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Jet pulls down fares, others follow

New Delhi, Feb. 19: Fare wars have spiralled into the stratosphere.

Jet Airways announced the sale of 2 million seats on all its domestic flights at deep discounts with some tickets priced as low as Rs 2,250.

The airline has opened its booking window for these cheap tickets for six days till February 24. Tickets booked during this period will be valid for flights till December 31.

Rivals like Indigo, SpiceJet, Air India and GoAir responded with counter offers within minutes of Jet Airways’ announcement, triggering a mad, cyber stampede for online ticket purchases.

This is the third time that the airlines have been locked in a bruising dogfight in a desperate attempt to ratchet up ticket sales, claw market share and crank up their load factors — an efficiency metric that measures the number of seats that an airline is able to fill. In the third quarter of October-December 2012, Jet Airways achieved a load factor of 72.7 per cent while JetLite achieved a load factor of 75.6 per cent.

Airline and online travel websites struggled to cope with the heavy traffic and the Jet Airways site was down for some time before its engineers brought it back on air.

“We are experiencing high booking activity on our website and guests may see a slow response. We are working to address the response time and we apologise for the inconvenience,” Jet Airways tweeted in the evening.

Last month, SpiceJet had unleashed a fare war by offering 1 million one-way tickets in a three-day fire sale of tickets to all domestic destinations between February 1 and April 30. The airline claimed it had sold seven lakh tickets, collecting Rs 160 crore in three days. IndiGo had slashed fares in reaction to the SpiceJet offer but withdrew it within a few hours.

Today, travel website yatra.com said the number of hits tripled in the afternoon. “Jet started the price war (this time) and everyone followed suit. The number of hits to our website has gone up by 60 per cent. We expect the number of hits to go up by more than a 100 per cent,” said Pratik Mazumdar, head of marketing and strategic alliance at yatra.com.

The low fare tickets will be available for over 450 daily flights across 57 destinations that Jet Airways and JetKonnect fly to. The airline has introduced four different slabs based on the travel distance and these are inclusive of taxes.

“Fares up to 750km have been priced at Rs 2,250, while fares for destinations from 750km to 1,000km are priced at Rs 2,850. Similarly, destinations for which the travel distance is 1,000km to 1,400km are priced at Rs 3,300. Above 1,400km, the tickets are priced at Rs 3,800. These fares are inclusive of all taxes,” the airline said in a statement.

Justifying the heavy discounts, Jet Airways’ chief commercial officer Sudheer Raghavan said: “This nationwide low fare sales offer is a goodwill gesture to our loyal guests who will now be able to plan and schedule their travel much in advance, especially during the holiday seasons, while benefiting from these special fares. This limited inventory under the offer is subject to availability on all domestic flights of Jet Airways and JetKonnect.”

IndiGo did not release the details of its sale offer. But it is learnt that it is also offering tickets at prices that are 30 to 40 per cent cheaper than the normal fare. The airline did not specify the validity period of its offer.

Travel experts termed it a full-blown fare war that could continue as long as Jet Airways’ offer lasted.

Some aviation experts said the discount fares of Jet Airways and IndiGo were not being offered on all flights. “It is primarily on flights that have limited loads. The offer has been introduced to stimulate demand and boost forward bookings,” a source said.

The Directorate General of Civil Aviation (DGCA), the civil aviation regulator, said it was watching the situation. Recently, it had warned airlines not to start crippling price wars. “We are waiting to see whether these discount schemes will have any long-term repercussions on the airline industry,” said a senior DGCA official.

Air India had unleashed the first price war last November with its Jaldi-Jaldi scheme that was meant for domestic flights. Inspired by its success, the state-owned airline launched a special all-inclusive promotional return fare scheme on its international flights.

In early 2011, SpiceJet and Indigo were locked in a price war that prompted full-service airlines like Jet Airways and Kingfisher Airlines to approach the government and demand curbs on predatory pricing.


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