Airlines face-off in premium fare war

Jet Airways and Vistara slash prices by 40 and 30%, respectively

A battle for business class passengers has broken out with Jet Airways and Vistara slashing their fares in limited period sale offers.

Jet Airways  and Vistara are offering upto 40 per cent and 30 per cent discounts, respectively, on their business class seats to boost passenger loads.

Thus a Delhi-Mumbai business class seat on Vistara is priced at Rs 15,000 compared to Rs 21,000 earlier. Vistara said the offer is for a limited number of seats and is available for booking and travel till April 15. A Jet Airways ticket on the same route is priced at Rs 14,885 and its discounted tickets are valid for travel till April 17. The fares do not include tax.

While discounts have been announced for several months, leading to a 20 per cent growth in passenger traffic, this is the first time domestic players have announced steep cuts to lure travellers for premium classes.

Corporate  travel slows in March and picks up when companies finalise travel budgets for next financial year. The move is thus aimed at attracting business class loads.

The fare war also comes on the heels of Vistara announcing a cut in its business and premium economy class seating and appointment of Sanjiv Kapoor as its chief commercial and strategy officer. Kapoor, in his earlier role as chief operating officer of SpiceJet, had launched offers to boost load factors of the airline.

Another reason for the discount is the increase in capacity, and the fact that the March-April period is lean season.  

Experts say as business class seats are normally priced higher, there is legroom for airlines to experiment with prices and low crude oil prices offer them the best opportunity to do it. “This is an opportunity for Vistara, which is a relatively new player, to attract more customers and challenge Jet Airways, which is the only other entrenched full service carrier in the country,” said Sharat Dhall president of online travel portal Yatra.com.

The Indian aviation sector is witnessing its most buoyant period on the back of low fuel prices and passenger growth. According to estimates by International Air Transport Association (IATA), India’s domestic air travel soared 22.9 per cent in January compared to a year ago. Growth is being propelled by the comparatively strong domestic economy and increases in air services.

The Indian market overtook both Australia and Japan during 2015 and is currently level with Russia at around 1.2 per cent of global passenger traffic.
CASHING IN

• A Delhi-Mumbai business class seat on Vistara is priced at Rs 15,000, and on Jet Airways it is Rs 14,885
• This is the first time operators have announced discounts for premium class
• Experts say business class fare allows legroom for discounts
• IATA says domestic air travel grew 22.9% in January compared to a year ago