Flash Sale Boost Air Travel Bookings in September

The price war started by the airlines has resulted in a sudden surge in air travel bookings, which have gone up by nearly 300% in the first week of September itself. Carriers such as Jet Airways, Indigo, and Spicejet have slashed their fares substantially in order to woo the travellers for a period of 90 days and above in advance. And the strategy seems to be doing wonders to the airlines’ business.

Sharat Dhall, President, Yatra.com, an online travel portal, confirmed this while talking to BI India. He said “We have seen flight bookings going up by nearly three times of what it generally is during this period. We have witnessed an increase in the number of bookings on numerous sectors”. According to him leisure travellers are the ones, who are making the most of these flash sales. “We saw an exponential increase in the bookings for leisure destinations such as Kerala, Goa, Srinagar, Ladhak and Leh as well as for metros such as Delhi, Mumbai, Kolkata among others,” Dhall stated.
The ‘Air Fare’ War
Spicejet, at the beginning of this month, offered tickets for Rs 499 (1 September3 September) for the travel period January-October 2015. Jet followed the suit and sold tickets for Rs 500 to people planning their travels for the next year. Indigo too came up with a similar offer and sold its tickets for Rs 999 for bookings done three months in advance.
Who Won The Jackpot?
The ‘air far’ certainly helped give every carrier the much-needed boost, but according to industry experts Spicejet emerged as the winner. The LCC had sold over 1 lakh tickets on the first day of its offer.
Flash Sales: The Way Forward?
Analysts warn that the move could be hazardous in the long run. They fear that the airlines through discounted tickets are bringing their current revenue by mortgaging their future. “It is tantamount to the airlines eating their young just to survive, which is disastrous”, said Devesh Agarwal.
However, Amber Dubey, Head and Partner, KPMG India is positive about it. He said, “Flash sales of air tickets are a good way to stimulate buying, bring in non-flyers and sell unsold seats, which are anyways likely to remain unsold in non-peak hour flights. The cost structure of airlines is mostly of a fixed nature–fuel wages, airport charges, aircraft lease and maintenance among others. The incremental cash that flash sales generate helps defray part of the fixed cost. Flying an empty seat is the biggest pain-point for an airline”.
Amber seems to have a valid point. Flash sales in India have proven to be a great marketing strategy for the airlines. On an average, the passenger load factor (PLF) for any carrier is 70% while the remaining 30% seats fly empty. Flash sale, which generally last for a few days, only helps an airline to sell off these empty seats and marginally recover the cost per seat.