Price war in Indian skies: Jet Airways, Spicejet, AirAsia cut fares

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A price war has broken out in Indian skies with full-service carrier Jet Airways announcing special offers that include base fares starting as low as Rs 396 (excluding taxes and fuel surcharge) on select domestic routes while rival low-cost airline Spicejet has come out with discounted fares for both domestic and international routes.

The offers come close on the heels of AirAsia’s discounted fares announced on Monday.
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Jet Airways said tickets for the special fare offer can be booked between October 4 and October 7 for the travel period from November 8, 2016 onwards on select domestic routes.

The offer is valid only on Jet Airways direct flights within India and available on firstcome-first serve basis, it said. The base fare excludes fuel surcharge, statutory taxes and fees.

“This exciting limited-period offer is our way of joining the festive celebrations, together with our guests, their families and loved ones,” Jet Airways Chief Commercial Officer Jayaraj Shanmugam said.

Gurgaon-based SpiceJet has announced airfares as low as Rs 888 for its domestic flights and Rs 3,699 for overseas flights under its festival sale offer.

The flights under the offer can be booked from October 4 till October 7 while the journey can be undertaken between November 8, 2016 and April 13, 2017, SpiceJet said in a release. The seats available under the special festival sale are limited and on a first-come-first-served basis, it added.

Applicable only on direct flights, under this offer, tickets on domestic routes are priced for popular routes such as Bengaluru – Kochi, Delhi -Dehradun, Chennai – Bengaluru at Rs. 888 (all-in; one-way) while within the international sector, the sale offer has encompassed Chennai -Colombo routes at Rs.3699 (all-in; one-way) among others.
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Another no-frills carrier, AirAsia India, which has only domestic operations, has also launched a discounted ticket schemes as part of its year-end sale, in which it is offering fares starting at Rs 999 for a limited period.

However, its parent company AirAsia is offering discounted fares on international routes as well.

An industry insider said the slashed fares are being offered to fill seats in advance which otherwise may have gone empty.

Airlines such as SpiceJet have been very aggressive in their pricing and this advance sale of tickets helps it to get hard cash in hand which lowers the requirement of raising costly working loans to run operations.

Former Air India executive director and aviation expert Jeetendra Bhargava said, “Such offers that benefit customers are welcome but airlines should not chase market share at the cost of profitability.”

He said aviation industry is currently blessed with two key factors – relatively low jet fuel costs and high load factorsthat will help them to break-even, but they have to keep in mind that low fares cannot be offered at the cost of jeopardizing profitability as this will spell trouble for the industry.