‘DUMP’ FARES BY FOREIGN AIRLINES

The Indian middle-class seems to have been come the latest favorites of regions, looking to fill up their wide body planes that link their respective hubs to rest of the world. The CAG has questioned UPA’s generosity to those airlines at the cost of Indian carriers in the performance audit report of the aviation ministry tabled in Parliament on Thursday.

For instance, the CAG report says an average 74% of people carried to and from India by  European carriers in 2009-10 like Lufthansa, Air France and Austrian just transited through their hubs in Frankfurt/Munich, Parts and Vienna. Lufthansa – which could not get AI into Star Alliance – tops this list with a whopping 87%.

Called sixth freedom in airline parlance, an average of 68% people flying Gulf airlines to and from India similarly transited from their hubs to Europe. Australia, Africa and the Americas “The massive expansion of bilateral entitlements in respect of several countries (notably in the Gulf, south-east Asia and Europe) has facilitated several foreign airlines (predominantly Emirates) in tapping the vast Indian market and funneling such traffic over their hubs (e.g. Dubai) to various destinations, the entitlements exchanged are vastly in excess of genuine  flying requirements between the two countries,” the report says.

Importantly it adds that Indian carriers, including AI, look up this issue with the aviation ministry several times but nothing happened.  A senior Indian airline official said that foreign airlines “dump’ fares on India routes to get as many passengers as possible from India. “Foreign airlines like Emirates will have single aisle planes taking off from India around the same time to reach their hubs in places like Dubai in time for those passengers to then fill sunup the wide bodies like Airbus A-330/340/380s or Boeing 777s to rest of the world and ditto for return.  The don’t have enough local traffic so they can throw dirt cheap fares to get flyers from India.  We have to offer competitive fare but they is not economical and we are suffering from government generosity to foreign players,” the official said.

While Indian travelers benefit from choice and low fares, acknowledged by the CAG, the practice can reach ridiculously high amounts at times.  Giving the example of Emirates, the auditor says that from May 2007 to March 2010, the airline saw its weekly seat capacity going up from 18,400 to 54,200 . The number of cities they connect in India also rose from 10 to 14 in that period.