Harried flyers get major relief, fares plunge over 50 per cent

New fares only for limited time; Air India tickets for a steal at Rs 1,357 on certain routes.

Update: 2014-01-21 22:06 GMT

Mumbai: Flyers who have been paying through their nose for tickets are in for a big relief with top airlines, including state-run Air India, on Tuesday slashing fares by as much as 50 per cent for a limited time to tide over the traditionally weak demand in January-March period.

The move was triggered by budget carrier SpiceJet earlier in the day, but was soon copied by Air India, and others. The national carrier is offering fares as low as Rs 1,357, which is up to 70 per cent discount, on certain routes.

According to travel agents, two more no-frills carriers - IndiGo and GoAir - followed suit, offering up to 50 per cent discounts. Currently, spot fares for a one-way Mumbai-Delhi trip is upwards of Rs 10,000, while a one-way Delhi-Goa ticket comes at about Rs 6,000.

With these special fares, travellers can save more than 50 per cent on each trip. Air India termed its discount offer as 'Spring Sale' under which it is selling tickets from tomorrow through the midnight of January 24 for travel between February 21 and April 15 across sectors, AI said in a late evening statement. The fares will cover all domestic sectors of the Air India network and can be booked both on and offline.

The scheme is inclusive of taxes and offers rates as low as Rs 1,357, it said, adding the fare on the Agartala-Kolkata route will be as low as Rs 1,385, while for Delhi and Mumbai it will be Rs 2,830. SpiceJet effected a steep 50 per cent cut on base fares and fuel surcharges across sectors for travel 30 days ahead of booking. Soon IndiGo and GoAir came out with similar offers, said travel agents.

However, officials of these two airlines were not available for confirmation. "This kind of limited period off-season sale is a routine practise in the airline industry across the world and is part of tactical inventory management to help airlines fill seats that would otherwise go empty. It is revenue-positive for the airline," a SpiceJet spokesperson said. The offer is valid for a three-day period starting today, the Chennai-based airline said, adding the special offer will end on January 23 midnight. "IndiGo and GoAir too have come out with similar offers," a travel agent said.

The move is being seen as an attempt by carriers to mop up funds for the March quarter, traditionally a weak period both from demand and revenue points of view.

MakeMyTrip claimed it saw a 250 per cent rise in bookings within hours of the prices being reduced, with its chief executive Rajesh Magow saying "we expect this to go up even further as word about the offer spreads."

He said that after the success of similar promotions last year, "airlines seem to have hit on a winning formula to energise the sector. Thus, they are able to drive purchases further out, improve forward-loads and yields by incentivising earlier purchases and gain yield predictability by filling up seats earlier."

Travel portal Yatra.com President Sharat Dhall said "SpiceJet and Indigo slashing airfares is an attempt to garner early bookings for the coming summer season."

With other airlines likely to follow suit, travellers are finally getting a respite from the high airfares and will take advantage of these great prices to book their holidays in advance, he said.

Consultancy major KPMG's Aerospace Division head Amber Dubey said the limited period discount offer would help stimulate demand in a lean quarter and generate cash for the airline.

"The seats on offer are chosen carefully without compromising flights with high demand. This also helps to widen the narrow flyer-base of the country. So overall, it's a good move," Dubey said.

Albert Dias, Co-founder of Musafir.com said such discounts "often increase passenger traffic and prove to be advantageous to the airline as well as the industry."

Expedia GM Vikram Malhi too said the discounts were aimed at stimulating demand during the lean period and added that his premier travel has already seen a rise of 25–30 per cent in bookings.

"Last year also we saw such slashes across the first quarter of the year and thus can expect more such offers in near future with other airlines following suit.

"However, this time around the fare slash is not as deep as last year and it is just a short period promo of only three days. The Indian traveller has evolved into an aware consumer who knows how to make the best out of every opportunity," Malhi said.

Harried flyers get major relief, fares plunge over 50 per cent

New fares only for limited time; Air India tickets for a steal at Rs 1,357 on certain routes.

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