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Last Updated: Wednesday, 29 June, 2005, 13:43 GMT 14:43 UK
India worried over air fare wars

By Soutik Biswas
BBC News, Delhi

Air Deccan's ATR 42-500
Air Deccan fares are as low as one rupee
A fierce fare price battle in India's start-up budget airlines market is worrying aviation authorities.

Civil Aviation Minister Praful Patel told the BBC he was concerned by "indiscriminate" fare wars.

With four Indian budget carriers already flying and an equal number expected to begin operations by the end of this year, fares have plummeted.

One airline has offered seats for one rupee (two US cents). The aviation boom has no parallel in India's history.

"I am all for passengers getting cheaper fares and better connectivity, but I am concerned that the [aviation] industry remain healthy," Mr Patel told the BBC News website.

We are building new airports plus upgrading existing runways, taxi tracks, air traffic controls to handle a higher volume of traffic
Praful Patel

"Aviation is a capital intensive, high cost industry. We are not a matured [aviation] market yet.

"We wish a fair balance is struck though market forces will eventually determine who is going to remain operational," he said.

India's strong economic growth has boosted the market for air travel.

Flying has become more affordable in a country where the number of people travelling by air in a year is nearly equal to the number of people travelling by train on a day.

India recorded a 25% growth in air passenger traffic in the past year alone.

There are six to seven million air passengers in the country, and industry watchers say their numbers could easily rise nearly tenfold in five years.

Big buyer

Applications to set up new budget carriers are pouring into Mr Patel's office.

Delhi airport terminal 2 (Pic: Airports Authority of India)
Long queues are a constant feature of many airports

Indian airlines emerged as big buyers at this year's Paris Air Show, placing orders worth roughly $12bn.

State-owned Indian Airlines and Air India will be buying 111 new airplanes between the two of them, including 50 wide-bodied long-range planes, and 43 Airbus aircraft to replace an existing fleet.

Mr Patel reckons that even if the number of fliers trebled to around 17 million within the next year, India would easily need nearly 1,000 aircraft to carry them.

Weak infrastructure

But India's aviation industry is hampered by overcrowded airports, stretched air traffic controls, antiquated ground handling equipment and a shortage of pilots and engineers.

The civil aviation ministry estimates India will need some 3,000 to 5,000 fully trained pilots in the next three to four years, which is equal to the total number of pilots hired over the past half century.

"All things will fall into place - maybe in a year. We have allowed foreign pilots to be brought in by Indian carriers. As the industry starts building up, there will lots more flying schools, and so lot more pilots," Mr Patel says.

To tide over the pilot shortage in the short term, the ministry has relaxed terms of pilots moving from one aircraft type to another.

"We are building new airports plus upgrading existing runways, taxi tracks, air traffic controls to handle a higher volume of traffic," he says.

He promises that passengers will see a "qualitative change in Indian airports" from 2007 onwards.

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