Within a day of its debut flight between Shimla and Delhi, the discounted Rs 2,036-tickets had been booked on the route till June falling under a government scheme subsidising air travel on short sectors.
The non-subsidised seats currently available were priced between Rs 5,300 and Rs 19,080, according to the website of Air India, whose subsidiary, Alliance Air, operates the flights.
Alliance has deployed a 42-seater aircraft on the sector. The flight will be operated five days a week.
"Since this is the season for travelling to Shimla and with fares as low as Rs 2,000 we are seeing a tremendous response", Alliance Air CEO C S Subbiah told PTI.
He also said two seats per flight, falling in the highest fare bracket, were being sold at a little over Rs 19,000 each. Airlines divide their seats into different fare brackets or reservation booking designators to maximise revenues.
Under the regional connectivity scheme, or UDAN, airlines operating on routes allotted to them must offer 50 per cent of the total number of seats on a flight to passengers at the rate of Rs 2,500 per hour.
The flight from Delhi can take 35 passengers, while the one from Shimla can accommodate only 15, because of factors such as the runway length, temperature and altitude at the Jabarhatti airport.
With half the total aircraft capacity set aside under the UDAN scheme, 24 seats from Delhi and 15 seats from Shimla are available at the discounted fare of Rs 2,036, inclusive of taxes.
Subbiah said the airline would study the trend over the next few days and look at ways to maximise revenues from this route.
Meanwhile, Alliance Air has sought financial assistance of about Rs 1.42 lakh for every return flight on this route, or Rs 5 crore per year, from the Himachal Pradesh government to mitigate losses because of the limited number of passengers on the flight.
It is estimated that every Delhi-Shimla-Delhi flight will cost Rs 4.06 lakh, but generate only around Rs 2.64 lakh, inclusive of the financial assistance already provided by the government.
Under UDAN, which seeks to make flying affordable by connecting unserved and under-served airports, the losses incurred by an airline on a particular sector are to be shared by the Centre and the state concerned.