Thursday, December 30, 2021

Is this the start of another price war in Indian skies?

A fresh airfare war appears to have broken out in Indian skies after almost two years as airlines seem determined to prevent the grounding of their fleets or flying near-empty aircraft amid uncertainty over the pandemic.

Travel demand was strong in December, with daily passenger traffic rising to 380,000, which was about 98 percent of the pre-pandemic levels. However, forward bookings were weak as people reconsidered travel plans in the wake of the rise in Omicron cases and curbs by state governments, experts said.

Additionally, the January-March quarter is a relatively less busy season for non-business travel.

GoFirst, formerly GoAir, kicked off the price war on December 22, offering a 20 percent discount for double-vaccinated passengers on domestic flights for tickets booked on the airline’s website or mobile app. The discount is applicable for travel 15 days after the booking date.

SpiceJet followed, offering all-inclusive, one-way fares starting at Rs 1,122 for bookings made from December 27 to 31 on routes such as Chennai–Bengaluru, Bengaluru–Chennai, Chennai–Hyderabad and Jammu–Srinagar.

AirAsia India and IndiGo came out with similar discounts within a day. IndiGo announced a five-day year-end sale offering all-inclusive fares on domestic routes starting at Rs 1,122. The December 27 to 31 sale is valid on travel from January 15 to April 15.

The fare wars are the first since September, when the government said price bands would apply for travel only within 15 days of booking instead of 30 days earlier. However, airlines had stated they would not indulge in predatory pricing because they wanted to improve their operating margins after two years of enduring pandemic-induced pressures and high fuel costs.

Experts said advance booking fares were slashed to fill seats that may have otherwise gone empty due to rising concerns over the spread of Omicron.

Apart from discounts, airlines are also allowing passengers to change tickets up to three days before their flights free of cost. Airlines are also offering refunds if flights are cancelled due to travel restrictions imposed by the government.

“The floodgates have opened up once again. Airlines are looking to lure passengers and are working to ensure that there is no fall in air passenger traffic after nearly two years of the pandemic,” said Sanat Kaul, chairman of the International Foundation for Aviation Aerospace & Drones.

30/12/21 Yaruqhullah Khan/

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