SpiceJet slashes ticket prices; IndiGo, GoAir follow
Mumbai: India’s second largest low-fare airline SpiceJet Ltd on Monday cut fares by 75% for bookings made during 24-26 February to fill seats during the lean season.
This offer is valid for travel between 1 April and 30 June, the airline said on its website.
According to the SpiceJet website, a typical Mumbai-Delhi fare would be as low Rs.3,186 after the discount compared with the last-minute booking price of Rs.10,098, while Delhi-Goa fare would be Rs.3,737 against Rs.11,148.
“Super Summer Sale is valid on all domestic direct
flights on the SpiceJet network. SpiceJet will offer discount on base
fare and fuel surcharge only. All applicable fees and taxes to be paid
by the customer,” the airline’s website said.
IndiGo, India’s largest airline by passengers carried, joined the fare war with flights starting at Rs.1,867. The airline, which is operated by InterGlobe Aviation Ltd, announced rates for select sectors including Mumbai-Delhi (Rs.3410), Mumbai-Goa (Rs.2,078), Bangalore-Hyderabad (Rs.1,943) and Ahmedabad-Mumbai (Rs.1,867).
The airline, in a late night circular, said the travel is valid between 1 April to 30 June and for bookings from 24-26 February.
GoAir, the low-fare airline run by Go Airlines (India) Ltd, also joined the fare war by offering 70% discounts for the booking up to 26 February.
“Summer vacation travel offer. Fares starting as low as Rs.1,726,” GoAir wrote in its microblogging site. The discounted fares are excluding taxes.
Neelu Singh, chief operating officer at Ezeego One
Travels and Tours Ltd, which runs online travel agency firm
www.ezeego1.com, said these discounts will bring down the travel costs
by at least 30% and this is a great saving for the upcoming summer
season.
“However, the inventory on metro routes are very limited
and it is aimed at tourist and non-metro destinations which will see a
surge in bookings from people eager to book their summer vacations. The
earlier the booking better is the discount as these fares are for a
limited inventory,’’ she added.
Sharat Dhall, president at Yatra
Online Pvt. Ltd, that runs Yatra.com, said SpiceJet has launched a
three-day sale of up to 75% for flights between 1 April and 30 June and
the discount ranges from 35% to 75% on current fares across sectors and
is an attempt to stimulate the market and garner early bookings for the
summer holiday season.
“IndiGo has also launched special summer fares for the
same period, and I expect other carriers to follow suit as well. This is
a bonanza for holiday makers and a great opportunity to get super
discounted fates for the family holiday this summer,” Dhall said.
“We are already seeing bookings triple from normal levels within hours of the sale being announced,” Dhall added.
The promotional fare plan comes at a time when SpiceJet
is looking for investment to fund its expansion plan. Last week,
consultancy firm Centre for Asia-Pacific Aviation, or Capa, said in a
report that SpiceJet is estimated to need close to $200 million to
remain operationally viable, while a realistic and meaningful turnaround
may require $300 million or more.
Chennai-headquartered SpiceJet recently appointed
consulting firm Bain and Co. to restructure its network and return it to
profitability after losses mounted over the past few quarters.
As of 31 March 2013, the total accumulated losses of the
airline industry over the previous seven years had risen to $8.6 billion
(based on current exchange rates), consultancy firm Capa said in its
last week report adding the industry debt had climbed to $12.6 billion,
with the full-service carriers—Air India Ltd, Jet Airways (India) Ltd and Kingfisher Airlines Ltd—accounting for 94% of the amount.
SpiceJet, controlled by media baron Kalanithi Maran, posted a net loss of Rs.173 crore in the three months to December, against a net profit of Rs.103 crore in the year-ago quarter.
In January, SpiceJet had cut fares by more than half for
bookings for three days, a move promptly followed by other airlines
including Jet Airways and Air India.
“SpiceJet is committed to leading the way in offering the
most attractive fares to the most customers. We received overwhelming
positive feedback from customers who booked the earlier ‘Super Sales’
for taking the lead in making air travel more affordable, where
travelers can now book more spontaneously and more often by air, and
also for attracting many first time air travelers who would otherwise
endure long train journeys or not travel at all,” said Sanjiv Kapoor, chief operating officer, SpiceJet.
Kapoor said these advance purchase offers are a win-win
for customers, for airlines, and for the travel industry and the economy
overall, as it leads to significant demand stimulation, even as
customers get to enjoy deeply discounted fares, airlines get to reduce
wastage of seats that would otherwise fly empty, and others in the
travel ecosystem get more business.
“These are not fare wars as is commonly reported, as
there are no losers. This is just basic customer segmentation and
inventory and revenue management,” he added.
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