Domestic Airlines in India
Domestic Airlines in India - Leveraging Price Till the year 2002, the Indian traveler rarely traveled by air as the fares were much higher than those for road and rail travel. But in 2002, the companies offering air travel changed the market dynamics completely. For the first time in the history of the industry, efforts were made to make air travel affordable to a larger section of the population, leading to an unprecedented development in the commercial aviation industry in the country.
The reason for this change in strategy is not very difficult to understand. Though there were only three major players in the Indian aviation market, namely Jet Airways (JA), Air Sahara (Sahara) and the state-owned Indian Airlines (IA), competition was getting fiercer by the day. To counter the competition, the companies had to resort to pricing wars.
It started in June 2002 when IA announced a 3-15% cut in fares for all classes on the western sector and on Delhi-Srinagar, Delhi-Jammu, and Delhi-Khajuraho routes. The next day, JA reduced its prices by Rs 635 for the economy class on the Mumbai-Nagpur route and the Mumbai-Goa route.
One of the most innovative offers (following the global aviation industry’s footsteps) was the Advanced Purchase Excursion (APEX) fares scheme, under which passengers who booked their tickets at least three weeks in advance, got a huge discount in fares. IA introduced the APEX fares under its ‘U Can Fly’ scheme and JA under the ‘Everyone Can Fly’ scheme.
However, passengers had to face two disadvantages under the Apex scheme. Planning air travel three weeks in advance was not very convenient. Cancellation charges were also high. Passengers had to lose 50% of the ticket price if the ticket was canceled less than 21 days before the travel date. Despite these disadvantages the scheme proved very successful for IA. Around 1,600 passengers fly every day under the scheme. Revenue generation and passenger load factor have also increased.
JA also
The reason for this change in strategy is not very difficult to understand. Though there were only three major players in the Indian aviation market, namely Jet Airways (JA), Air Sahara (Sahara) and the state-owned Indian Airlines (IA), competition was getting fiercer by the day. To counter the competition, the companies had to resort to pricing wars.
It started in June 2002 when IA announced a 3-15% cut in fares for all classes on the western sector and on Delhi-Srinagar, Delhi-Jammu, and Delhi-Khajuraho routes. The next day, JA reduced its prices by Rs 635 for the economy class on the Mumbai-Nagpur route and the Mumbai-Goa route.
One of the most innovative offers (following the global aviation industry’s footsteps) was the Advanced Purchase Excursion (APEX) fares scheme, under which passengers who booked their tickets at least three weeks in advance, got a huge discount in fares. IA introduced the APEX fares under its ‘U Can Fly’ scheme and JA under the ‘Everyone Can Fly’ scheme.
However, passengers had to face two disadvantages under the Apex scheme. Planning air travel three weeks in advance was not very convenient. Cancellation charges were also high. Passengers had to lose 50% of the ticket price if the ticket was canceled less than 21 days before the travel date. Despite these disadvantages the scheme proved very successful for IA. Around 1,600 passengers fly every day under the scheme. Revenue generation and passenger load factor have also increased.
JA also