Wednesday, January 23, 2013

SpiceJet scheme triggers a full-blown fare war among domestic carriers as they scramble to drop ticket prices

New Delhi: SpiceJet's recent mega ticket sale at 2,013 a ticket, has spurred a full-blown, but silent, fare war among its peers as they scramble to drop fares, albeit discreetly. This has forced the fragile financials of a sector to be put to test on the sustainability of the recent turnaround in the sector.
To begin with, Air India dropped fares much lower than rival Jet Airways to surpass even the three budget carriers on some routes Monday night, forcing the low-cost airlines to match that drop. However, the travel industry fraternity says this is not where things would stop as IndiGo, SpiceJet and GoAir could drop ticket prices further to protect their market share. The airlines in India are heading to a lean season, which begins from February.
"Air India has dropped fares over the past two days quietly to match those of budget airlines in order to maintain its market share as passengers will prefer to fly AI over low-cost carriers to avail of better services like in-flight entertainment, meals and the likes," COO (corporate travel) and Senior VP (air product) Sunny Sodi told ET.
23/01/13 Anindya Upadhyay/Economic Times