SpiceJet launches latest spate of low air fares

MUMBAI: Low fare carrier SpiceJet on Tuesday launched its latest spate of low air fares, even as the latest Railway Budget left recent hikes in railway tariffs untouched.

The budget carrier will, between July 8 and 10, sell a million seats at base fare of Rs 999 for travel between January 6 and October 24, 2015."Fly our domestic network at fare starting Rs 999, lower than train fares," the airline said in its promotion.

Earlier in the day, India's railway minister DV Sadananda Gowda announced a slew of measures for passenger-friendly train travel, but didn't roll back the 14.3% increase in fares which was announced on June 20.

SpiceJet has been leading price wars throughout the year, forcing other low fare carriers to follow suit, often at the cost of their margins. The Kalanithi Maran-controlled airline in January slashed fares by 50% and later followed with a Rs1 fare.

The DGCA cracked down on the offer and called it"predatory" pricing. On June 10, SpiceJet announced an offer for Rs1,999, but only for south Indian cities such as Bengaluru, Chennai and Coimbatore. A few weeks later it repeated the offer for the entire network.

The fare wars are set to intensify with the recent entry of Malaysian carrier AirAsia’s local venture into the market.

"Competition has intensified in the air market with the entry of new players, and this sale announcement by Spice-Jet targets shoring up bookings in advance, so as to sustain their market share in the face on increased competition that is likely going forward. We anticipate other airlines following suit and are already seeing a huge surge in our bookings," said Sharat Dhall, president, Yatra.com.

The fares have increased SpiceJet’s load factors which would impact its already depleting margins and highlight an urgent need for cash. It posted record losses of Rs1,003.3 crore in the year ended March 31.