Airlines slash fares by 50% on advance bookings, earn in last quarter

Domestic airlines have slashed fares by as much as 50 per cent on advance bookings due to fierce competition as the peak travel season drawing to a close. Low-cost carrier SpiceJet was the first off the blocks offering a 50-per cent discount on base fares for tickets booked on select flights, at least, 30 days prior to travel. The offer closes on January 23 midnight.

The discounted tickets are valid till April 15.

No-frills rivals IndiGo and GoAir reacted with similar schemes cutting fares by 30-50 per cent for advance purchase of tickets on their websites. Travel portals reported an immediate upswing in bookings within a few hours of the announcements.

Air India (AI) launched a short-term 'SpringSale' with a 50-per cent discount on all domestic sectors in its network. The offer will be available from today till midnight of January 24 for travel between February 21 and April 15. "The fares will cover all domestic sectors in the Air India network and tickets available for booking through Air India's website and booking offices, and travel agents and on- line travel agents," the airline said.

AI fares under the scheme are inclusive of applicable taxes and start as low as Rs 1,357. The fare for the Agartala-Kolkata sector would be as low as Rs 1,385, Delhi-Mumbai Rs 2,830 and Delhi-Ahmedabad Rs 2,292.

After having successfully cashed in January 2013 by selling off 10 lakh seats at an all inclusive fare of just Rs 2,013 per ticket, SpiceJet has gone in for the same strategy this year.

Airline sources said that the move is being seen as an attempt by carriers to mop up funds for the March quarter, which is traditionally a weak period both from demand and revenue points of view. "This kind of limited period off- season sale is a routine practice in the airline industry across the world and tactical inventory management to help airlines fill seats that would otherwise go empty. It is revenue- positive for the airline," said the spokesperson of SpiceJet.

Amber Dubey, head, aerospace, at global consultancy KPMG said, "It's a limited- period discount that will help stimulate demand in a lean quarter and help generate cash for the airline. The seats on offer are chosen carefully without compromising flights with high demand." This, he said, will also help to widen the flyer- base of the country. "So, overall, it's a good move," Dubey added.

Rajesh Magow, chief executive, Make-MyTrip said, " We have seen a very good response so far with many travellers looking to plan their holiday breaks due to the discounted fare options available.

Under this promotion, ticket for a popular route like Delhi- Goa is available for Rs 3,355 (one-way) while the spot fare for the same route is about Rs 6,000.

These offers are targeted at leisure travellers with a longer booking horizon (one to two months) and offer bigger savings to long- haul travellers."

Courtesy: Mail Today