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Airlines wage price war

With the lean period for travel approaching, airlines offer various discounts to keep seats filled. SpiceJet set the ball rolling with a flat 50 per cent off on its base fare for three days for bookings made 30 days before travel.  As soon as the announcement went on air, competitors in the industry, Indigo, Air India, GoAir and Jet Airways followed suit with similar offers. It is expected to help airlines from a dry run and fund their working capital.

SpiceJet experienced a turbulent 2013 and the Centre for Aviation (CAPA India) estimates it to post a loss anywhere between Rs 175 crore and Rs 215 crore for the quarter ended 31 December 2013. The airline industry is hit by high prices of aviation fuel, rupee’s fall and increase in ticket fares. With the lean period also nearing such offers help airlines to attract business customers, impulsive and casual passengers to fly.

Last year, SpiceJet’s Rs 2013 offer to fly anywhere in India offered 10 lakh seats to be booked within three days at an all inclusive price of Rs 2013. The roaring success of this strategy forced all industry players to slash back rates. With nail biting competition, passengers are the happy lot.

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