Indian airlines should raise fares by 15%: Boeing

Indian airlines would suffer over 1 billion dollars in FY2011-12 due to high operating costs

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Cash-strapped airlines in India should raise fares by at least 15 per cent by achieve the break-even point, a senior official of Boeing said here today. 

Boeing Senior Vice-President, Sales in Asia Pacific and India, Dinesh Keskar also said airlines in India are estimated to post loss of over 1 billion dollars in the current fiscal. Stiff competition, depreciating rupee and the rising costs of fuel have impacted earnings of the Indian airlines, he added. 

"The best way [for the airlines] is to raise fares by minimum 15 per cent to hit a break-even point," he said at the Singapore Airshow. 

"Indian airlines would suffer over 1 billion dollars in FY2011-12 due to high operating costs," he added. 

Keskar pointed out that these cost elements were beyond the control of airlines. 

Airlines in India are going through turbulent times and many of them have been consistently registering losses. High fuel costs and low passenger fares are cited as the main reasons for rising operating costs. 

Air India is sitting on huge a debt of around Rs 65,000 crore. Private sector Kingfisher Airlineshas loans to the tune of over Rs 6,000 crore. 

Keskar said the present business environment for the Indian airlines would have to be corrected and the operators of this capital and cost intensive business would have to figure out how to control costs and improve revenues,

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