Taking things easy

IIPM’s 36th Glorious Year of Academic Excellence

How much does the fuel price-rise affect the business?

A lot! If there is fuel price rise, we will definitely be forced to levysurcharge and the tickets will get costlier. This eventually results into a loss of business.

Is Kingfisher Airlines looking for ward to hedging the fuel in future. Oil prices have soared tremendously in the past?

Yes! We can go for hedging and are looking into the matter. But nothing has been decided yet, as no one knows which way oil price will go.

Any plans to cut flights?
Not taken any decision on it yet. But if the ATF price does not stabilise then we will for sure. Since there is fixed cost involved with every flight, if losses would increase due to fuel, we will be left with no other option but to do that.

According to you, what are the issues which need to be urgently addressed in the current scenario, when the sector is facing losses?

Rationalisation of fuel, reduction in the sales tax, modernisation of airports by investing more and route dispersal guidelines are the key ones. I think there should be no route dispersal guideline at all. There should be free routing for all and one should be allowed to add and reduce as many flights according to the needs commensurate with profits and losses. Compare with China we are no where near in terms of infrastructure.

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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