China and India's domestic travel in strife
Monday, 6 October 2008：Air travel in China and India are facing high prices as state-controlled fuel prices have led to plummeting numbers in air traffic.
Traditional distribution channels in both countries, according to the Centre for Asia Pacific Aviation, have had serious disruptions due to the winding down of travel agent commissions to nothing.
Tightened security due to the Beijing Olympics and India’s holdup in infrastructure has also seen airlines struggling financially, where traffic downturn has led to high pressure on revenue.
Fuel price reductions would help to mitigate these problems and state-controlled suppliers have slightly helped, with China cutting the 4Q08 fuel price by 6.9% after a 39% hike in July, and Indian Oil cutting domestic fuel prices by 5.4% after a 16% cut early September.
In the short term, both countries will have increased air traffic as holiday and festival seasons commence, with Indian carriers still keeping with fuel surcharges to stay afloat.
Luo Zhuping expressed his concern for the Chinese domestic market where there was “continuous decline”, added on top of the fact that “the winter is coming and uncertain economic prospects make it difficult for domestic demand to rebound in the short term”.