Too good to be true: Why those ₹12 air fares are only a flight of fantasy

Come June, the lean season for the airline industry takes off. The country’s largest carriers have begun to roll out their discounted ticket schemes, some announcing base fares as low as ₹11. But if these fares sound too good to be true, it’s because they are.

The actual ticket price depends on the fuel surcharge collected by the airline and the taxes collected on behalf of the government. However, airlines are not transparent about how they determine the fuel surcharge. As a result, a ticket with a base fare of ₹11 or ₹12 could finally cost much more.

For example, SpiceJet currently has a five-day fare discount scheme to celebrate the airline’s 12th anniversary. It promises low base fares starting at ₹12 on some sectors; the offer ends on midnight, May 28. Indigo has a six-day special sale, from May 23 till May 28, with a base fare of ₹11.

However, a Mumbai-Delhi one-way ticket for July 17, on Makemytrip, costs ₹2,183 on both airlines.

On SpiceJet’s ₹12 base fare, it adds on ₹2,171 as fees and surcharge. Indigo’s base fare is ₹312, but it comes with an additional ₹1,871 levey as fees and surcharge.

So why does the fuel surcharge differ on the same route? No one in the airline industry wants to talk about it.

Kapil Kaul, CEO (India and Middle East), CAPA India, an aviation advisory firm, said, “While the taxes are fixed, the fuel surcharge component is the airline’s prerogative. Ideally, this should be distance-based. The surcharge was introduced when crude oil prices were between $90-110 a barrel. With Brent Crude now at around $55, the surcharge does not seem logical.”

A Spicejet spokersperson said the airline has the “prerogative to fix the fuel surcharge, which may vary from flight to flight. By giving out a break-up of the base fare, fuel surcharge and taxes, SpiceJet is not only being transparent but is also... educating the customer on various charges that constitute his final ticket price.” A spokesperson for IndiGo said, “Our fares include base fare, fuel charge and the CUTE charge (applicable in few stations only). In our discounted (base) fares, the fuel surcharge remains the same as that of regular fares.”

Notably, discounted tariffs are available only on a limited number of seats, and those numbers are never disclosed.

Mahesh Reddy, Secretary-General, Air Passengers Association of India, told BusinessLine that these discounts are a “gimmick.”

“Since there is no regulation on how fares should be structured, there is no transparency about how the discounts work. What airlines should advertise is the final cost. Ads which say the base fare starts at ₹12 mislead passengers,” Reddy said.

Kaul disagrees. “A lot of customers benefit from the market stimulation that airlines resort to by lowering fares. And airlines will do this even more now given the capacity they have been adding. If you’re lucky, during a firesale, you can get fares for less than ₹1,000 in certain sectors.”

“Any sale anywhere, in any industry is on a first-come, first-served basis,” the SpiceJet spokesperson added.

A Jet Airways spokesperson said, “In order to encourage travel during the monsoon season, we offer incentives by way of discounts and savings on fares on select routes within India. These fare sales are popular with our guests and help with incremental revenue as well.”

An official with the Civil Aviation Ministry said he is aware of the low base fare schemes but declined to say whether any action is being planned against the airlines. An e-mail and text messages sent to the Directorate General of Civil Aviation remained unanswered.

(With inputs from Ashwini Phadnis in Delhi.)

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