Air fares set to rise, airlines say can't help it

New Delhi: Major airlines have increased their base fares, saying the market had forced them to withdraw concessions.

Air India, Jet Airways and Kingfisher Airlines have decided to stop the low-fare advance purchase (APEX) schemes, saying the airfares would now be decided by the market.

However, the regular fares and the fuel surcharge are not being touched, spokespersons of these airlines said.

Air India, which sold the lowest-priced ticket at Rs 89 on certain sectors, is now selling them at a base fare Rs 486, plus taxes and fuel surcharge. Sources said some tinkering was being done on the lower class economy fares and "some revision" was being effected.

A Jet Airways spokesman said the airline "adjusts fares on a regular basis depending on the market conditions. Recently, the fares have been adjusted on certain sectors and fare buckets. The effected changes are a day-to-day practice in the revenue management of the airline".

The full fare on both economy and business classes as well as the fuel surcharge was not being changed, he said.

Maintaining that Kingfisher Airlines followed a "dynamic" pricing policy, its spokesperson said, "We confirm that on flights that can sustain higher revenue, we have closed low fare buckets and are concentrating on selling higher fare buckets."

He said the focus of the premier carrier was on earned revenue and not seat factor.

Industry sources said the decision to withdraw lower-level fares was taken as these did not stimulate demand and also in anticipation of a spurt in demand for summer holiday travel.

The increase in airfares was being anticipated by some airlines, the industry sources said, adding that most of the Indian carriers were opposing the "under-cutting" of each other by substantially lowering the base fares.

Sources in SpiceJet and IndiGo said that fares were likely to stabilise in the low Rs 3,000 range from the current Rs 2,000 levels, though it was difficult to say whether they will go up 20-30 per cent because of competitive pressure.

Officials of other low-fare carriers, requesting anonymity, said they were also looking at revising the lowest level of fares, but would not go beyond the lowest of the full-frill ones.