Airlines roll out discounts in abundance to woo customers

Flash sales in the aviation business are not uncommon. While the low-cost carriers frequently roll out discounted fares, full-service carriers are rather conservative who resort to them for boosting sales during lean months. In India, almost all major airlines woo passengers with discount fares. IndiGo, Jet Airways and Air India have fewer flash sales whereas in SpiceJet and AirAsia India they are more frequent.

SpiceJet, which was acquired by Ajay Singh early this year, has been consistently coming out with discounted fares in order to increase its occupancy. For instance, it has recently announced 3-day flash sales giving 10 per cent (if booking is done online or through call centre) and 15 per cent (booking through mobile app) discounts. The deal is available on 20 routes, including Bengaluru-Delhi, Ahmedabad-Mumbai and Mumbai-Kochi.

Since May, the Gurgaon-based airline has rolled out six flash sales. During the same period, its passenger load factors (PLF), an industry metric for measuring seats occupied as a percentage of total available seats, has skyrocketed to reach the highest in the industry. In July, for instance, SpiceJet's PLF stood at 93.4 per cent, which was highest in the industry. In fact, SpiceJet's PLF is highest amongst all airlines since April this year.

Frequent flash sales can be risky though. It was one of the primary reasons why the airline almost went kaput early this year. In a conversation with Business Today in March, Singh said that flash sales don't result in losses if airlines can plan them well. "These are the seats that airlines determine would otherwise remain unsold. It would not be more than four-five per cent of the total seats. Also, [flash] sales are an interesting way of stimulating demand," Singh had said.

Meanwhile, the flash sales by SpiceJet and others has improved the passenger traffic through this year. AirAsia India too has a promotional scheme running that offers fares starting from Rs 1,090. The passenger traffic in the first seven months of 2015 has registered a significant jump of 21.13 per cent as compared to the corresponding period last year.