Fact. Aviation sector is not buzzing with airfare discounts as much as e-commerce sites, which are offering huge price cuts in ecommerce space, this festive season. But the anomaly ends there as the fact is that air travellers can travel at the cheapest rates this peak season thanks to the overall low ticket prices which are on offer by both full service carriers such as Air India, Jet Airways and budget carriers such as SpiceJet, Indigo and Go Air.
The October to December period is considered peak season for air travel with a jump in occupancy levels for airlines. Due to this, the trend has been for airlines to increase fares during his period between 10-30% every year. However, fares are ruling about 20% lower this year as compared to same period last year, according to travel portal Cleartrip.
The average 60-day fare in sectors such as Delhi-Mumbai, Mumbai-Bangalore and Mumbai-Goa is lower at about Rs 3,500 while on popular international sectors such as Delhi-Dubai and Mumbai-Hong Kong, the two-month advance fare is Rs 10,500, about 10% lower than the same period last year.
An airline executive said that pricing has been subdued during the peak season this year due to oversupply wherein few airlines such as Spicejet and Indigo continue to add capacity, resulting in lower occupancy in flights. This is being made up through offers that run the entire festive period up to December.
In April, SpiceJet filled about 73% of its planes while IndiGo had occupancy of 76%. In June, SpiceJet load factor shot to 81% while Indigo’s was 82%. However the period between October to December is the holiday period which sees a spurt in travel and increased loads for airlines. Cutting fares for that season shows airlines are expecting to use unutilised capacity.
While the delay in increasing fares may affect the margins of airlines, low fares have spurred bookings that has grown by almost 30% according to Cleartrip. But with most airlines bleeding, the low fares are expected to end soon. A Jet Airways executive said that fares may be revised upwards once there weas clarity that no more offers were coming.
But its not that fare war and offers are lacking for the season. Both Spicejet and Indigo announced fare cut early in June for peak travel season travel. Spicejet cut ticket prices for the peak travel season, from September till December. The offer included Rs 1,999 for a trip between Delhi and Goa though tickets would have to be bought before 30 June. IndiGo responded with a similar offer.
