| There is a huge decline in air traffic compared to a | | | | in India. |
| couple of years ago. This is mainly because of the | | | | Competition for business: |
| recession the world has witnessed in the recent past. | | | | With lesser passengers opting for air journey in the |
| This situation has lead to a huge fall in air tickets | | | | time of recession the competition and among the |
| prices as well. With many of the MNCs choosing to | | | | airlines for attracting the passengers began in the |
| cut cost of their business operation and minimize air | | | | aviation industry than ever before. Many of the |
| travel there are very few individuals who choose to | | | | popular airlines reduced their flight charges by as |
| fly. | | | | much as 50% to get the customers. The |
| You'll be surprised to know that a flight to Delhi from | | | | competitors had to substantially reduce the air fares |
| Chennai would have cost somewhere around INR | | | | to stay in the field. |
| 7,000.00 to 8,000.00 in 2007-08 and the same was | | | | If Indigo reduces the air fare by 50% the competing |
| available for a mere INR 3,000.00 in 2009. Such was | | | | Spice Jet can't say that we'll stick to our rates since |
| the effect of recession on the aviation industry and | | | | a passenger will opt for a cheaper journey and is not |
| even now also many of the airlines are running in | | | | too worried about who offers it. Likewise the rates |
| huge losses by as much as INR 400 Crores. | | | | of the air fare came down drastically to attract the |
| Earlier many of the corporate companies used to | | | | passengers and encourage them to take air journey. |
| offer their resources an abroad project with many | | | | Fill up the vacant seats: |
| attractive packages. The companies were even | | | | Once the flight charges were reduced the next big |
| ready to sponsor the partners of their resources for | | | | task was to fill up the vacant seats. As you know |
| these projects. However since 2008 most of the | | | | the airlines had to incur huge operating costs every |
| companies have chosen not to encourage such | | | | time it flies and this is recovered from the |
| abroad projects and cut down the air journey. | | | | passengers. When there are vacant seats in the flight |
| Many of the CEOs of the corporate companies | | | | the cost of operation increases and the profit |
| chose to travel in economy class instead of regular | | | | declines. To fill these vacant seats the airlines came |
| business class to cut down on their travel | | | | with further reduction of air fares. These seats were |
| expenditures. In total contrast to this phenomenon | | | | offered at almost no base fare to attract the |
| the common man has benefited the most. A middle | | | | customers and recover the operation costs. A ticket |
| class person was the real winner as he was able to | | | | is available for as less as Rs.1.00 in a flight to Delhi |
| afford the air journey which was not the case earlier. | | | | from Bangalore (excluding fuel surcharge and taxes). |
| The following are some of the reasons why | | | | This is the effect of recession on the air fares. |
| recession is directly responsible for cheaper air tickets | | | | |