British Airways Urges Ai To Stop Fare War

The fare war triggered off by British Airways (BA) to celebrate the countrys 50 years of independence seems to have boomeranged with the British carrier now seeking Air Indias (AI) help to stop it.

The British airline, on January 19, caught the airlines in the city by surprise with a 40 per cent discount for flights out of the country. This led to a virtual scramble by all airlines to announce discounts a windfall to passengers.

Things were looking up when BA spoilt the market by announcing discounted tickets putting pressure on yields, said an AI official. AI took strong objection, and in retaliation reintroduced the companion-free offer on first and business class tickets.

 

The discounts were to have stopped from February 14 following a meeting of the Board of Airline Representatives, but, AI decided to continue the offer till February 28.

BA regional director of India and Sri Lanka, Kevin Steele, has now expressed surprise that AI discounts would continue especially at a time when all seemed to be going very well and we were all looking forward to increased yields from now on and sought his personal attention.

Steele, in a message to all airlines, said all is not lost and we have a good chance to cease such pricing quickly. He has called a meeting in Delhi today to finally resolve all issues.

They did this earlier in China, Indonesia and Singapore, an airline official said. The official said during the period January 20-February 14, foreign airlines had issued back dated tickets so why should AI become the guinea pig.

AI regional director G S Ahuja, in a message to BA managing director Robert Ayling took strong objection to Steeles unjustified protests to Mascarenhas and said it was not only ill-advised but may even be counter-productive since Steele must explain the rationale behind BAs initial action in discounting fares. Stating the fare war was started by your airline, Ahuja said AI continues to suffer from the very dilutionary effects of price discounts.

Lufthansa had termed this as mad fare disease, while KLM summed up the industry situation by stating publicly that while BA had initiated the fare war they would not be the deciding force to stop it.