SpiceJets Re 1 base fare offer nixed by DGCA

Written by fe Bureau | New Delhi | Updated: Apr 2 2014, 10:10am hrs
The Directorate General of Civil Aviation (DGCA) has told Indias third-largest airline SpiceJet to put an immediate stop to the three-day super sale announced on Tuesday. Under the sale, SpiceJet was offering tickets for R1 for travel between July 1, 2014, and March 28, 2015. This offer was to introduce the airlines revamped network.

However, by the time DGCAs direction came, most of the inventory seats were sold, which does not affect the passengers.

The countrys aviation watchdog has told the airline that the offer was misleading for customers and detrimental for the health of the entire industry as other airlines may be forced to offer similar low fares for competitive reasons.

Under the SpiceJet offer, return tickets to Kolkata or Chennai were available for as low as R2,000.

Under section 135 (4) of the aircraft rules, the DGCA has asked SpiceJet to stop the sale immediately. It feels that the super sale is predatory pricing, because only 1.7% of the ticket inventory is on offer and it is largely a marketing gimmick, a source said.

The DGCA has asked the airline for the rationale behind the move in the afternoon, but had reportedly not been satisfied with its answer. As for the tickets that have already been sold under the offer, SpiceJet can take a call on what to do with it, the source said.

Sharat Dhall, president, Yatra.com said, This is an attempt to target leisure bookers with extremely attractive advance booking fares, a tactic that has been successfully used by LCCs across the world. SpiceJet is looking to pick up a significant share of these forward bookings, which could insulate them from the threat of higher competitive activity that is expected later in the year.

SpiceJets website went down due to heavy traffic hours after the sale was announced. Within hours of the announcement, we saw bookings that are four times the normal, Dhall said.