15th April 2011

On the recommendation of Civil Aviation Minister Vayalar Ravi, state-owned Air India is making fares market-friendly. According to a report in the Midday, to curb losses for the past 10 years, the fares of the state carrier have been lowered by 20-30 per cent on certain routes. 

After assuming office, Ravi had clearly said that his priority would be to bring back the glories of Air India by making it a profitable venture, and three months into the job, the wheels have been set in motion. This move comes at a time when other airlines are working out strategies to increase fares, owing to the climbing crude oil prices because of political unrest in the oil-rich Gulf. “It will not be appropriate to say that we are offering discounted fares. Rather, we have made the fares competitive, unlike before, to operate in a competitive market,” said Kamaljit Rattan, Chief Information Officer, Air India, adding that, “With the new fares, the ticket sales have surged. We are expecting a good growth in the coming days.” 

The carrier’s move has upset the plans of other airlines that wanted to hike fares to cope with the expensive fuel. A senior official from a Low Cost Carrier said, “The new Air India fares are a big challenge for us as crude oil prices have gone up. All the airlines, including us, want to increase fares to avoid losses. We had earlier thought of increasing the fare, but with AI’s move, we will now wait for sometime.” 

 Travel agencies have termed the airline’s move as competent, saying that the new fares have fuelled demand, raking in revenue for the ailing carrier. “With the new fares, the sale of Air India tickets has gone up in the past few weeks. Especially if you look at the Mumbai-Delhi sector, the fares are competing with all other airlines, on some sectors they are cheaper than those offered by others,” said Devang Sanghvi of Venus Holidays. 

Experts suggest that, apart from lowering fares, coordination with the employees will make things better for Air India, continually surrounded by complaints from dissatisfied employees and other controversies. Captain Mohan Ranganathan, an aviation expert, said, “It’s a good move. But any airline can only win the trust of passengers with better services and fares. The former is the job of employees and till date there is a lot of discrimination between them and the management. Even if the minister makes a new policy, it is the management that is going to implement it. So there is a need for good coordination between them, which is not happening.”

"travelbizmonitor"