Season for airline flash sales
With the immense popularity and buzz garnered by the flash sales, airlines continue the trend to better their bottom line.
On February 24, SpiceJet announced a ‘ Super Summer Sale’ for customers who book within the next three days till February 26, for travel between April 1 and June 30, 2014. Post the success of the offers launched by the airline earlier this year, the third flash sale, offering 75 per cent off base fare plus fuel surcharge relative to lastminute fares, was part of the airline’s strategy to make seats that would otherwise fly empty available to passengers at highly- discounted advance purchase rates.
“We received overwhelming positive feedback from customers who booked the earlier ‘ Super Sales’. By taking the lead in making air travel more affordable, travellers can now book more spontaneously and more often by air, and we also attracted many first- time air travellers who would otherwise endure long train journeys or not travel at all,” said Sanjiv Kapoor, COO, SpiceJet. According to Kapoor, “These are not fare wars as commonly reported, for here there are no losers. This is just basic customer segmentation and inventory and revenue management.”
In a bid to compete with SpiceJet, other carriers such as IndiGo, GoAir, Jet Airways and even Air India again jumped onto the flash sale bandwagon.
Rajan Sehgal, Chairman, TAAI Northern Chapter, believes the reason behind such short intervals in the flash sales is because airlines need instant cash flow. “By announcing such offers, airlines want to boost their targets before the end of this financial year, since most of them are facing huge losses. A part of this is also a sales gimmick, as on the popular routes, almost 80 per cent will be sold out. So when you check the site to book your tickets, you end up buying tickets to less popular destinations like Ahmedabad or Pune, just because the rates are less.”
With drastic drop in prices offered, airlines are expected to witness a surge of 15 – 20 per cent in passenger traffic, Sehgal added.
"Airline operators are looking to fill their seats that are currently running below optimum capacity. But additionally, with Air Asia soon entering the scene, current operators are preparing for the tight competition in prices that will bring. By coupling with distribution channels, airlines can reach out to intended audiences who are looking to avail these discounts," said Jackson Fernandez, MD, Wego.com. By allowing travellers to book within the travel period from April to June, the carriers ensure that their peak summer season will be booked.
Online travel agents reaped the maximum rewards from the flash sale. Sharat Dhall, President, Yatra.com, said, “We have witnessed an overwhelming response on the first day of the sale having recorded an overall growth of 253 per cent within 24 hours. The phenomenal growth in certain sectors has surpassed all expectations, and we are certain that this will bring much needed respite to travellers from the prevailing high fares, as they plan their summer breaks.” He added that the Delhi-Mumbai route witnessed a 320 per cent growth in bookings, while the Delhi-Bengaluru witnessed the highest jump of 476 per cent.