Airlines drop fares as demand remains flat

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Jet Airways is offering seven lakh seats at discount. Air India, GoAir too lower fares

New Delhi: Domestic airlines have slashed fares to boost loads as demand for air travel remains subdued this year. August being a lean month for air travel carriers including Air India, Jet Airways and GoAir have dropped fares to attract flyers. 

On Saturday, Jet Airways announced it is selling seven lakh tickets at 15-20 % discount in a seven day advance purchase offer. Jet Airways sells 45,000 tickets daily on domestic routes and the seven lakh seats make about 10% of its domestic capacity. 

Under the scheme, one way tickets excluding taxes and airport fees are available from Rs 1777 onwards (on routes like Mumbai Ahmedabad, Delhi-Jaipur, Pune-Indore). One way tickets on routes like Mumbai-Delhi, Pune-Delhi and Chennai-Kolkata are on sale for Rs 3777. The sale is valid till next Friday and for travel from next Saturday onwards. According to a source  the discount fares have been introduced as the loads are 5-7% lower this season compared to last August. ‘This will also help fill up the base load and attract train travellers to book air tickets. Last August all the airlines with the exception of IndiGo had reported loads less than 70%   

Jet’s campaign comes close on heels after Air India launched discount fares available on  certain flights with low loads. These fares are available for sale three days prior to journey date are upto 20% lower than a normal fare. ‘With this we will be able to compete  with other low cost airlines.,” an Air India executive said. Wadia group run GoAir too is offering upto 50 % off on fares through various schemes and is tapping leisure travellers, corporates and small and medium enterprises to push sales. The discount offer is valid till September end.  In an earlier interaction Giorgio De Roni, CEO of GoAir told this newspaper that the airline had slashed fares to boost demand 

Deep Kalra, founder and chief executive officer, Makemytrip said, ‘The discounts this time are definitely steeper as load factors are very low. Traffic started falling July onwards and is expected to be under pressure for some time. Normally, October onwards, we see an uptick in demand. Pre-booking start much earlier. But given the situation right now it is hard to tell when things will look up.’ 

Neelu Singh, chief operating officer of  Ezeego1.com. ‘Airlines will resort to such tactics in order to fill inventory during the lean season. Travellers can use this opportunity to book quite low fares and go on short breaks. We have noticed that such promotions help in creating demand and we see this as an opportunity to market our holiday packages.” 

Demand for air travel has been low in peak summer months too barring May which saw a decent traffic growth.  Air traffic dropped 1.84% in June after a month of positive growth in May. April-June quarter is good season for travel as it coincides with school and college holidays. Air travel registered a slight drop of 0.39% in April but it rebounded in May with 4.8% growth in May. Agencies

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