Thursday, 28 August 2014

Air India has stiffed up competitors in the domestic aircraft sector by offering airfares priced at Rs 100 (apart from taxes), in a five-day sale, evidently to enjoy "Air India Day" as a mark of its merging with the erstwhile India Airlines in 2007.
However, if history indicates anything, such price conflicts among cheap air tickets may cause excellent deals for air fliers, but could only mean trouble for the airlines.

Aggressive costs have been the standard ever since low-budget airlines such as SpiceJet and IndiGo came into the picture with their 'affordable' fares. While the stand up war is extremely warmed among the four providers, namely IndiGo, Jet Air passage, JetLite, and SpiceJet, Air India's move hints at frustration to create sure it is still in the reckoning with brochures. These airlines are ready to compromise profits for market stocks, and the numbers indicate accordingly.

However, even as these successes come from competitive costs, SpiceJet documented its fourth straight every quarter reduction with a loss of Rs 124 crore in April-June. In 2013-14, Air India revealed failures of Rs 5,000 crore, mostly because of the weak rupee that had overpriced fuel costs and other expenses. Jet Airways had also revealed its highest yearly loss of Rs 4,129 crore in the same period.
But these airlines continue to have losses to make sure they do not have to fly vacant aircraft, and Indians are lapping up the fares.

As train fares rise, many Indians now prefer to journey by air, with the count of travelers in January-July this year reaching 376.28 Lakh, as per the Directorate General of Civil Aviation.

While an growing client platform is excellent information for airlines, firm competitors means that they often charge brochures below the all inclusive costs suffered. Thus, it can only be considered that while a Rs100 provide may seem exciting, it could only mean short-term pleasure, as airlines would once again have to push up prices if they have to survive.


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