A-I discounts wean away IA passengers

MUMBAI, Oct 28: It turned out to be Indian Airlines' loss and Air-India's gain. While the recent 11 per cent steep fare hike by Indian Ai...

MUMBAI, Oct 28: It turned out to be Indian Airlines’ loss and Air-India’s gain. While the recent 11 per cent steep fare hike by Indian Airlines has failed to boost its bottomline, it was Air-India which has benefitted the most with bulk of domestic passengers now switching loyalties as the latter is giving a 32.5 per cent discount in night fares and 25 per cent in the day fares over IA fares.

Since the Indian Airlines’ suicidal decision to increase its fares — following intense pressure from the private airline lobby — the passenger load factor of Air-India has gone up substantially. “It would be difficult to get a seat now in Air-India’s domestic sector,” said an official.

Due to the ongoing recession and the resultant cost cutting drive, corporate and individual passengers are now preferring to fly Air-India which has launched an intense marketing drive to fill its 400-seater jumbos in the domestic sectors. “This (discounts) has helped the airline to generate revenue as these jumbos were anywaygoing empty to domestic destinations after disembarking passengers in the metro cities,” said an Air-India official. “For us, it’s a nothing-to-lose situation.”

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Indian Airlines, despite jacking up its fares, has seen its passenger load factor coming down to around 60 per cent and notched up a net loss of Rs 34 crore in the first six months of the fiscal 1999 as against a budgeted loss of Rs 20 crore. Though Air-India has also recorded losses in the same period, the airline is now showing signs of recovery while Indian Airlines is again diving into red as it failed to cut its cost effectively.

Smelling success, Air-India has now increased the timings for its night flights to woo domestic passengers. Passengers will now be able to avail of night fares on flights departing between 8 pm and 8 am instead of 11 pm and 5 am earlier.

Besides, Air-India’s wide-bodied aircraft coupled with audio-video entertainment has helped it to corner more passengers from other airlines including private airlines.Officials say that Air-India is now offering more convenient day flight to its passengers so that they can take advantage of the discounts.

However, passengers should not rejoice so early. Following lobbying by the private airlines, both carriers have set up a route rationalising committee to avoid encroaching on each other’s territory. While Indian Airlines is flying to Gulf routes, thus eating into Air-India’s traditional markets, the latter is flying in the domestic sectors.

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The route rationalising committee consisting of three board of directors was set up as the Ministry was of the opinion that both airlines should not compete instead complement each other.

Nevertheless, till New Delhi decides to kill competition again, it is the passengers which are benefitting the most due to discounts and higher standards of service.