‘Very good’ response to APEX air fares

As for rival Jet Airways, it has already sold close to 65 per cent of the total seats it has on offer under the APEX scheme. The airline has sold as many as 1,300 of the approximately 2,000 seats it is offering every day at lower prices. ‘The new fare scheme will generate incremental revenue and incremental traffic and fill up additional seats at a very marginal extra cost as our aircraft are flying 40 per cent empty right now,’’ said a Jet official. Discounted seats are just 10 per cent of its total seats on offer and are in big demand by budget travellers who need to produce an identity while buying a ticket. (On the non-metro routes, where the airlines are flying with very low passenger loads, airlines are offering upto a fourth of the seats on the basis of APEX discounts.)

APEX fares, an abbreviation for advance purchase of tickets, are basically tickets that are purchased around three weeks before the date of flying. Airlines offer a massive discount on them, upto half the normal rate. This helps the airlines get a minimum steady traffic on a regular basis, and helps avoid sharp surges and dips in traffic revenue. Both Jet and Indian Airlines are offering discounts for travel between August 1 and October 31 on tickets booked at least three weeks in advance. Aviation analysts say instead of letting their aircraft fly empty, domestic airline will get at least some revenue, and this will help cut losses. Last fiscal, Jet made a net profit of Rs 5 crore on a turnover of Rs 1,800 crore.

Smaller airliner Sahara Airlines, which has a market share of less than 10 per cent, also lowered its prices and its auction of tickets through its website is a big hit among passengers. Jet’s climbdown by overing low fares and IA’s reaction came after sales growth slowed this year as overseas visitors put off travelling to India because of religious riots and border tensions with Pakistan.

Indian Airlines which flies about 30,000 passengers each day is expecting that its passenger load factor (PLF) will improve in the next few days as world of mouth publicity results in higher ticket sales. The airline which earned a revenue of Rs 4,000 crore last year is expecting that passengers will take advantage of its fares which would help it to earn some revenue.

According to Director General of Civil Aviation, Indian Airlines’ market share sank to 39.9 per cent in March, sliding from 40.5 per cent the previous month and 41.4 per cent in January. The fare war announced first by Jet could have seen its market share plunging further. Hence, the rate cut, officials say.

Not to be outdone, Air-India has also decided to reduce its fares but till date it has not announced when it would reduce its fares. Watch this space.