Economics News Article Review

Question

"India to act over predatory airline pricing",

By Amy Kazmin in New Delhi

India's government has warned domestic airlines that it intends to crack down on "predatory pricing" after carriers sharply increased fares on popular routes during a recent festival, as overall passenger traffic surges.Indian travelers were outraged during the recent festival of Diwali -  Hinduism's biggest gift-giving holiday - when some carriers charged about Rs25,000 ($550) for a last-minute Delhi-Bombay round trip ticket, a route on which fares usually range from Rs10,000-Rs15,000.
Fares on other popular routes also surged during the holiday period, as local airlines sought to cash in on a newly buoyant market. "This predatory pricing can't be allowed to continue," Praful Patel, the civil aviation minister, said at an industry conference in New Delhi on Thursday. "We shall try our best to bring discipline."

Mr Patel said the carriers should have a "price band" for different routes, and warned that the director general of civil aviation, the industry regulator, had "special powers" that could be invoked if airlines did not act appropriately, especially with last minute travelers. The warning comes as India's airline passenger traffic numbers are soaring after the difficulties of 2008, when carriers - which had been growing at about 25 per cent a year for several years - were hit by surging fuel prices, and plummeting passenger traffic.

From January to October, Indian airlines  carried 41.9m domestic passengers, up 18 per cent over the same period last year, and higher than the pre-crisis peak in 2007.
Dinesh Keskar, chairman of Boeing India, said passenger load factors are now about 80-82 per cent, and are likely to be even higher between now and February - the peak season for foreign travel to India. But Indians remain highly price sensitive. About 70 per cent of India's domestic air travel is on low-fare carriers such as Indigo and SpiceJet, and the low-fare arms of full-service private carriers, Jet and Kingfisher. "We are extremely cost sensitive consumers as a culture," said Samyukth Sridharan, SpiceJet's chief commercial officer. "People view aviation as efficient, point-to-point on-time travel." Kingfisher  Airlines,  India's second-largest carrier by market share, said on Thursday it had taken advantage of improving market conditions to reach a deal with lenders to restructure an estimated $1.3bn in outstanding debts. The airline - which is owned by the billionaire liquor baron Vijay Mallya - told the Bombay Stock Exchange it is converting about $445m of debt into equity. The repayment period for the remaining debt would be extended to nine years, with a two-year moratorium.
 

Summary

The article in economics deals with increase airline ticket fares during festive seasons in India. Indian airline industry has grown steadily over the past decade. And the prices have come down to an extent. But, during the festivals, the demand for air travel increases as most Indians would want to spend time with their families. This scenario has been explained well in the solution.

Total word count is 517

Download Full Solution

Comments

  • HWA
    Rasha

    this is a very good website

  • HWA
    maani

    I have 50 questions for the same test your page is showing only 28

  • HWA
    joeanne

    hi can you please help or guide me to answer my assignments. thanks

  • HWA
    joeanne

    hi can anyone help or guide me to my assignments. thanks

  • HWA
    Monik


  • HWA
    Cristina

    This solution is perfect ...thanks

  • HWA
    Janete

    Hello Allison,I love the 2nd image that you did! I also, had never heard of SumoPaint, is something that I will have to exolpre a bit! I understand completely the 52 (or so) youtube videos that you probably watched. Sometimes they have what you want, sometimes they don't! However, it is always satisfying when you are able to produce something that you have taught yourself. Great job!Debra 0 likes

  • HWA
    Sandeep

    Perfect bank of solution. 

  • HWA
    Oxana

    great !

  • HWA
    Paul Brandon-Fritzius

    thanks for the quick response. the solution looks good. :)

  • HWA
    tina Johnson

    thnx for the answer. it was perfect. just the way i wanted it. 

  • HWA
    Giuseppe

    works fine.