AI hopes to push load, revenue higher with discount fares

Air India expects to increase its revenue by 10-15% and improve its load by offering discounted fares on sixty days advance purchase. On Wednesday the airline introduced discount fares to attract leisure travellers but rival airlines including GoAir and IndiGo have followed suit matching Air India's fares.

Air India's passenger load last May and June was 66.5% and 69.5% respecively lower than other airlines. During the same period, IndiGo's load was 86%, while Jet Airways and SpiceJet had loads of around 75% and 80% respectively.

A senior AI executive confirmed that the scheme will help the airline to improve its load and increase its revenue by 10-15%. "During the last summer our load was very poor. The scheme will help improve advance bookings. There is a market segment comprising of train travellers which books tickets months in advance. We want to tap that segment. This is not a limited period sale offer. A limited number of seats will be available on all flights and all routes,. '' he said.

Air India launched the scheme on Wednesday to target train travellers who book in advance by offering air fares which are 15-20% lower than normal fares. Checking online booking sites reveals that other airlines like IndiGo and GoAir too have dropped fares matching those of national carrier.

Air India has announced that all-inclusive 60-day advance purchase fare on the Delhi–Mumbai sector is Rs 3,981 while on the Delhi–Lucknow route it is as low as Rs 2,566. In a smart marketing move the national carrier is promoting that these fares are closely positioned with AC train fares though in fact they are much higher than second or third AC fares.

In January, SpiceJet launched a one- rupee base fare and offered ten lakh seats at Rs 2,013 all inclusive fare for travel between February-April. Jet Airways introduced discount fares and offered 20 lakh seats for travel till December end last month.