Air India Ticket Promo Ignites Price War

Saturday, 23rd March 2013 at 03:14am

India's air travel market is showing some slack in recent months prompting airlines to entice travelers to fly. Recently, Air India launched a promo offering air travelers heavily discounted rates for those who purchase tickets 60 days in advance.

Not to be outdone, its major rivals either launched similar promo or crafted their own gimmickry to lure them to fly with them. These include Jet Airways and IndiGo who quickly matched Air India's low fares promo. While IndiGo didn't formally launched its own promo, it nonetheless, offered discounts almost similar to Air India's.

The slash-down promo has proven to be a very effective way to attract customers and Air India has been using this scheme to their advantage. The airline is expecting to improve its revenue by up to 15% and increase it load factor.

The three airlines offered almost identical price for a one-way ticket from Mumbai to Delhi at around Rs4,200 or about 15-20% less than regular fares. Customers were disappointed, however, upon discovering that Jet's promo price wasn't available on its website.

The state-owned carrier has put on an aggressive stance in its effort to fill its planes via offering ticket promo at a low price after it failed to do so last summer which is considered a peak season for air travel.

During last summer, Air India's load factor averaged 68% for the two months, which paled in comparison to its major rivals. IndiGo was the winner during that period whose load factor averaged 86% as opposed to SpiceJet's 80% and Jet Airways' 75%.

According to Air India official, he was hoping that the promo would help them make up for what they have lost last summer. He said that they are going to tap a certain market segment which remains unexploited, it is the segment comprising train travelers.

He, however, clarified that the ongoing ticket discount sale is not at all a limited-time offer. That the offer will go on for indefinite period without elaborating details. What is limited, he explained, is the number of seats available on a certain flight. He elucidated further that they offer the discounted price on all flights across their entire network.

According to an online travel agency official, discounted tickets allow airlines to increase their market share and, at the same time, stimulate market demand which remains low since last year.

On average, most airlines in India have a load factor ranging from 75 to 80 percent. To improve this sagging rate, airlines should slash their fares down to entice the public to take the air when they travel.

Early this year, SpiceJet offered its customers a base fare of Rs1 on all routes with 1 million seats available within the travel promo period, from February to April this year. Last year, Jet made similar promo offering a base fare of Rs1 with 2 million seats available on all routes.

By: Pete Lee.