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Indian airlines hike fares in bid to stem fuel losses
Fri, Jun 20, 2008
AFP

NEW DELHI, INDIA - INDIA'S airlines, reeling from heavy losses caused by surging fuel prices and cut-throat competition, have hiked fares again in a move that could further slow passenger growth.

The airlines posted a combined loss of 938 billion dollars (S$1,280) in the fiscal year to March 2008 and the government has said the figure could double this year if oil prices remain high.

The hikes announced late Thursday were between five and 20 per cent, depending on the route and other factors.

They pushed the one-way fare on the New Delhi-Mumbai sector, India's busiest route, to around 5,000 rupees from 4,500 for low-cost carriers and to 6,000 rupees from 5,500 rupees for full service airlines.

'Oil is killing everybody,' Naresh Goyal, chairman of Jet Airways, the nation's largest domestic carrier, told the Economic Times newspaper.

The increases are the latest in a string of fare hikes.

Airlines now have raised fares six times during the past six months as they have struggled to cover rising jet fuel bills.

The airlines were already losing money as a result of fierce competition in India's skies crowded by new carriers that took off in hopes of attracting the country's newly affluent middle class.

But the surge in fuel prices pushed them further into the red. Before the latest fare increases, jet fuel accounted for nearly 50 per cent of operating costs, industry officials said. -- AFP

 

 
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