Mumbai: More then a decade back, just a few hours before Air Deccan, India's first lowfare carrier, was to launch its Mumbai-Ahmedabad flights with a fare of Rs 1,500, national carrier Air India slashed its own fare on that route to Rs 1,400, down from Rs 4,000.
A few months later, both Air India and Jet Airways, then the market leader, dropped fares by a third after Air Deccan introduced Rs 4,000 round fares on its new Delhi-Srinagar flight.
Both Jet and Air India were selling at a huge discount: thousands of rupees below their per seat cost. But the strategy was simple: slash prices to keep your share of passengers. Marketshare first, margins and bottomlines later. Not much has changed since then.
On Thursday, just a day before AirAsia India launched its services, SpiceJet offered fares of Rs 1,499 on Bangalore-Goa and Bangalore-Chennai, the Malaysian carrier's planned maiden India sectors. AirAsia pulled out all stops. It offered one-way prices of Rs 990 allinclusive on its routes and later topped it with a Rs 5 base fare promotional tickets.
02/06/14 Anirban Chowdhury/Economic Times
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A few months later, both Air India and Jet Airways, then the market leader, dropped fares by a third after Air Deccan introduced Rs 4,000 round fares on its new Delhi-Srinagar flight.
Both Jet and Air India were selling at a huge discount: thousands of rupees below their per seat cost. But the strategy was simple: slash prices to keep your share of passengers. Marketshare first, margins and bottomlines later. Not much has changed since then.
On Thursday, just a day before AirAsia India launched its services, SpiceJet offered fares of Rs 1,499 on Bangalore-Goa and Bangalore-Chennai, the Malaysian carrier's planned maiden India sectors. AirAsia pulled out all stops. It offered one-way prices of Rs 990 allinclusive on its routes and later topped it with a Rs 5 base fare promotional tickets.
02/06/14 Anirban Chowdhury/Economic Times
