No-frills air fares tumble

Air Deccan cuts the fare on Delhi-B'lore sector by 30% to Rs 4,400.

The battle in the aviation sector has moved to the next plane with low-cost carrier Air Deccan cutting the peak fare on the Delhi-Bangalore sector by 30 per cent to Rs 4,400 from 6,200, and on the Mumbai-Bangalore sector by 10 per cent to Rs 2,600 from Rs 2,900.

The move is in response to the fares of Vijay Mallya's Kingfisher Airlines, which took off last month charging Rs 4,900 on the Delhi-Bangalore sector and Rs 2,900 on the Mumbai-Bangalore sector.

Significantly, Kingfisher Airlines provides meals as well as in-flight entertainment to its passengers. Deccan fliers, on the other hand, have to buy food on board.

Adding to the Air Deccan punch is a scheme that takes off tomorrow offering tickets for Re 1, although the total outgo for the passenger will be Rs 222, once the tax component is added. One thousand such tickets will be available every month, translating into 2-3 seats on every flight.

"This is a strategic move. When two low-cost carriers operate in the same market, the prices will come down considerably. India is seeing this for the first time," said Kapil Kaul, chief executive, Centre for Asia Pacific Aviation, according to which, fares will come down further on key routes where low cost carriers compete.

"It is better to offer tickets at a low price than flying with empty seats. We will have about two to three Re 1 tickets on every flight. As long as we make an average yield per passengers, we will make money,' GR Gopinath, managing director, Air Deccan, said.

Air Deccan also today announced a strategic tie-up with Hindustan Petroleum to sell tickets of the no frills airline at HP retail petrol outlets across the country. This partnership would enable the low cost carrier to expand its ticketing network to every nook and corner of the country.