Zero Basic fares are back

MUMBAI: The days of zero fare are back again. An online search for a Mumbai-Delhi ticket for a Saturday evening flight showed a GoAir ticket for Rs
0, basic fare, that is. But the total cost of the air ticket with taxes and fuel surcharge included works out to Rs 3,112, which, though, is not as low as what the Mumbai-Delhi fares were two-three years ago. In December 2007, for instance, when the aviation turbine fuel price was much higher than what it is today, a Mumbai-Delhi cheap fare was priced at Rs 1,850. "The fuel surcharge component has remained unchanged at about Rs 2,700 (for Mumbai-Delhi), and so despite the Rs 0 basic fare, the total cost of a ticket does not fall below Rs 2,900 these days,'' says a travel agent.

There is no dearth of these Rs 0 fares as they were available for even the 6 am and 8 pm Saturday flights. But what is noteworthy is that low-cost airlines like GoAir have now moved the dirt cheap basic fares from the advance booking bucket and put them into the last-minute category. Other airlines, though, have stuck to the resolve of rewarding the early birds, like the 21-day advance purchaser.
"Air tickets to destinations like Delhi, Goa, Kolkata, Bangalore among others start at a very low base fare for January 22. IndiGo, for instance, has a Rs 0 base fare for Mumbai-Bangalore, Mumbai-Delhi and other destinations. SpiceJet is offering air fares for Re 1 (Rs 99 in some cases). Kingfisher Red and JetLite have slashed it down to Rs 9, basic fare. The full-fare carriers like Kingfisher and Jet Airways, on the other hand, have a Rs 200 base fare offer (total fare is Rs 3,484), while Air India is selling at Rs 300,'' he added.

Vijay Mallya, chairman and CEO of Kingfisher Airlines, in a statement last week said: "Kingfisher Airlines has slashed air fares between 21% and 65% on various routes across its network with effect from January 1. This is consistent with Kingfisher Airlines' mission to aggressively pursue an increase in market share.'' Mallya said that the declining prices of ATF facilitate such consumer-benefiting initiatives that will also stimulate the industry. "We will aggressively pursue sales and share and this will help sustain increased load factors in the shoulder season between February and April,'' Mallya added.

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Bonanza: Airlines drop fares.

CHENNAI: This is the perfect New Year gift for frequent fliers, more so for those who shunned airports and headed to railway stations to take the Shatabdis and Rajdhanis.
On Friday, discount or low-cost carriers announced that they were dropping their base fares' to as low as Re 1 and Rs 99 while full service providers have lowered fares to Rs 250. However, as a flier you need to still cough up around Rs 2,700 a ticket as fuel surcharge and a couple of hundred rupees as taxes.
Vijay Mallya-promoted Kingfisher Airlines on Friday announced an up to 65% cut in domestic fares, while other airlines, including IndiGo and Jet, announced fresh concessions. Announcing the cut in the range of 21% to 65%, Kingfisher said the new tariff was effective from January 1.

IndiGo announced the introduction of Re 1 to Rs 99 base fares on a majority of its sectors with immediate effect. "In line with the reduction in ATF prices, the airline was passing on the benefit to its passengers," it said in a statement.
The base fares are available for tickets booked at least 21 days prior to the travel date. For IndiGo, the base fare now is Re 1 while JetLite charges Rs 9 and SpiceJet Rs 99, while Kingfisher and Jet charge Rs 250.
The fare for a Kingfisher flight between Chennai and Mumbai for February-end travel is Rs 250 plus taxes, which works out to a total of Rs 3,325. If you choose a Chennai-Pune flight for February 20, you would have to pay Rs 3,024 net on SpiceJet. For a Chennai Kolkata flight on IndiGo for mid-February, you will end up paying Rs 2,926 one way.
On international routes too, fares have crashed with Jet Airways announcing a host of offers. Mumbai-Singapore return fare in the premiere class is available for two persons for Rs 1,01,250.
Similarly, a companion free offer with a return premiere ticket worth Rs 94,500 is available on the Mumbai-Hong Kong sector. Similar offers are available in the Chennai_Kuala Lumpur sector too. Customers travelling between India and London can avail return premiere ticket of Rs 85,000. This is a 14-day advance purchase tariff. Economy class fares on the same routes are available for Rs 15,990, while the fare for New York return would be Rs 32,600 plus taxes.

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Airlines eye short haul flyers

NEW DELHI: Getting shorthaul passengers back in planes from Shatabdis and deluxe coaches seems to be the clear aim for airlines as they finally
start cutting their exorbitant fares. While Kingfisher and Air India (domestic) are yet to announce cuts, Jet's lower fares that have come into effect from Monday are clearly indicative of this. Shorthaul routes where people have attractive surface transport options have seen the maximum cut.

Most long metro routes have seen a cut of Rs 250 as trains. The popular Delhi-Mumbai route will now have a lowest total fare slab of Rs 5,075, just Rs 250 down from the previous low of Rs 5,325. The Delhi-Bangalore route has also witnessed a similar cut. But closeby metros like Mumbai-Bangalore will see its lowest slab falling by over Rs 500.


So short sectors are the ones to get the best farecuts. For instance, Jet's fares for Delhi-Udaipur sector will now begin at the lowest slab of Rs 2,825, Rs 1,750 down from the earlier Rs 4,575. Similarly, the basic fare on Mumbai-Ahmedabad will now start from Rs 500 which will be in addition to a taxes and surcharge of Rs 2,325. However, these are the lowest slabs of fares that would keep rising as a flight gets sold out.

Since this cut in basic fare comes within a month of all airlines cutting fuel surcharge by Rs 400, the overall fares have fallen anywhere from 4% to 20%. AI (domestic) that's yet to announce its farecut does not levy the congestion charge of Rs 150 unlike Jet and Kingfisher that do. LCCs like IndiGo and SpiceJet also don't levy the congestion charge and are working on attractive fares.

"With the introduction of these special fares now lower by up to 40%, Jet customers will have one more reason to fly and experience its world-class service, commencing this holiday season," said a statement issued by the company.

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Deferred tax liability lowers Kingfisher’s loss

MUMBAI: Kingfisher Airlines has seen a decline in its losses for fiscal 2007-08, thanks to the deferred tax liability of over Rs 600 crore,
according to the company’s annual report.
The report, which was presented at the UB Holdings annual general meeting in Bangalore on December 26, says the deferred tax liability enabled the Vijay Mallya-owned Kingfisher Airlines to reduce its losses in FY2008.


Kingfisher, a subsidiary of UB Holdings, suffered a loss of Rs 1,013 crore, but deferred tax - an entitlement of Rs 604 crore arising from the merger of low-fare carrier Deccan Airways - brought this figure down to Rs 408 crore. The total revenues were pegged at Rs 2,751.4 crore.
The deferred tax was a result of the unabsorbed losses and depreciation incurred by the commercial airline division, which was transferred to Deccan Aviation, the earlier avatar of Kingfisher Airlines. The management of Kingfisher Airlines is certain about future profits, against which the deferred tax assets can be realised. The chairman Vijay Mallya recently stated that the airline will break even in 2009.
Subhash Gupte, vice-chairman, UB group and director of the airlines, said the losses resulted from soaring fuel and high sales taxes, with states levying anywhere between 34% and 40%.
Kingfisher’s competitor, Jet Airways, reported a loss of Rs 653 crore for fiscal 2007-08. The country’s aviation industry posted combined losses of Rs 8,000 crore during the same period as unprecedented fuel prices pushed up the operational costs.
Kingfisher started operations with four aircraft in May 2005. It suffered a loss of Rs 240 crore in the first year and Rs 577 crore in the subsequent year.

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