India's domestic airlines have welcomed the decision by the UK and the US to stop warning their citizens not to travel to India.

But the companies said it was hard to predict when business would recover, and unlikely there would be major gains for their business this year.

It is certainly a good move as it will remove uncertainties and fears

Saroj Datta, Jet Airways

Nonetheless, Jet Airways, India's biggest carrier on domestic routes has decided to go ahead with a $500m (�319m) order for new planes.

India's airline and tourism industries have been floundering since Britain and the US advised in late May against all travel to India and Pakistan as tensions rose between the nuclear-armed neighbours.

Price wars

A spokesman for state-owned Indian Airlines said the lifting of the warning against travel to India would bring "a positive effect definitely, but it is difficult to quantify".

Indian Airlines is the number two carrier on domestic routes.

"It is certainly a good move as it will remove uncertainties and fears, but whether people will start travelling soon we cannot say," said Saroj Datta, executive director at Jet Airways.

Airlines have discounted seat prices to attract passengers.

Mr Datta said Jet Airways planes had been flying 40% empty and it had been cutting prices on 2,000 seats a day.

The reduction in numbers of foreign passengers had a big impact on the airlines' revenue because tickets to tourists tend to be sold in US dollars, said Mr Datta.

Optimism

He predicted "things will start improving" by the end of this year but warned "we are not very optimistic about the results for this year".

Even before tensions rose in the disputed border area of Kashmir in May, tourism to India had declined as part of the general reduction in international travel since 11 September.

US-led military action in Afghanistan, an attack on India's parliament which its government blamed on Pakistani-backed militants, and riots in the Gujarat region all helped make tourists wary.

The British government continues to advise against all non-essential travel to Pakistan by British citizens of non-Pakistani origin because of " the continued risk of terrorist attacks".