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from India Insight:

Fare wars over India: You win, airlines lose

(Any opinions expressed here are those of the author and not of Reuters)

Indians like it cheap -- be it a car, a phone call or airfare. If that plane ticket is about 25 percent cheaper than a train ticket, you can imagine the rush to buy.

Airlines in India are doing just that. Jet Airways, until recently the biggest Indian carrier, offered 2 million tickets at nearly half price in a “goodwill gesture”. Its website crashed soon after, just as SpiceJet’s did when it offered a million tickets for just 2,013 rupees  last month. That led many to believe the offer was a hoax.

I was lucky to book a New Delhi-Guwahati return ticket for March, paying just 3,578 rupees compared to the 13,047 rupees I paid for a one-way ticket as recently as November, and 4,420 rupees for the cheapest round-trip ticket on the Rajdhani Express, India’s premier long-distance train.

No doubt reduced fares are excellent news for consumers. But does it make business sense?

from Money on the markets:

SpiceJet, Sun TV slip on CBI probe talk

SpiceJet aircraft prepares for landing at the airport in Mumbai July 15, 2008. REUTERS/Punit Paranjpe/FilesShares in SpiceJet and Sun TV Network fell on market talk that Sun founder Kalanithi Maran's deal of buying a stake in SpiceJet was under investigation by the Central Bureau of Investigation, four dealers said.

Shares of both the companies had fallen 7-13 percent on Friday

SpiceJet closed 2 percent lower at 47.65 rupees while shares in Sun TV Network ended 11.4 percent down at 410 rupees.

from Money on the markets:

Airline stocks face the heat

Airline stocks failed to bring cheer to the market on Monday after the Federation of Indian Airlines (FIA) called off plans for a one-day strike later this month.SPICEJET/INVESTMENT

Private airline operators had on Friday announced they would suspend operations on August 18 to protest the lack of government relief for the ailing industry.

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