Fares competitive, but not triggering price war: Akasa

Due to increased airline rivalry to gain a larger part of the passenger market, the removal of price caps as of August 31 resulted in a considerable decrease in airfares across all routes.

Praveen Iyer, co-founder and chief commercial officer of India’s newest airline, said that the fares offered by Akasa Air are competitive and do not result in a price war.

“Dumping capacity and, thus, dump pricing is not our purpose. Being enduring long-term players is our goal. Even though the routes we run are quite established and dependable, they nevertheless require capacity. We were able to reach respectable load factors in such a short period of time precisely for that reason. Therefore, he stated in an interview, “There is absolutely no purpose to start a price war, either in deed or on paper.

Due to increased rivalry among airlines to get a larger part of the passenger market, the removal of pricing caps as of August 31 resulted in a considerable drop in airfares across all routes.

Competition has intensified after Akasa Air entered India’s congested low-cost carrier market. It became clear when Akasa Air sold Mumbai-Ahmedabad airline tickets for just $1,400, and Go First followed suit by cutting the route’s regular pricing range of $4,000–$5,000 to just $1,000.

Demand vs supply alone determines pricing, not anything else. Make sure to increase capacity in the appropriate city pairings where there is a need or a shortage. You don’t actually start price wars when you set your prices where the competition is, but you do give people lots of options,” Iyer continued.

The yield of airlines is impacted by competitive airfares. But for Akasa, the strategy entails putting the consumer first.

At present time, Akasa’s rates are competitive. Profitability and sustainability are very individualised concepts. Being a company, there are numerous things that go into being continuously profitable, yet we are only a startup. It is too early for us to worry about it, although I wouldn’t say we aren’t paying attention to it. Our goal is to make sure the assets are used where there is a need and that the consumer is satisfied with the final output. As we increase operations in the domestic market, our main goal is to improve the client experience.

With four aircraft already in service, Akasa now offers 30 daily flights; on October 7 and 21, two more will be added. By the end of the month, 44 flights per day will have been added. The passenger load factor, which was 53% when it first started operations in August, is also improving. By March 2023, it hopes to have a fleet of 18 Boeing 737-800 MAX aircraft, for which it has placed orders for 72.

Sources: https://www.livemint.com/companies/news/fares-competitive-but-not-triggering-price-war-akasa-11665076220118.html

Leave a Reply

Your email address will not be published.