All's fare: Air India follows 'Jet' trail of discounts

Move comes after Jet offers 20 lakh seats at Rs 2,250-3,800

The war of discounts for a bigger chunk of Indian sky being waged by airlines since Tuesday intensified on Wednesday with national carrier Air India also joining private airlines in offering an unprecedented number of discounts on airfares.

According to information available on various travel websites, the discounts offered by Air India on one-way tickets in the economy class were higher than those offered by private airliners on many sectors.

For example, an economy class one-way ticket offered by Air India on the Delhi-Mumbai route for mid-April was priced at Rs 3,201, which was the lowest fare in comparison to other airlines. Air India’s fares on the Delhi-Chennai, Delhi-Kolkata and Delhi-Hyderabad sectors were also lower than that offered by private carriers.

The announcement from the national carrier came a day after Jet Airways put up 20 lakh seats priced at Rs 2,250-3,800 each (depending on distance travelled) till the year-end, which implied a fare reduction of more than 50 per cent in many sectors. Budget carriers IndiGo and GoAir were quick to take the cue and slash their ticket rates on several sectors.

Official sources maintained on Thursday that the low fares on offer have so far not breached the lowest rates given by the airlines to the aviation regulator DGCA.
In the case of Jet, the special economy one-way fare offer will be available till the year-end. Under four different slabs, fares up to 750 km were priced at Rs 2,250, fares for distances from 750-1,000 km were priced at Rs 2,850; 1,000-1,400 km were priced at Rs 3,300 and above 1,400 km at Rs 3,800.

Air India’s decision surprised many experts, since the airline had earlier maintained that it was not joining the fare war. Moreover, it even urged other airlines in January this year — after SpiceJet slashed fares — not to resort to such a practice as it could hit their bottomline.

Air India chairman Rohit Nandan, however, said they were watching the situation and had responded accordingly. “We are watching the situation. Air India shall respond to this depending on how the situation develops,” Nandan said at a press conference.

According to the Airport Authority of India, India is the ninth largest civil aviation market in the world and fourth by way of domestic passenger volumes with a market size of $12 billion. Annual passenger handling capacity rose two-fold from 72 million in fiscal 2006 to 143 million in fiscal 2011.