Air India slashes fares, says more cuts likely (Lead)

December 30th, 2008 - 7:41 pm ICT by IANS  

New Delhi, Dec 30 (IANS) State-owned operator Air India Tuesday announced fare cuts up to 82 percent in at least 20 sectors, mostly on metro routes, with a senior airline official saying there could be another round of fare cut.”As many as 20 major sectors will offer a benefit of an average reduction of 52 percent in basic fares. The new fare cut comes into effect today (Tuesday),” Air India said in a statement.

A senior airlines official told IANS the move would largely benefit passengers on metro routes, and added: “You can expect a second round of fare cut soon. Our fare cut will trigger further competition and will force other airlines to further reduce fares.”

Two private carriers, Jet Airways and Kingfisher Airlines, too, have reduced fares since Sunday.

Air India’s fare cut is the highest on the Bangalore-Chennai sector, which has seen the basic fare slashed to Rs.200 from Rs.1,100 - a cut of nearly 82 percent.

On prime routes the like Delhi-Mumbai sector, the carrier brought down the basic fare to Rs.1,675 from Rs.3,300, a reduction of 49 percent.

Similarly, the Mumbai-Bangalore basic fare is now Rs.1,200, down 52 percent from Rs.2,475 charged earlier.

The fares are exclusive of taxes as well as fuel surcharge, which is Rs.1,950 for sectors less than 750 km and Rs.2,700 for sectors above 750 km.

India’s leading private air carrier, Jet Airways, Monday reduced fares on its domestic routes by up to 40 percent with immediate effect.

In a statement, Jet said the economy class base fare will now be Rs.2,000 on its Mumbai-Delhi flight, Rs.4,065 on the Mumbai-Kolkata route, Rs.1,220 on the Bangalore-Mumbai sector, and Mumbai-Ahmedabad for as low as Rs.500.

These fares are exclusive of taxes, which average about Rs.3,500 on every economy ticket.

Another leading carrier, Kingfisher Airlines, Sunday announced fare cut from Jan 1. However, it has not announced the quantum of fare cut.

Low-cost carriers are also expected to follow suit, said an industry official. The fare cuts come in the wake of slackening demand in the post-peak season and continued decline in fuel prices.

Over the past four months, there has been a sharp decline in aviation fuel prices. While some air carriers earlier this month reduced the fuel surcharge on the ticket price by Rs.200 to Rs.400, they did not touch the base fare.

Oil companies have reduced aviation fuel prices seven times since September. The fuel is now sold at Rs.32,691.28 per kilolitre in Delhi after prices were slashed by Rs.4,208.37 in the first week of December.

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