New Delhi, Jan. 8: Airlines today announced they would slash fares by 15 per cent, making early-bird economy class travel cheaper than first class air-conditioned trains.
Airline officials said fares could come down further if the government’s decision to halve excise on aviation fuel to 8 per cent is also passed on. Fuel accounts for about a third of an aircraft’s running cost and the duty cut could result in rates dropping by another 2.5 per cent.
While the Delhi-Calcutta normal economy fare has dropped from Rs 8,570 to Rs 7,480, apex fare on a ticket bought 30 days in advance has dropped to Rs 3,330 from Rs 3,800. In contrast, first class air-conditioned train fare stands at Rs 4,215.
The Calcutta-Mumbai fare has dropped from Rs 8,555 to Rs 7,465 while the apex fare dropped from Rs 4,500 to Rs 3,940, said an Indian Airlines spokesperson.
Fares to the Northeast will not be affected as they are already exempt from air travel tax. However, the cut in the aviation turbine fuel tax could translate into minor fare adjustments.
U.K. Bose, the chief executive officer of Sahara Airlines, said the cut would boost domestic air travel. “This will give a breather to the industry. The move has come after a long time,” Bose said.
A spokesman for market leader Jet Airways said the airlines would work out the precise impact on prices by tomorrow. “We would not levy the travel tax on tickets and so there will be a direct reduction in prices on this front. There will be a proportionate reduction in ticket prices due to the lowering of taxes on turbine fuel,” he said.
Indian Airlines managing director Sunil Arora said the airline would save around Rs 60 crore, which would help fleet renewals and expansion.