With the lean season (August-October) around the corner, Jet Airways and airline Air Deccan have come out with attractive fares.
BANGALORE: A fresh bout of fare wars has just taken off. With the lean season (August-October) around the corner, full service carrier Jet Airways and budget airline Air Deccan, which are leaders in their respective segments, have come out with attractive fares to push up their load factors on some sectors.
While Jet has relaunched its Superfare scheme by offering one lakh tickets at fares which are close to those of no-frills airlines, Air Deccan has lowered the prices of its air tickets to Rs 99, Rs 299 and Rs 500 on routes services by ATR aircraft. And as things stand today in the aviation sector, which is plagued by intense competition, other airlines may soon follow suit to save marketshares.
“Our tickets are already priced at rock-bottom prices, but if the fares of Jet and Air Deccan hurt our market then we will be forced to cut it further,” laments an airline official.
In June, SpiceJet Ltd had offered 24,000 seats at Rs 99, Rs 299 and Rs 499 for travel between July and September on some sectors - and these have been filled up.
“We have been able sell most of these lean season tickets,” says SpiceJet Ltd chairman and CEO Siddhanta Sharma.
Traditionally, air traffic during these months (especially in the leisure segment) dips because schools are open. Many airlines are also bracing themselves for the entry of a new budget airline, the InterGlobe Enterprises-owned IndiGo, on August 4. They expect the new player to be aggressive in its pricing.
IndiGo has opened bookings for major cities in the country’s eastern and western regions from Delhi. Surely enough, as was feared by existing airlines, its fares are around 50% lower than other low-cost airlines on the same sector.
SpiceJet, which could be most affected by IndiGo, is not reacting to the threat as yet. “Since these are promotional fares we will not counter it as it is funded out of promotional budgets,” says Sharma.
Analysts, however, believe that sooner or later SpiceJet, and also other airlines, will have to give in to price war. If they don’t, they stand to lose marketshare in a price-sensitive market. So, even as airlines may hike fuel surcharge to absorb the impact of rising fuel prices, the aviation picnic for Indian flyers is far from over. And they can expect ever-low fares to stay till the competition stays intense.
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