AI surprises with a 70% fare cut

Mumbai: The national carrier and state-owned Air India has decided to cut fares by as much as 70% on 35 sectors, starting Tuesday. The massive cut in fares will take place despite a 6.7% increase in aviation turbine fuel (ATF) prices last week.
Air India’s direct competitors — Kingfisher Airlines and Jet Airways — have hiked fares by around 8% two days ago, while low-cost carrier SpiceJet said that it will increase fares in a few days. A senior Air India official confirmed the fare cuts to ET and said the company wants to increase its passenger load factor (PLF) to boost bottomlines. The load factor for domestic carriers dropped to around 65% in March from 73% in February.
“The reduced fares have no hidden conditions like being for a limited offer period. Passengers have to buy their tickets 10 days in advance through the website, travel agents or the company’s sales offices. These reductions in fares are mainly on tier-II routes connecting Mumbai and it is over and above our offer on the summer fares,” the senior official added.
For example, on the Mumbai-Hyderabad sector, Air India has brought down the one-way fare to Rs 2,694 — this is all inclusive except the User Development Fee (UDF), and is a drop of 70%. Similarly, the one-way Mumbai-Mangalore fare is now down to Rs 2,494, which is down by almost 60% from the earlier price of Rs 5,875.
On Sunday, the Kingfisher and Jet Airways combine increased fuel surcharge by Rs 200 for sectors less than 750 kms and by Rs 300 for sectors over 750 kms after oil companies raised ATF prices for the third consecutive time in a month. Jet fuel prices vary at airports depending on local taxes. The average ATF prices are now at Rs 2,066 per kl, which accounts for 40% of an airline’s costs.
21/04/09 Mithun Roy/Economic Times

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

Categories: NACIL Apr 2009