Delhi & Mumbai: Leading low-cost carriers (LCCs) have rejected a proposal by full service airlines asking them not to sell tickets below their cost of operations, which could have translated into an increase in fares.
The LCCs stated categorically that they would continue to sell at least 20 to 30 per cent of their tickets below cost, in a bid to expand the market.
Any hike in fares could make the LCCs lose market share to full service airlines. At present, budget carriers control 30 per cent of the market.
The LCCs said they would go in for a fare hike only if full service carriers raised their fares simultaneously, so that the price gap between the two did not go down.
Leading aviation consultant Centre for Asia Pacific Aviation (CAPA) had predicted that LCCs? market share in India would reach 70 per cent by 2010, making it one of the world's leading LCC markets in terms of total market penetration.
07/12/06 Surajeet Das Gupta & P R Sanjai/Business Standard
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Thursday, December 07, 2006
Fare hike talk divides airlines
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