Indian H1N1 spread starts to cause concern

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By TESTCustomwebLP TESTCustomwebLP March 16, 2015 22:01

Indian H1N1 spread starts to cause concern

It is rare these days that a positive spin can be found to put on a story coming out of India, and alas so it is again today.

There have now been close to 30,000 confirmed cases of H1N1 (Swine flu) in India over the past weeks. Charter aircraft operators, which operate under strict rules in India, have been turning away passengers with infectious, contagious ailments for over a week now and many Indian news outlets are starting to ask why commercial airlines are not doing the same. To date, Indian commercial airlines have been falling back on the fact that there have been no directives issued by the authorities to airlines or airports for handling passengers suffering from or suspected to be suffering from H1N1, but that looks set to change if the number of cases continues to rise and public opinion starts to carry the day. Moreover airlines have a duty to protect their own staff members from H1N1, which will be the deciding factor.

In 2009 when there was a H1N1 global pandemic, there were no travel restrictions in place in India and air transits were largely unaffected. But the air travel market is now far larger. In 2009 Indian domestic business air travel saw very sharp falls during the period of the H1N1 outbreak. This coupled with the fact that at this time India is alone in having such an outbreak, will put pressure on tourist and business transits to Mumbai and other affected areas.

At the same time, as airlines move through what is traditionally a lean period for passenger traffic in India it is interesting to note that once again airlines have benchmarked airfares against Rajdhani train fares. On the key Delhi-Mumbai sector, airlines have moved again to benchmark fares against the Rajdhani AC-II fare (rail fares). Both SpiceJet and IndiGo are offering one-way economy Delhi-Mumbai tickets for around Rs3,000 against the Rajdhani AC-II fare of Rs 2,840 for those who buy their tickets15 days in advance. For 90 day plus advance bookings the fares are almost matched against those of the train company.

If we put all of that into perspective, we can argue that passenger yield for this period will be around 18% less than what it was in the last reported quarter (4Q). This move by the airlines seems to be working though since Indian domestic passenger traffic was up 21% in January year on year. We also need to remember that the lower yield per passenger might yet be offset partially by lower fuel costs as fuel prices in India are down 13.5% year on year at this time.

All Indian domestic carriers are expected to increase their prices in the next few weeks as is normal for the April period. We shall see if they move in unison as in 2015 as SpiceJet is likely to keep prices as low as it can.

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By TESTCustomwebLP TESTCustomwebLP March 16, 2015 22:01