Tuesday, November 07, 2017

Airfares on southern routes to drop in IndiGo, SpiceJet war dogfight

Mumbai: The South bound fliers are in for a good time. A battle is brewing between rival low-cost carriers SpiceJet and IndiGo which may result in significant drop in fares in the next few months.

While SpiceJet has been a major player on the Southern routes, IndiGo, India's largest airline has lined up plans to intensify operations from December – by increasing frequencies on existing routes and adding new destinations.

The Southern peninsular regions, which includes commercially developed belts, upcoming business centres and pilgrimage destinations, have played a significant role in increasing of yields for SpiceJet, helping it to make a dramatic turnaround in its fortunes from near-closure around three years back. With IndiGo scaling up operations, analysts expects yields of SpiceJet to soften from the fourth quarter of this fiscal.
" In fact, these southern peninsular destinations have been one of the key determinants for higher yields of SpiceJet.With IndiGo starting its regional foray from December, we expect yields of SpiceJet to soften from Q4 of FY18," an ICICI Securities report said.

Yields in aviation parlance refers to the average fare paid per mile travelled.

On IndiGo's plans, ICICI Securities said while most of the destinations are also served by the current A320 fleet, some new cities have been added like Vijayawada, Rajahmundry and Tirupati.
07/11/17 DNA/Shahkar Abidi