SpiceJet has unleashed a price war in the aviation industry. They have cut all fares by 50 percent on all bookings till January 23.
The move is aimed at filling seats during the lean season between February and April. Management said this discount will help increase the passenger load factors from current 70 percent levels. Last year too the airline had unleashed a price war in the same period. Analysts expects other airlines to follow with similar promotional offers.
According to CAPA, the promotional fare plan has come at a time when SpiceJet is desperately looking for investment to fund its expansion plan. Spicejet is estimated to need close to USD 200 million to remain operationally viable, while a realistic and meaningful turnaround may require USD 300 million or more, CAPA analysed. The airline is currently undergoing a strategic review in order to develop a restructuring plan which could involve downsizing of domestic operations.
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