The Hindu : Airlines lure elite rail passengers with fare cuts

Online edition of India's National Newspaper
Sunday, Jul 07, 2002

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National

Airlines lure elite rail passengers with fare cuts

By Our Special Correspondent

NEW DELHI JULY 6. The Indian Airlines, Jet Airways and Sahara Airlines' decision to slash the fares is likely to make railways take another look at its upper class tariff on superfast trains.

Indian Airlines already has a "flexifare" policy to adjust the fares according to seasons and competition. Both Indian Airlines and Jet Airways have announced reduced fares for the off-season months — from August to October — on tickets bought three weeks in advance.

The discounted one-way Apex Indian Airlines fare for Delhi-Chennai will now be Rs. 3,295 instead of Rs. 8,960, Delhi-Mumbai fare is Rs. 3,920 (Rs. 5,045 earlier), Delhi-Bangalore is Rs. 5,055 (Rs. 8,710) and Delhi-Kolkata is Rs. 2,860 (Rs. 6,875).

Jet Airways' reduced one-way fare between Delhi-Chennai is Rs. 3,292, between Delhi-Mumbai is Rs. 3,920, Delhi-Bangalore is Rs. 5,053 and Delhi-Kolkata is Rs. 2,860. All fares are inclusive of taxes.

The catch is that passengers will have to buy confirmed tickets against these reduced fares 21 days before the date of travel. Indian Airlines said the cancellation charge for returning these tickets will be 50 per cent.

Jet Airways is yet to decide on the cancellation charge. No other discount shall be valid on this tariff.

Sahara Airlines is also likely to announce reduction in fares of tickets bought across the counter although the airline is already running an online auction of tickets at almost 50 per cent lower than normal fares. Besides, it has just launched a "Sixer" campaign offering six destinations to passengers for Rs. 25,000 till December 20 — with no cancellation fee.

Indian Airlines sources said the Apex scheme was aimed at creating a new market segment. The fares had been kept at a level which would attract passengers who were now not travelling by air but by train.

The airline had recently announced a "Bharat Darshan" scheme under which a passenger could fly for seven days on purchase of tickets worth Rs. 1 lakh till October 31.

The sources said that in a market scenario of depressed demand on account of travel advisories and low tourist arrivals, these fares were expected to expand the market size and generate incremental revenue for the airline.

"We expect to fill up empty seats with this new segment of passengers,'' they said, adding that while there might be a dilution of average yield, improved seat factor and incremental revenue would enhance the route economics.

Asked whether this meant that the profit margins on air tickets was quite high, sources in Jet Airways said that the airline was likely to suffer losses but it might gain in luring a new segment.

Both Indian Airlines and Jet Airways roughly have a market share of 45 per cent each, while Sahara has a market of 10 per cent.

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