Air India Express to offer cheaper flights to Gulf

BY A CORRESPONDENT
April 15, 2006

Air-India Express has been given permission to commence services to Kuwait by the government. The airline will offer flight tickets at a reduced fare, following the example set by Malaysian Airlines, which reduced its fares on the India-Singapore and the India-Kuala Lumpur route to Rs 6,000. The state owned low-cost subsidiary of Air India will reduce fares to under Rs.10,000 for round trip to these destinations.

A Financial Express report suggests that this may trigger off a price war in the sector, which is one of the busiest India-Gulf air routes. Comparative fares of other airlines, like Jet Airways and Singapore Airlines hover on the Rs.20,000 mark. According to an Air-India spokesperson, quoted in the report, "The fares to south-east Asian destinations are likely to be 50% less than the current fares offered by full service carriers."

Meanwhile Business Standard said that the civil aviation ministry had said that the government had formed an understanding with Kuwait to enable A-I Express to operate flights in that sector. After the Kuwait route, other routes could be opened up for the airline. Services to this sector had been reserved for Air-India in 2004 for a period of three years.

While the Malaysian Airlines fare is a promotional offer that will expire on April 15, according to SOTC (a Kuoni Travel Group company) senior vice president Frederick Divecha, the Air-India Express price reduction will push other airlines to reduce fares by at least 10%.

While low fares are expected to increase air traffic in the sector by 25%, experts also suggest, according to the report, that the Air-India Express may be a promotional offer that will increase subsequently.