Friday, January 22, 2021

Airlines Offering Steep Discounts to Augment Cash Reserves, Bring Back More Capacity

Fare wars induced deep discounting has reappeared in India's aviation sector, as airlines seek to augment cash reserves, consolidate market share and bring back more capacity. The first shot in this war of extremely low prices was fired recently with most airlines commencing their sales offers. The development comes around a year since Covid-19 lockdown devastated the sector.

Industry insiders, however, now believe that the roll-out of anti-Covid-19 vaccination programme will give a boost to air travel.

Besides, some of the travel period offered under these schemes are beyond the current expiry of the fare cap imposed by the Centre.

IndiGo's Chief Strategy and Revenue Officer Sanjay Kumar said: "Low fares always helps stimulate the demand for the travel period far out and works as a part of airline strategy."

"These sales stimulate traffic among extremely price sensitive customers and helps airlines meet overall objectives."

The latest passenger traffic data from the sector regulator DGCA indicate that the growth in passenger volumes is not yet adequate enough for a revival in the airline sector.

22/01/20 News18

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