Airlines kick off fare war, cut advance ticket prices
Jan 21 2014 , Mumbai
SpiceJet was the first to announce a 50 per cent cut in 30-day advance ticket prices bought till the midnight of January 23. The cut is applicable to fares on all its flights. IndiGo has followed with matching cuts.
GoAir also has a New Year offer, according to its website. With fares starting from Rs 2,507, the offer is valid only on tickets bought 60 days in advance.
Air India too jumped into the bandwagon with all-inclusive 30-day and 60-day “Jaldi Jaldi Advance Purchase Fares” starting at Rs 2,530.
Jet Airways is expected to follow suit.
According to an industry expert, IndiGo has cut fares by up to 50 per cent though it has not officially confirmed this. “These are marketing tactics which airlines have been coming up from time to time. It is unlikely to expect these sales to generate major cash flow for the airlines or to result in a higher load factor,” he said.
January-March is one of the leanest quarters in India for leisure travel. But cutting advance tickets will help the airlines get confirmed occupancy on flights.
Amber Dubey, partner in KPMG, said, “This is a limited period discount offer that will help stimulate demand in a lean quarter. It will help generate cash for the airlines. The seats on offer are chosen carefully without compromising flights with high demand. This also helps widen the narrow flyer-base of the country.”
Similar cuts were seen also in the first quarter of calendar 2013. But the cuts this time are not as deep as last year. Some of the airlines have opened the discounted advance purchase window only for three days.
According to online travel agents, bookings have risen. “Cutting advance ticket prices is an attempt to garner early booking for the coming summer season. Within hours of the fare cuts, booking went up by 250 per cent,” said Sharat Dhall, president of Yatra.com.
According to Vikram Malhi, Expedia GM for South and Southeast Asia, the point of attractive discounts is to stimulate demand. “This helps the airlines control the last minute chaos in demand season by enticing the customer to book in advance. We have already seen a rise of 25-30 per cent in bookings,” he said.
These offers are said to be targeted at leisure travellers with a longer booking horizon (of one to two months).
Rajesh Magow, CEO of MakeMyTrip, said, “Low-cost airlines SpiceJet, Indigo and GoAir have announced sales in a 30-60 day advance purchase window. After the success of similar promotions last year, they seem to have hit upon a winning formula to energise the sector. They can drive purchases further out, improve forward loads and yields by incentivising early purchases and gain yield predictability by filling up seats earlier. During a similar flash sale last year, our average daily sales of flight tickets went up three-fold.”
International player Qatar Airways is also offering up to 30 per cent off on economy class and premium cabin tickets to a wide variety of destinations in Europe, West Asia, Africa, Asia,
Australia and the Americas. Known as “New Year New Journeys”, the three-day global sale will end on Wednesday.
Singapore Airlines has also announced special all-inclusive, return economy class fares starting from Rs 58,000 for flights to Australia from 11 Indian cities. The all-inclusive return economy class fare to Singapore start at Rs 21,000 onwards. Valid for a minimum of two passengers travelling together, the offer is open till February 15 and the Australia offer till January 31.
The travel period for the Australia offer is till September 30, and that for Singapore till April 15 and from June 1 till July 31. Return travel must be completed within one month for Singapore and three months for Australia.
Albert Dias, co-founder of UAE-based Musafir.com, said, “Global sales often increase passenger traffic and prove advantageous to an airline.”