Financial Daily from THE HINDU group of publications
Friday, Apr 14, 2006
Financial Daily from THE HINDU group of publications Friday, Apr 14, 2006 |
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Logistics
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Airlines Variety - Travel & Places Air travel: Rich returns on mofussil routes Sudhanshu Ranade
Chennai , April 13 You can fly from Mumbai to Belgaum for Rs 2,278. Yet a flight to Bangalore, 541 km farther away as the crow flies, costs only Rs 2,078. Similarly, the 364-km trip from Bangalore to Hubli sets you back one hundred rupees more than the 855-km journey between Bangalore and Mumbai. To take yet another example, the 230-km journey between Bangalore and Coimbatore costs Rs 250 more than the 291-km trip between Bangalore and Chennai. The reason why airlines can get away with charging higher fares on shorter trips to mofussil centres is simply that there is more competition on trunk routes. So on mofussil routes they are able to charge "what the traffic will bear." In short, judging by the ever increasing demand for them, mofussil services are not only cost-effective for passengers, but also generate much higher revenues per passenger per km for airlines. As shown in the last column of the table, ferrying a passenger from Bangalore to Coimbatore, Hubli and Belgaum, respectively, can earn an airline Rs 7.73, Rs 5.98 and Rs 5.92 per passenger per km. Carrying a passenger from Mumbai to Bangalore or from Kolkata to Chennai brings in only Rs 2.43. Competition also helps keep fares low on trunk routes. It is widely known, airlines vie with one another to offer large off-season discounts. However, not many people are aware that they can save money simply by opting to fly at a time when more alternatives are available. A passenger paying Rs 2,078 for Air Deccan's morning flight between Mumbai and Bangalore on the morning of April 19 could trim Rs 300 off this fare by taking the evening flight instead. Similarly, April 19 fares for Air Deccan's six daily flights between Bangalore and Chennai varied all the way from Rs 1,529 to Rs 929.
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