They can't be so low cost, whines Kingfisher Airlines

New Delhi: A tariff war in the Indian skies is pitting full-service carriers against low-cost airlines
with at least one player, Kingfisher Airlines, alleging that the race to the bottom would leave the industry grounded. Kingfisher has voiced its concerns to the government through informal channels against budget carriers—SpiceJet, IndiGo and GoAir—for bringing down tariffs to “unrealistic levels”, said a company executive.
Currently, a Delhi-Mumbai ticket that costs about Rs 3,500 in a full-service carrier comes around Rs 1,000 cheaper in budget airlines. “These fares would spoil the sector and leave the industry sick. We have taken the issue at every level. Besides informing the ministry of the unwarranted development, we have also discussed the issue in the Federation of Indian Airlines (FIA) meeting,” the Kingfisher official, who didn’t want to be identified, told ET.
However, the argument doesn’t wash well with no-frills players. “It’s actually the full-service airlines which have lowered fares to unrealistic levels. If they claim to be five-star or seven-star airlines of the country, I don’t know why they are selling tickets at dhaba rates,” said an official with a budget airline on conditions of anonymity.
When the fuel price reached its peak in August last year, all the airlines under FIA banner had flocked to the government for a bailout package. Domestic carriers together lost Rs 4,000 crore in 2007-08 mainly on account of high aviation turbine fuel (ATF) price, predatory pricing and excess capacity.
05/02/09 Nirbhay Kumar/Economic Times

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

Categories: kingfisher Feb 2009, Low Cost General Feb 2009