Cheap airfares resurface to woo travellers back from railways

Cheap airfares resurface to woo travellers back from railways
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First Published: Tue, Oct 21 2008. 11 27 PM IST
Updated: Tue, Oct 21 2008. 11 27 PM IST
Mumbai: Airlines are trying to woo passengers back to the skies by offering cheaper fares, special incentives, advance booking plans and frequent flyer benefits to arrest a 19% slide in the number of air travellers last month from a year earlier.
Domestic airlines carried 2.63 million passengers in September, down from 3.3 million in the same month last year, as travellers faced with rising airfares opted to travel by rail and road instead.
Carriers such as SpiceJet Ltd, GoAirlines (India) Pvt. Ltd that operates GoAir, and IndiGo, run by Interglobe Aviation Pvt. Ltd, have knocked off a Rs150 congestion surcharge imposed on each ticket.
State-owned National Aviation Co. of India Ltd, or Nacil, which runs Air India, never imposed the congestion surcharge, but others including Kingfisher Airlines Ltd and Jet Airways (India) Ltd continue to load this on every ticket.
The airline firms are also going back to permitting bookings as much as six months in advance, dropping the current practice of limiting ticket purchases to three months before the travel date.
After reducing fares by 15% across the board, Delhi-based low-fare carrier SpiceJet on Tuesday reintroduced its Rs99 fare (excluding taxes and surcharges) on some sectors, keeping bookings open into March next year. The airline has also announced an all-inclusive Rs3,225 ticket on the Mumbai-Delhi sector compared with tickets priced between Rs5,000 and Rs6,000 earlier.
The Wadia Group-promoted GoAir has decided to offer every single flyer on the airline a Rs200 voucher with each boarding pass, which can be redeemed on the next ticket purchased within three months. Under a “fly smart” programme, the Mumbai-based carrier has offered a free base-fare ticket against the purchase of the fifth consecutive ticket bought online from now to March.
Airfares in India comprise a base fare and levies such as fuel and airport surcharges.
“We are bringing back the advance ticket purchase schemes on our system. GoAir will start aggressive pricing for different segments, based on routes and traffic,” GoAir chief executive officer Edgardo Badiali said.
G.R. Gopinath, who pioneered low-cost air travel in India and is now vice-chairman of Kingfisher Airlines—to which he sold his carrier—said airlines were smarting under dropping passenger traffic in response to rising airfares. “Airlines, especially low fare carriers, will have to increase their consumer base by offering cheaper fares since they are competing with railways,” he said.
According to a 3 October Citigroup Global Markets Inc. report, the difference between low-cost carriers, or LCCs, and rail fares has gone up by at least 50% since May and 80% since January.
“As a result, domestic air traffic growth—propelled by the launch of several LCCs—has dropped off sharply, registering a decline of 17% in August,” it said.
Aditya Ghosh, president of IndiGo, said passengers could save as much as 50% of base-fares by booking two-three weeks in advance and by almost 40% one-two weeks ahead.
Nacil will announce new benefits to the frequent flyers on Wednesday.
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First Published: Tue, Oct 21 2008. 11 27 PM IST
More Topics: Airfares | Airlines | GoAir | SpiceJet | IndiGo |