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Aparna Kalra
New Delhi, Aug 29:
When Sahara Airlines announced fare cuts at the beginning of summer, it broke every rule in the book. From operating in the almost cartel-like situation as in the past, Sahara forced its bigger rivals, Indian Airlines and Jet Airways, to start coping with the rules of a highly competitive industry. The fare undercutting has had a snowballing effect, with even Air India initiating the lowered fares on its domestic routes.
In an interview, Sahara Airlines director, Parvez Damania, wards-off criticism that competitive fares will lead to sickness in the domestic aviation sector:
The fare discounts launched by Sahara Airlines had a spiralling effect, with Indian Airlines (IA) carrying them forward to new sectors. IA also offered the biggest discount on the Delhi-Mumbai sector forcing Sahara and Jet to match them. Are you feeling the heat now?
No, Sahara will offer the fare discounts for as long as it takes. We are not under any financial pressure. We have the cushion totake the reduced fares and still post profits.
I cannot speak for other airlines but Sahara is in a very comfortable position. (Smiles) Of course, Sahara does not operate on the routes out of Mumbai where IA has recently offered discounts. The fight there is between Jet Airways and IA. Your detractors are saying that a fare war will only introduce sickness in the domestic airline industry. There is concern that private airlines have just stabilised and fare discounts will erode the thin margins on which they operate.
Domestic airlines have to learn to adjust to the principles of a free market. Fare cuts are part of airline industries all over the world. In India also, fare undercutting had to happen. All airlines have to live with competition and this is a sign of competition.
What are Sahara Airline's future plans?
Sahara acquired its sixth aircraft, a 150-seater Boeing 737-400 a week ago. It is on dry-lease from Boeing Capital, a subsidiary of Boeing Company. In a month's time, we willacquire another Boeing 737-400, taking our fleet strength to seven aircraft. Sahara plans to service new trunk routes with the new aircraft. We plan to introduce two daily flights on the Mumbai-Calcutta, Delhi-Calcutta and Mumbai-Chennai routes. Last week, we added a Delhi-Mumbai frequency. We have already established a very strong presence on the trunk routes where we operate. After the discount offers, passenger load factors on Sahara Airlines jumped to 75 per cent which is a very good load factor. Our market share has increased to 9 per cent from the 5-6 per cent it was earlier.
How are plans for the subsidiary airline, Sahara Connect, shaping up?
We have still to get a final permission from the Government for acquiring the 30-seater Embraer aircraft. The nod from the Government will now come only after the elections now. But we are sure that we will have the airline operating by November or year-end on feeder routes.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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