Calcutta is the battleground for a new Gulf war.

Airfares to Europe, the US and West Asia have declined 10 to 15 per cent ahead of the holiday season, thanks to three airlines headquartered in Dubai, Abu Dhabi and Doha competing for passengers from this part of the country.

If competitive fares are the primary weapons of war, freebies like free transfers between cities and special promotions like first-class travel for the price of a business-class ticket are luring passengers in a market where supply has outgrown demand over the past few years.

Emirates and Qatar Airways have regular flights from Calcutta to Dubai and Doha. With Etihad Airways, the second largest airline in the United Arab Emirates, joining the dogfight, the first signs of a price war came the moment holiday bookings for April and May started picking up.

Travel industry sources said an economy-class return ticket for Calcutta-London in April could be had for less than Rs 50,000. In the last two years, the average fare in this sector was between Rs 55,000 and Rs 60,000.

Fares for Calcutta-San Francisco too are lower than what travellers paid in the previous two years. A business-class return ticket in this sector is available for around Rs 1.5 lakh. The same ticket was priced upwards of Rs 2 lakh during the festival season last year, sources said.

Sources in the Gulf-based airlines said that until last year, sales promotions, in which low fares are offered for a period of time, would take place around four times a year. This year, some airlines are planning seven to eight such promotions.

'Etihad has brought down fares on several popular routes to get a foothold in the Calcutta market,' an official of another airline said.

Once the Abu Dhabi-based airline slashed fares, its two main competitors had little choice but to respond with offers of their own. 'We are offering dynamic fares and passengers are reaping the benefits,' an Etihad official said.

The airline's return fare for Calcutta-Abu Dhabi is Rs 28,000. Emirates's average return fare for Calcutta-Dubai is Rs 30,000.

Sources in Emirates said the airline hadn't reduced fares drastically because its focus was on quality and connectivity, the two most important factors for fliers.

Both Emirates and Etihad are offering free transfers to Abu Dhabi and Dubai respectively.

'The Gulf route and connections to Europe and the US are facing a challenge similar to what the Bangkok sector faced last year. There are now several players and capacity is more than demand. Fares are inevitably fluctuating,' said Anil Punjabi, chairman (east) of the Travel Agents' Federation of India.

Between 700 and 750 people travel to Dubai or Abu Dhabi from Calcutta every day, many of them en route to Europe and the US. The number of seats available daily is nearly 900 since Etihad started operating from the city.

The number of travellers does increase during the peak season but the Calcutta market is still heavily dependent on leisure and education traffic, both of which are seasonal,' Punjabi said.

Emirates used to be the only airline connecting Calcutta to West Asia for a long time following the withdrawal of British Airways, Lufthansa and direct Air India flights to Europe. Till 2011, Emirates was the only choice for passengers from the city headed for Europe and the US.

In 2009, Emirates started two flights a day for five days a week and was still filling its seats. In 2011, Qatar Airways came in with narrow-bodied aircraft having a capacity of around 150 seats.

'Since Etihad added another 150-odd seats, supply has outstripped demand and so fares have also started declining. Calcutta is not only a price-sensitive market but also has fewer business travellers flying to international destinations compared to Delhi and Mumbai,' an airline official said.

The city's international passenger traffic is only 25 to 30 per cent of Delhi and Mumbai's, which tells the story.