November 7, 2008

Kingfisher, Jet Airways May Reduce Fares

Mainline Indian airlines Kingfisher and Jet Airways are expected to slash ticket prices by up to INR1,000 on domestic routes by December 2008, reported The Economic Times.

The two private airlines are anticipated to reduce fares in view of the Indian government's planned bailout of the country's aviation industry and falling aviation fuel prices.

Oil companies had recently announced a 17% reduction in aviation turbine fuel (ATF) prices, with the government slashing customs duty on jet fuel by 5%, the news source reported. Both airlines have also received an extension to pay off INR20 billion in fuel arrears.

Kingfisher and Jet are both expected to reduce fuel surcharges to effect fare reductions, and are expected to announce the same by December 2008 following consultations. The airlines have also been reportedly hit by falling passenger numbers.