India Insight

(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?

Indian airlines hardly make money, and everyone knows the fate of Kingfisher Airlines. High fuel prices and expensive airports make India a tough sell for airlines, with tickets usually priced below cost. State taxes up to 30 percent make jet fuel more than 50 percent more expensive in India compared to the global average, one of the reasons why foreign carriers prefer to stay away from the local market.

One of the many benefits of vegetarianism, so animal rights activists say, is that it cures impotence. To that end, the global rights group PETA is offering a way to give flagging Kingfisher Airlines a lift.

The airline, once the flashiest in the Indian aviation industry with well-groomed hostesses and gourmet food, is struggling to stay upright after running up a debt of about $1.3 billion. It has been wooing investors, pleading with banks and sounding out anyone who could help.

Now, help is being offered from an unlikely quarter.

PETA has made a “tempting offer to help keep Kingfisher Airlines out of its financial crisis and flying sky-high”, the group said in a statement. Condition: The airline — whose advertisements once featured tastefully served lobsters and baked chicken — covers its planes with anti-non-vegetarianism slogans.

State Bank of India Chairman Pratip Chaudhuri took recourse to the Great Bard when asked about what the banks, who now own a substantial portion of the debt-hobbled airline Kingfisher Airlines, would do about its exposure.

“Much ado about nothing,” Chaudhuri said in response to the media frenzy, in a reference to the Shakespearean comedy about two pairs of lovers who are caught in a web of misunderstanding.

Even as he tries to make light of the situation, Chaudhuri, the largest lender to Kingfisher, has reason to be worried. He, himself, is fighting rising bad loans at his own bank and wouldn’t like Kingfisher to add to it.