Aviation fare war: About 22% more flights would be operated, forcing carriers to offer low rates

With 22% more flights scheduled this winter season asking more for seats to be filled, the domestic airlines have once again started a fare war, offering tickets for as low as Rs 900.

Market leader IndiGo has come up with discounts for 10 lakh tickets, with fares starting from Rs 899 for travel period from November 8 to April 15 next year. The period after Diwali until the second half of December sees sales softening a bit. Rival airline GoAir had earlier come out with a similar low fare offer followed by AirAsia, Jet Airways and others.

Neelu Singh, CEO and director, Ezeego1, said, “While unsold inventory level is reducing to a large extent, airlines introducing new aircraft is leading to capacity growth, forcing them to introduce last-minute sales to fill the extra seats.”

Rahul Bhatia, co-founder and interim CEO, IndiGo, during a conference call with analysts said that as competition intensifies the ticket booking outside the 15-day period before departure, which was previously about 60%, has now come down to 54%. “The real problem is the last-minute discounts,” said an IndiGo executive. Most of the airlines are facing overcapacity as around 1,000 planes are on order.

According to data available with Director General of Civil Aviation, Indian airlines will operate 22% more flights during winter schedule 2018 at 23,117 departures a week as compared to the similar period last year. Globally, the winter schedule runs from the last Sunday of October to last Saturday in March of the following year.

Aloke Bajpai, CEO and co-founder, ixigo, said all major airlines are offering promotional sales for destinations, including Lucknow, Patna, Guwahati and Dehradun, in order to lure passengers and boost demand in the domestic market. “Owing to this, we have seen an increase of 22-24% in bookings for domestic travel in the coming months.”

John Nair, head-business travel, Cox & Kings, said this year there is an increase in capacity across sectors, and new sectors such as Mumbai-Jodhpur have come onstream, thereby diverting some traffic from hubs such as Jaipur.

However, according to industry insiders, the fares during the days of Diwali and Christmas are likely to go up further.

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Rajeev Kale, president & country head - holidays, MICE, visa & passport services, Thomas Cook (India), said the domestic air fare position this year is seeing significant peaks this Diwali-festive season, with fares to favourites like Andaman as high as Rs 35,000-40,000 per person.

Source: DNA Money