New Delhi: Full service airlines Air India Ltd and Jet Airways have joined the Diwali airfare sale offering tickets sometimes even cheaper than their low-cost airline counterparts.
Air India and Jet Airways have matched fares and in some cases are offering lower fares than what’s being offered by airlines like IndiGo and SpiceJet, among others, on dozens of routes, according to searches on airline websites and travel portals.
Low fare airlines charge for food (an additional Rs250 or more). They also do not provide additional services like frequent flier miles.
Air India said it is also offering an additional discount over and above the cheaper fares and complimentary food and extra baggage.
“(There will be a) 10% discount for domestic travel in economy and business class for bookings made on web and mobile app (of Air India),” the airline said on its website.
The Air India sale is effective for flights from 13 October to 15 December, but not for 21, 22 and 23 October.
Typically, fares in the fortnight leading up to Diwali and in the quarter to 10 January are among the highest in the year, helping airlines make up for losses in the lean seasons.
This year is different. One-way economy flight tickets from Delhi to Mumbai are now going for Rs2,000, all inclusive. These used to be about Rs5,000-8,000 in the fortnight before Diwali, which falls on 19 October this year.
Mint first reported on 2 October how low demand was dragging down flights fares.
“It’s going to punch a hole in airline finances. If you see oil has gone up and rupee has also inched up against the US dollar. We had thought everyone would maintain market sanity but we didn’t start the sale this time. But when it came, one after the other, everyone had to follow,” said a low-cost airline official, who did not wish to be named. “It’s almost like a race for the highest load factors.”
Load factors refer to passenger occupancy per flight. Higher occupancy does not necessarily mean higher revenues, unless both the fare charged per passenger and occupancy are high.
The sales by airlines show very poor demand forecasting, said Keyur Joshi, co-founder, MakeMyTrip.com.
“They were sitting on too many seats and Diwali demand is falling way short of their expectation,” Joshi said.
He said there was more pain ahead if the slight economic slowdown does not peter out.
“With industry continuing to add capacity and economy showing some signs of slowing down (may be temporary), there will be some short term distress. If economy recovers to grow over 7%, the growth story of Indian aviation will continue & if growth falls below 6% we will need slowdown in capacity building or there will be a lot of pressure on pricing,” he added.