International airfares may decline by Feb

New Delhi: Airfares on some international routes are likely to drop by as much as a fifth by the end of next month as the entry of Kingfisher Airlines Ltd into sectors already serviced by multiple airlines triggers new price competition between carriers early in the new year, some travel industry executives say.
Kingfisher Airlines plans to launch Mumbai-London, Mumbai-Hong Kong and Mumbai-Singapore flights in January, competing with National Aviation Co. of India Ltd-run Air India, Jet Airways (India) Ltd and several international carriers.
“The additional capacity is likely to result in lower fares on the routes which they plan to operate,” said Sydney-based Binit Somaia, regional director for the Indian subcontinent and the Middle East at the Centre for Asia Pacific Aviation.
Airlines have been battling a slump in domestic traffic amid a crisis and high aviation fuel prices that have dented profitability. Kingfisher’s new international flights will mark the end of its freeze on new overseas operations.
A Kingfisher Airlines spokesman said the carrier may announce promotions for its new flights but has no intention of offering cheap tickets. “We are definitely not going to do cheap pricing. It will be on par with the market and offer a value proposition,” the spokesman said.
In September, Kingfisher’s entry into the London sector with a flight from Bangalore led to rivals like British Airways Plc., Virgin Atlantic Airways Ltd, Air India and Jet Airways slashing fares by Rs10,000-12,000. This time, the airline has opened bookings just a month in advance in the peak season. Seat bookings on international flights typically open at least three months in advance.
Neither international nor Indian carriers have hastened to announce promotions or discounts in response to Kingfisher’s imminent entry because market dynamics are different, said Sanjeev Bhasin, assistant vice-president at travel portal Makemytrip (India) Pvt. Ltd.
10/12/08 Tarun Shukla/Livemint

To Read the News in full at Source, Click the Headline

Categories: Foreign Dec 2008, Indian Aviation- In General Dec 2008