Airlines cut fares to beat monsoon woes

At a time when airlines are struggling to make both ends meet, reduction in fare from the carriers comes as a shocker. Airlines have introduced low fares to increase yield per passenger. The motive behind reducing fares, say industry observers, is to stimulate air travel when business and leisure travel take a backseat during the monsoons.

Air India has set the trend by introducing fares as low as Rs 2,429 on the Delhi-Mumbai route. Fares on short-distance sectors start at Rs 1,979. Air-tickets with these special fares can be purchased between June 27 and July 3 for travel before September 15. Ironically, the carrier has recently requested its higher rung executives to forgo salary for July and has also taken initiatives to curtail monthly operating costs.

Private carrier Jet Airways, which reported losses of Rs 961 crore for FY08-09, has also brought down its fares to Rs 2,000 on Mumbai-Hyderabad sector which otherwise was priced over Rs 5,000. The carrier has downsized its staff and has also downgraded salaries of its employees to improve its financials.

Low-cost carrier SpiceJet has introduced low fares at Rs 1,600 for Mumbai-Jaipur flight for the next three months. These carriers had hiked their fuel surcharge by Rs 400, only a week ago, but reversed their decision.

Samyukta Sridharan, SpiceJet's chief commercial officer, while speaking at the conference in Mumbai, said, "We have special fare schemes to stimulate non-travellers to book tickets. The reduced fares encourage travellers to fly with us. However, passenger service fee and applicable airport charges are in addition to the prices." Says an executive from a carrier, "Seats on the aircraft are perishable commodities. Once the doors of the aircraft are closed, the empty seats do not have the potential to earn revenues. Carriers introduce fares to fill up those vacant seats during lean season."

Flying low

Air India has introduced fares as low as Rs 2,429 on the Delhi-Mumbai route.

Jet Airways has brought down its fares to Rs 2,000 on theMumbai-Hyderabad sector.

SpiceJet has introduced low fares at Rs 1,600 for Mumbai-Jaipur flight.

As rains ground fliers, airlines rain schemes

With passenger load declining in the ongoing lean season, airlines have come up with special monsoon offers to lure leisure passengers. This limited period all-inclusive (except airport tax) offers are nearly 50 per cent lower than normal fares, said airline executives.

Tickets need to be booked before July 3, and travel before September 15. Air India, for instance, offers Mumbai-Delhi, Mumbai-Chennai, Mumbai- Bangalore flights at Rs 2,479, inclusive of all taxes except for airport UDF. The fare from Mumbai to Kolkota is Rs 2,729, while for all short sectors it is just Rs 1,979.

Jet Airways group - inlcuding full service Jet Airways and low cost services JetLite and Jet Konnect - has also aggressively lowered fares in its monsoon offer. "We come out with such offers to exhaust unsold inventory. Past experience had shown good results and seat load goes up by 10 to 15 per cent. Such offers give us top line growth," said Rajshiv Kumar, head, revenue management, Jet Airways.

Jet Airways is charging a mere Rs 250 over its low-cost arms to lure passengers. While the highest fare in Jet Airways for distances above 1,400 kms is Rs 2,750, the cheapest seat offered by Jet Konnect for distances below 750 kms is Rs 1,750.

SpiceJet is offering fares starting from Rs 1,500 for its 18 destinations. Passenger Service Fee and relevant airport charges are charged extra. "These unbeatable low fares will encourage more people to fly," said Samyukth Sridharan, CCO, SpiceJet.

GoAir has announced a special promotional offer for all flights operating from and to Ahmedabad, with one-way fares starting at Rs 1,500. Besides this, the airline is offering complimentary snacks to fliers at the departure hall in Ahmedabad before boarding, the airline said.

Paramount Airways has also lowered fares for the season. For select destinations, a Paramount passenger can avail all-inclusive fares as low as Rs 2,229. Airlines those increased fuel surcharge by Rs 400 early this month are worried about declining traffic.