Air fares between India and the United Kingdom are all set to fall by about 15-18 per cent as a result of the recent decision by the British Civil Aviation Authority to award more flights to Virgin Atlantic, British Airways and British Midland Airways.

This means, the average Rs 25,000 charged for a one-way trip to the UK from India will come down by as much as Rs 4,500. In the not too distant future, fares on this route could come down to as less as Rs 15,000, according to travel industry estimates.

With the airlines fighting over a market of 1 million passengers growing at 10 per cent annually, air travellers can expect a lot more goodies to come their way.

Last week, the regulator allocated 10 flights to Virgin (7 to Delhi and 3 to Mumbai), 7 to British Airways (4 to Chennai and 3 to Bangalore) and 4 to British Midland Airways (all 4 to Mumbai).

Sources said all the three airlines had predicted to the CAA there would be a sharp fall in fares if they were awarded a specific number of flights by the authority.

They also said some of the airlines had even predicted a £500 million profit if they were awarded all the 21 flights which were given away by the authority.

"This will have an impact on the fares as it is a demand-supply scenario. In addition, the centres we service will also go up," said Alok Sawhney, country commercial manager (India), British Airways.

He also said the carrier was currently working on its exact pricing and positioning strategy in the event of introduction of competition in the route. "Yes, there will be more competition," Sawhney said.

Virgin Atlantic Chairman Richard Branson, during his visit to India, has warned the competition that he will use every trick in the book to capture a larger market share in this route. He had also predicted price cuts and a fall in air fares as a result of this.

"You will see prices dropping as more flights and additional capacity will be mounted in this route," Branson had said.

The Indian travel industry also sees this development as a beneficial one. "There will be more competition and more flights in the route. We expect prices to come down. Besides, the carriers will also be deploying new generation larger aircraft," said Balbir Mayal, president, Travel Agent's Association of India.

Moreover, the Indian government is also expected to award flying rights of its quota of 21 flights to Indian carriers.

According to sources, the government will split the 21 flights amongst Air-India, Indian Airlines, Jet Airways and Air Sahara, which could lead to a further fall in air fares and easier availability of seats on this route.