Even as low-cost carrier SpiceJet was chastised by the Directorate General of Civil Aviation for triggering another fare cut, the company put out a spirited defence of its move in a release in the evening. The Kalanithi Maran-owned loss-making carrier -- which cut fares sharply for the third time in the past few months -- offered flyers tickets for Re 1 but had to suspend the offer within a few hours following a rebuke from the aviation regulator, which accused SpiceJet of resorting to “predatory pricing”. But the company maintained that its intent was to stimulate demand – rather than eliminate or reduce competition – in an industry that faces weak demand.
Spice pointed to other occasions, where domestic Indian carriers had resorted to a similar pricing structure, possibly referring to a Re 1-sale that was carried out by now-defunct Air Deccan a few years back. “[Leading Asian low-cost] airlines such as Air Asia and Tiger Airways have had numerous fare sales, including in the recent past -- including for their flights originating in India -- where the base fare was Rs 0/- (excluding fees and taxes, but including fuel surcharge),” the carrier said in the statement, adding that this kind of low-fare "market stimulation and inventory management", if done properly, was essential for the LCC business model.
02/04/14 Moneycontrol.com
To Read the News in full at Source, Click the Headline
Spice pointed to other occasions, where domestic Indian carriers had resorted to a similar pricing structure, possibly referring to a Re 1-sale that was carried out by now-defunct Air Deccan a few years back. “[Leading Asian low-cost] airlines such as Air Asia and Tiger Airways have had numerous fare sales, including in the recent past -- including for their flights originating in India -- where the base fare was Rs 0/- (excluding fees and taxes, but including fuel surcharge),” the carrier said in the statement, adding that this kind of low-fare "market stimulation and inventory management", if done properly, was essential for the LCC business model.
02/04/14 Moneycontrol.com
