British Airways flightBritish Airways will compensate 2,200 people who had bought the $40 tickets between the United States and India on October 2 after the carrier had mistakenly posted the wrong fare on its website.
The airline had cancelled the bookings and offered all affected passengers a travel voucher of $300.
An official statement said British Airways, in an agreement with the US department of transportations aviation enforcement office will compensate consumers for cancellation penalties and other expenses incurred due to the carriers erroneous offer of $40 fare between the US and India.
"This agreement with British Airways will compensate passengers for losses they suffered as a result of the carriers mistaken fare offer," transportation secretary Ray LaHood said.
The lowest US-India fare being offered by British Airways prior to the mistaken ad, not including taxes, was over $750.
The $40 fare, which did not includes taxes and fees, was posted on British Airways own website at about 6.30 pm on October 2.
The carrier realised its error and removed the fare within minutes from its own website, but it remained on the websites of certain on-line travel agents for about two hours. During this time, more than 1,200 bookings were made covering approximately 2,200 passengers.
In consultation with the Aviation Enforcement Office, British Airways has now agreed to reimburse passengers for their expenses resulting from having relied on the erroneous $40 fare.
"These could include fees for cancelling flights or cancelling hotels, rental cars or other ground arrangements, as well as additional costs incurred in rebooking flights due to fare increases on previously held flights that were cancelled in order to book the $40 fare," the statement said. British Airways has also apologised to its customers who booked the $40 tickets.
Source: Rediff Business
Friday, December 4, 2009
Wednesday, December 2, 2009
Airlines are flying in a 'comfort zone'
After flying low in the initial months of this year, airlines are gradually gaining altitude as yield -- or net revenue per seat -- and demand situation improve.
This trend is reflected in the International Air Transport Association's (IATA) Airlines Financial Monitor for October-November published on Tuesday, which said in the third quarter -- July-September -- 75 major airlines turned a loss of $3.4 billion in the same quarter last year into a profit of $0.7 billion.
However, despite improved financial performance of some carriers over last year, the Geneva-based air transport body has maintained its earlier forecast for an industry of $11 billion this year.
The domestic airline industry is also upbeat about the improving market condition and expecting the next two quarters to be better than last year's.
Samyukth Sridharan, chief commercial officer (CCO) of SpiceJet Ltd, said going by the environment in the last four months, the industry was optimistic about coming months too.
"If you look at the past four months, demand is back and that there is no reason to think otherwise. "The past few months have been encouraging and we can be optimistic about the same (financial performance in the next two quarters)," he said.
M Thiagarajan, managing director of Paramount Airways, said most local carriers have performed better in the last two quarters of this year compared to the same quarters last years.And he believes they would be able maintain the good numbers in the coming two quarters too with prevailing favourable market conditions.
"All (local) Airlines are flying in the comfort zone. Last year during this time, jet fuel prices were around $140 per barrel, which was way above today's $80-85 per barrel. I don't think it will climb to last year's peak level. I expect the impact of the winter demand in the US and Europe on the aviation turbine fuel (ATF) prices to be counter balanced by the economic trouble in the Middle East," said the owner of Chennai-based all-business airline.
Thiagarajan feels a stronger rupee against US dollar is also beneficial for the airlines, whose 60% of the operational costs - lease rentals, salaries of expat pilots, aircraft maintenance, spare parts and others -- are denominated in the US currency.
But what will really push airlines into the profit zone, he said, would be the improving yields and passenger load factor (PLF), both of which were headed north.
"I see gradual improvement in yields. I would say fares are moving in the right direction and will slowly increase by 20-25% from the current levels in the coming few months. The industry needs to get to these levels of fares for sustainable profitability," he said.
Thiagarajan's airline and budget carrier IndiGo Airlines were the only domestic carriers which reported profits last fiscal. As per Centre for Asia Pacific Aviation, Indian airlines lost around Rs 9,000 crore ($2 billion) last year as demand slipped and oil prices soared in an industry plagued with overcapacity.
But last year's trend has completely reversed this year with not just the demand picking up but even the yields improving.A senior executive with low cost airline GoAir said that all travel segments - leisure and business - were doing well this year.
"This (jump in business and leisure travel), combined with higher fares promise to take us towards better financial numbers," he said.
An analyst with a local broking firm predicted that most airlines will see a surge in yields and PLF in the December quarter. Jitendra Bhargava, executive director of Air India, was less optimistic than his peers. "PLF has certainly improved but fares and yields are still low, making it very hard for us to make money," he said.
Source: Daily News & Analysis
This trend is reflected in the International Air Transport Association's (IATA) Airlines Financial Monitor for October-November published on Tuesday, which said in the third quarter -- July-September -- 75 major airlines turned a loss of $3.4 billion in the same quarter last year into a profit of $0.7 billion.
However, despite improved financial performance of some carriers over last year, the Geneva-based air transport body has maintained its earlier forecast for an industry of $11 billion this year.
The domestic airline industry is also upbeat about the improving market condition and expecting the next two quarters to be better than last year's.
Samyukth Sridharan, chief commercial officer (CCO) of SpiceJet Ltd, said going by the environment in the last four months, the industry was optimistic about coming months too.
"If you look at the past four months, demand is back and that there is no reason to think otherwise. "The past few months have been encouraging and we can be optimistic about the same (financial performance in the next two quarters)," he said.
M Thiagarajan, managing director of Paramount Airways, said most local carriers have performed better in the last two quarters of this year compared to the same quarters last years.And he believes they would be able maintain the good numbers in the coming two quarters too with prevailing favourable market conditions.
"All (local) Airlines are flying in the comfort zone. Last year during this time, jet fuel prices were around $140 per barrel, which was way above today's $80-85 per barrel. I don't think it will climb to last year's peak level. I expect the impact of the winter demand in the US and Europe on the aviation turbine fuel (ATF) prices to be counter balanced by the economic trouble in the Middle East," said the owner of Chennai-based all-business airline.
Thiagarajan feels a stronger rupee against US dollar is also beneficial for the airlines, whose 60% of the operational costs - lease rentals, salaries of expat pilots, aircraft maintenance, spare parts and others -- are denominated in the US currency.
But what will really push airlines into the profit zone, he said, would be the improving yields and passenger load factor (PLF), both of which were headed north.
"I see gradual improvement in yields. I would say fares are moving in the right direction and will slowly increase by 20-25% from the current levels in the coming few months. The industry needs to get to these levels of fares for sustainable profitability," he said.
Thiagarajan's airline and budget carrier IndiGo Airlines were the only domestic carriers which reported profits last fiscal. As per Centre for Asia Pacific Aviation, Indian airlines lost around Rs 9,000 crore ($2 billion) last year as demand slipped and oil prices soared in an industry plagued with overcapacity.
But last year's trend has completely reversed this year with not just the demand picking up but even the yields improving.A senior executive with low cost airline GoAir said that all travel segments - leisure and business - were doing well this year.
"This (jump in business and leisure travel), combined with higher fares promise to take us towards better financial numbers," he said.
An analyst with a local broking firm predicted that most airlines will see a surge in yields and PLF in the December quarter. Jitendra Bhargava, executive director of Air India, was less optimistic than his peers. "PLF has certainly improved but fares and yields are still low, making it very hard for us to make money," he said.
Source: Daily News & Analysis
Tuesday, December 1, 2009
Air travel rises, but freight demand falls
Passenger demand for air travel rose in October but freight demand continued to fall, especially in Europe, data showed on Monday, indicating the global economic recovery remains fragile. Data from the International Air Transport Association (IATA) showed passenger demand rose 0.5% on the same month a year before while freight demand fell 0.5% after a 5.4% drop in September.
“Cargo traffic is 14% above the December 2008 low point but remains 15% below the early 2008 peak,” IATA said. “European carriers saw the biggest weakness in demand with a fall of 11.3% compared to October 2008, relatively unchanged from the 13% drop in September,” it said.
Air freight, a key barometer of the strength of world trade, tends to pick up early in the economic recovery cycle when businesses start to replenish their inventories. Passenger demand was 6% better than the low point reached in March 2009, but remained 5% below the peak recorded in early 2008, IATA said.
“Stripping out seasonal fluctuations, passenger capacity has been essentially flat throughout 2009... Yields remain under severe pressure. Although there has been a modest rise in air fares since mid-year, it remains around 20 percent less expensive to fly in real terms today than it was a year ago.”
IATA represents 230 airlines including British Airways, Qantas, United Airlines, Cathay Pacific and Emirates. It forecasts the sector will lose $11 billion on a net basis this year and $4 billion in 2010.
“Cargo traffic is 14% above the December 2008 low point but remains 15% below the early 2008 peak,” IATA said. “European carriers saw the biggest weakness in demand with a fall of 11.3% compared to October 2008, relatively unchanged from the 13% drop in September,” it said.
Air freight, a key barometer of the strength of world trade, tends to pick up early in the economic recovery cycle when businesses start to replenish their inventories. Passenger demand was 6% better than the low point reached in March 2009, but remained 5% below the peak recorded in early 2008, IATA said.
“Stripping out seasonal fluctuations, passenger capacity has been essentially flat throughout 2009... Yields remain under severe pressure. Although there has been a modest rise in air fares since mid-year, it remains around 20 percent less expensive to fly in real terms today than it was a year ago.”
IATA represents 230 airlines including British Airways, Qantas, United Airlines, Cathay Pacific and Emirates. It forecasts the sector will lose $11 billion on a net basis this year and $4 billion in 2010.
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