I was reading about the news of airlines slashing up the prices.So thought of writing about whatever information I gathered from economic times.
Since the beginning of 2013 airlines are offering heavy discount to lure the passengers.
Spice jet has announced that there are 10 lakhs seats on offer for travel between Feburary to April.
Responding to this offer country's largest airline(by market-share) IndiGo also followed suit by following their pricing strategy and slashed their fares among different routes, viz Delhi-mumbai,Ahemdabad-delhi and Pune-Chennai.
Other competiting airlines in business like Air India and Jet Airways too will have to alter their strategies sooner or later to stay competitive or risk losing business.
The airfares had shot up by 30-50% in 2012 compared to 2011 due to grounding of Kigfisher airline which led to significant capacity removal from market by reduction in the number of available seats per kilometre thus reducing supply in the market of increasing demand.
The prices have been slashed to pull passenger load in the lean season of February and peak season months of March-April. The motive seems to be to try to gain market share, ahead of its planned raising of funds to finance its capacity addition over the next 3 years.
This trend was started by Air India by offering special discount on early bookings, which was immediately followed by Jet Airways and Indigo.This strategy could help in controlling losses as tickets closer to the day of departure day will be expensive, making up for the discounted prices thus forcing the customer to book early.
No comments:
Post a Comment