Kingfisher woes add tailwind to air fares

A partial withdrawal of flights by Kingfisher Airlines has led to a more than 100 per cent rise in spot fares on key metro routes.

Spot fares between Delhi and Mumbai went up to Rs 20,000 last evening and were over Rs 15,000 for an evening flight on Wednesday.

This, when it has normally ranged between Rs 6,500 and Rs 7,500.

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The Directorate General of Civil Aviation, taking note of the sudden withdrawal of flights, has chosen to act.

"They should inform us before going ahead with any such mass withdrawal. We will send them showcause notice asking for the reason," said DGCA director-general E K Bharat Bhusan.

Travel agents say the fares have risen primarily because of Kingfisher's partial withdrawal of flights.

It has led to demand-supply mismatch, according to Rajji Rai, former president of Travel Agents Federation of India.

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"The increase is seen in only the metro routes that mainly sees corporate travel," he adds.  Spot fares have also risen between Delhi and Bengaluru -- to over Rs 16,000.

The Mumbai and Bengaluru sector has seen spot fares going up to Rs 14,000.

MakeMyTrip.Com, while noting that a partial withdrawal of flights by one carrier has pushed up the fares to this extent, wondered about the way the civil aviation sector can be impacted if an airline completely closed its operation.

Keyur Joshi, co-founder & chief operating officer of the online travel portal said it was, however, important for airlines to earn more from last-minute or spot fares.

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DGCA's Bhusan, while commenting on rising fares, said the directorate was monitoring the fares on a daily basis.

"We will inquire into any kind of increase in fares that go beyond the monthly maximum limit," he added.

Kingfisher, which commands 20 per cent market share in terms of passenger carriage, is the second largest carrier -- after Jet Airways (26 per cent).

Out of the total 170,000 domestic seats airlines offer in a day, Kingfisher offers around 4,000 seats daily with 325 daily flights.

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Kingfisher had said it would to withdraw 32 flights a day till November 19 on the grounds that they are reconfiguring their aircraft following a decision to discontinue with their low-cost operations.

The UB Group subsidiary, which commenced operations in May 2005, has been under financial stress and has been defaulting on payments to oil companies and airports.

The airline has also delayed payment of salaries to its employees in August and September.

The carrier is the only listed airline not to have made profit in the last financial year, having ended it with a loss of Rs 1,027 crore (Rs 10.27 billion).