Indian airfares rose fastest in Asia-Pacific

Airfares in India registered the sharpest rise in Asia-Pacific region during the last quarter of 2003, according to the latest American Express Travel Index.

During the quarter, first class airfares from India increased 8.9 per cent and business class fares rose 7.7 per cent as compared to the third quarter of 2003. All other fares remained unchanged.

As compared to the fourth quarter of 2002, first class fare hike for the quarter was 15 per cent, business class hike was 12.1 per cent and economy and discount -economy classes was 5.6 per cent.

"The overall hikes in airfares in the Asia-Pacific region for the fourth quarter of 2003 compared with the third quarter of 2003 were between 0.1 per cent and 0.8 per cent. Fare hikes compared to the fourth quarter of 2002 were between 1.2 per cent and 5 per cent," Amex sources told Business Standard.

Other countries in the region witnessed lower airfare hikes than India.

In Malaysia, the first and business class fares increased by 4.1 per cent in comparison to the third quarter of 2003, whereas discount fares increased by 7.2 per cent from a very low base.

In Thailand, airfares remained unchanged in the fourth quarter of 2003, though year-on-year business class fares went up by 5.8 per cent and full economy fares increased by 2.2 per cent.

In Taiwan, the discount economy fares fell by 1.9 per cent and first and business class fares did not change in the last quarter.

The marginal increase in fares was because the travel industry in the Asian region received a major setback in 2003 following the outbreak of SARS, Bali Bombings and the war in Iraq. But Indian companies were not affected much by these events.

"The fare hikes are the result of growth in demand outstripping supply and indicate that the travel industry is climbing back after a tough 12 months," said Andy Aitkinhead, VP and head of operations at American Express Corporate Travel (Asia-Pacific).

The first and business class fares have increased the most in the region.

According to the index, the modest increases in economy and discount fares could partly be also because of the stiff competition faced by full service airlines from low-cost carriers.