Analysts say the offer of ‘cheap’ tickets may be just a marketing ploy
Diwali is round the corner and so is good news for airline passengers in India. Or so it might seem.
Over the past week, SpiceJet, GoAir and Jet Airways have announced special fares in a bid to attract passengers. Will passengers bite?
Aviation analysts say this is nothing more than a marketing ploy to get air travel back into the consideration of travellers to whom it had once again become a luxury.
An analyst with a foreign brokerage said, “The perception that air tickets are now expensive is on the rise. Due to inflation, people were also cutting down on travel expenses. The schemes which are being offered are just enough to help airlines get back into the minds of individual travellers. At the same time, there is a realisation that airlines cannot offer tickets way below costs just to increase their market share.”
Sure enough, air travel was down a massive 38% in September, according to figures released by civil aviation authorities. Marketing gurus say that while these schemes might help temporarily drive traffic towards the airline’s portals, there is an issue of credibility involved. The attention-grabbing Rs 99 fares do not reveal the surcharges and taxes. They say that this would only help in complicating a situation where airlines’ trust is on the line, and lead to questions of integrity.
Harish Bijoor, chief executive officer, Harish Bijoor Consults, said, “Airlines need to declare all details, including additional charges and the number of seats available at cheaper fares in their communication. Only then will they be trusted by consumers.” But airlines say this is not a new issue. Gaurang Shetty, senior vice-president, Jet Airways, said the intention of the new apex fares, which Jet has come out with, is to incentivise early bookings. He added: “Showing surcharges and fares separately is an issue all over the world. If you put it out clearly that the fares advertised are just the basic fares, then I don’t think there is a problem.”
With the slide in prices of crude oil, airlines can almost be sure of a massive cut in prices of aviation turbine fuel at the end of the month.
It remains to be seen if such cuts would be passed on to fliers. The aviation analyst quoted earlier added, “The lower price of fuel as compared with the record levels seen in July should result in reduced prices. It would give even more room for such marketing activities.” The average price of crude this month, based on the last traded price, has been at $81.68, which is significantly down from a similar average of $103.76 at the end of last month. Add the announcement from the government that it will look at revising ATF prices every 15 days and there is suddenly light at the end of a very dark tunnel for India’s airlines and more importantly, the passengers.
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