Indian airlines in danger of price war collapse

The Indian Government has warned airlines that they are engaging in predatory pricing against one another as competition reaches new levels of intensity.

Telling airlines that they were selling tickets clearly below the cost of travel, India’s aviation minister ruled out any government action – so may as well have said nothing at all.

Indian air fares have dropped significantly – by around 20% on some key routes like Delhi-Mumbai which now costs barely £48/US$64 for a return ticket.

Meanwhile Indian airlines are buying more and more aircraft and key routes are at saturation point, with frequencies in some areas at unsustainable levels as airlines aim to drive each other out.

Indian airlines reported some dire financials in the last business quarter and seem to have only pricing to maintain customer numbers. The Indian public seem to have little loyalty to any specific airline and are entirely cost driven.

India’s lack of bankruptcy protection laws often leave airlines in a bizarre state of limbo when they do go under. Kingfisher took years to officially cease to exist and JetAirways is technically still operating as a business even though it has no aircraft or staff.