Airfare wars are back as Indian skies get busy. Recently, full-service carrier Vistara kicked off its sixth birthday celebrations with a sale. After air services resumed in late May following weeks of coronavirus-induced lockdown, the Indian aviation industry has not seen the kind of sales it is used to before the outbreak. Airlines now have to adhere to floor and ceiling prices on fares.
Budget airline SpiceJet in August was the first to offer discounted tickets after the resumption of services but had to pull the sale back after a rap from the Directorate General of Civil Aviation (DGCA). The airline was offering a free ticket for every ticket purchased, which was termed a violation of the fare-cap guidelines.
Vistara, jointly owned by the Tata Group and Singapore Airlines, was smarter. The sale period—January 8-9— coincided with its anniversary but tickets were for travel beyond the fare-cap period. But the fare-cap period was extended to March 31 and the airline quickly readjusted the dates.
No sooner had the sale began than low-cost carriers jumped in. SpiceJet, AirAsia India and IndiGo announced copycat sales.
After months of hibernation, the Indian aviation industry was back to its old ways—cut-throat competition, undercutting each other and selling below cost. Indeed “sale” is a mechanism to shore up bookings, fill up seats and get additional cash flow in times of need. A good sale is the one that juggles all three well and not just the flow of cash.
IndiGo and AirAsia India are offering fares starting at Rs 877 while SpiceJet’s offer is Rs 899. The travel period for discounted tickets for all three airlines is from April 1 to September 30.
The lowest fares are for short routes like Guwahati- Imphal or Agartala-Imphal. The floor price set by DGCA starts at Rs 2,000. While the sale window is perfectly legal, it highlights what could have happened had the government not set a price range.
15/01/21 Ameya Joshi/Moneycontrol.com
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