Senior officials of competing airlines termed SpiceJet’s ₹1 ticket offer pure “gimmickry” and “suicidal”, but conceded that they, too, will be forced to take some measures to woo customers.

It is not uncommon for most airlines to jump into the fray and offer discounts once an airline comes out with the sort of promotional fares which SpiceJet is offering.

Travel agents said that by late evening on Tuesday, IndiGo had dropped fares on certain key sectors, including Delhi-Mumbai, Delhi-Bangalore and Delhi-Lucknow. IndiGo operates 10 daily flights on the Delhi-Mumbai sector alone.

Travel market

Pointing out that SpiceJet has yet again stimulated the air travel market by its latest announcement, Sharat Dhall , President, Yatra.com, said the move was an attempt to target leisure bookings with extremely attractive advance fares. “SpiceJet is looking to pick up a significant share of these forward bookings, which could also insulate it from the threat of higher competitive activity that is expected later in the year.”

This probably has to do with AirAsia India, the joint venture between Malaysia-based AirAsia and India’s Tata Group, which is expected to begin operations later this month.

The Malaysian carrier globally offers huge discounts for passengers making bookings well in advance of the travel date.

Instant cash

Amber Dubey, Partner and Head-Aerospace, KPMG, felt the limited period discount offer will help generate instant cash for the airline.

This was the fifth discounted sale scheme, which SpiceJet has announced in 2014. The airline reported a net loss of ₹172.79 crore for the third quarter ended December 31, 2013 against a net profit ₹102 crore a year ago.

The concept of ₹1 fares (excluding taxes and surcharges) was first introduced in 2005 by Air Deccan. The airline eventually collapsed under a huge debt and was taken over by Kingfisher Airlines in 2007.

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