GoAir, IndiGo, Air India quickly respond to SpiceJet’s opening salvo

After a lull, domestic skies are once again witnessing a price war. On Tuesday, SpiceJet fired the opening salvo, announcing a 50 per cent discount on base fares for three days, provided the booking is made 30 days prior to travel.

Within hours, rivals IndiGo and GoAir announced similar fare offers.

Later in the evening, state-owned carrier Air India joined the fray, announcing that a similar scheme would open on Wednesday, with travel to be completed by April 15.

The discounted fares on all the airlines are available only for a limited number of seats.

Given the high fares prevailing until now, passengers stand to benefit immensely.

A passenger flying from Bangalore to Delhi on SpiceJet will have to pay Rs 3,444, while a Chennai-Port Blair ticket will cost Rs 2,302 and a Kolkata-Chennai ticket, Rs 2,565.

Unlike in January last year, when it offered a million seats at a fixed price of Rs 2,013 each, SpiceJet has not disclosed the number of discounted seats this time.

“The idea of the sale is to make it attractive enough for impulsive and casual travellers. This time we are also making a clear distinction between the long- and short-haul sectors, in terms of pricing. The idea is to improve utilisation so that revenue gets optimised,” said S.L. Narayanan, Group Chief Financial Officer, Sun Group, which owns SpiceJet.

He added that sales on the first day had been “superb”.

John Nair, Head (business travel), Cox & Kings Ltd, said the low fares during this “season of discounts” would encourage people to book holidays in advance.

Amber Dubey, Partner and Head, Aerospace and Defence, KPMG, and Rajesh Magow, Co-founder and CEO, MakeMyTrip, felt that the scheme was a good way to stimulate passenger demand during the lean quarter.



(This article was published on January 21, 2014)
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