Fares to the Gulf to get dirt cheap

Passengers flying to West Asia can soon see fares going down by 10 to 30 per cent as Indian domestic operators such as Jet, its low-cost carrier (LCC) Jet Lite and Air Deccan are all set to fly to this market.

"In all likelihood there will be a tug of war between airlines to garner loads and also to offer the cheapest fares. Till now, the Gulf has been a profitable route and airlines such as Air India have made money servicing this route. But, it is a price sensitive market and with Indian LCCs entering the fray, there will be intense competition and not everybody will be able to make money on the route," said Ajay Sarkar, secretary, Travel Federation of India,an association of travel companies. Airlines such as JetLite seem to have worked it out already.

Awaiting a nod to fly to Muscat, Abu-Dhabi, Dubai, Doha, Bahrain and Kuwait, the airline declares it will fly the cheapest way possible to the Gulf, using a Boeing 737 in an all-economy configuration.

"There is a sizeable number interested getting from point to point for the bare minimum fare. This is the reason why we are flying an all-economy class configuration, in the cheapest way possible," said Gary Kingshott, CEO, JetLite.

That is why JetLite will fly routes such as Calicut to Sharjah, where passengers are not looking at premium service, but cheap price.

Air India Express, which has dominated the lower-end of the West Asian market with 47 flights per week, says it is prepared to take on the challenge.

"If they fly cheap, we will fly cheaper. We have enough margins and can sustain the cost war," said Jitendra Bhargava, executive director, corporate communications, Air India.

But, there are conservationists within the airline who believe it will be difficult to sustain such optimism. Air India Express, as a thumb rule keeps fares 20 per cent lower than full schedule carriers, but till now it has not been confronted with a situation where Indian LCCs are in the fray.

"It will be difficult to fly at fares that will be even lower, as meeting operational costs will become even more difficult. It is difficult as it is now," said an Air India Express official refusing to be quoted.

Air Deccan, which planning its Gulf operations from August, meanwhile refused to talk about its strategy. "It is too early for us to comment, but we would be flying with the current configuration and existing equipment," said Ramki Sundaram, CFO and acting CEO, Deccan Aviation.

Even foreign LCCs are bracing up to handle the glut in services. Housam Raydan, spokesperson of Sharjah-based LCC, Air Arabia, which recently announced a hub in Nepal and operates 45 flights out of India to the Gulf, said, "There are other LCCs like us and Kuwait-based Jazeera Airways and the price is just one factor. We are now an established LCC and have an early mover advantage. We have built a base of loyal customers and would rather promote flying as many times as possible for the lowest fares possible."

Traffic in West Asia is growing by 30 per cent and is likely to go up further with more players getting in.