Airfares to rise as AI sheds below-cost tag

New Delhi: Get ready to shell out more for flying as cashstrapped Air India — which has been accused of charging below-cost fares in the last few months to show higher aircraft occupancy — has finally decided to do "course correction". Private domestic airlines, both full service and low-cost carriers (LCC), which were also forced to cap their fares due to market compulsions, are also likely to go for hikes in the coming days. While no airline was willing to give an estimate of the increase, industry sources said a 10%-15 % increase in basic fares was on the cards.
While the aviation ministry said it would not interfere in fares — unless airlines gang up to exploit a situation by hiking fares exorbitantly like last Diwali — it is monitoring AI's cash flow very closely. Aviation minister Vayalar Ravi has ordered a twice-daily monitoring of AI that is conducted by aviation secretary Nasim Zaidi and the new CMD Rohit Nandan.
15/09/11 Saurabh Sinha/Times of India

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Categories: Air India Sep 2011