans and tourism would thus be negatively affected. According to a survey conducted by holiday planning site ‘TripAdvisor‘, sixty six percent of the thousand members polled said that they would be changing their holiday plans due to budget constraints.

If we think that competition among different airlines would reduce the fare, it might just be the opposite. The fares have gone beyond the reach of the middle class families already, but since travelling in a costly airline positively impacts a person’s social status, the competition might never be profitable to the majority of Indians. Increased taxation should be stopped if poor people need to survive. Air travel is not the only issue, but if these are not the genuine increase in prices, like the chairman of the CCI hints, some poor people who have started using air travel recently might opt out soon. It could then be true in the coming years that many flyers would gradually stop using the medium of travel and the entire air travel industry may not survive. Therefore, possible solutions in the favour of frequent flyers could be transparency in pricing of air tickets. Only then can we save this industry from dying out.