The price war is back in Indian skies, much to the delight of air travellers. SpiceJet on Friday slashed fares by more than 50 per cent on travel from February to April. The airline said that it was offering “10 lakh seats for an all-inclusive fare of Rs 2,013” for any domestic flight between February 1 and April 30.

Hours after Chennai-headquartered SpiceJet came up with the special fare offer, the Delhi-based IndiGo Airlines discreetly lowered its air fares. While IndiGo did not comment on the issue, the airline Web site was offering a return fare on the Delhi-Mumbai route at about Rs 4,500.

Meanwhile, in a late night development, the Government spoke to the industry and asked it not to go for a price war. Sources indicated that IndiGo, GoAir and Jet have agreed not to join the price war.

February to April is traditionally a lean season for travel. Typically, a Mumbai-Delhi airfare - when booked three weeks before the date of travel – is about Rs 4,700. The fare goes above Rs 8,500 if booked less than a week before travel date.

However, the low price that triggered a rush of bookings in the SpiceJet Web site resulted in a server crash. Many people could not access the site due to heavy online traffic. Twitter was abuzz with confused and hassled comments by people who could not make bookings from the SpiceJet site.

Meanwhile, SpiceJet said that the server problems were due to the heavy online traffic and they were working to rectify the issue. Till 5 p.m. on Friday, SpiceJet had sold 1.7 lakh of the 10 lakh seats on offer during the 72-hour promotional window, the airline Chief Executive Officer Neil Mills said.

‘Irrational pricing’

However, industry watchers termed this promotion ‘irrational pricing’. Countering this allegation, Mills said, “I do not see how you can call this irrational pricing. We are selling seats which would have otherwise gone empty. We hope that this promotional limited time sale will see people take up discretionary travel and possibly some people who would have, otherwise, travelled by train shift to air. We do not benefit or lose.”

(with inputs from Meenakshi Verma Ambwani in Delhi.)

nivedita.ganguly@thehindu.co.in

ashwini.phadnis@thehindu.co.in

(This article was published on January 11, 2013)
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