Outsourcers Could Benefit As Airfare Between U.S. And India Set To Drop

Pact could also mean more flights from more U.S. cities to India.
U.S. technology executives and other business travelers who frequently fly to India may soon get a break on airfare as the two countries are poised to sign an agreement that could cut the cost of round trips by as much as 25% to 30%, U.S. government officials say.

U.S. Transportation Secretary Norman Mineta is scheduled to visit India next month to sign the Open Skies pact, which would open most major U.S. cities to Indian airlines such as Air India, Jet Airways, and Air Sahara. Currently, Indian carriers are limited to operating flights in and out of New York, Newark, Los Angeles, and Chicago. The agreement would also allow American carriers access to more cities in India.

Mineta's intention to sign the pact in April was confirmed earlier this month by Robert O. Blake, the U.S. deputy chief of mission in India, at a press conference in Jaipur.

Round-trip airfare to major Indian cities from U.S. hubs such as New York and San Francisco is typically priced in excess of $1,200. The hope is that the pact will bring average fares to less than $1,000 and boost trade ties between the two countries, Blake said.

It would also increase the frequency of flights to India as more carriers establish routes from various cities in the United States, a development that some U.S. technology executives say is more important to them than the price drop. "We buy [airline tickets] in bulk, so the fare isn't a problem, but there are days on which we simply can't travel to our facilities, and that is a problem," says Marc Hebert, executive VP at offshore software developer Sierra Atlantic Inc.

Hebert says present airline schedules often require him to make four stops over 30 hours when traveling from the company's headquarters in Fremont, Calif., to its development facilities in Hyderabad. "It feels like it takes forever."

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