• Aviation Ministry may adopt Railways’ model to beat higher fares during festival rush

    The aviation ministry is discussing a railways-kind of model to provide relief to flyers from higher fares during festival season and long weekends and is considering allowing airlines to add more capacity for such short periods to bridge the demand-capacity mismatch.

    “The fares do get high during seasons like Christmas coming and all. For those times, we do not have capacity (aircraft) lying idle that can be used when the demand spikes. The solution could be to bring in more capacity for a brief period to tide over the fare hike. We can ask airlines that we will allow them to bring in aircraft lease for a brief period of time,” Aviation Minister Ashok Gajapathi Raju told ET.

    The model will be on the lines of Indian Railways, which launches special trains during the festive seasons to accommodate the huge increase in number of people who travel to celebrate these festivals. While the average airfares are lower, they spike during extended weekends and around the festival season, which is traditionally October to December in India.

    Raju was quick to add that ‘nothing is firmed up now but this could be a solution.’ “It’s a complicated problem and we do not have simplistic answers. If you find a simplistic answer, you will be adding to the problems.”

    Analysts believe that the idea is logical but the implementation could be tricky.

    “It’s a great idea and will surely help control the fare surge during such days of the year. I would assume that airlines would also like the idea of bringing in more capacity and getting maximum business during the surge. But the bigger question is the feasibility of such an idea. It will not be easy to ensure that extra capacity in the country gets slots at airports and also excess manpower to make it happen,” said Sharat Dhall, president at Yatra.com, India’s second largest online travel agency.

    One said wet lease of aircraft as a stop gap arrangement is not a model that is followed anywhere in the world.

    “How can you control fares by wet leasing aircraft, which itself costs three times higher than dry lease. Wet lease, as it is, is a model for country that does not have enough pilots and crew, which is not the case with us. The government should try to ensure that fuel prices are brought down, as cost of fuel is the largest component on any airline’s balance sheet,” said Mark Martin, CEO at Martin Consulting, an aviation consultancy firm.

    Raju also said that the competition helps in keeping the fares low. “Competition has ensured it (fares) to come down. What is our problem? Our problem is when the competition is minimal,” he further added.

    His assertion was seconded by an analysis of fares in the highest band offered by airlines by the Directorate General of Civil Aviation. The analysis shows that airline sell their highest fare band tickets in sectors like Delhi-Leh, Delhi-Dehradun and Chennai-Port Blair — all routes have lesser number of flights, leading to a demand-supply mismatch. Brian Dawkins Womens Jersey

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