BA’s "retaliatory move" is another cut in fares

The cut in fares ex-London is seen as a “retaliatory measure” by BA, as A-I has declined to respond to the appeal made by the foreign carrier to end the fare war.

“How do we know the discounts market has been cleaned up and there are no more discounted or backdated tickets being issued?” a senior A-I official asked.

The fare war in India was triggered off by BA on January 20 last, when it announced a cut in fares by 40 per cent to celebrate India’s Independence. This forced A-I and other carriers to match the BA offer.

Though the airlines expected to end the war fromFebruary 15 following a meeting of the board of airline representatives comprising all carriers, A-I decided to continue even after its extended deadline expired yesterday.

Meanwhile, the general manager of KLM in India, Vincent Knoops, has sought A-I’s intervention to stop “this dangerous practice” as yields of all carriers were in a “shambles.”

A-I has, however, responded by writing strongly to the chairman of KLM, Leo Van Wijk, drawing his attention to the protest lodged by Knoops to the A-I management and pointed out that “almost all carriers continued to float discounts in the market and also backdate their tickets to take advantage of the discounted fare levels.”

The regional director of A-I India, G S Ahuja, said, “Air-India did not initiate the fare war and continues to suffer from the very dilutionary effects of price discounts. "In these circumstances, the protest by Knooks is ill-advised and may even be counter-productive since British Airways must explain the rationale behind theiraction in discounting fares.”