The rapid promotional fares announced by SpiceJet may have pleased costumers who are logged on to travel websites to grab seats, but the airline too stands to gain from the initiative.
The airline will improve its cash flows to the extent of Rs 200 crore from advance bookings done at a magnum opus scale. Travel agents assert that going by previous trends, there are atleast 30% cancellations by customers due to inability to travel and as a policy, airlines do not refund amount for tickets purchased during offers.
SpiceJet wants to create brand awareness as it competes with bigger rivals Air India and Jet Airways on domestic routes.
Travel agents and industry watchers say that at least 3 lakh tickets were booked in few hours post the announcement of the offer on Friday evening. On any other given day, the airline books around 30,000 seats.
With a market share of around 20% and plans to add Colombo, Male and several Gulf destinations to its network, the airline needs to create brand awareness. Such campaigns do help popularise brand.
However, travel agents say that many other carriers like GoAir and IndiGo followed suit and put up a sale tag on select fares but later on, rolled back the offer.
At a time when the sector is bleeding and predatory pricing is considered a sin, SpiceJet's offer surprised customers, but nevertheless the airline announcing grand sale to beat lean season starting from Feb-April, cannot be ruled out.
Insiders say, SpiceJet has upset rival carriers for its prompt strategy to ensure loads during the lean season.
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