Airfare hike to lead to cartelisation within industry: CNBC

It's the first signs of the Indian aviation industry headed towards price cartelisation. Civil aviation sources say that airlines under the Federation of Indian Airlines are looking at increasing fares by between three and five per cent.

Th prices may be increased in a phased manner independently by the airlines. State run Indian (former Indian Airlines) has already confirmed the fare increase.Its managing director, Vishwapati Trivedi, told CNBC, "We may have to hike fares nominally."

Sources in low cost airlines like Air Deccan and Spicejet have also confirmed a nominal fare increase for the winter. The season starting December is good for the airlines as there is increased demand.

Most airlines have suffered major losses due to high fuel prices this year. And extra income would be welcome. All domestic airlines are members of the The Federation of Indian Airlines. The airline lobby was primarily formed to take up issues like government taxes and infrastructure.