Abu Dhabi: Air passenger traffic in the UAE has risen 34 per cent this year despite an increase in fares, said a senior official of the Abu Dhabi Travel and Tourism Agencies Committee (ATTAC).
Airlines have been forced to increase fares as the cost of jet fuel has almost doubled from last year. Airlines are paying 22 per cent more this year on an average compared with 12 per cent in 2007.
"This year has the highest recorded passenger uplift in the UAE, but due to airlines bearing various operational costs, around 70 per cent are not breaking even and are even suffering losses," said Hani Khorsheed, Secretary-General at ATTAC.
Present at the meeting was Mohammad Al Sawi, General Manager of Omeir Travel Agency, who said that airlines will soon bounce back in terms of profit-making.
Considering the rising costs, airlines are looking at various ways to maximise returns in a process called yield management (revenue management) that involves anticipating customer behaviour in order to maximise revenue or profits, such as airline seats or hotel room reservations.
"After the implementation of yield management, airlines will start to make profits and possibly break even," said Khorsheed.
According to the secretary general, about 80 per cent of airlines have an average of 12 different airline classes; it is not just about economy, business and first class anymore.
"Each seat on a plane has a price. The pricing scheme is determined by the airline. Travel agencies have no say in determining the fare."
The recently published seven per cent increase in air tickets is the result of government authorities issuing a decree stating that all airlines who opt to implement the zero per cent commission policy with travel agencies have to mark up their air fares by seven per cent. This was nine per cent before 2000.
Booking an airline ticket on the internet offers savings of five to seven per cent compared to traditional booking. But only three per cent of UAE residents and 18 per cent worldwide use the internet to book tickets.
"Passengers prefer to deal with a sales officer either over the phone or directly. That is why travel agencies have a dedicated team offering a variety of services to passengers," said Khorsheed.