Jet Airways raises fares marginally

Jet Airways, India's biggest domestic airline, has increased some of its fares by Rs200 ($5) since last month and also cut the number of tickets it sells at a discount. Last year, the carrier was forced to sell around 60 per cent of its tickets at a discount. But the situation has eased after three airline tie-ups reduced competition.

Jet's acquisition of Sahara Airlines (now JetLite) earlier this year, the Kingfisher-Air Deccan tie-up and the merger of state-owned carriers Air India (AI) and Indian Airlines (IA) has curbed the price wars that caused fares to plunge in a market that is set to become the world's fastest growing through the next two decades.

Higher priced tickets may help the airline industry return to profit in 2008. This year, the industry expects losses of up to Rs2,000 crore ($500 million).

Jet expects to raise as much as Rs1,600 crore ($400 million) in a rights offering it plans for January, to help pay for new planes as well as to increase its capital, which will enable it to borrow more. The share sale was earlier scheduled for this month, but was delayed owing to market conditions.

The airline also made a profit from the sale and leaseback of four Boeing 737 aircraft last month.

Air travel in India will grow by an average of 7.7 per cent annually through 2025, compared with 7.2 per cent in China and 4.8 per cent globally, says commercial plane maker Airbus. This is seen from the fact that the Mumbai-New Delhi route is the world's sixth-busiest, with 742 flights a week.

India's passenger numbers rose around 18 per cent in the year ended 31 March 2007 to 86.8 million, including 60.9 million domestic passengers, according to the Civil Aviation Ministry. This comes after a 24-per cent rise in the previous year.