'Mkt stimulation efforts' positive for travel biz: SpiceJet

Low-cost airline SpiceJet, which comes up with discount offers frequently, today said its "market stimulation efforts" had a positive impact on the travel industry.
Its comments come against the backdrop of questions on whether its market stimulation efforts are coming at the cost of revenue dilution or top line revenue reduction.
"We believe that SpiceJet's market stimulation efforts have had a positive impact on the travel industry as a whole by helping increase demand to fill seats that would otherwise go empty...," SpiceJet said while announcing its financial results for the quarter ended June 2014.
These efforts are benefiting not just the airline through incremental revenue but also customers who are getting more affordable fares if they are willing to book early, and for all other players in the travel value chain due to the increased volume of travel, it added.

The no-frills carrier, which has logged a Rs 124-crore net loss in the latest June quarter, comes up with discount schemes frequently. SpiceJet's moves had also triggered fare wars in the airline industry.
"SpiceJet is the airline that has made flying truly affordable on a pan-India basis for those who are willing to book early," the carrier said.

According to the company, there has been a lot of speculation and numerous comments and questions relating to its frequent market stimulation efforts, as well as on whether the increase in loads and market share is at the cost of revenue dilution or top line revenue reduction.

"The revenue results above clearly indicate that our market stimulation efforts are driving not just higher loads, but higher unit revenue (RASK) as well...
"As a result, SpiceJet's top line revenue remained constant despite capacity reduction of 8.4 per cent," it said.