You can get air tickets at rock-bottom fares if you are not averse to taking a chance with a financially strapped airline that has been in the news for frequent schedule changes and unannounced cancellations. Kingfisher Airlines is offering fares up to 65 per cent lower than its nearest rivals, who happen to be low-cost carriers.
To stay afloat, the airline has substantially cut the number of flights it operates to 120 a day, with a fleet of 20 aircraft — 10 Airbus 320s and 10 ATRs. At its peak, it used to operate 400 flights a day, with a fleet of 64 aircaft.
The airline has temporarily suspended operations from several major cities, including Ahmedabad, Hyderabad, Kolkata and Lucknow, and asked nearly half its 7,000-odd employees to stay at home till it manages fresh funds.
Industry insiders feel cheap fares are the only option for the airline to generate cash, as it would help improve the passenger load factor. Some weeks earlier, the airline had sold its inventory to travel agents at a cost 50 per cent lower than normal.
“One cannot be sure whether Kingfisher will be able to maintain normal operations. We do not push anyone to book Kingfisher flights unless the person asks for it. Passengers will fly Kingfisher only if they’re incentivised,” said Ajay Prakash, president, Travel Agents Federation of India, which represents around half of the country’s 3,000 agents.
The airline has accumulated losses of Rs 6,000 crore and is under a debt of over Rs 7,000 crore. It recorded a loss of Rs 1,027.40 crore in 2010-11 and Rs 1,175 crore for the first three quarters of the last financial year. It owes Rs 400 crore to oil companies and Rs 300 crore to airport operators.
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However, other airlines are not worried about the fare war started by Kingfisher and term it a desperate measure.
“Starting any fare war in a market that is already discounted and making huge losses is uncalled for. But, Kingfisher is too small an airline to make an impact on industry fares, as the public perception about the airline is totally bad,” said a senior executive with an airline, who did not wish to be identified. “The industry needs a fare increase by 25 per cent to make up for the increase in cost of operations,” he said.