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Tuesday 27 June 2017
News updated at 3:59 AM IST

Fares descend to Rs 749 as airlines vie for monsoon biz

Furquan Moharkan, Bengaluru, DH News Service Jun 19 2017, 14:27 IST
Image for representation.

Image for representation.

Airlines are rolling out huge discounts for the monsoon — fares start at Rs 749 for economy class tickets.

Jet Airways, Vistara, IndiGo, GoAir and Air India are among the airlines offering huge fare cuts. On Air Asia, a Bengaluru-Kuala Lumpur all-inclusive return ticket comes for Rs 7,099.

Domestic offers
The Air India Saavan sale — open between June 17 and 21 — covers domestic travel between July 1 and September 20.

Vistara’s ‘Great Monsoon Sale’ features all-inclusive fares starting at Rs 849. In premium economy, its lowest fare is Rs 2,099.

IndiGo fares start at Rs 899 for domestic destinations. The low-cost carrier is also offering discount vouchers of Rs 899 on other routes.

GoAir, whose sale ended on Saturday, had fares starting at Rs 899 onwards for travel between July 1 and September 30. Jet Airways domestic tickets are priced at Rs 1,111.

Various travel portals like MakeMyTrip, Via and Yatra are also running their own deals.

Routine pattern
So what’s driving prices down? Experts say the monsoon brings a drop of 5-8% in passenger load for airlines.

“The airlines offer such discounts to encourage passengers to advance their bookings. This is to maintain cash flows in what is seen as a lean period,” an official from via.com, an online ticketing platform, told DH.

GST questions
Though it is not clear how GST will impact airlines, low-cost carriers are wary.

“Input credits are available on services only in case of economy class, so GST can skew the passenger load factor in favour of full-fledged airlines,” said Naveen Rajpurohit, partner at BDO, a tax advisory firm.

GST on economy class will be 5% against 6% in the current regime.
Business class will be taxed at 12% against the existing 9%, but input credit is given on goods as well as services.

Air traffic fuel is out of the GST net, and that means the industry can’t claim credit for taxes paid on fuel.


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