Jet Airways to link fares to demand

Seats on overbooked flights to cost more.

Jet Airways, the country's largest private airline, is planning to introduce a new fare category where rates will be determined by the demand for seats "" the higher the demand, the higher the fare and vice versa.

While this fare system is being introduced for the first time in the history of Indian aviation, it is a common practice in the West. Jet is scheduled to announce that it is launching what is called the "yield management system".

The airline is putting in place software that will track ticket booking trends as well as seat demand patterns on different flights by analysing the historical data as well as current industry trends. This will help the airline to price its seats accordingly.

For instance, if the software indicates that there is or is likely to be a heavy demand for seats on a particular flight, the airline will sell the remaining seats on that flight at a premium to the original price. Jet may also decide to induct additional flights to cash in on the rising demand.

Similarly, on flights that have excess seats, the airline may offer attractive discounts to fill them. An airline seat being a perishable product, the idea is to sell it at any cost if the aircraft is about to fly with empty seats.

Confirming the move, Wolfgang Prock-Schauer, chief executive officer, Jet Airways, told Business Standard: "The yield management system will enable us to optimise revenue in an efficient way. The idea is to manage our inventory in such a manner that the yield per seat is maximised. We are planning to launch the initiative within the next few months."

The airline has tied up with information technology related travel solutions provider GetThere, a Sabre group company, for designing the software for the yield management system.