Mumbai: SpiceJet has dropped fares for the third straight time in the past two months, prompting a price war. Within hours of SpiceJet’s announcement, IndiGo and GoAir, too, cut fares on some their flights.
Unlike SpiceJet’s earlier offers aimed at boosting occupancy in a lean season, this one is for travel between April and June, during school and college holidays. The airline said tickets in a three-day sale would be cheaper by three-fourths than the last-minute ones. Sector sources say a series of discounts from SpiceJet indicates a cash flow problem at the airline. The company had a loss of Rs 172 crore in the third quarter, usually a good one for airlines. A large chunk of its loss came from domestic operations.
“These advance purchase offers are a win-win for customers, airlines, travel industry and the economy overall, as it leads to significant demand stimulation. Customers get to enjoy deeply discounted fares, airlines get to reduce waste of seats, and others in the travel eco-system get more business. These are not fare wars, as commonly reported, since there are no losers. This is just basic customer segmentation and inventory and revenue management,” said SpiceJet Chief Operating Officer (COO) Sanjiv Kapoor.
25/02/14 Business Standard
To Read the News in full at Source, Click the Headline
Unlike SpiceJet’s earlier offers aimed at boosting occupancy in a lean season, this one is for travel between April and June, during school and college holidays. The airline said tickets in a three-day sale would be cheaper by three-fourths than the last-minute ones. Sector sources say a series of discounts from SpiceJet indicates a cash flow problem at the airline. The company had a loss of Rs 172 crore in the third quarter, usually a good one for airlines. A large chunk of its loss came from domestic operations.
“These advance purchase offers are a win-win for customers, airlines, travel industry and the economy overall, as it leads to significant demand stimulation. Customers get to enjoy deeply discounted fares, airlines get to reduce waste of seats, and others in the travel eco-system get more business. These are not fare wars, as commonly reported, since there are no losers. This is just basic customer segmentation and inventory and revenue management,” said SpiceJet Chief Operating Officer (COO) Sanjiv Kapoor.
25/02/14 Business Standard
