DAMMAM, 26 March 2003 — Airlines operating to India from Dammam have increased their fares by more than 25 percent, effective April 1.
The newly-formed Yield Improvement Group (YIG), a consortium of Saudia, Air-India, Qatar Airways, Gulf Air, Emirates and Garuda, met recently and the members decided to revise their fare structure on the Indian sectors in order to improve their revenue yield.
The airline industry in the Eastern Province has been troubled by fare wars and from time to time, airlines operating on Asian sectors have met and agreed on uniform fares, though later they themselves disregarded the agreement and resorted to undercutting.
There is a possibility the fares were increased in anticipation of a huge exodus of Indians from Kuwait if the war is a long one. Agents say that if that does not happen, there are chances that some members will breach the accord and begin undercutting.
The members of YIG say that this time they are serious in implementing the new fares and will stick to it. The war in Iraq has affected airline business and if they cannot increase revenues, they will suffer huge losses.
According to the new fare structure for all YIG members, a one-way economy ticket to Bombay or Delhi from Dammam will be SR1,075 compared to the existing SR700. Similarly, a round-trip economy ticket to the same destinations will increase to SR1,650 from the present SR1,300. To Kerala, a one-way ticket will be SR1,275 with the round trip rising to SR2,155. Many airlines will also charge an additional $10 for one-way tickets and $25 for round trips.
The YIG also agreed to a 40-kg baggage allowance for each economy class passenger. The Indian government has also decided to increase Air-India fares to international destinations by 5 percent; however, Air-India in the Eastern Province said that it would not add the extra 5 percent to the YIG fares.
Industry experts say that the present fare hike is temporary and they expect a further hike in June when the air industry will really feel the pinch of war.
“Business is already down and not many people are traveling. It appears most people have postponed their travels and as a result, our flights are very lightly booked,” said the manager of an Asian airline.
“If this continues and fares are not revised, then losses will be enormous,” he said. Airlines operating from Dammam normally increase their fares during summer which begins at the end of June. Airlines expect further fare increases at that time.