After Jet, will other airlines cut fares?

Thursday, February 12, 2009 at 11:02 am under India News After Jet, will other airlines cut fares?

Two major domestic airlines on Wednesday (February 11) rolled back the fare hikes after Civil Aviation Minister warned the carriers against acting like a cartel to jack up tariffs.

“Our Ministry is against any cartelisation among airlines. We will keep a watch and take strict action in any such case,” Patel said in New Delhi.

His comments follows major carriers’ decision to stop promotional advance purchase or APEX fares to arrest losses, though Air India said its fares will be 10 per cent lower than the cheapest rates of Jet Airways and Kingfisher.

Soon after Patel’s warning, the Directorate General of Civil Aviation stated that a probe will be conducted into this issue and wrote to all the airlines asking for details on the recent fare hike.

The Aviation Ministry had managed to corner substantial benefits for airlines when they suffered massively due to steep oil prices from April to August last year. When oil prices started falling sharply from August, the government began reminding the industry that no more concessions could be made unless the benefits were passed on to passengers. At this point, Patel asked airlines to lower fares which they did from January 1 but went on to revoke it just 40 days later.

Meanwhile adhereing to what the Civil Aviation Minister said, Go Air issued a statement saying: “We have decided to revert to the ever so familiar and simple option of buy early – pay less. So, for example travellers booking in advance of 30+ days, will avail of a zero base fare.”

Kingfisher Airlines, on the other hand, was not happy with bringing down the air fares. They stated increased airport charges and high government taxation as reasons for the fare hike. Authorities went on to say that under such circumstances, the expectation of low airfares is unfair.

Following aviation minister’s comment, Jet Airways and its budget arm, JetLite, said they were offering 30-day apex fares at Rs 300 and Re 1, respectively. The apex fares were available on nine key domestic sectors of both Jet Airways and JetLite and valid till April 30, a Jet Airways press release said.

Some of the Jet Airways sectors where these fares are applicable include Mumbai-Ahmedabad, Mumbai-Goa, Delhi-Srinagar and Hyderabad-Indore, the release said. Similarly, Jetlite now offers Re 1 fare on sectors such as Mumbai-Delhi, Mumbai-Hyderabad, Kolkata-Delhi, and Delhi-Hyderabad, the company said.

( This post is from an independent writer. The opinions and views expressed herein are those of the author and are not endorsed by APakistanNews.Com.)

Written by: Sajid Manzoor

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