Air India, SpiceJet, IndiGo and GoAir trigger full-scale fare war, slash tickets prices

Written by PTI | New Delhi/Mumbai | Updated: Jan 22 2014, 04:14am hrs
Air IndiaIndian carriers, including Air India, today triggered a fare war offering limited period low-priced tickets across several sectors within the country. Reuters
With the peak travel season coming to an end, Indian carriers, including Air India, today triggered a fare war offering limited period low-priced tickets across several sectors within the country. SpiceJet was offering 50 per cent off on base fares on tickets booked on select flights at least 30 days prior to travel (which can be purchased till January 23), while its no-frill competitors - IndiGo and GoAir - launched a similar scheme slashing fares by 30-50 per cent for advance purchases on its websites.

Air India launched a short term 'SpringSale' of up to 50 per cent on all domestic sectors of its network, while a Jet Airways spokesperson said no such decision has been taken so far.

Air India said its promotional scheme would be up for sale from tomorrow till January 24 and valid for travel between February 21 and April 15. These fares, which would be as low as Rs 1,357 including taxes, would cover all domestic sectors of the national carrier.

The fare on Agartala-Kolkata would be Rs 1,385, between Delhi and Mumbai Rs 2,830 and Delhi-Ahmedabad Rs 2292, inclusive of taxes.

SpiceJet scheme would be valid for travel till April 15 but bookings have to be made in the next two days and all applicable fee and taxes would have to borne by the customer.

The move came as the airlines expected a weak demand in the upcoming lean period and attempted to mop up funds for the March quarter, which is traditionally a weak period both from demand and revenue points of view.

Travel portals reported an immediate upswing in bookings within a few hours of the announcements.

"Such a limited period off-season sale is a routine practice in the airline industry across the world and tactical inventory management, to help airlines fill seats that would otherwise go empty. It is revenue-positive for the airline," a SpiceJet spokesperson said.

Spokespersons of IndiGo and GoAir were not available for comments, but travel agents confirmed that these two airlines have also launched similar offers.

MakeMyTrip claimed it saw a 250 per cent rise in bookings within hours of the prices being reduced, with its chief executive Rajesh Magow saying "we expect this to go up even further as word about the offer spreads."

He said that after the success of similar promotions last year, "airlines seem to have hit on a winning formula to energise the sector. Thus, they are able to drive purchases further out, improve forward-loads and yields by incentivising earlier purchases and gain yield predictability by filling up seats earlier." Travel portal Yatra.com President Sharat Dhall said "SpiceJet and Indigo slashing airfares is an attempt to garner early bookings for the coming summer season."

With other airlines likely to follow suit, travellers are finally getting a respite from the high airfares and will take advantage of these great prices to book their holidays in advance, he said.

Consultancy major KPMG's Aerospace Division head Amber Dubey said the limited period discount offer would help stimulate demand in a lean quarter and generate cash for the airline.

"The seats on offer are chosen carefully without compromising flights with high demand. This also helps to widen the narrow flyer-base of the country. So overall, it's a good move," Dubey said.

Albert Dias, Co-founder of Musafir.com said such discounts "often increase passenger traffic and prove to be advantageous to the airline as well as the industry."

Expedia GM Vikram Malhi too said the discounts were aimed at stimulating demand during the lean period and added that his premier travel has already seen a rise of 25-30 per cent in bookings.

"Last year also we saw such slashes across the first quarter of the year and thus can expect more such offers in near future with other airlines following suit.

"However, this time around the fare slash is not as deep as last year and it is just a short period promo of only three days. The Indian traveller has evolved into an aware consumer who knows how to make the best out of every opportunity," Malhi said.