Competition in the skies is hotting up. Following SpiceJet's three-day mega sale it is the turn of Air India to drop fares. The national carrier has slashed fares on several domestic routes to push up loads and compete against low cost airlines.
January-March is considered an off season for travel and last year during this period Air India's passenger loads ranged from 63-65%. This was much lower than SpiceJet and IndiGo which had loads of 75% and 80% during those months. Overall too Air India's passenger load for last year was lower than these airlines.
Air India has introduced apex fares which can be purchased 7-30 days before the date of travel and are priced upto Rs 200 less than its -prevailing lowest fares. "The fares have been dropped to compete against low cost airlines and is available on certain flights which have poor demand," an Air India source said. The source added that the discount fares are not available on certain sectors like Delhi-Kolkata, Mumbai-Goa, Mumbai-Ahmedabad amongst others. The discount fares are available for sale till April end.
"Air India's strategy seems to ensure optimisation of load factors in a low season. They are trying to match fares with low cost airlines but the incentive offered by Air India is not attractive enough to generate excitement amongst travellers,'' said Sharat Dhall, chief operating officer of online portal Yatra.com
Low-cost carrier SpiceJet kicked off a price war ten days ago slashing fares for one-way travel across the country to a consolidated Rs 2,013, including all taxes. The airline had on offer one million one-way tickets and said it sold seven lakh discount tickets in a three day sale. IndiGo too sold limited number of seats for Rs 2,000 but stopped the sale in a day.
"There were primarily two reasons of selling 10 lakh tickets at Rs 2,013. Firstly, selling marginal tickets which were difficult to sell in this quarter as the load factors is around 70-75% and also try and create some sort of interest from the consumers to fly and have more interest in airlines and particularly in Spicejet. We are pretty sure that 7 lakh tickets that we sold will not only be good for Spicejet but also for the consumers as well,'' SpiceJet chief executive officer Neil Mills told Business Standard.