Mon, May 19, 2003
Now In Price Contest With Private Carrier
At
issue... nothing less than an airline's survival. Sad to say, but
that's not really news these days - it's happening almost
everywhere you look. But this time, an entire nation is pitted
against a single, privately-owned airline.
India's stat-run airline, India Air, is battling Jet Airways for
control of the skies - or at least, the terminals - on the
subcontinent. Together, those two airlines dominate the air travel
market in India, carrying 90% of the country's passengers. In a
country as populated as India, that's a big market.
Of Course You Know, This Means War
"Normal growth is not happening. The total
capacity (number of aircraft) has increased in the market. So it is
a question of survival," said IA spokesman Ashok Sharma in an
article published by the Arab Press.
"This year, when we saw the economy was not
growing... because of the Iraq war... because of SARS and other
factors, we thought we needed to boost the market," said Jet
Airways chairman Naresh Goyal. So Jet Airways fired the first shot
in a crushing fare war with India Air - dropping the price of a
seat by as much as 60%. India Air quickly matched the sale and the
airlines were suddenly engaged in an all-out price war. They're
even going to the mattresses on the Internet, where they've both
started auctioning tickets at a price of just five cents to
bid.
"These special air fares can compete with second class
airconditioned train travel. We are hoping to increase the number
of air travellers," said one Jet Airways executive. Chairman Goyel
said the situation is so grave that his company has deferred on the
planned purchase of ten Embraer turbo-prop commuters."We believe in
the equipment, it's a great aircraft, but we have delayed it for at
least a year until the travel industry is on surer grounds. We will
continue looking at new small places for tourists in the
meanwhile," he said.
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