Financial Daily from THE HINDU group of publications
Wednesday, Jul 13, 2005
Financial Daily from THE HINDU group of publications Wednesday, Jul 13, 2005 |
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Logistics
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Airlines Marketing - Strategy IA's new scheme may spark more fare revisions Tunia Cherian George
Mumbai , July 12 WITH Indian Airlines launching its `Easy Fares' scheme last week, Jet Airways is now reviewing its own policy on ticket sales and pricing. According to Mr Saroj Datta, Executive Director, Jet Airways, this was the normal procedure and ticket pricing and sales was reviewed from time-to-time to keep abreast of the market environment and the offers from competing airlines. However, he said that the airline had not finalised its plans. According to other industry players, the private airline is expected to improve on its `Check Fares' scheme and bring fares down even further under this head. According to Mr Datta, both the Check Fares and apex fares schemes had received good response. Under the Check Fares scheme, customers do not have to book their tickets in advance, as is the case with the apex fares scheme. The airline simply allocates a certain number of seats at a fixed price on certain specified flights in an effort to improve occupancy. Once these seats are sold out, the customer would have to book tickets from the higher price basket. The Easy Fares scheme launched by IA last week has four price baskets, with the lower price baskets getting booked first, before reservations move on to the higher price categories. According to an official from Air Deccan, the trend of lowering fare structures would not be viable for full-service carriers in the long run. "Low-cost carriers can afford to offer such fares as our fares are based on a cost-plus structure," he said. He added that the airline would keep its eyes on load factors. "We will ensure that we protect our turf." Meanwhile, Mr Prithviraj Singh, Chief Operating Officer, SITA India, a leading tour operator, said that the special low-fare schemes represented a value offering for the domestic customer. However, they are not yet available to foreign tourists. On the viability of such low-fare structures, he said that the airlines were adopting different models to balance their average revenues. "If they are able to strike the right model, the schemes will work out to their advantage."
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