Air India (AI) has flown some distance away from its heavy-footed image. Today, it faces the twin challenges of low passenger demand and the imminent competition from Jet-Etihad alliance. Air India has stepped up its sales and marketing by focusing on pricing and expanding its corporate travel business to brace for the competition. As a result, it has seen increase in load factors and yield, metrics that denote an airline’s earning efficiency.
With the exception of May, air traffic decelerated in the past few months. This has led airlines to discount tickets by way of promotional offers. While Jet Airways put up 700,000 seats for sale, GoAir offered fares that were lower than regular rates by up to 50 per cent.
Historically slow to react to such fare wars, Air India was pro-active with its pricing this time. An AI executive explains, “We had advance purchase fares for 14, 30 and 60 days before the travel date but none closer to the day of travel. We have recently introduced special fares that can be booked three days before the travel date. The fares have been introduced to fill flights with light loads and will help us compete with other low-cost airlines.”
Full report here Business Standard