Low fares do exist contrary to APAI’s belief

I’ve been reading tons of publicity that an association called Air Passengers Association of India is getting over the past two days, due to their claim that Low Fares in India are a hoax/fraud.

Now, this organisation, which I’ve heard on and off since the past 4 years, is someone based in Chennai. They don’t even have a website in today’s day and age of the internet since the website www.apai.in goes to a holding page.

Anyhow, their claims in the media over the past few days, I’ll quote from the report for the Hindustan Times (bolding is mine):

Flash air tickets witnessed almost every month indicates that domestic airlines have formed a cartel, a non-profit fliers’ body has reported to the aviation safety regulator.

The complaint filed by the Air Passengers’ Association of India (APAI) on October 24 asked the Directorate General of Civil Aviation (DGCA) to conduct a probe against airlines offering tickets priced cheaper than long distance train tickets.

“We have received several complaints that it is often difficult to log into airlines’ website when flash sales are announced. And, often the low priced tickets are sold out. It seems that such initiatives generate tremendous publicity for airlines at no cost and gullible passengers are cheated in the process,” said Sudhakar Reddy, national president, APAI.

This year witnessed more than a dozen flash sales offering cheap tickets across domestic airlines.

Based on the complaints, the APAI put three of its staffers to buy the low fare tickets. But the discounted tickets on most domestic routes were sold out, the complaint stated.

Now, I understand that this year SpiceJet has been on a roll, and has done multiple fare sales to be able to fill up their planes. This clearly helped them fill up their planes since the leisure traveller who was going to use the train may have upgrade to flying in a plane, or a last minute traveller may have booked ahead of time to be able to get in on these eye-popping low fares sometimes.

Here are links to some of the sale fares that I wrote about earlier this year, and these are not all the sales I’ve written about because sometimes I don’t find it an interesting sale or I am not around to write about it:

Yes, there has been fooling around, but it has been by our national airline called Air India, like I highlighted in their INR 100 fare sale earlier, which was a clever marketing gimmick.

I’ve got to tell you guys, these fare sales are for real. Let’s see from my personal experience.

  • BOM-CCU-BOM for INR 7300 on SpiceJet for Durga Puja season, in fact, two tickets at that. The route regularly retails for INR 13,000 upwards on a normal day per roundtrip.
  • Book DEL-GAU-DEL for INR 6000 on Indigo for peak summer season, in fact, two tickets at that.
  • BOM-DEL for INR 3,247 on SpiceJet for Diwali travel season, while it costs INR 5,500 upwards on a normal day and Diwali is much more pricey
  • BOM-SIN-MAA-BOM for INR 40,000 on Jet Airways Business Class, while it costs INR 100,000+ regularly.
  • While I’ve not booked it, I’ve spotted BOM-EWR-BOM at INR 90,000 in business class on Jet Airways.

And I’ve made at least 4 or more trips on the BOM-DEL-BOM route this year where I paid an average of INR 3,300 or so one-way for my tickets, which is a good 40% discount on the price of INR 5,500 which is my benchmark price for booking these tickets a few months out. I have one more planned soon as well. If you see the screenshots in my links above, each one is from a real life example, so of course those tickets exist.

Discounting is one way to get your planes to fill up, and airlines across the world use this as a tactical strategy. This simply means that if you can book your tickets far out and can stick with the policies of the airlines on these routes, you get to be on that plane far cheaper than last minute or even 2 weeks out travel dates.

Why are the sales so similar?

It seems the people behind APAI do not have business sense at all or have not studied about competition in the market place. Air Travel is a commodity, where each seat is a perishable commodity. An airline is either able to sell that seat, or they will fly it empty. With most airlines in India, you get a seat and you get a check-in baggage allowance, so that is all the experience you are limited to on a no-frills carrier.

When an airline puts a sale out, they are doing this to fill up these marginal seats, not the whole of the plane at deep discounts. So, you-d expect 2-5 seats to be open per flight on this sale, not 100 out of 180. When some passengers commit to these flights, the revenue management department has more surety on how to break even on the flight or make a profit, and the rest of the tickets may be priced accordingly.

Because seats are a commodity, if someone is offering a cheaper product in the market, economic theory would say that people would go for the cheap because one airline is replaceable with another in terms of travel. To make sure the guy who likes Indigo, for example, is not flying on GoAir or the girl who likes GoAir is not flying SpiceJet, everyone else gets in the game as well. The logic is to protect your own territory, your own flyers and your own market share.

I explained this in a blogpost two years ago, titled the Economics of Fare Sales.

Should DGCA act?

This APAI has apparently asked the DGCA to act on their complaint and stop these frequent sales by the airlines. If I understand correctly, DGCA’s mandate is not to manage the financials of airlines but Air Safety in India. So, unless by flying an A320 with 180 passengers capacity, the airline is committing a security issue, then DGCA has no business acting on it. They did act to stop SpiceJet from offering INR 1 fares earlier this year, and even then, I contended it was not their job.

I guess the APAI does not read this blog, else two years ago their staffers would have learned how to get tickets during fare sales in India.

As for the surge in traffic and people not being able to reach the website, that even happened to Flipkart during their megasale, and to Big Bazaar years ago during their first megasale. Those outages, well, you live and you learn.

Dear APAI, come, let me teach you the next time how to get a fare ticket on cheap. But If you don’t want to, here is my only tip:

  • Be flexible about travel dates and times. You may not get a ticket on the exact flight but the one before or after.

My readers, do you think this is a valid charge by APAI or have you benefitted from these fare sales over the months?

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About Ajay Awtaney

Ajay is a financial services pro, working to bring order to the chaos of the financial industry on an everyday basis! Beyond that, he dons the hat of India's favourite frequent traveller, trying to help people elevate their travel experience via tips and tricks they never knew before, or introduce them to the world of miles and points. Armed with an MBA from MDI Gurgaon and graduate degree in computer science from the University of Delhi, Ajay brings a systematic and objective approach on the table for his audience in dissecting travel and loyalty programs in India and around the world, and how to benefit from them. Ajay has been quoted in various reputed traditional and online media including The Hindustan Times, Inside Flyer, Bloomberg, DNA India, Conde Nast Traveller, The Telegraph, Mumbai Mirror, Mint, MoneyLife and The USA Today.

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Comments

  1. Krishna kumar and Ajay this associociation was started around more then 20years back when the domestic air sector was monopolised by Indian airlines, by some big industrialists. By chance I also attended their one of the meeting in Chennai at one of the star hotel. Since then domestic aviation has changed totally, even emails to them given on website are not replied.

  2. Well, I too learnt durin my b school stint how airlines manage to sell cheap tickets – didn’t seem that difficult to understand then 🙂 I too have booked BOM-CDG return in J class for INR 60k. While it is not domestic economy class ticket, it does prove that discounted tickets are offered (I booked 3 tickets).

  3. some baseless allegations for publicity… many of us has managed to grab some grt fares…. (hyd – blr Rs.200 /- on spicejet… Rs.450 on Air asia (blr – goa) ..n some decent deals on Jet airways too….

    I think only Air india sale disappointed us….

  4. Dear AJ
    I think these chaps do not know how to go about buying tickets.During all the recent offers of Jet I have purchased many tickets at very low prices.I have return tickets from Delhi to Port Blair in Feb 2015,for self and wife for Rs 4800/- per head with approx 1500 JP miles per person plus tier Bonus.I think it is a classic case of the “Grapes are sour”.

  5. Hi AJ,

    I think APAI is not run by street smart guys like you and me…

    I have been taking advantage of these sales frequently.. Some sectors which I booked/traveled were offering ridiculous prices,

    Pune Delhi Spicejet Oct 14- 2 tickets at Rs 800 each,2 tickets at Rs 1600 each.
    Delhi Srinagar Oct 14 – 1 Ticket at Rs 800 and 3 tickets at Rs 1600
    Srinagar Pune on Jet Airways- 4 tickets at 5100/- each for Nov. 14
    Mumbai- Jabalpur- Mumbai at Rs 2900 return per person for 4 PAX in March 15 on Spicejet.
    Pune- Mumbai on Jet Airways 2 tickets at Rs. 900/- for May 15.

    The points is that these fares do exist but you need to be alert and quick to grab them.

  6. Absolutely! Last 3 months I did Blr>Mum>Blr over weekends at least 7/8 times of 12 odd weekends. With fares slashed the average round trip fare was ~4.5K which is 20-25% cheaper than usual 5.7k-6K fare. So there is no denying that sale fares are for real.
    However, I do agree on the fact that the fares are not just similar but same quite a few number of times.

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