Cheap Tickets To Stay As Airlines Squabble Over Fare Hikes
NDTV
IndiGo controls more than 50% of the domestic market. Nine other airlines compete for the rest, giving the fast-growing low-cost carrier commanding power over fares.
Top airline bosses agreed on many things at the Wings India airshow in Hyderabad last month: taxes should be reduced and airport capacity must be ramped up. One thing they couldn't settle upon: whether unfair competition is keeping fares artificially low in what's already a brutally competitive market.
Sunil Bhaskaran, the chief executive officer of AirAsia India, was upfront. Indian aviation is suffering from "irresponsible competition" that's kept fares low despite high taxes and fuel prices, he said. Bhaskaran didn't single out who he was referring to. But the one carrier capable of making the entire market dance to its tune is IndiGo, India's largest airline.
IndiGo, operated by InterGlobe Aviation Ltd., controls more than 50% of the domestic market. Nine other airlines compete for the rest, giving the fast-growing low-cost carrier commanding power over fares. Competition is set to heat up even further, with two other airlines preparing to launch services later this year in a market where tickets are often sold below operational costs -- a situation that has led to the demise of several high-profile carriers.
IndiGo, however, is unperturbed by criticism as well as calls from smaller rival SpiceJet Ltd. for airlines to work together to increase fares, even if that results in a slight dip in bookings.