Surge pricing for Rajdhani, Shatabdi fares positive for aviation: SpiceJet

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Published: September 9, 2016 4:18:48 PM

SpiceJet CMD Ajay Singh feels that the recent introduction of flexi-pricing in Rajdhani and Shatabdi fares will positively impact the aviation sector.

SpiceJet, SpiceJet news, SpiceJet fares, SpiceJet rajdhani, Rail fare hike,Train fare hike, Rajdhani fare hikeSpiceJet said: We do not wish to get into the race of diluting fares. (Reuters Photo)

SpiceJet CMD Ajay Singh feels that the recent introduction of flexi-pricing in Rajdhani and Shatabdi fares will positively impact the aviation sector. Indian Railways has introduced the system of surge pricing for premium trains. The base fares will increase by 10% with every 10% of berths sold subject to a prescribed ceiling limit. There will be no change in the existing fare for 1AC and EC class of travel. The model is in line with what the aviation sector already follows, but with air travel becoming increasingly cheaper these days, the SpiceJet CMD’s view may actually turn out to be true.

Talking about SpiceJet’s growth plans, Singh said, “We plan to grow our share but not at the expense of revenue or profits. We do not wish to get into the race of diluting fares.” “The plan is to order aircraft and hopefully the process will be complete in a few weeks. The target is to maximize margins, profits and not run after market share,” he said. “The focus remains on profitable growth,” he reiterated.

According to Singh, there is need to have sustainable fares in the market. “This last minute drop is not a good phenomenon,” he said. “I cannot give you a quarterly guidance, the company is growing responsibly and profitably. The unit revenue and unit fares have dropped marginally by 2%. The load factor is up by 2.5% and that has neutralised the impact on revenue,” he said.

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