Airfares in India have never been so cheap and they are likely to fall further because of increasing competition from recently launched low-cost airlines. In the last two weeks, two more low-cost airlines began services. The ultimate gainer from the fare war will be the passenger.
Launch of Kingfisher Airlines and SpiceJet in the last two weeks have already cut the Delhi-Mumbai return airfare about 38 per cent to around Rs 10,000.
"I feel a Delhi-Mumbai return ticket could stabilise in the vicinity of Rs 5,000-6,000 in future," said Kapil Kak, head of Centre for Asia Pacific Aviation.
"Good times are here but how long they will last is anybody's guess," Kak said.
Experts are of the view the low-cost regime will last if new carriers save on distribution cost (the key being ticketing, as low-cost carriers prefer online ticketing to the conventional method), operate the same aircraft type (that will help maintain low inventories), and have low turnaround time (time taken to ready the aircraft for its next destination).
"We are looking at pulling out train passengers from AC II and AC III and offer them fares that are comparable and competitive," said Mark Winders, chief operating officer, SpiceJet.
With 80,000 passengers travelling by first and second class AC against an availability of 40,000 seats a day by air, Winders feels the low-cost model will stimulate the market.
SpiceJet, the new entrant that started operations Monday on the Delhi, Ahmedabad and Mumbai sectors is offering one way fares in the range of Rs 1,699 to Rs 4,899.
SpiceJet sold 37,000 tickets within 24 hours of opening its online booking, indicating that conventional train travellers are keen to fly instead of travelling by train.
"It is not just the price, but what we offer at that price and our commitment to high quality service that will differentiate and position SpiceJet," Winders said.
