Indian Airlines Slash Fares Despite Hike in Global Aviation Industry

Air travellers all over the world would higher air fares after the Organisation of Petroleum Exporting Counties, OPEC decided last month to cut output.However, this might not apply to travellers in India, as the country has the world’s fastest-growing major aviation market.

Despite harsh realities in the global aviation industry, airline cut fares in November, selling tickets about 12 per cent cheaper on average for Mumbai-New Delhi flights from a year ago, according to Yatra.com, India’s No. 2 online travel agency.

The steepest discounts were as much as 30 per cent for the world’s seventh-busiest local route, Economic Times reports.

The slashing of fares during the peak holiday travel season threatens to wipe out gains accrued from cheap oil and push some of the operators back to losses.

Carriers in China and India are expanding capacity with orders for hundreds of planes and luring passengers with discounts.

Excess capacity combined with tickets offering base fares as low as 2 cents to first-time fliers have constrained the ability of Indian carriers to translate an increase in passenger traffic to profits.

An increase in capacity coupled with the ban on old currency notes led to a short-term dip in ticket sales in November, Sharat Dhall, chief operating officer of Yatra.com, said in an e-mail. To offset that, airlines came up with promotional fares to fill seats, driving airfares to “their lowest in November,” he said.

India is one of the costliest aviation markets in the world, with provincial taxes of as much as 30 per cent. Despite more than a 20 per cent growth in passenger traffi ..