Overseas flights are set to get cheaper from September 2012, with strike-hit national carrier Air India set to restart its international operations after a section of pilots rejoined work.
During the agitation, airfares offered by rival airlines to important destinations such as London, Paris, Munich and flights to Toronto had risen by 25 per cent. That should now reverse, with Air India planning an aggressive pricing strategy, according to a report in The Financial Express by Parul Chhaparia.
Sources say the airline may immediately slash fares to Europe and North America. The aim, according to one Air India official, is to regain the market share lost due to the pilots’ strike. The national carrier is also looking at special offers to be promoted by the travel agents to woo passengers.
Prior to the strike, AI commanded about 19 per cent of the flights flying to and from India with popular flights to Amritsar and flights to Delhi against the market share of about 11 per cent for Emirates, its closest rivals. This has come down significantly now.
“Reducing fares is the only option with us to get back in the market that has almost been closed for over two months. The new fares would be announced as and when the flights would be added,” said an airline official, who did not want to be identified.
According to the finding of a government committee was set up to examine AI’s routes, the carrier lost Rs 1,492 crore on its international network in 2011-12. The maximum losses came from its flights to Europe and flights to Toronto where the airline lost about Rs 300 crore last year. However, the AI official said that these routes would become cash positive once the airline introduced the Boeing 787 Dreamliner on them, since it was a more fuel-efficient aircraft.
According to travel agents and analysts, airfares on international flights have gone up by 25-30 per cent, and by 70-80 per cent on domestic routes mainly due to the crises at Air India, combined with high fuel charges. For instance, flights to Delhi tickets that was available for Rs 49,000-50,000, is now being sold for Rs 64,000. Similarly, a ticket to Germany is prices at around Rs 55,000-plus, a Rs 10,000 increase from the levels seen in March.
“The time-frame for low fares and special discounts offer would depend on market response. However, lower fares cannot be an option for the long term,” the AI official said.