Thursday, February 12, 2009

Minister scolds, airline cuts back fare hike

Minister scolds, airline cuts back fare hike:
Patel's statement came as leading airlines decided to stop promotional fares to arrest losses, though flag carrier Air India said its fares will be ten per cent lower than those of Jet Airways and Kingfisher's cheapest rates.

Patel said Air India will 'never be a part of such cartelisation and will ensure that competitive pricing ensures better prices to passengers'.
I wonder how Air India can offer 10% lower fares than other airlines. But then it is owned by the Govt., so I guess it has all the money it needs. As far as my experience goes Air India has to be the worst I have been aboard. So unless Air India is eating into tax payer money, it rather offer lower fares, else I would have very little reason to board their aircraft.
Jet Airways announced 30-day apex fares on key domestic routes after Patel made his displeasure over airlines hiking fares clear.
On what basis does Patel know what the correct fares are? Also, from what I know the biggest part of cheap tickets is the airline tax. Maybe Patel should cut the tax a bit!

Also, the Govt.-industry nexus sucks in India. The industry wilts very easily under Govt. pressure and I think that is because of the favors exchanged between the two. Setting up anything, not just an airline but lesser business enterprises would need greasing the palms of the government and of course greasing will continue as long as the enterprise. I am especially skeptical of the big business families in India who very often are seen sucking up to politicians. They keep the Govt. happy and at least till very recently and I guess even now to a great extent the Govt. protects them from any external competition.
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