SpiceJet and GoAir have slashed fares by 25% on certain domestic routes for the next week, in order to stimulate demand before the festive season encompassing Christmas and New Year.
According to travel agents, other airlines may follow the trend in a week’s time.
SpiceJet announced a two-day scheme wherein it is offering 15% discount on certain international routes and 25% discount on domestic routes from December 5 to 11. Budget carrier GoAir, too, is offering similar discounts.
The fares have been slashed on routes like like Mumbai-Delhi, Delhi-Mumbai, Mumbai-Ahmedabad, Bangalore-Delhi, Bangalore-Mumbai and Amritsar-Delhi.
The fare-cuts appear to somewhat reverse hikes earlier this year which were effected due to a depreciating rupee, higher fuel prices and increasing airport charges.
Currently, airfares across different domestic sectors are at least 20% higher than those during the same period last year, accounting for sluggish air passenger traffic.
However, the Directorate General of Civil Aviation (DGCA) data suggest that October witnessed a growth in traffic by 10% on account of the festival season.
“At least 60% of bookings happen seven days before the travel. It’s a good strategy to stimulate demand before the start of the festival season. The move will have a positive impact on the load factor of airlines,” said Sharat Dhall, president, Yatra.com, an online ticket bookings website. “In the next ten days, we expect more deals to be on offer from other airlines.”
With demand slowing, flash sales and bulk discounts have of late become a regular feature of the domestic carriers’ lean season strategy. For instance, in August, most airlines offered discounts on domestic routes to stimulate demand.
Jet Airways, the second biggest airline in terms of passengers flown, had announced a massive 20-25% cut then in fares on certain routes with a starting price of Rs 1,777. However, such discounts on fares became unsustainable for most airlines due to rising fuel costs and rupee depreciation.