Will Airlines fresh strategies rope in passengers?
In a move to
ensure that their passenger load factors do not fall dramatically as a result
of the recent hike in fares, full-service carriers like Kingfisher, Jet Airways
and Air India have sold travel coupons worth around Rs 300 crore (Rs 3 billion)
to travel agents. The coupons, valid till the end of June, were sold a few days
before the airlines almost doubled their fares in one go.
Experts say the full-service carriers have ensured 5-6 per cent of their
average sales through these coupons. This, they add, will partly make up for
the slowdown in demand that is expected due to the fare hike.
This will also give the big airlines an edge over low-cost carriers, none of
whom, except IndiGo, have sold coupons in such large chunks. The fares offered
by full-service carriers through the coupons are 20 per cent less than the new
fares announced by the LCCs on key routes. Experts say the move will hit the
passenger load factor of LCCs, which will in any case fall due to the increase
in air fares.
Unlike their normal practice, travel agents were selling the coupons even in
ones and twos to attract leisure travellers. "This is the first time we
have sold coupons in such large numbers," said Siva Ramachandran, head
(global sales), Kingfisher. Travel industry executives said Kingfisher sold
coupons worth around Rs 80 crore (Rs 800 million).
Full-service carriers carry close to 2 million passengers per month. Taking the
average ticket price to be Rs 4,000, the average monthly passenger revenue of a
full-service carrier is Rs 800 crore (Rs 8 billion).
"The coupons were very smartly sold before the price hike. Now that the
fares are up, every passenger, especially corporate travellers, want to either
buy these coupons or redeem them if they have already bought them, since the
price will be lower than what the low-cost carriers are offering on several
sectors. Thus, these coupons will help full-service carriers take away a lot of
traffic, especially corporate travellers, away from the LCCs," said Keyur
Joshi, COO of travel portal Makemytrip. The portal purchased coupons worth
around Rs 3.5 crore (Rs 35 million).
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