In a bid to maintain the air traffic growth rate, Air India has started working on slashing the fares. Though no confirmation has been made on the issue yet, media reports suggest that the cut in Air India's fares on the domestic sector could range between 10 and 12 percent. Steps could also be taken to slash fuel surcharge and tinker with the congestion surcharge and the fare reduction could be made effective in December itself, the reports added.

Union Civil Aviation Minister Praful Patel, had last week asked all the carriers to slash fares in response to the government's support to the aviation industry to meet the financial crisis. The rate of air traffic growth in the recent weeks, which is considered the peak travel season, has been on a much lower level than last year.

The number of flights by all airlines each week fell from 10,922 in March to 9,635 in October, according to latest official figures. There has also been a 30-32 percent fall in passenger traffic respectively at Delhi and Mumbai airports - the two busiest.

It is yet to be seen whether the full-frill private carriers will follow suit, though the Aviation Minister was optimistic that air fares would come down by December.