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Foreign airlines join hands to stop undercutting fares

Rumi Dutta

If you're flying abroad, don't expect any more discounts on air fares. International airlines have decided to stop undercutting. This means passengers will have no other option but to fork out the standard fare offered by all airlines on a particular route.

Senior executives at Emirates said, "There is now a mutual agreement among all international carriers that we will adhere to a common tariff rate on common routes with effect from April 1. However, we are not sure how long this will continue."

Led by Air-India, international airlines had ganged up against Emirates, accusing it of undercutting them. They were planning to move the Directorate General of Civil Aviation.

The Dubai-based airline, which has always maintained that it doesn't undercut other airlines, now seems to have amicably settled the issue with other carriers.

A-I has filed the new fare structure with the DGCA which has come into effect from April 1. It is normal practice for the national carrier to file the fares first - the other airlines then match them.

The return fare for the Mumbai-New York and Mumbai-London flight under the 'Pex' (purchase excursion) category is Rs 56,000 and Rs 43,500, respectively, while a return flight to Dubai costs Rs 19,140 (excluding taxes).

Leading travel agents confirmed the development on the airlines offering standard rates and said that they are currently sacrificing a maximum 4 per cent out of their 7 per cent commission to attract customers.

Senior Air-India executives said, "With the peak season approaching, the airlines have joined hands and have mutually agreed to retain fares at a particular level. But, the real test is during the lean season when the airlines offer hefty discounts to capture market share."

Moreover, under the new tariff regime, there exists little scope for undercutting - except if they offer a higher commission rate to the agent which, in turn, is passed on to the consumer.

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