Impact of Changes in Fuel Charges on SpiceJet Booking

The world has become a global village with the onset of revolutionary technologies in the communication industry. People belonging to different parts of the world can get connected through video chat or voice calls in just a few seconds. This increased communication led to expansion of business as well as personal relations with people of different cities and countries, which in turn increases the need to cover long distance journeys for personal meetings, when required. People involved in such cross-country or cross-city businesses often opt for air booking to save their precious time and reach the destination without any hassle. Significant reduction in air fares has increased the affordability, and hence reports show a long jump in the number of fliers in the recent years.

The cost aviation turbine fuel (ATF) is extremely high in India as compared to other parts of the world. In order to provide a platform for new entrants and motivate existing player, respective authorities are making efforts to bring it down. A reduction of approximately 7.3 per cent in the existing prices announced by them has come as a sigh of relief. This is the fourth time a cut in ATF has been done and it is expected that low-cost carriers (LCCs) will make the most of it by reducing the cost of seat reservation. The chief operating officer (COO) of SpiceJet said that the load factor was around 86 per cent because of festivity season, backed by heavy discounts. However, a further fall in the prices will certainly increase SpiceJet booking in the coming months.

As per reports, the jet fuel rate for Delhi is approximately INR 62537.93 per kilolitre after reduction of INR 4987.70. The ATF in Mumbai is comparative high and stands at INR 64414.98 per kilolitre. Similarly, it varies with different states because of difference in the taxation policies. Cheaper procurement cost due to declining international oil prices led to reduction in price. As per industry experts, 40 per cent of the cost seat reservation with airlines is constituted by jet fuel. It is expected that India-based airlines may reduce tickets prices and Jet Airways, Air India, GoAir and IndiGo booking can increase in the following months.

Frequent Promotional Schemes Bolster SpiceJet Flight Ticket Booking

The aviation space of India has witnessed significant developments in the past few decades. The inception and advent of low-cost carriers and the trend of online flight ticket booking have led to the dawn of the era of air travel here. Today, there is a host of aviation companies in the country, which strive to offer world-class passenger, as well as, cargo air services. The current fiscal has been an interesting one by far. Factors like the commencement of operations of AirAsia India and growing rivalry among carriers have created an interesting market scenario. Leading low-cost carriers or LCCs of the country, such as IndiGo, GoAir and SpiceJet have been involved in a tug of fare war. These budget airlines have been announcing attractive promotional schemes throughout the year in order to maintain and enhance passenger traffic.

In this airfare war, the most trending and interesting battle is going on between IndiGo – the leading carrier of the country in terms of market share and SpiceJet – the Sun Group aviation foray. SpiceJet, which had recorded loss in the past few years, has emerged to be the second leading airline as per recorded market share data. Travel experts suggest that the primary reason behind the boost in SpiceJet flight ticket booking is the treat of flash sales, which the airline has been offering since January, 2014. From base fare at INR 1 and about 50 per cent slash down in price, to Monsoon Sale and Bundled Prices, this no-frills airline has offered an array of discounts and benefits. These schemes have increased the influx of passengers with the carrier and brought it into a somewhat better position. It is expected that by the end of this fiscal the airline might be in a profitable position in the market.