Huge sale on domestic
tickets offered by the Air India last week may have grabbed the expected crowd
of the flyers and stimulated air travel booking; the flash discounting is
considered as a reaction to Vistara, but the picture is much wider than this. The
fact is Air India is struggling to shore up its brand image by encouraging
flyers to travel on their new wide-body Boeing 787 Dreamliner fleet.
Air India has recently
launched this airbus that is extensively deploying on domestic routes. The
airline expected Boeing 787 dreamliner fleet will give the company an edge in
the market as the brand has faced trouble due to the perceptions of offering lower
service quality standards than its private sector peers.
The airline’s collected
losses are already at about Rs 50,000 crore. The participation of Air India in
this loss is about the half. Apart from this, the airline offered a 50%
discount to Book Domestic Flights in
India.
The picture behind this is
that this leading airline can clearly take a margin hit even offering some
seats below the cost of fuel since its funding is secured by the sovereign
guarantee of the government of India. Offering such deep discounting that’s
where will be a great challenge to other carriers where IndiGo making profit,
though Jet has recorded losses of over Rs 4,000 crore in 2013-24.
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