Sunday, December 14, 2014

Vistara, Air Asia & SpiceJet likely to put downward pressure on air fares in 2015

Mumbai/New Delhi: Happy New Flying Year? More so for the corporate frequent flyer? Quite possibly. 2015 may see lower domestic fares and more metro-to-metro flights than this year. And no-frills flying, the clear winner in 2014, may yet again see some serious competition from business classplus-free meals flying options. Three New Year developments are likely to put downward pressure on air fares.

First, the Tata-Singapore Airlines-run full service carrier Vistara (fleet size 5, by March) will start operations early next year and its promised highquality full service will be in direct competition with Jet Airways (fleet size 101), which has discontinued its low-cost operations and is girding up to improve its full-service offering.

Second, low-cost carrier Air Asia (fleet size 3, expected to go up to 5 or 7 in 2015) will significantly increase its metro operations and will be taking an aim at nofrills biggie IndiGo (fleet size 85). And IndiGo itself is adding one aircraft a month to its fleet and will ramp up more once the 180 aircraft it ordered in 2011 start arriving in the last quarter of 2015.

Third, the SpiceJet (fleet size 39) story may not be over. The airline may survive and may recover at least partly from its current ignominy of having had to surrender 186 flying slots to the aviation regulator.
12/12/14 Economic Times
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