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Tuesday, Jan 15, 2008
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The time to fly on a budget

Ananth Krishnan

The lean season for air travel brings benefits for passengers

CHENNAI: The lean season for air travel has begun, and early indications are that a global lull in traffic is likely to hit airlines hard. Passengers, of course, can expect cheaper fares and a range of concessions as airline operators try to stimulate travel.

The period from February to early April is traditionally a testing time for airlines, but signs are that the lean season has set in early this year. “The first week of January was very bad for airlines,” says Kapil Kaul, CEO (India), Centre for Asia Pacific Aviation, an aviation consultancy.

“February and March are usually the bad months, but the lean period has in some ways already started.”

With aviation turbine fuel prices on the rise, industry experts say passengers cannot expect the kind of price reductions seen in previous years. While fares are still expected to drop in coming weeks, passengers also should not expect “across-the-board” reductions.

“You will have to take into account the specific sector in question, the time of day, etc.,” Mr. Kaul says. “While it is difficult to say with certainty that fares will decrease across the board, I think we will still see a pricing pattern emerging on the lower side.”

Surcharges

Passengers also have good news regarding the surcharges payable. Currently, airlines in India charge fixed rates of fuel and congestion charges, but they are expected to introduce a system that makes surcharges commensurate with the distance travelled. In other words, the surcharge on a Bangalore-Chennai trip will be less than the surcharge on a Chennai-New Delhi trip.

Concessions

And, while airlines have not announced specific price cuts, most operators have introduced a number of concessions.

For instance, passengers who fly 25 times between the six metros on Air India will get a free international return ticket to selected destinations. Passengers who purchase tickets in January have a range of discounts available until April.

The low-cost carrier SpiceJet is offering a Rs. 500 basic fare on several sectors, while Air Deccan is offering a competing Rs. 499 fare on certain sectors for passengers who book tickets with a State Bank of India credit card.

The rush to offer concessions is also evident on the international front, with airlines like Singapore Airlines slashing prices on several sectors out of India.

It, however, remains to be seen if the price reductions will be a big enough incentive to get people to fly. A recent survey carried out by CAPA revealed that over 50 per cent of travellers on low-cost airlines would have still made the journey if the fare had been double, and only 5 per cent would not have made the journey at all.

“By reducing the price, you cannot simply generate sales anymore,” confirms Indumathi Venugopal, director, Pegasus Travels. “People now need to have a reason to travel.”

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