This is despite the fact that due to global recession and mega alliances, air fares around the world are constantly declining, Indian air fares - thanks to the choice of only three airlines - have been revised by nearly 10 times since 1990. ``The rise in domestic air fares in India is totally unwarranted. While a Mumbai-London-Mumbai ticket will cost you a little over Rs 20,000, a Mumbai-Calcutta return will cost around Rs 15,000,'' says a travel agent.

``As the seat-load factor is falling, the airlines should reduce fares to attract passengers. In India, we have been taking the short-cut to cannibalise the remaining passengers. The hike in fares is ill-advised,'' said consumer activistM R Pai.

With the civil aviation ministry -- which has taken every step possible to prevent competition like Tata Airlines to take off -- finally succumbing to the pressure and allowing the fare hike, the Indian Airlines' move will help the private players like Jet and Sahara to rake in the moolah. In fact, Sahara is already discontinuing its discount schemes called the `Stand Buy schemes' in all the routes from October 1 onwards.

Incidentally, the Aviation Ministry had rejected the proposal of IA to increase the fare early this month. Aviation secretary P V Jayakrishnan had, in a directive to the Indian Airlines, said ``the fare hike would mean a bonanza for profit-making private airlines.'' Pulling up IA for not seeking the ministry nod for the hike, the secretary also mentioned the fact that no private airline had approached the government seeking a fare hike.

``It's strange that only IA has complained about the rising input costs but not other private airlines,'' said a businessman, adding, ``It's amyth to say that more than 95 per cent air travellers are not paying from their pockets. With high fares, more travellers, including corporate sector would look at an alternate mode of transport. The corporate sector -- which is already going through a crippling recession -- will reduce travel expenditure of its employees.'' AIAI president Vijay Kalantri said the fare is the highest when compared to other airlines and stable oil prices.

Alarmed over falling load factors, Indian Airlines decided to hike fares citing high input costs to increase the fares for the second time in the last 11 months. In October 1997, the fares had gone up by 11.5 per cent in all the routes. ``The IA stand of high input cost is like saying that an organisation should give a raise to its employees just because his household expenditure has gone up,'' added another Mumbai-based frequent flier. ``IA should bring down its input costs by efficient managerial staff instead of adopting such soft options,'' Kalantri said.

The IA moveto turn the corner by hiking fares has opened a new gateway for the private airlines to boost the their bottom lines. ``This move was more promoted by the private airlines themselves rather than IA management,'' aviation experts who preferred anonymity said. Private airlines are not allowed to charge more than the IA fares.

IA already had a bumpy ride in June and July this year when it reported losses of around Rs 15 crore. This has upset the calculations of the national carrier which, till that time, actually posted profits of around Rs 8 crore.

The airline, which made a profit of over Rs 45 crore during 1997-98 after eight years of losses, has projected a profit of Rs 100 crore for the current financial year. "IA needs to revise its financial projections as with the present situation, it may not even report last year's profit figure. It is trying to cover losses by hiking the fares," sources said.

Due to the recession in the Indian economy, the seat-load factor of Indian Airlines has already fallen toaround 60 per cent in July. "This July, the airline carried around two million passengers as compared to 2.2 million passenger in the same period last year," said an Indian Airlines official.