Air India relying on fare cut to woo international flyers

New Delhi: Here’s the Air India Maharaja’s strategy to negotiate turbulance. While other carriers are increasing basic fares as well as fuel surcharge to stay afloat, the national carrier is all set to slash fares on international sectors. The aim of the fare cut is to aggressively woo back passengers and improve loads.
Air India cut down basic fare on some Gulf sectors by up to 20% last week. It’s also expected to bring down fare by about 5-10% on Delhi-London and other international routes.
At a recent review meeting, civil aviation minister Praful Patel asked the carrier to get back passengers (the airline’s passenger load factor is below the industry average of 60%) and check losses. An Air India official said the carrier would adjust fares moderately as lean season had begun.
“While foreign airlines flying out of India can manage the load factor of 70-75%, we don’t think why Air India should lag behind. Though we don’t interfere in the airline’s operations, we have asked them to take measures to contain losses. They have to attract passengers to increase load and revenue,” said a civil aviation ministry official.
Air India, however, denied the move to cut airfare was related to the civil aviation ministry’s suggestion.
22/07/08 Nirbhay Kumar & Vishakha Talreja/Economic Times

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Categories: Air India - International Jul 2008, Foreign Jul 2008, NACIL Jul 2008