Fuel prices have Indian airlines rethinking expansion
Domestic airlines in India are feeling the crunch of higher fuel prices and plan to cut back on services as well as delay fleet expansions, the Times of India reported Thursday.
While most fuel prices have stayed fairly stable in India (diesel and gasoline prices have risen less than 5 percent in recent months), jet fuel costs are on the rise. That’s forcing the burgeoning air industry to cut back on services with low loads. With many of India’s international and domestic carriers jumping into the air cargo sector, that could have an impact on freight movement, particularly domestic moves.
Fleet expansions are also being put on hold, the report said, as higher operating costs are denting bottom lines and preventing up-and-coming airlines from investing in the planes they previously ordered or planned to order this year. That is having a knock-on effect at India’s airports. A scaling back of flights and fleet expansion could hamper development of two-dozen new airports and huge expansions in Mumbai and Delhi. The newspaper said that late payments from airlines to the country’s airport authority was problematic, given that the airport authority is investing billions of dollars over the next five years to upgrade facilities nationwide.
In other air cargo news, the Hindu Business Line reported that Lufthansa Cargo stopped charging a freight-handling fee on import cargo just three days after it was implemented May 21. Shippers’ complaints about the fee were enough to get the German carrier, the largest cargo airline operating in India, to abandon the surcharge.