Indian carriers resume fare war as oil prices rise

NEW DELHI (Dec 20): Air travellers globally are bracing for higher fares after OPEC decided last month to cut output. Not in India, the world’s fastest-growing major aviation market.

Carriers cut fares in November and are selling tickets about 12% cheaper on average for Mumbai-New Delhi flights from a year ago, according to Yatra.com, India’s No. 2 online travel agency. The steepest discounts were as much as 30% for the world’s seventh-busiest local route.

The slashing of fares during the peak holiday travel season threatens to wipe out gains accrued from cheap oil and push some of the operators back to losses. Carriers in China and India are expanding capacity with orders for hundreds of planes and luring passengers with discounts. Excess capacity combined with tickets offering base fares as low as 2 cents to first-time flyers have constrained the ability of Indian carriers to translate an increase in passenger traffic to profits.

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