Domestic carriers have slashed airfares in a bid to up their revenues at a time the airline industry has been hit by rising aviation fuel prices and a weaker rupee.
While full-service carrier Vistara is offering discounts up to 75% on its tickets (a Delhi-Lucknow ticket starts at Rs 1,599; for longer routes such as Delhi-Mumbai, it would be Rs 2,299), budget carriers AirAsia and GoAir are offering tickets at a flat rate of Rs 1,399 and Rs 1,299, respectively.
While flash sales are not new in India, the rationale behind rolling them out, especially when the carriers have taken a hit in their profit, is surprising. “The second quarter of the year has always been weak and therefore we see aggressive price wars between the carriers to fill up their seats,” said aviation expert Kapil Kaul, South Asia director, Centre for Asia Pacific Aviation (CAPA).
Kaul explained that airlines are offering discounts on advance booking and on limited seats. “The airlines recover the cost in another quarter when the demand is strong. Usually, the first and third quarters are the strongest as it’s the holiday season and there is substantial rise in the passengers,” he said.
Vistara is offering its flash sale for domestic travel between June 6 and September 27, while GoAir is offering discounts on tickets for trips between June 24 and September 30. Air Asia’s offer stands for all tickets booked till November 30.
However, this could soon change as experts expect prices to be revised upwards. But Manheer Singh Sethi, co-founder, Travkart.com, said there would be a price correction only if fuel prices continue to rise. “However, short-duration flights might take a hit sooner than the long-duration flights, he said, adding that as of now such a hike in fares wasn’t expected.
Balu Ramachandran, head-air and distribution at Cleartrip said if there was a price correction in the industry, it could dampen the demand for air travel. “Given the significant capacity addition plan of up to 130 new aircraft in FY19 and high competitive intensity in the Indian aviation sector, it is unclear if airlines can pass on a part or whole of this higher fuel prices to the consumer.”
