Airfares in India unaffected by rising fuel prices

Rising fuel prices have not impacted airfares in India as the prices of tickets have remained unchanged in the fourth quarter of the current year.

Even on an annual basis, airfares in India were flat except for a 1 per cent increase in the full-economy and discount-economy class fares. This was revealed by the latest American Express Airfare Index for the Asia-Pacific Region.

Compared to this, airfares on many routes in the region, particularly those of Australia, Malaysia, Singapore and Thailand, have shown an increase.

Business class and full-economy airfares and, to a lesser extent, first-class airfares, have continued to increase at a more rapid rate in recent quarters, compared with discounted-economy and non-refundable excursion airfares.

According to Robert Tedesco, head of consulting services, (Japan, Asia-Pacific, Australia), American Express: "The fourth quarter 2004 American Express Asia Pacific Index results show that high oil prices continue to be a major factor in the upward pressure on airfares. Oil prices traded in the range of $50-55 per barrel for most of October, 2004, and were still just below $50 per barrel in early November 2004."

"Airlines partly, though not entirely, reduce their exposure to rising fuel costs by hedging and through long-term contracts. Even so, many airlines in the region have announced temporary fuel surcharges in recent months, while some have incorporated higher fuel costs into their airfares," Tedesco added.

Airfares from Malaysia posted the highest increase this quarter, rising by over 4 per cent. Full-economy airfare from Australia increased by nearly 3 per cent, while business-class airfares increased by 2.4 per cent. Airfares from Thailand also went up by 3.6 per cent and 3.5 per cent for the first-class and business-class, respectively.

In the case of Pakistan, the first, business, full-and discount-economy airfare indices fell by 0.4 per cent, in the fourth quarter of 2004.

However, on a year-on-year basis, first-class, business-class and full-economy airfares in Pakistan increased by 1 per cent; and discount-economy increased by 0.3 per cent.