Air India jumps into fare war with up to 30% discount

Written by fe Bureau | Mumbai | Updated: Feb 27 2014, 23:51pm hrs
Air IndiaAir India finally joins the price war initiated by SpiceJet by announcing a 30% discount on airfares.
Air India has finally joined the price war initiated by SpiceJet earlier this week as it announced on Wednesday a 30% discount on fares for travel between March 29 and September 30.

The discount offered by Air India, spread across 115 flights operated by the airline is, however, applicable only on select domestic and the domestic leg of international flights. The bookings will also have to be made between February 27 and March 1, to avail the offer. Fares under the discounted scheme, start from as low as R1,586 for Goa-Mumbai, R1,889 for Delhi-Lucknow, R3,470 for Mumbai-Kolkata and R2,557 for Trivandrum-Mumbai, exclusive of taxes, the airline said.

Low-cost carrier SpiceJet had on Monday triggered a price war by offering up to 75% off on base fare and fuel surcharge relative to last minute fares, for travel between April 1 and June 30, applicable for bookings made till February 26. Other no frills carriers like IndiGo and GoAir quickly announced similar schemes within hours of SpiceJet's announcement. This was the third time the Chennai-based airline shelled out discounted fare in the last two months.

Jet Airways, however, entered the price war only on Tuesday as it launched a three-day sale of 60 days and 30 days apex fares on domestic flights operated by Jet Airways and JetLite. Travel under this offer is valid from March 27 to September 30, 2014.

Airline operators are looking to fill their seats that are currently running below optimum capacity. But additionally, with Air Asia soon entering the scene, current operators are preparing for the tight competition in prices it will bring, said Jackson Fernandez, the managing director of travel portal Wego.com. By coupling with distribution channels airlines can reach out to intended audiences who are looking to avail these discounts, he added.

Travel operators say that demand for air tickets to key leisure destinations like Goa and Kerala have increased tremendously after the announcement of the fare cuts.

We are already seeing strong demand on the key leisure destinations like Goa and Kerala and bookings have more than doubled after the announcement. We expect other airlines to follow suit with similar discounts as these prices are sure to strike a chord with leisure travellers, said Sharat Dhall, president of Yatra.com.

Our website has witnessed a three-fold growth in visitors and we sold over 60,000 tickets on Tuesday alone. Delhi, Mumbai and Bangalore continue to be the top-selling routes, while leisure sectors like Goa and Srinagar have also seen a big spike, said Rajesh Magow, co-founder & CEO India, MakeMyTrip.

These promotions have definitely fuelled summer-holiday breaks for larger groups (such as families) since we saw a higher proportion of group-bookings compared with single-passenger bookings. Also, a higher proportion of return bookings indicated planned leisure and business travel, he added. Indian consumers are evolving and seeing the pattern from last year, they have begun expecting such discounts more often. Typically, what we have observed so far is that whenever an airline has dropped fares or offered discounts on advance booking, other carriers have matched their pricing to keep their market share, added Vikram Malhi, GM, Southeast Asia, Expedia.