Jet offers tickets at Rs 716 to counter Spicejet, Go; fierce war begins in the sky

Even as crude touches its lowest point in a decade making airliners smile and their stocks sizzle, a war of airfare breaks out in Indian sky. It turns fierce and closer like never before on Wednesday when Jet Airways, the full-service airline started offering tickets at a price of just Rs 716, exclusive of taxes countering almost similar offer made by Spicejet on Tuesday. While air passengers did not hesitate to promptly log on to Jet portal to book their tickets in advance using the opportunities of buying air tickets at such a low price, national carrier, Air India jumped into the bandwagon also offering low-priced tickets and also even free tickets for the 'lucky ones.' Indian sky finally is hotting up.

Meanwhile, private non listed player, Go Air also entered the airfare war by offering tickets at just Rs 603. Recently listed entity, Indigo, as industry experts feel at this juncture may come up with its offer to beat the competition in a day or two.

Considering price war among the sector, the aviation industry will benefit from increasing its top line in coming quarters. As a whole crude oil prices are favourable to the sector with an additional advantage. The low-fare war is definitely going to help the airliners to improve on their passenger load factors (PLF) while it is not sure whether their bottomline too is going to witness an impressive sign of improvement, add industry observers and market analysts.  Interestingly, the share price of aviation industry companies performed better during one year.

Aviation players started summer season sale on the year end itself. The sharp drop in crude oil prices helping sector to perform positive financials as about 60 to 70 per cent expenditure is incurred by fuel expense. The various fund houses across the market also expecting oil prices will not bounce back and will not go beyond its historical highs of USD 100. The oil prices are trading at USD 37 per barrel which is almost a 11 year low.