Low cost carriers to see 5-7% fare hike: SpiceJet

Excerpts from Power Breakfast on CNBC-TV18 Watch the full show » RELATED NEWS Airfare hike to lead to cartelisation within industry BSE | NSE 01/01/70 Are Mutual Funds betting on ?

The low airfares people enjoyed due to the cut throat competion between the airlines may be now over. Airline companies are coming together this time to hike fares.

Speaking on the rate hikes, Siddhanta Sharma, MD and CEO of SpiceJet informs that low cost carriers may see 5-7% fare hike in November-December.

But he also states that low fares would be available if tickets are booked in advance. According to him, ATF prices have been down 16% in the past month. He mentions that there is no cartelisation among low cost carriers.

Excerpts of CNBC-TV18's exclusive interview with Siddhanta Sharma:

Q: Is it the beginning of some kind of cartelisation in your sector?

A: Beginning of rationalization of senses, I would say, no cartelisation at all. I think the fares have been under pressure because of the increased capacity in the market and that was coupled by the low season in the monsoon.

With the festive season coming now, I think some sense is prevailing and we are looking at having some sort of minimum fare below which one should not be selling. So it is not really cartelisation but making some business sense out of the whole thing.

Q: Would you also reduce the number of seats available on discount as a corollary of raising prices?

A: I think what will happen is that low fares would still be available if one books well in advance. But closer to the date of travel, the fares would tend to go up.

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