Study finds that Indians Value Punctuality Over Cheap Flights

Market research on consumer behavior and noticing the associated patterns of changes makes it possible to dispel the old beliefs and effect suitable changes in the strategies of business. One such recent study conducted by the Indian Institute of Management, Ahmedabad, has dispelled the old notion related to the Indian aviation that it is a price sensitive market and it is essentially by maintaining the lowest air fare of the tickets that the airlines are able to garner more of market share and customer loyalty.

Spic(e)y Discounts On Indian Skies

It seems that Spicejet is the main driver of the discounted flights in the Indian aviation market. It brings up one heart-warming offer of cheap air tickets and the others are left with no option but to follow the suit. This happened in May, 2012 last year when it cut down its prices to abysmally low levels on the occasion of its birth anniversary. Again this time in January, it has now come up with a new exciting offer for travelling anywhere in the domestic sector at the rate of Rs 2013 for travelling from February 1 to April 30, 2013.

“All-in” air fares made mandatory to exhibit for the airlines

Surprised that the cheap ticket fares that you saw in advertisements are actually not so! Well, if you are flying on Canadian airlines then you will not be surprised anymore. The airlines regulators have made it mandatory for the airlines to exhibit the actual prices of tickets on all types of advertisements such as print advertising, billboards and the online advertisements. Earlier, it was quite a common practice, and is still so in many other industries and countries of the world, to have different prices of flight booking on the marketing materials than the actual costs for the sake of attracting the customers. There was the invariable sign of some special character on the advertised prices which indicated that the prices is subject to certain conditions and might include or exclude a number of other charges.

Ottawa has begun this process of change since the marketing materials will now feature the prices which the customers will actually have to pay if they book the supposedly cheap international flights to destinations. The ticket prices exhibited will now include all the taxes, fees and other charges such as airport development fee, etc. so as to enable the customers to know which airlines is offering what all prices upfront without having to run through the process of flight booking to find the true prices.

The move will usher in more transparency in the advertisements and will prevent people being taken to a ride by the airlines or the agencies. It often used to happen that the customers got to realize at the fag-end of their flight booking exercise that there are more charges to be paid for. This left them with two options, either to abandon the online booking at that site or to pay the price for completing the booking, though with a bad taste.

How are interline agreements for air ticket booking are different from the code share agreements?

You must have heard of the code share agreements between the airlines. As a result of these agreements amongst the airlines, you do air ticket booking on one flight but are flown on the other airline, which might surprise you when you take the boarding pass. The code share agreements are quite common among the airlines. These give the benefits of extended market reach and better seat factors to the airlines. However, the interline agreements are relatively rare as compared to code-share ones. Both these types of flights can have flight numbers different from the one of primary airline. But, there are some basic differences between the two.

In case of the code share flights between the source and the destination in a multiple-leg trip, the flight number of each airline with passengers is different. But, in a similar situation, the interline agreement provides the same flight number for all the airlines.

Another major difference between the two is that the code share agreements allow for honoring the frequent flyers programs of airline on which cheap flight tickets are booked with the code-share partner carriers. So, when you are flying on the code share flight, your miles will keep on getting aggregating. Further, you can redeem these points on these carriers as well. But, in case of interline agreements, the rewards programs of booking airline are not honored for those segments of journey whose flights do not have code share agreement with one another.

Yet another difference is with respect to the baggage which needs to be checked-in. In case of code-share agreements, the baggage needs to be checked-in at each segment of flight since these are treated as separate flights. However, in case of the interline agreement, the baggage follows you wherever you go obviating the need for checking-in all the time.

Seat shortages in Indian Aviation Market

There is a handful of domestic airlines and you can count them on fingers: IndiGo, Spicejet, Jet Airways, Go Air and Air India. Together there airlines offer close to 2 lakh seats every day to the passengers. In a country, where the percentage of population travelling by air is not even 1 percent, these number of seats are still very less. So, this fact is sealed that there is indeed a shortage of seats, especially since the Kingfisher Airlines has been grounded. Add to it the persistent problems at the Air India and even these seats become susceptible to availability.

Out of these airlines, it is only Air India and, to some extent, Jet Airways which provide the medium and long haul flights. Since these are the full service carriers, these carriers do not provide the cheap international flights. So, if you have to travel to the destinations beyond Singapore on west and the United Arab Emirates on the East, you do not have many options in terms of carriers flying on these segments. So, besides the shortage of seats in the domestic market, there is also a shortage of seats on the short and long haul flights on the domestic carriers. Well, the foreign carriers do fill that slot but these might not offer as much cheap air tickets as the domestic ones. 

Besides the absolute seat shortages on the domestic and international flights, there are also shortages in the class-wise segments. While the no-frill service providers are filling the ever increasing demand of the cheap air tickets of the economy class travel, there is acute shortage of the business class seats for the people who want to use more comfortable travel options on all routes.

These shortages are the prime reasons for the prices of the air tickets shooting the roof, stoking the fears of cartelization of air fares by the domestic carriers. 

Why Are Red Eye Flights Operated?

Red Eye flights are referred to those late night flights on short haul routes which reach the destination early morning. So, it is quite normal for the passengers on these flights to come out with redden eyes since they might not have slept the whole night. What makes these flights important? Why do the airlines fly these flights?

When talking about the rationale behind these flights, there are many reasons. The first and the foremost reason has to do with the operational requirements of the next day. The airlines might need to have the airplanes at specific destinations in order to operate as schedules the next day. For this purpose, the airlines have to make the rearrangements by moving the airplanes which would be a lost opportunity to earn some revenue if these are operated without passengers.

Besides this rationale, another important reason is that since these flights are cheap, it gives the people an opportunity to fly on these flights. The business executives, who have to be at their offices the next morning, prefer to take these flights as it saves them time as well as money. Further, in the cheap flights moving from one time zone to the other, it is often more convenient to take these late night flights as they can sleep all night in the plane and remain awake during the day at the destination.

Thus, the rationale for the Red Eye flights stem from the benefits that these provide to the airlines, in managing their schedule for next day, and to the customers, for the lowest air fare and better management of time zone changes.

Changing use of the self- services kiosks

A kiosk is a free standing computer screen which is used by the passengers to print baggage tags or air tickets, scan the printed boarding pass, seeking confirmation of flight information, review and change the assigned seats and even tell you which gate to approach for taking the flight. The emergence of online commerce in travel industry, whether on your computer or on the mobiles, is fast changing the way the traditional kiosks are used by the airline for performing a variety of functions like doing the check-in, getting boarding passes and offering a few other services. With most of these services being offered on the internet to the customers and the once long queues now becoming a thing of past, the airlines have started mulling the usefulness of the kiosks afresh since it does require considerable expenditure on its maintenance.

As per IATA, there are about 5000 kiosks around the world and some of which have been closed by the airlines as they feel that the time is up for these kiosks. But, with about 20 percent of passengers still using these, most of the airlines feel, it is time that these are put to other uses as well.

The experts point out that the relevance of the kiosks will continue for the passengers with the hold baggage. These will continue to hold immense importance in the processing of the self service baggage and flight tickets processing.

Another likely use of the kiosks, as per IATA, is in the verification of the documents. One specific requirement pointed out in justification of this use of kiosks is that of passenger passport scanning. Though there are efforts at developing a mobile scanning and verification solution, it will take time to develop it and, in the meantime, the kiosks can be used for this purpose.

It has also been suggested that the use of kiosks as the first point of call for the passengers can be changed to provide a more comprehensive set of services and products. So, these can be used, as per IATA, as multiple channels product and service offer points. 

Struck by High Diwali-time Fares, Ajit Singh Orders CCI Probe

It is not new that the charges of cartelization of prices have been leveled against the domestic airlines. Before this year, there have been at least two other occasions in the last two years when the charges of increasing the prices of the tickets by airlines acting as a cartel have been leveled. On one occasion even the Competition Commission of India conducted the probe but found no evidence of it. This year, the charges and the CCI probe are back in news. At first, it was Captain Gopinath who brought forth this charge of FIA acting as a cartelization body under whose garb the airlines fix the entry level prices of the tickets. Not long after this charge was made, the people who wanted to fly on premium domestic sectors on Diwali found the prices to be just too high to be reasonable. Even the airlines which offered the lowest air fare were charging unexpected higher sums.

It was this unexpected exponential rise in ticket prices, even of the cheap flights offering airlines, which was considered well beyond the realm of reasonableness and the demand-supply mathematics, has led to the ordering of a probe by the Minister of Civil Aviation, Mr Ajit Singh. Under the terms of the probe, the CCI will be required to investigate the reasons in the high prices during the Diwali time and also to look into the charges of cartelization which have often been leveled against the airlines.

It is noteworthy that the airlines release the number of seats and fares for each flight in buckets. The first bucket generally has the lowest price and its seats get booked, the next bucket of seats and its prices is rolled out. The last bucket has the highest prices. Generally, the more is the demand, the more are the prices. And, this is precisely the logic of high demand and less supply in the last buckets of seats which is advanced for justifying high prices. But, the lid seems to have gone too high this time, prompting a probe into the airline ticket pricing system of the airlines. 

Indian Winters: Weather Plays Spoilsport In High Demand Times for Flight Booking

The winters are back, as usual, with their own set of benefits and troubles for the airlines and the passengers. The winters are good seasons for tourism in India, as the people are saved from heat of the sun which prevents them from making vacation and travel plans. Similarly, this is the time when a number of festivals happen around the world and there are working offs in most parts of the world. These are the times when the people plan their travel schedules and set-off to vacations in different parts of the world. If you had tried doing a hotel booking in this season in India, you would realize the heavy tourist rush during this season since most of the hotels would be reporting a total booked status for days and months ahead.

Heavy domestic and international tourist demand makes the flight tickets pricier. You shall not expect the lowest air fare during this season. And, even if you are flying on the dearer tickets, you shall not expect that the flights will be operating on schedule and that you will be saved of the troubles and inconvenience which arise due the flight operations in winter season. There are good chances of getting the dense blankets of fogs all through the late evenings to the early mornings. And, if the fog is able to beat all the advanced flight landing and take-off systems such as CAT II or CAT III and which it does more often than not, then you can always expect time delays in the flights or even the cancellations of flights.

This also puts a lot of pressure on the seat factors in the flights operating at times when the fog is expected to be clear since the people prefer to do flight booking at these times when fog is not around. So, there is huge demand and the cheap air tickets are out of question. In fact, the fliers can expect long queues at congested airports, waiting for their turn. Airlines can also expect to see a rise in the number of flight cancellations and the consequent claims for refunds. So, the typical weather conditions of winters make these both the restraining factor as well as the high demand factor for booking domestic and cheap international flights.

Captain Gopinath Puts the Spanner in the Works: Blames FIA for Catelization of Ticket Prices

In a scathing attack on the way the aviation industry functions in India, the former founder of the Air Deccan and an old industry veteran, Captain Gopinath, has blamed the Federation of Indian Airlines (FIA) for behaving like a cartel and charging that the airlines under its ambit fix the entry level prices among themselves. These serious charges are likely to dent the image of the aviation industry of the country and raise a public outcry as customers have been taken for a ride, if these charges are established to be true. The passengers normally assume that the airlines operate the cheap flights under competitive environment. However, Captain Gopinath has blamed the low-cost carriers and the full-service carriers of colluding with each other and for maintaining almost same prices of the entry level air tickets.

In the light of this blame, one can recall that the airlines have been asked in the past by the regulator and also by the Ministry to restrain the rapid price increases. The regulator has even tried to take measure to make it mandatory for airline to disclose its price band. There has been initiation of investigation into these charges as well but these were not conclusive of any wrongdoing.

Meanwhile, both the full service and the low cost carriers have refuted the charges. IndiGo has said that in the age of internet, where the customers can check and compare the prices across different airlines, evolution of a cartel is not possible. Spicejet, another LCC which provides the domestic and international cheap flights, puts it straight that since cartelization is done for making profits, every airline would be have booked profits. Rather, the picture of the financial health of airlines is very dismal.