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Air India Wednesday rejected the charge that it was driving air fares down by offering cheaper ticket prices for the last minute travel against the industry's practise of increasing them manifold. "We are not driving down air fares. We are only filling empty seats by lowering last minute air fares to the level of AC-II class ticket prices of Rajdhani trains," Air India chairman and MD Ashwani Lohani said. In a move that check-mated its rivals like Jet Airways and Vistara on the pricing front, the carrier had early this month announced dropping its last minute fares to the level of AC II tier ticket prices of Rajdhani trains to 4 key destinations from Delhi. Later, it extended the offer on 7 other routes, giving jitters to the private airlines, which jack up their last minute fares to astronomical sums. <br/>

There's a growing contradiction at United Continental. On the one hand, the company has maintained its commitment to capacity discipline. In the face of weak unit revenue trends, United is holding domestic capacity growth below 2% this year. On the other hand, the company admitted last month that domestic capacity cuts have caused United to lose market share in its hubs over the past 5 years. It believes this has hurt its unit revenue. This puts CE Oscar Munoz and his management team in a bind. If United Airlines increases its domestic growth rate, it will worsen the current capacity glut, especially if it provokes a response from any of United's competitors. That would almost certainly drive unit revenue down even further. But if it does nothing, United's market share in its hubs will continue to languish. <br/>