Aviation

Airlines must stop foolish discount air fare schemes to survive Q2


DELHI
As Indian airlines struggle to make money quarter after quarter, two things are becoming clear. One, the cost environment will continue to be hostile and may even worsen on global economic woes and possible increase in fuel prices. Two, all the buzz around foreign airlines wanting to buy into remaining Indian carriers (after Etihad’s decision to purchase 24% equity in Jet Airways at a significant premium) may be just that — buzz without actually anything materializing on the ground. So fresh investment is unlikely to come into the sector in a hurry, despite a crying need for cash by most airlines.

In this scenario, it is interesting to see that airlines like Jet and even Air India are doing further disservice to the industry by launching frequent discount schemes. Not only have aircraft loads,which means number of occupied seats on a flight,  not increased substantially despite heavily discounted tickets, the very survival of Indian carriers is at stake now. So these schemes are, in effect, hurting the industry more than anticipated and could well lead to a crash one day.

Full report here Firstpost 

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