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    Airlines in fare war again: SpiceJet, IndiGo roll out discounts for the peak travel season

    Synopsis

    Offer included eye-catching figure of Rs 1,999 for a Delhi & Goa trip though tickets would have to be bought before 30 June. IndiGo responded with similar offer.

    SpiceJet posted record losses of Rs 1,003.24 crore in the year ended March 31. Air India has quietly been following the fare cuts. 
    MUMBAI: SpiceJet on Friday cut ticket prices for the peak travel season, from September till December, to induce travellers to book tickets in advance.

    The offer included the eye-catching figure of Rs 1,999 for a trip between Delhi and Goa though tickets would have to be bought before 30 June. IndiGo responded with a similar offer.

    “A popular route like Delhi-Goa is on offer at Rs 1,999 (one way) while the spot-fare for the same route is Rs 11,253. These offers will not only help travellers to plan their Puja holidays but also post-October breaks,” said Rajesh Magow, co-founder and India CEO of Makemytrip.

    “With fare-validity window falling in the winter holiday season, we expect travellers will use this opportunity to upgrade the transport-leg of their holiday to flight instead of rail or other land transport options,” he added.

    For both airlines the low fare only apply to tickets bought till next Monday (June 30). SpiceJet has been leading price wars throughout the year, forcing other low fare carriers to follow suit, often at the cost of their margins.

    The Kalanithi Maran controlled airline in January slashed fares by 50% and later followed with a Rs1 fare (excluding taxes). The DGCA cracked down on the latter offer calling it “predatory” pricing.

    On June 10, SpiceJet had announced a monsoon package but that offer was for those whose journeys originated from south Indian cities such as Bengaluru, Chennai and Coimbatore.

    At the end of May, the Indian arm of Malaysian carrier AirAsia launched flights with all inclusive fares of Rs 990. IndiGo followed with aRs1 base fare.

    These fares could impact margins. SpiceJet posted record losses of Rs 1,003.24 crore in the year ended March 31. Air India has quietly been following the fare cuts.

    Jet, which hasn’t been as aggressive has steadily lost marketshare this year, declining from 19.9% in January to 17.1% in May. In April, SpiceJet filled about 73% of its planes while IndiGo had occupancies of 76%. In June, SpiceJet load factors shot to 81% while Indigo's was 82%.

    However the period between October to December is the holiday period which sees a spurt in travel and loads for airlines. Cutting fares for that season shows airlines are expecting unutilised capacity.
    (Catch all the Business News, Breaking News Events and Latest News Updates on The Economic Times.)

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    31 Comments on this Story

    Hari Krishna Muppalla2229 days ago
    great .... gives an opportunity to the first goers a chance
    Anushka 2229 days ago
    Finally it will burden to tax payers when they go to file bankruptcy.
    Kapil Agrawal2231 days ago
    good for flyers
    The Economic Times