Kingfisher: Delhi-Mumbai dumped to 69 €

Kingfisher dumps prices by up to 65 per cent, to avert financial disaster. A flight from Delhi to Mumbai can now be booked at as low as 69 € for the 1,100 km long flight. Wrong move, analysts say

Kingfisher has substantially cut the number of flights  to 120 a day, with a fleet of 20 aircraft — 10 Airbus 320s and 10 ATRs. At its golden days, it used to operate 400 flights a day, by means of 64 aircaft.

The airline has temporarily cut operations from several major cities, such as Ahmedabad, Hyderabad, Kolkata and Lucknow, and asked about 3,500 of its employees to stay at home until it can raise money for salaries.

Industry insiders feel cheap fares are the only option for the airline to generate cash, as it would help improve the passenger load factor.

Kingfisher now has total losses of 900 m€ and a debt of over 1 billion Euro.  In 2010-11 it recorded a loss of 1.53 bn € . The airline owes 60 m€ to oil companies and 45 m€ to airport operators.

The fare war is seen as a desperate measure as Kingfisher is too small to have an impact on the rest of the industry. In general, the industry needs a 25 pct. raise in air fares to grow healthy, analysts say.

Photo: Flickr by Premshree Pillai

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