New Delhi: Low-cost airline IndiGo’s decision last week to fly on overseas routes has not led to any tariff war. As per data, this has happened for the first time as average air fare on international sectors have in the past dropped 15-20% whenever a new player entered with promotional fares.
For instance, in 2010, JetLite reduced fares on the Delhi-Kathmandu route when rival low cost carrier SpiceJet launched its maiden overseas flight with a promotional one-way fare of R1,499 (exclusive of fuel surcharge and taxes).
Similarly, when Air Asia started its Delhi-Kuala Lumpur service last year, rival Malaysian Airlines cut fares to woo passengers.
Airfare on the Chennai-Colombo route had fallen sharply in 2004 when Jet Airways and Air Sahara (now JetLite) started flights on the route. Then, Indian Airlines had cut fares twice soon after the two players had launched their services.
23/06/11 Nirbhay Kumar/Financial Express
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