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Business Exclusive News

Another War-FARE!! Same Rivals!!

Mar 13 (): SpiceJet and Indigo enter into another fare – war, cutting their prices by 15-30% considering Holi festival. The airline companies had entered into slashing their fares more than twice in the past three months. SpiceJet was the first to start the game this time too announcing INR 1999/- all-inclusive prices on select routes and on limited seats. Indigo followed the offer with super attractive prices starting from INR 1714/- all-inclusive prices with almost the same criteria.

The same airline companies earlier announced summer vacation travel special prices. The price-cut comes at a time when the Indian airline Industry is bleeding with losses with Air India, Jet Airways and Kingfisher Airlines accounting for most of the losses. The airlines expect air ticket sales to improve with these offer announcements. SpiceJet and Indigo are also facing financial issues making a net loss as projected in their quarterly figures.

It is not evident that these airfare slashes are useful for majority of the flyers as the offers are for very limited capacities and has to be booked 90 days in advance. This offer is only targeted towards a customer who can plan his schedules very early and that is the catch in this offer. It helps the better planned customer but the main motivation is to pull someone to travel for the offer and make him spend the extra penny which will benefit the airline.

The competition might take a different shape with Air Asia preparing to enter the race and SpiceJet hiring ex-Air Asia employee Kaneswaran Avili as the new Chief Commercial Officer. Avili was also working with Tiger Airways as a Commercial Director and has strong domain knowledge and capabilities to lift up the airline’s profitability.

With the current situation of the aviation Industry and the travellers base increasing at a rapid rate, an innovative, customer friendly offer will attract a lot of attention and increase revenue to the airlines and Industry. The offers now are not being targeted at the travelling majority and it adds up very little with new travellers. Good luck to the airlines!!