Both state-run Air India and the private sector Jet Airways have started operations to the US, and more entrants to the sector are expected soon. The India-US sector is set to see a battle royale between Indian, American and European carriers.
The choice, basically, is between carriers offering non-stop services like Air India, Delta, Continental and Kingfisher Airlines (when it gets government approval), and those with a one-stop service, including Jet, Sapphire and, of course, all the European carriers.
To take on Air India, Continental Airlines, which already has a daily non-stop Delhi-New York flight, is starting its daily non-stop Mumbai-New York flight from 2 October instead of 31 October. American start-up Sapphire Airlines, promoted by NRI Rahul Puranik, is planning daily services on the San Francisco-Bangalore and San Francisco-Delhi sectors.
But it seems Indian passengers prefer flights with a short stopover. The Jet Airways inaugural flight on 5 August had a passenger load factor (PLF) of 100 per cent compared to Air India's average 50 per cent PLF on its flights starting 1 August. It's too early to make any definitive conclusion, as AI has just dropped its prices to match the competition.
No major price skirmishes are expected on the sector, but carriers are still reducing fares so that they do not lose customers to Air India's promotional fares. Roundtrip fares are expected to settle around Rs50,000 to Rs75,000, say experts.
Air India expects this sector to earn 28 per cent of operational revenue by the end of this year. The airline needs new earning sectors quickly, as its monopoly on Gulf routes - which earned 75 per cent of its revenue - ends in 2008.