International routes could be counter productive for airlines

The meltdown on Wall Street that was brought about by the fall of investment banking firm Lehman Brothers could well prove to be an important factor that drags down international air travel.

Aviation experts are now suggesting that US and Europe-bound air traffic could take a hit because of the financial crisis that has resulted in jobs losses.

The International Air Transport Association (IATA) has said that the meltdown in the financial sector could have a wider impact than the fuel price spike that happened a few months ago, leading to negative growth in travel and directly impacting airline's revenues.

The Economic Times, in a report quoted Amadeus India managing director as saying that the collapse of US financial giants is almost bound to US-bound air travel. He said that Europe-bound traffic could also be expected fall since some of the financial institutions in that continent are also looking as though they are headed for a possible crisis. He said a number of companies in India were directly or indirectly related with these falling giants.

However, domestic airlines Jet Airways and Kingfisher airlines are not overtly worried about the fallout of the financial crisis. They say that there has not been any significant change to their operations, and they do not anticipate any impact in the near future.

The Economic Times report quoted Kingfisher Airlines executive vice president Hitesh Patel as saying that India itself is a big market, and the current financial situation in the US would not have any impact on the international operations of Kingfisher Airlines. It quoted Jet Airways vice president of marketing, Gaurang Shetty as saying that it was still to early to gauge whether the financial troubles of the US would affect traffic, but thus far, the airline has not seen any impact.

Industry sources suggest that corporate travellers make up around 65 per cent of India's tally of inbound and outbound international air traffic. They point out that higher airfares which were prompted by the spiralling costs of jet fuel have already taken their toll on leisure travel.