Fare war heats up summer skies, Air India offers tickets at Rs 1,499
It’s raining cheap airfares. After flash sales by no-frills carriers SpiceJet and IndiGo, full-service Air India too joined the bandwagon offering all-inclusive tickets starting as low as Rs 1,499 on its domestic network.business Updated: May 22, 2016 10:01 IST
It’s raining cheap airfares. After flash sales by no-frills carriers SpiceJet and IndiGo, full-service Air India too joined the bandwagon offering all-inclusive tickets starting as low as Rs 1,499 on its domestic network.
The discounted tickets offered by the three airlines, which command a combined domestic market share of close to 67%, are more or less for the same period – July to September, which is traditionally considered a lean season for airlines.
The flash sales, industry experts say, are targeted at ensuring that airlines fly with decent load factors during the lean phase when schools and colleges re-open and air travel sees a decline.
The October-December quarter, which coincides with the festive season starting with Durga Puja and ending the Christmas-New Year break, is considered to be the peak season for airlines followed by April-June when schools close for summer breaks.
The latest sales, however, come at a time when the average ticket prices are already at their lowest compared to the past many years.
“The fares are definitely at the lowest…almost 20% cheaper than last year and they have been so for last six-seven months. That’s what is really driving the growth,” said Sharat Dhall, President, Yatra.com.
India was the fastest growing aviation market in the world in March 2016 clocking a growth of 27.4%, according to the International Air Transport Association (IATA). India’s growth was over six times than that of the US, which with 4.1% was the second fastest growing market in the world.
“Fares were down 25-28% during the January-March 2016 quarter on a year-on-year,” said Ajay Singh, CMD, SpiceJet.
Domestic airlines carried over 30 million passengers during January-April this year as compared to the 25 million last year – a growth of 23.22%, according to the latest figures released by the government.
“That growth has really been driven by the fact that prices are much lower than last year,” said Dhall.
An analysis done by MakeMyTrip reveals that average fares on most domestic routes like Delhi-Goa, Mumbai-Goa, Delhi-Leh, Delhi-Srinagar for April-June, 2016 period are much cheaper as compared to the corresponding period last year.
“Average airfares have come down thanks to airlines adding capacity and a fall in fuel prices. Even ticket prices during the last October-December quarter saw a sharp dip,” said Rajji Rai, former chief of the Travel Agents Association of India.
“The low airfares have made the fare difference between travel by train and air negligible giving a big boost to air travel,” said Rai.
The latest airline sales have been a big hit. “Last week sales went up 70% on a week-on-week basis because of the sales. However, there are very few seats at the lowest fare and those tend to go away very quickly. So, one has be to really quick,” said Dhall.