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Thursday, September 18, 2014

Government Approval Awaited for Lowest Airfare

SpiceJet is the largest airline of the country on the basis of load factor and second largest when market share is considered. It is one of those carriers, which offer seats at lowest airfare. With more than 300 daily flights catering to around 49 destinations, this low-cost carrier (LCC) is grabbing market share at a fast rate. It has a fleet size of around 53 aircraft that includes Bombardier Dash 8 Q400 aircraft and Boeing 737s. The carrier has placed an order for 57 more aircraft to be delivered in a couple of years. As soon as these new models will be delivered, the company may start operations on new routes including international ones. Apart from this, the carrier is planning to lower ticket prices for passengers who travel without check-in baggage.

However, it has not been approved by Directorate General of Civil Aviation (DGCA). Its rival AirAisia is also looking forward to introduce this offer as soon as DGCA clears the proposal. Chief Operating Officer (COO) of SpiceJet said that this move will encourage travellers to come up with lighter bags, which in turn will reduce the fuel burn. It may increase booking in the coming months, as SpiceJet flight fares will be reduced after approval, attracting more business travellers. As per reports, AirAsia asked for the permission regarding this offer as soon as it initiated operations in India.

The unbundling of services reduces the cost of a ticket and gives passengers an option to pay for the services they are willing to avail. This step will benefit both travellers and LCCs; hence, the civil aviation authorities are considering this proposal. Global airlines such as British Airways already practice this method of pricing and it is quite successful over there. As per industry reports, more than 40 per cent people travel with no baggage and new pricing strategy would a boon for them.

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