Tuesday kicked off
an air fare battle by announcing it would offer two million tickets at
discounted prices — between Rs 2,250 and Rs 3,800, depending on distance. These
would be 30-50 per cent cheaper than normal tickets.
Travel portals say
the aggressive offer is for about eight per cent of the total number of seats
the airline sells on an average over 10 months. The discount-offer tickets,
available for both economy full-service and low-cost arms and valid for travel
till December-end, could be booked till February 24. The move would help the
airline boost its low passenger load factor (of around 70 per cent) in the lean
months of February and March, besides its revenue from each flight, experts
say.
Responding quickly
to the move, rivals IndiGo and GoAir also dropped their fares on various
routes, though they did not make any formal announcement on this. Their fares
on some of the competing routes are even lower than those of Jet (see table).
Jet’s move comes a
few weeks after SpiceJet surprised the market by offering a million seats (for
a three-month period) at a rock-bottom fare of Rs 2,013. The airline was able
to sell over 700,000 tickets and rake in Rs 160 crore from its three-day sale.
Yatra.com COO
Sharat Dhall says: “As Jet is offering discounted tickets across peak and lean
seasons, we believe it will release more seats during the lean season and less
in the peak.”
The fares on
offer, however, are substantially lower than what Jet had declared to the
government as its lowest. For instance, the basic fare on the lowest bucket for
Delhi-Mumbai is Rs 1,630 — around five times higher than the Rs 348 it is
offering. After adding airport development fees and fuel charges, the fare
difference comes to 40 per cent.
“We want to
stimulate the market. For far too long, we have been passive on price actions
and innovation,” said a senior Jet executive. Some passengers complained of
difficulty in accessing the airline’s booking engine, but the executive denied
any problem with the website. “We will probably be able to sell all seats
within 24 hours,” he claimed. However, travel portals say, the lowest fares
have already been booked in many of the popular sect
http://www.business-standard.com/article/companies/jet-kickstarts-round-ii-of-fare-war-113022000069_1.html
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