Budget airlines offer fresh discounts, trigger new fare war

Written by fe Bureau | Mumbai | Updated: Feb 25 2014, 10:29am hrs
SpiceJet on Monday said it is offering up to 75% discount 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.

This is the third time in the year that SpiceJet has given discounts under its advance purchase offer, a move which like its predecessors has led to price war of sorts with other airlines (no-frills) following the discounted summer fares.

Under this offer, customers can get up to 75% discount on base fare plus fuel surcharge relative to last minute bookings (bookings that are made within seven days of travel). A Delhi-Goa fare that otherwise sells for Rs 11,148 all-in for last minute purchase, can be bought for as little as Rs 3,737 all-in under this offer, said a SpiceJet release.

Travel agents say the latest move by SpiceJet has forced other no-frills or low-cost carriers like IndiGo and GoAir to come up with similar offers.

SpiceJet and Indigo are providing discounts on their summer fares. SpiceJet has launched a three-day sale with discounts ranging from 35% to 75% on current fares, said Sharat Dhall, president of travel portal Yatra.com.

An IndiGo spokesperson said the airline is offering attractive discounts on bookings made till February 26 for travels between April 1 and June 30. However, the airline hasnt mentioned the percentage of discounts its shelling out for its customers.

Go Air also announced similar discount offer. The airline is offering up to 70% off on airfares for travel between April 1 and June 30, 2014, applicable for bookings made till February 26. The offers are on selected routes but the airline however didnt elaborate on the routes it were giving the offers on.

These flash sales are becoming a regular feature in the first few months of the year, said Vikram Malhi, GM, Southeast Asia, Expedia.

Recently, a report by Centre for Asia-Pacific Aviation (CAPA) said Indian carriers lost $1.65 billion on revenue of $ 9.5 billion in FY13, while 40% of the annual loss was generated in the fourth quarter (January-March 2013) period itself.

These advance purchase offers are a win-win situation for customers, for airlines, and for the travel industry and the economy overall, said Sanjiv Kapoor, chief operating officer, SpiceJet. The SpiceJet stocks closed 0.74% up at R13.70 on Tuesday on BSE.