SpiceJet surprised travel industry today by slashing fares by over 50% in a limited period offer. Neil Mills, the airline's chief executive officer, tells Aneesh Phadnis that discounted fare is being offered to keep load levels intact.
SpiceJet's average passenger load in February-April is around 75%. Why then reduce fares in this season?
We would have struggled to even get 70% loads now with the higher fares and low demand. We are going to have a lot of empty seats. Why do I not get those passengers who would have travelled in second AC in a train or not travelled at all. I do not expect all ten lakh seats to be sold. I am only making them available. With the special promotion fares I am expecting to maintain loads of 75%.
SpiceJet is offering over 20% of its seats for next three months at discounted rates. Will it not impact your revenue?
The sale will only add to revenue. This will be incremental. The sale window is only for three days and we are encouraging people to fly. Our revenue would have been impacted if we do such pricing all round the year.
SpiceJet booking engine crashed and passengers were unable to book seats today?
Our booking engine did not go down. But due to sheer volume we limited the number of people who could log in simultaenously. This was to prevent the site from crashing. We sold two lakh tickets today while on average we sell 40-45,000 tickets daily. How could we sell two lakh tickets if our system crashed.
Following SpiceJet IndiGo has dropped fares and other airlines are likely to do the same?
I do not have problem with honest competition.
