Price War in Aviation Industry

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Price Wars in Aviation Industry – Boon or Bane? Introduction Aviation Industry in India is a significant one among those industry segments that have experienced a phenomenal growth across the globe over the past years. The open sky policy of the Indian government is one of the key factors that have allured international players into the aviation industry in India. Since long, the aviation industry in India has been growing in terms of number of air travel firms and number of aircrafts. Today, private airlines alone bear the burden of not less than 75% of the domestic aviation requirements. Indian aviation industry is the 9th largest in the world. As per the statistics released by the Ministry of Civil Aviation, in the year 2008 alone…show more content…
With air-travel fares being much higher than rail and road travel fares, the average Indian traveler rarely traveled by air. However, in these two months, the companies offering air-travel changed the market dynamics completely. The reason for the above was not very difficult to understand. Though there were only three major players in the Indian aviation market, namely Jet Airways (JA), Air Sahara (Sahara) and the state-owned Indian Airlines (IA), competition was getting fiercer by the day. | Thus, when JA launched its promotional campaign 'Everyone Can Fly ' that offered special fares on select routes, industry observers commented that such a move was long overdue. Immediately, IA responded by launching its 'U Can Fly ' scheme with similar conditions as that of 'Everyone Can Fly. ' Thousands of seats were to be offered by both JA and IA between August 1 and October 31 at rates, which were comparable with rail fares. The special fares could be availed of booking at least three weeks in advance. Though JA claimed that its campaign was a move to commemorate the first flight of 'Wright Brothers ' in 1902, there were few takers for this. In August 2002, Sahara surprised its competitors and customers alike, by announcing the 'Steal a Seat ' campaign. Beginning August 26, 2002, customers could bid for 10% of Sahara 's unsold seats for as low as Re 1.
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