Here’s How SpiceJet’s Attempt To Lure Customers Was Stopped By Regulator

A look into why SpiceJet’s promotional ticket sale was stopped by the regulator who said that the airline has violated certain norms.

The pandemic has been tough for airlines. Crisil in a report in July said that Indian airlines are looking at a revenue loss of ₹1.3 trillion between fiscal 2020 and 2022 as the Covid-19 pandemic has significantly affected demand. Also, the International Air Transport Association has predicted that passenger traffic won’t return to pre-crisis levels until at least 2023.

From the above information, two things are clear: Indian airlines are making losses and it will take years for air traffic to go back how it was before the pandemic. So, it only makes sense when companies try to deploy tactics that will help them make money. Here is our insight about how SpiceJet started a sale and why did the company do it?

The Big Sale

SpiceJet announced a five day 1+1 special offer, meaning that if customers buy a ticket (priced at least ₹899) between August 3 and August 7, then customers would get a voucher for another ticket of the same base fare, valid until March 2021.

Move By The Regulator

The Directorate General of Civil Aviation (DGCA) asked SpiceJet to stop its sale, saying that it has violated the government’s competitive pricing terms. As per the regulations, there would be seven bands of ticket pricing with lower and upper fare limits based on flight duration.

The first such band consists of flights that are of less than 40 minutes duration. The lower and the upper fare limits for the first band are ₹2,000 and ₹6,000 respectively.

The consequent bands are for flights with durations of 40–60 minutes, 60–90 minutes, 90–120 minutes, 120–150 minutes, 150–180 minutes and 180–210 minutes. The lower and upper limits for these bands are: ₹2,500-₹7,500; ₹3,000-₹9,000; ₹3,500-₹10,000; ₹4,500-₹13,000; ₹5,500-₹15,700 and ₹6,500–18,600, respectively.

SpiceJet’s Move

A day after SpiceJet announced its promotional ticket offer, it had reportedly withdrawn the offer because of DGCA’s directive.

The Motive Behind The Sale

Sources indicate that the airline was offering discounts as it is one of the quickest ways to raise capital during difficult times, writes Livemint. A senior industry source told Livemint that the aim of such an offering is to generate more revenue by getting limited passengers to fly them rather than other airlines.

The Attempt Continues

Even though this sale was blocked by DGCA, SpiceJet is not backing down anytime soon from looking for ways to boost the sale of tickets. SpiceJet now allows customers to book two seats or even a full row in its passenger flights. This is available across the airline’s domestic network at a discounted rate which is dynamic and depends on the ticket price.

So, be it SpiceJet or any other airline, they all have to come up with new ways to make money this pandemic and if they don’t, they might not be able to survive for much longer.

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