Coinciding with the traditionally lean travel months, the swine flu scare has spelt lower fares, in several instances almost 50 per cent lower than the peak fares this year on metro routes. A Delhi-Mumbai trip currently costs less than Rs 2,500 on a low-cost carrier, half of the amount the flyer shelled out in February earlier this year. The discount is applicable only to round trips, and not to one-way fares. It’s mostly the low-cost carriers who are offering competitive fares. But they insist fares might pick up once in festive season.
On one of the busiest air traffic routes, Delhi-Mumbai-Delhi, SpiceJet and GoAir are offering a round trip in less than Rs 5,000 while Indigo and Jet Lite charge slightly higher. “Quarter 2 (June, July and August) being the weakest travel period, airlines are forced to look at attractive promotional fares. At an average one-way ticket price of Rs 3,000, airlines hope to shore up occupancy levels,” said Centre for Asia Pacific Aviation (CAPA) South Asia CEO Kapil Kaul. Despite the attractive fares, the outlook is grim for the second quarter as yields are likely to be 20 per cent lower than in the previous quarter, splashing red on balance sheets, says CAPA.
With festive season just a month away, Go Air is the first one to announce special all-inclusive fares beginning at Rs 1,500 for travel till March 2010 for tickets booked within next week. Not all airlines are, however, as enthused to offer lower fares in the festive season. “In September, the demand is likely to be robust. So the fares will start picking up, maybe even earlier than the festive season,” said SpiceJet COO Samyukta Sreedharan. As the domestic flyer shifts from full-service carrier to the no-frills, the full-service airlines are busy re-jigging their business models and adding capacity to their low-cost arms. Jet Airways’ no frills economy service — Jet Konnect — will soon start operating on several domestic routes as it tries to tap the lower fare segment and increase yields. “Share of low-cost traffic is likely to swell from 60 to 70 per cent in the next three months, putting pressure on fares. Jet Konnect, which accounts for one-third of Jet Airways traffic, is likely to touch two-thirds by the third quarter of this fiscal. Kingfisher Red accounts for almost 74 per cent of Kingfisher’s traffic,” said Kaul. Waiting in the wings to enter low-cost domestic market is Air India Express, which experts believe will have a short-term impact on fares.
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