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Business News/ Companies / News/  SpiceJet, IndiGo extend discounted airfares scheme
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SpiceJet, IndiGo extend discounted airfares scheme

Jet Airways and Go Airlines have also joined the discounted sale scheme

A Delhi-Mumbai ticket that is otherwise `10,098 for last minute purchase can now be purchased for as little as `3,617 under this offer. Photo: ReutersPremium
A Delhi-Mumbai ticket that is otherwise `10,098 for last minute purchase can now be purchased for as little as `3,617 under this offer. Photo: Reuters

Mumbai: Low-fare airlines SpiceJet Ltd and IndiGo on Friday cut fares by 30% for bookings until Sunday to fill seats during the lean season.

And online travel agents said Jet Airways (India) Ltd and Go Airlines (India) Ltd have also joined the sale.

“SpiceJet will offer 30% discount on base fare and fuel surcharge on the ticket. All applicable fees and taxes, etc., to be paid by the customer. Minimum 30 days advance purchase is required to avail of the Super Sale fares," said the website of SpiceJet.

The sale would require customers to book at least 30 days in advance for weekday travel from Mondays to Thursdays till 15 April. A Delhi-Mumbai fare that is otherwise 10,098 for last-minute purchase can be purchased for as little as 3,617 under this offer.

Together SpiceJet and IndiGo make up for nearly 48% of the domestic aviation market. Jet Airways too is offering a 30% discount on the base fare as well as fuel surcharge, travel agents said. “After the grand success of the Spring Super Sale offer and in response to a deluge of requests to repeat the offer from those who missed it the first time, we are pleased to announce the Second Chance Super Sale offer for the benefit of our customers," said Sanjiv Kapoor, chief operating officer of SpiceJet.

“These offers are a win-win for customers and for the airlines, since it leads to significant demand stimulation, customers get to enjoy deeply discounted fares, and airlines get to reduce wastage of seats that would otherwise fly empty in low season," he added.

Kapoor said, “SpiceJet is also demonstrating that you do not need foreign airlines to show India the power of low fares and market stimulation; we are just as capable of doing it ourselves, and are committed to creating multiple opportunities for as many Indians as possible to fly."

This second round of promotional fares comes at a time when SpiceJet is looking for investments to fund its expansion. Earlier in January, consultancy firm Centre for Asia-Pacific Aviation, or Capa, said in a report that SpiceJet is estimated to need close to $200 million to remain operationally viable, while a realistic and meaningful turnaround may require $300 million or more.

Vikram Malhi, general manager (south and southeast Asia) at online travel agency firm Expedia Inc., said his firm had seen a surge of 150% in bookings since Friday morning.

“A Delhi-Mumbai fare that would cost 10,098 on last-minute purchase can be purchased for 3,617, including tax, under the present offer," he said. “These offers are a win-win for customers and for the airlines, since it leads to significant demand stimulation, customers get to enjoy deeply discounted fares, and airlines get to reduce wastage of seats that would otherwise fly empty in low season."

Also, by selling some percentage of inventory at discounted prices during the lean season, airlines would be in a better position to assess their bookings and load factor to plan for the holiday season, Malhi added.

India’s airlines lost an estimated $1.95 billion in the last fiscal year on combined revenue of $9.5 billion, according to Capa, due to high fuel and other operational costs. The debt of Indian airlines increased 8-9% in 2012-13 to an estimated $14.5 billion.

“It is a good opportunity for customers to firm up their travel plans as these are meant to prop up sales in a weak quarter which they can take advantage of," said Neelu Singh, chief operating officer at Ezeego One Travels and Tours Ltd, which runs online travel agency firm www.ezeego1.com.

Kapil Kaul, chief executive officer (South Asia) at Capa, said his firm expected further pricing offers by airlines after the recent discounts to perk up travel demand and raise cash.

“Domestic aviation continues to be an unviable business with no near-term turnaround likely. More important, industry actions reflect almost no desire to return to profitability as funds seem easily available," Kaul added.

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Published: 31 Jan 2014, 08:58 AM IST
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