Moneycontrol Bureau
After SpiceJet and Jet Airways, it was Air India's turn to slash fares by around 50 percent in a 60-day advance purchase scheme.
A seat on Delhi-Mumbai sector which costs around Rs 7000 can now be availed at Rs 3981, if purchased under the scheme
Why was it critical for Air India to join the fare discount bandwagon?
SpiceJet and Jet Airways have already secured 10 lakh and 20 lakh seat each in lean season and on lesser density routes. AI has announced discounts at the onset of summer vacation so that holiday-makers can plan trip in advance, it said in a statement
But industry experts have a different take on the entire fare discount episode. AI also wants to secure occupancy on those seats which otherwise go empty, they say.
Second, the airline has 20 percent market share compared to IndiGo's 27 percent and SpiceJet's 19.5 percent. Given its aircraft fleet size which is more than treble to that of smaller players, the airline needs to not only improve market share but also improve yields per passenger.
The initiative can be considered an attempt to strengthen the national carrier's foothold in the leisure travel market, which is party taken away by smaller players.
The airline operates around 500 domestic flights each day. Even if it manages to confirm minimum five seats on lesser desnity routes, it can spruce up revenues significantly.
June-September is a lean period for airlines domestically, With this scheme in place, AI can definitely improve load factors.
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