Airlines are scrambling to fill empty seats by slashing fares

With domestic airlines locked in a price war, airfares have dropped by 50 per cent in some sectors and this bonanza could continue till early October, say experts.

Airfares would shoot up just before Durga Puja, which starts from October 9, they said.

With load factor depleting due to various reasons in this lean season, airlines are scrambling to fill empty seats by slashing fares either through sale offers or dropping fares to poach passengers from competitors and to create demand by attracting rail passengers to fly.

Though APEX (advance purchase excursion fare) fares are still available at cheap rates, airlines are now more concerned to fill seats in the coming days as the number of empty seats has increased.

A low-cost airline currently facing severe cash crunch is slashing fares, a la Kingfisher before it went burst, without announcing any sale and this has prompted other airlines to lower fares, airline officials said.

“The traffic is not going up as anticipated. Though there was a passenger growth of 3-4 per cent last month, we are finding a drop in air travel. At present, there is an urge for all airlines to fill seats. There is a bit of anarchy in one airline in pricing fares and everyone is following,” said an airline executive asking not to be named. On Saturday, Jet Airways announced sale of seven lakh seats in the range of Rs.1,777-3,777, excluding taxes. Though this sale will end on August 9, passengers can fly from August 10 which indicates the desperation of airlines to fill seats at the earliest.

“All airlines created additional capacity in the past 12 months to fill the void created by Kingfisher’s exit. Overall demand has shrunk by 10 per cent. Demand for air travel is extremely weak due to the prevailing economic condition and people are either postponing visits or have stopped flying. Low fares will stimulate some demand,” said Ankur Bhatia, Executive Director, Bird Group.

“Such offers help bring in incremental passengers who may have otherwise taken the train. A flight allows passengers to convert even a two-day weekend into a vacation which may not be possible if one travels by train. And one may also not get the tickets during peak season.

Limited discounts in airfares help expand the base of flyers in India which is abysmally low at the moment”, said Amber Dubey, Partner and Head-Aerospace and Defence at global consultancy KPMG.

“If any airlines dumps seat inventory in the market for an extended period covering say 15-20 per cent of its capacity, it’s perhaps a fit case for the Competition Commission to step in,” Mr. Dubey added.

Whatever may be the case, passengers are now rejoicing.

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