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Airfares set to drop this summer

By Vinay Kumar

NEW DELHI, FEB. 22. Airfares on the domestic and international sectors are likely to go down this summer as more players enter the skies. At least three new private domestic airlines — Kingfisher, Royal Airways "SpiceJet" and Wadia — are planning to begin operations in April when already established private carriers, Jet Airways and Air Sahara, are poised to start flying abroad.

For a limited period of a little over a month, SriLankan Airlines has offered a substantial 50 per cent reduction on tickets to destinations in Europe, the Far East and South East Asia. SriLankan Airlines is offering a bonanza for Indian travellers and tourists with a 50 per cent off on tickets to London, Paris, Zurich, Singapore, Bangkok, Hong Kong, Tokyo, Kuala Lumpur and Male, in addition to Colombo. The offer is valid till March 31and passengers can purchase their tickets till February 28 and fly out of India by March 31. The discount on the existing individual fare is on offer from any of the seven Indian cities — Delhi, Mumbai, Bangalore, Hyderabad, Calicut, Thiruvananthapuram and Kochi.

Kingfisher ready

With orders already placed for 10 new A-320s and three A-319s with the Airbus Industrie, Vijay Mallya's UB Group is set to launch Kingfisher Airlines on March 7. In all probability, the newest private carrier will have three 174-seater A-320s to start its domestic operations. While its fares are likely to be all-economy on the lower side, it would not opt for the no-frills, low-cost model, sources indicated.

Wadia and Royal Airways are also planning to begin their domestic operations from this summer in the low-cost segment and Air Deccan is slated to launch its services on more regional routes, making competition fiercer and fighting for grabbing a sizeable chunk of the growing market.

IA strategy

The public sector Indian Airlines is offering 16 flight coupons on its domestic network for Rs. 65,000. Industry sources say that summer schedule is likely to witness fares dropping by nearly 15 to 20 per cent in the domestic and international sectors when Jet Airways and Air Sahara begin operations to Kuala Lumpur, Singapore and the U.K.

In addition, Jet Airways has also been permitted to fly to the U.S. thrice a week. Already in a buoyant mood after its IPO was oversubscribed within minutes of opening last week, Jet Airways appears to be cashing in on the IPO boom.

After Jet Airways issue, the Minister of State for Civil Aviation, Praful Patel, said last week that Air India and Indian Airlines too would come out with IPOs over the next few months but retain their PSU tag.

In this scenario when private carriers enter the skies, capacity addition from India to the U.K., Singapore, Malaysia and the U.S. would naturally lead to a slashing of the fares in the range of 10 to 20 per cent, industry sources predict. The Civil Aviation Ministry is also looking at more liberal air service agreements with France, Hong Kong and China.

Air India too will increase its weekly flights to the U.K. and the U.S. and launch its low-cost arm, Air India Express, with services for the Gulf region.

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