Mumbai: India’s second largest low-fare airline SpiceJet Ltd on Tuesday cut fares by more than half for bookings between 8 July and 10 July for travel between 6 January and 24 October 2015, signalling its desperation to mop up working capital even as its losses mount.

Ahead of the Union railway budget to be presented later in the day, SpiceJet offered a million seats starting at 999 , terming these “lower than train fares!" on its website.

Rival airlines such as IndiGo, run by InterGlobe Aviation Ltd and GoAir, run by Go Airlines (India) Ltd, are expected to come up with similar offers to match SpiceJet’s promotional fares.

SpiceJet said the fares starting 999 are one-way base fares and all other statutory taxes would be applicable on them. “Fares vary from sector to sector depending on the travel distance," the website read.

This is the third flash sale by SpiceJet in less than a month. Also, this is first time SpiceJet has declared the number of seats available under a promotional offer.

On 27 June, SpiceJet came up with 1,999 all-in-one fare to destinations across India to fill seats during the peak season between 1 September and 15 December.

The three months ending December are considered peak season for domestic airlines because of festivals and holidays falling in the period.

These fares were matched by rival airlines including IndiGo.

Last month, consultancy firm Centre for Asia Pacific Aviation (Capa) said the combined losses of Indian airlines would reach $1.4 billion in the current fiscal, and that the structural viability of airline business models would come under pressure because costs are expected to increase while yields are likely to remain soft with new entrants coming into the market.

The combined losses for Indian airlines were $1.77 billion in the previous fiscal and accumulated losses have reached $10.6 billion in the last seven years, Capa said.

SpiceJet, which has a domestic market share of nearly 20%, posted its biggest-ever net loss of 1,003.24 crore for the year ended 31 March. The loss widened five times from 191.07 crore a year ago. The airline lost an average of 2.75 crore every day that it flew in India. SpiceJet blamed the losses on a weak rupee and slower economic growth, which has limited growth in passenger traffic.

This story has been edited to correct a mistake in the fares.

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