AI slashes fares to woo holiday travellers

Written by Shaheen Mansuri | Mumbai | Updated: May 10 2011, 07:48am hrs
Air India (AI), which lost around R 100 crore in revenues over a period of 10 days owing to the pilots strike, has now resorted to an undercutting of travel fares to woo holiday travellers back into its fold.

The carrier, whose image has been dented as a whopping 1,500 flights got cancelled during the strike, is offering discounts of upto 20% compared to rival airlines like Jet Airways and Kingfisher Airlines.

These private carriers, for whom the AI strike proved to be a blessing as travellers migrated to them, had raised fares by upto 30% by March-end on account of the ongoing holiday season.

March-May is considered a peak season when summer vacation sets in, resulting in 15% increase in air travel. Online travel agency makemytrip.com quoted a fare of R4,177 for Air India on the Delhi-Hyderabad sector, much lower compared to Jet's R5,599 and Kingfisher's R6,166 for one way travel on May 11. Similarly, on cleartrip.com, a one-way fare on the Mumbai-Delhi route is the lowest at R3,604 on AI, when compared with Jet's R5,590 and GoAir's R4,928 for one way travel on May 15.

Also, AI costs the lowest on the New Delhi-Bangalore route at R4,674 (all inclusive) for travel on May 18, while low fare carrier Indigo and Jets low cost subsidiary JetLite charge R6,274 and R6,291, respectively.

Mahantesh Sabarad, an analyst with Fortune Financial said, Due to the strike by its pilots, AI had withdrawn its inventory for a few days. Now, since it has re-started its operations fully, it will sell tickets at lower price points if booked in advance like what other carriers do. However, an AI official said that even in the short term, the carrier has been compelled to sell discounted fares, which is never the case in a holiday season when demand overtakes supply. But, at the same time, the airline will deploy large capacity twin-aisle aircraft on domestic and nearby international routes. It will use its 290-seater Airbus 330, against 140-180 seater A319 or an A320, to fill more seats. The airline will have an optimal seat allocation on metro routes, where traffic is high. AI had a market share of 17.5% compared with Jet and its subsidiary JetLite's 26% and Kingfishers 18% in March, but in April and May, it is expected to have plunged to 10% owing to the strike.