The Hindu Business Line : Kingfisher to slash fares from Jan 1

New Delhi, Dec. 28 Domestic flying could become cheaper in the New Year. On Sunday Kingfisher Airlines announced that it will “slash prices” on its route network in the New Year. The airline, as in the past, however, did not specify the quantum by which it will decrease fares.

In a statement, the airline Chairman, Mr Vijay Mallya, said that “the current low prices of aviation turbine fuel (ATF) allow the airline to pursue an opportunity to significantly increase its market share.”

Despite the announcement by Kingfisher, the other domestic airlines are yet to take a decision on reducing fares.

In Delhi ATF prices have declined by 45.2 per cent between September 1 this year and now, while in Chennai there has been a decline of 44.37 per cent during the same period. Delhi along with Mumbai is among the two busiest airports in the country.

Despite the drop in ATF prices none of the domestic airlines has reduced fares although some airlines have decreased the fuel surcharge by about Rs 400.

This is not the first time this month that Mr Mallya is making a statement on fare reduction. Earlier this month the airline had issued a statement announcing that a fare cut would be announced in the next few days, but it later went back on the decision. At that time the airline had issued a statement saying that given the losses incurred by the airline it was not the right time to decrease fares.

Then addressing the Annual General Meeting in Bangalore last Friday, Mr Mallya had said that once the Government lowers sales tax on ATF to 4 per cent from the current 26 per cent, the airline will pass on most of the saving to the customer. “We want more people to fly and would pass on most of the savings to the passenger,” Mr Mallya said at a press conference in Bangalore.