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Airlines on pricing war as festival demand kicks in and airfare cap goes

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The festive season rush has blurred the lines between airfares for full-service carriers and low-cost carriers on key routes.

Data provided by ixigo illustrate that the average one-way airfare for travel during October 19-26 for New Delhi-Bengaluru route by Vistara was ₹5,796 – almost the same as what IndiGo charged at ₹5,772. On the New Delhi-Mumbai route, SpiceJet charged ₹6,488 whereas Air India charged ₹6,472.

Similarly, on the New Delhi-Hyderabad route, Vistara’s airfare was ₹7,056 and SpiceJet charged ₹6,971. On the Mumbai-Bengaluru route, Vistara charged ₹4,999 whereas GoFirst charged ₹5,165.

An Online Travel Agency’s (OTA) chief, requesting anonymity, told businessline, “Post the removal of airfare caps, both full service and LCCs are offering similar airfares in order to fill seats. And the same trend was observed for Diwali travel as well where full service carriers were offering comparable fares to LCCs. Even for tomorrow, if you see the airfare for New Delhi-Mumbai, a Vistara ticket is cheaper after discount compared with an Indigo ticket.”

The airfare caps were lifted in August-end.

Festival demand

Cleartrip and EaseMyTrip believe that due to the removal of airfare capping and the festive rush which has led to a humongous demand, many airlines are bringing their pricing to parity.

While Cleartrip’s spokesperson said, “This appears to be a temporary phenomenon due to extraordinary demand witnessed during Diwali,” Rikant Pittie, Co-Founder, EaseMyTrip, believes that the “pricing war will continue as the market is competitive with some airlines reviving and new ones entering.”

In a few cases, during the Diwali week for Mumbai-New Delhi route the airfare was ₹8,569-10,983. Interestingly, Vistara and Air India, both full service carriers, had the cheapest airfares; whereas Indigo had the highest airfare followed by GoFirst, SpiceJet and Akasa.

Similarly, airfare on the Mumbai-Bengaluru route was between ₹3,812 and ₹7,399. The cheapest airfare was charged by the country’s oldest airline whereas the highest airfare was charged by the newest kid on the block, Akasa.

A full service carrier provides services typically offers passengers in flight entertainment, checked baggage, meals, beverages and comforts such as blankets and pillows in the ticket price. Whereas a low-cost carrier also known as a no-frills carrier doesn’t offer either of these services hence cost the passengers lesser.

The aviation industry witnessed a lull period of two years due to Covid-19, the stringent airfare floor and cap and higher ATF prices along with heavy taxes.

According to data from multiple OTA players, compared with the festive months last year, this year the airfares have shot up by approximately by 40 per cent. Either way, if the airfares continue to remain elevated, passengers will have to dig deeper into their pockets to travel by air whether it is through a full-service carrier or a low-cost-carrier.





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