War Fare of Air Fare – Airlines are struggling to survive

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The trend of locking the horns over the Air Fare is not new in Indian Air-lines market. With the rampant increase in Airlines the cut throat competition is there to happen. It is not very long when the INDIGO airlines was introduced the low fare flights through India which sparked the competition in airlines. The Indigo trend was followed by the Kingfisher Airlines who were the second largest economy travel airlines till the year 2012. The bigger players like Jetair, Indian Airlines also jumped into this competition, till no sooner they realized that the low fare is not the true way of survival.

Some have succeeded in this war and some have doomed. INDIGO is today one of the most economical Airlines in India, while the Kingfisher Airlines have close down  their operations in India due to the recurring financial losses faced by the airline and were even unable to pay off their staff. The government of India suspended their operations domestic and international in year 2013.  The airfare war since then has been cooled down to quite an extent.

The recent announcement of INDIGO Airlines offering one-way fares starting at Rs 1,178 had again kick started the Air fare war.  According to the press release the offer is valid till Wednesday and the travel period for availing the special discounted fares is between July 1, 2015 and September 30, 2015. While Delhi-Mumbai fares start at Rs 2895, Indore-Mumbai flights start at a fare of Rs 1178. IndiGo has been almost regularly indulging its customers with discounted air fares. Just last week, it had come up with another scheme offering one-way fares starting at Rs 1,345.

Not to be left behind in this war fare Air Asia has also announced all-inclusive domestic fares starting Rs 1,290. The scheme is valid for travel between June 15 and September 30, 2015 and bookings can be made till April 12, 2015. GoAir had earlier announced one-way tickets starting Rs 1,299. Eyeing bigger market share than rivals, many players in the domestic market have come up with a series of discounted offers to lure customers in the January-March and July-September quarters – traditionally considered periods of low travel demand.

The budget carrier in its ‘lower than low’ scheme offers travel from Delhi to destinations including Goa, Mumbai, Bengaluru, Chennai, Pune, Kolkata and Jaipur. All-inclusive one-way fares are “valid for bookings made 90 days before travel date”, said IndiGo, India’s largest airline in terms of domestic market share.

Not to be left behind in this fare war TATA’s have also come up with the discount schemes for their customers. Tata’s Vistara airlines is now offering discounted rates on air fares for booking made 90 days in advance. The air fares start at Rs 2129. This marks Vistara’s entry into the fare war with other airlines offering hefty discounts in order to attract customers. Vistara is India’s third full-service airline after Air India and Jet Airways is offering Mumbai-Delhi flight tickets starting at Rs 3539, while Mumbai-Ahmedabad flight tickets start at Rs 2129.

This war will continue with the augment of Airlines into the aviation segment. The increase is also due to the demand from the market as the aviation industry in India is growing rapidly. The air travel is increasing due to boost in the business and need for the fast movement. Looking at the trends of the low fare airlines and increase in demand the profits are there to sore, but the overall business is appears to be boosting.

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