Stiff competition from rivals and changing market dynamics have forced Indian national carrier Air India to reduce fares by 15 percent on flights to Gulf destinations.
"Our fares for the economy and business classes will be lower than any other domestic or foreign airlines operating between India and the Gulf," an Air India spokesperson told IANS Friday.
Air traffic to West Asia constitutes nearly 40 percent of the Indian aviation industry's total international operations.
"We do not want to lose passengers. We have reduced fares on account of changing market dynamics and competition," the official said.
Air India till 2007 enjoyed monopoly in the lucrative India-Gulf operations, but lost its dominance after the government opened the sector to private airlines.
This, despite Air India seeking exclusivity over Gulf routes.
Last week, the government further opened the Dubai sector to Jet Airways.
Air India is likely to post a loss of more than Rs.20 billion this fiscal, airlines officials said.
Kerala Chief Minister V.S. Achuthanandan last week called for Prime Minister Manmohan Singh's intervention to reduce airfares to Gulf destinations.