Full service carriers lose Rs 150 cr/month

Mumbai: Domestic full service carriers (FSCs) are losing in excess of Rs 150 crore per month in their bid to cope up with the slack season on one hand and compete with low cost carriers (LCCs) offering cheap fares on the other.
FSCs which have a combined market share of 62.5% have resorted to heavy discounting on their tickets, according to industry estimates.
This, coupled with high aviation turbine fuel (ATF) prices and rising staff costs, has pushed these airlines deeper into the red.
With seats capacity growing at 45% per annum, a phase of intense price competition has begun. FSCs like Jet Airways, Indian Airlines and Air Sahara are discounting upto 60-70% on most of the domestic routes to match the new entrants’ ticket prices.
ATF prices, which are up 27% in the last 12 months, and increasing staff costs on the back of shortage of trained personnel, are already exerting pressure on airlines' bottomlines, resulting in losses for all the carriers.
21/09/06 Neelasri Barman & Sagar Malviya/Financial Express

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