Impact of New Rules on Air Ticket Fare

Technologies used in the aviation industry, including ingeniously designed engines, navigation tools and in-flight amenities have been replaced with new ones. Earlier, most of the metro cities were served by various airlines, but now flights to Bhopal, Varanasi, Lucknow and many other II as well as III tier cities can be availed as well. In addition to this, management strategies have also been revised to meet the dynamic market challenges and this is the reason that some changes are needed in aviation rules also. Although, a number of new regulations have been introduced, but old ones can also be seen revised in the coming months.

In response to issues regarding licences to Malaysia-based AirAsia and soon to be launched Vistara for global operation, the Federation of Indian Airlines (FIA) commented on the 5/20 rule. As per this rule, every airline set up in India needs to have a fleet size of at least 20 aircraft and must complete 5 years of operation, then only licence for international operation will be given to it. However, FIA, formed back in 2006 by Air India, SpiceJet, GoAir, IndiGo and Jet Airways, resisted this policy and said that it needs to be changed. A few months back, this law was asked to be waived off, but the Directorate General of Civil Aviation (DGCA) kept it intact.

However, one of the DGCA ministers said that no other country follows this rule; hence, it can be removed from the list pre-requisite conditions. The relevance of this law has been lost because of increased safety standards and application of the latest technologies as well as attempt of global operators to cater niche markets of various countries. The Associate Chambers of Commerce (ASSOCHAM) also released a paper mentioning that this policy of government has no logic in the current market scenario. This policy was drawn almost a decade back, and many new carriers have entered in the industry since then, as well as the country has undergone significant changes regarding air travel demands, since then. Today, air ticket fare is almost half of what it used to be 10 years back.

Availing Cheapest Airfare in This Festive Season

Stiff competition in the Indian aviation industry has lead to fare wars between low-cost as well as full-fledged carriers. This market has also witnessed a number of twists and turns in the previous quarter. As per Directorate General of Civil Aviation (DGCA) reports, SpiceJet gained substantial market and pushed back the flag airline of the country – Air India – in the ranking orders. Other low-cost carriers (LCCs) also managed to allure fliers by offering cheapest airfare, which in turn increased their flight occupancy. However, the Sun Group-owned company – SpiceJet – not only recorded growth in the number of fliers, but also topped the charts in terms of load factor.

As per reports, SpiceJet booking has increased because of the frequent flash sales announced by the company. Apart from this, the commencement of flights on new routes also contributed. The chief executive officer on the other hand shares a different view. Responding to these reports, he said that these discounts definitely helped in attracting new passengers, but the consistency in services provided by the carrier played an important role in retaining them. The airline operates more than 300 daily flights to over 45 national and 10 international destinations. Its fleet size of around 53 aircraft consists of the latest models launched by Boeing and Bombardier. These fuel efficient models allow these LCCs to cut down tariffs, which attracts more customers and is ultimately reflected as profits in the books of carriers. One of such offers includes SpiceJet tickets at just INR 699 to a number of domestic destinations.

This LCC recently announced Early New Year Sale followed by Early Bird offer in September. Under this deal, travellers can book flights to different cities of the country at INR 699 for travel dates falling between 16th January and 24th October, 2015. However, the bookings had to be made by 1st of October, 2014. Jet Airways and Air Asia also came up with similar offers, but to selective destinations of Southern India. The booking window for both of them was longer, till 5th of October. IndiGo, the leading airline of the country with over 32 per cent market share also announce similar offers to tackle this price-based competition.

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.

SpiceJet Booking along with Share Price Rise in the Current Quarter

The low-cost carrier (LCC), SpiceJet, has marked its presence in the Indian market quite evidently. Financial reports of this Sun Group-owned company show an upward graph since its inception in 2005. It has offices in several states with registered office in Chennai and the corporate office in Gurgaon. With a fleet size of over 55 aircraft, the carrier serves more than 19 per cent of total fliers of the nation. The airline has been declared as the third largest service provider of Indian aviation industry as per Directorate General of Civil Aviation (DGCA) reports for the second quarter. After analysis, it has been found that unparalleled services at lowest air fare and increased capacity are important reasons behind increase in the market share of this LCC.

The rise in market share has lead to increase in its share prices in recent months. Apart from this LCC, its competitors have also gained new fliers as a result of the expansion of the whole industry, which has given a boost to GoAir, Air India and IndiGo online booking as well. SpiceJet suffered loss in previous few quarters, but has come out of that phase brilliantly, and now gained an operating profit of around INR 9 crores in June. By far, over 13 lakhs shares have been traded in the BSE counter, which were 55.82 in the last quarter.

It registered a growth of 3.51 per cent, which has marked highest price of INR 12.40 SpiceJet shares. Introduction of new marketing strategies, restructuring of network, fleet size and capacity rationalisation have yielded a positive figure in the operating profit over the years. It replaced Air India from the third spot in the ranking order with a tremendous increase in SpiceJet booking, and is the second largest airline of the country in terms of domestic passenger share.

Investors Interested to Fund SpiceJet Booking to Qatar

Airfare in Indian aviation has hit a purple patch for frequent travellers as discounts have been offered right from the beginning of the calendar. Popular low-cost carrier (LCC), SpiceJet has led the pack with back-to-back offers for travellers. It was the first airline in the nation to start offering services and was followed by the rest. As many as six rounds of flash offers have been offered for fliers that has brought down the domestic travel expenses by quite a fair margin. However, the balance sheet for this carrier has not been something to cheer about in the recently ended fiscal. It has posted a record loss in the financial year ending 2013-14.

In this event, the airline has sought approvals for allowing to operate 7000 seats on a weekly basis. Several investors have shown interest in funding these operations for the Sun-group airline. It is believed that if the carrier is allowed to start operations to Qatar, SpiceJet Airlines booking will undoubtedly increase and its tides will turn. In this case, the final agreement between the investors and the airline has not been finalised, but reports have been received that some investors have shown positive interest for this purpose.

In this aspect, the carrier will hope to make an impact in the forthcoming couple of years and turn the tides. It has not faired quite well in the last quarter and for that matter, in the last financial year, as well. The onus of bringing the LCC back to the profitable side lies on the new management team, which was shuffled few months back. It is inevitable that new strategies will be adopted by SpiceJet and discounts will also be offered for boosting passenger influx. Whether or not, all these changes will have a positive impact, it is for time to tell.

Tips for Booking Cheap Air Tickets

Saving money on tours becomes important if travellers are on a strict budget. Besides, limited budget or not, who does not like to slash down the expenditure, especially while on a vacation. Well, today everyone knows that a flight ticket booking can be done easily with travel portals from anywhere and at any time. Frequent users might also be aware that these websites offer discount coupons and other benefits to frequent travellers. As a matter of fact, there are a few lesser known strategies, which when implemented, can reduce travel costs by a considerable margin.

E-mail Alerts

It is recommended that users register their e-mail IDs with leading travel portals and sign up for alerts. People who plan well-in-advance have higher chances of getting the best deals as they have the chance of registering their IDs for specific destinations at the desired time of the year. While, signing up for alerts for a particular place, users should make sure that they include nearby arrival and departure airports to get filtered alerts. Those who have not planned a trip but might need to buy air tickets, can sign up for alerts from a specific departure airport. These notifications are not limited to information about airfare, but also include details about holiday packages and car rentals.

Consolidated Bookings

Most leading online agencies offer consolidated services, including low airfare rates, hotel bookings, airport transfer and car rental. It is always advisable to go for comprehensive deals if the thought is for reduced expenditure. This not only reduces the hassles of making individual bookings, but it also makes the trip more organised. Another benefit of hotel plus flight booking is that it saves a considerable amount of money. These packages are reasonably priced and help in cutting down travel expenses.

Neighbouring Airports

Large cities and important towns generally have more than one airport – a main hub and one or more smaller ones. Travellers usually tend to focus only on major hubs in cities, but experts recommend that people should consider other smaller ones in their cities. This is because these airports receive less aircraft of global airlines and simultaneously, have lesser passenger influx. Sometimes, people are not even aware of the number and location of smaller ones if they are living in large metropolitan cities. They can check for such airports on online agencies and book tickets if suitable flights are available.  

Break Journey

If fliers are not short of time and they have to travel long-haul across continents, breaking the journey might prove to be a worthy alternative. Taking two separate flights with different airlines might increase the duration of journey but it is beneficial in two ways – firstly, it reduces cost significantly and secondly, it helps people to take a break and relax for a couple of hours, thus reducing fatigue. A recent survey reveals that the trend of break journey has become quite popular with people who fly long distances across the globe. Although these strategies do not guarantee a slash down in expenditure, but surely increase the probability of saving considerable amount of money to a significant extent.

Keeping in Mind the Basics while Looking for Cheapest Air Fare

Booking flights is considered one of the trickiest things because of excessive and frequent fluctuations in ticket prices. Most travellers get confused while making seat reservations, be it for domestic or international trips. Cheapest air fare remains the primary agenda, when a search for flight options is carried out. However, cheap is a comparative term and whether a particular option is cheap or not can be determined only by experience and proper application. Keeping in mind a few things might as come of help while making reservations of seats of an aircraft.

Compare Different Carriers

Comparing different airlines is regarded as the best way to get an idea about the flight fares between two destinations. The number of airlines operating in a particular region has increased by quite a margin in the last few decades, thus competition has grown manifold. On one hand, the number of available options has increased while on the other, choosing a particular airline has become a bit confusing, more so for frequent fliers. This has also made airfare on offer by airlines operating in the same region more competitive. Thus, choosing a flight meticulously is the best option if travellers are looking for cheap airfare.

Look for Airlines operating from Smaller Hubs

Frequent fliers have suggested that opting for those carriers, which do not operate out from major international hubs is a smart way of reducing flying expenses. Most airports levy a charge on carriers for allowing operation of their aircraft at their tarmac. The busier an airport is higher are the charges, so those airlines operating from less popular hubs are expected to have a reduced cost of operations. This in turn allows the airline to sell their tickets at a lower price, thus reducing flight fares. Having an idea about the base of an airline, thus, has a significant impact on reduction of travel expenses.

Operating Single-Aircraft Fleet

The fleet of an airline is another important aspect that has a considerable impact on determining flying charges. If a carrier is operating a single type of model for all its journeys, the maintenance and replacement charge is only of one type. However, if the fleet consists of aircraft of different types, the maintenance charges are of different types, thus, increasing the operational expenses. Furthermore, training procedure for pilots and crew for different aircraft is different and, as a result incurs more expenses. So, opting for those carriers, which operate aircraft of one type can be cheaper for travellers.

Opting for Discounts

Most airlines around the world offer international and domestic flight offers from time to time to boost passenger influx to increase their market share. Keeping a check on different carriers before making a flight booking, thus, allows travellers to get the best deals. Subscribing for mail alerts or notifications from various Online Travel Agencies (OTAs) is a smart way to stay updated about all offers. Whenever a discount is provided on a particular route, travellers are sent alerts from such agencies. This ensures that people do not miss out on the best offers.