Airlines slash fares, woo passengers
Price-cutting has been one of the ways airlines employ to attract passengers to fill their seats and to woo air travellers back to their airlines, especially in the face of the economic meltdown so as to remain in business. CHIKA EZEOKOLI writes.
GLOBALLY, airlines slash their fare tickets to a particular route or routes as a means of wooing more customers, and that has been competition among the airlines operators in the aviation industry.
Specifically, some offer free tickets or reduce the fare to children within an age bracket, it could be for one of the children travelling with the parent. At other time, they may offer passengers a discount of the ticket fares, while most airlines cut their fare price so as to fill their empty seats.
Nigerian airlines operators are not left out of this price-cutting strategy to boost their operations, being done internationally by airlines in other parts of the world. These airlines, Aero Contractor, Virgin Nigeria, Dana Air, Afrijet, Arik Air, Bellview, Chanchangi and others have at one time or the other reduced their fares price to satisfy their customers.
For instance, Virgin Nigeria airline has offered its passengers new fare options on its routes, which started on July 1, 2009.
The airline said the new direct Abuja -Accra, service is available for only $330, while there are cheaper return fare on Port-Harcourt, Abuja and Owerri at N28,000. It added that ticket fare for Lagos-Calabar is now at N10,000, just as the company indicated that the routes in all fare classes for Lagos-Banjul would be reduced compared to present fare options.
"There is no question about it, the company is focused on its customers' satisfaction. And as we grow stronger with a new 'proudly Nigerian' identity and image, all the recent developments route launched and aircraft acquisition, we are involved with the customer's needs on the top of our minds," said the Corporate Communication Manager, Mr. Francis Ayigbe.
Other international airlines like Qatar Airways have reduced their fares for all passengers in Nigeria. The fare reduction includes the economy, business and first class cabins to Dubai, London, Cairo, Maldives, Seychelles, and others.
Children travelling with the airline to London, it said, would have additional fun, as one child would obtain a free ticket accompanying the parent. The children would also have the opportunity to experience Dubai all for free.
Lufthansa Germany Airline has also offered its customers in the country 30 per cent fare discount on the London and New York routes. The London and New York return tickets were offered for N125,500 and N173,500 respectively. The Marketing Manager for West Africa, Mr. John Opara, said the two cities are the major holiday destinations of Nigerians and Lufthansa wanted to make travel cheaper and easier for passengers of these routes.
United has matched fares from other airlines through the various sales, said United spokeswoman, Robin Urbanski. To tap into low fares, Urbanski cautioned travellers to book early because there are limited discounts on each flight.
It is believed that delivering high quality service to passengers is important so that airlines can survive and strengthen their competitiveness. Since good quality service is an important factor for airlines, research related to service quality and customer satisfaction in the airline industry has been growing.
As a result, airlines are all set to woo back passengers who had given up flying due to high fares in last few months.
To achieve that, airlines have been slashing fares, so that they do not go out of airline business. Globally, a wave of fare sales has spread across the airline industry in the early days of the new year as the weak economy continues to put pressure on carriers to fill seats even after they drastically reduced capacity and some expressed willingness to cut more.
Many experts and even executives at some airlines had expected that after deep capacity cuts went into effect starting in September, the number of fare sales going forward would be fewer and farther between. But fuel prices have come down significantly, and the weak economy has eroded demand for air travel.
"Even so, base airfares outside of the travel periods for the recently launched sale fares are higher today on average than in the last few years," said Rick Seaney, head of airfare research site FareCompare.com.
He noted that there were 30 attempted airfare hikes between summer 2007 and summer 2008, two-thirds of which were successful.
"It's not unusual for airlines to announce fare sales in January - there were 17 or 18 announced in January, 2008, but what's different for several carriers this year is that the discounts are for travel extending as late as April, May, or June," he added.
Meanwhile, major United States airlines, Delta Air Lines Inc. and American Airlines Inc., would slash capacity this year as the recession erodes travel demand, the carriers said. The cuts, which were broadly expected, are likely to be matched by rivals. U.S. Airways Group and Continental Airlines Inc. also signalled plans to cut the number of seats available for sale.
The airline industry has barely digested last year's deep capacity cuts. But experts say more are needed to bolster fares and help compensate for rising oil prices and weak demand. "We think fourth-quarter capacity will be down at least 12 per cent over last year. Maybe even 15," said airline consultant, Michael Boyd. "Right now, capacity has not fallen to match decline in demand," he said.
AMR Corporation, parent of American Airlines, said it would cut available seat miles 7.5 per cent this year, compared with a previous forecast of a 6.5 per cent decline. U.S. Airways said it expects further capacity cuts in its transAtlantic flying, but could announce "marginal reductions" in domestic routes, too. "The truth is, we don't have a very reliable outlook beyond 30 days," Scott Kirby, U.S. Airways president.
After two years of steadily raising fares as fuel prices soared, U.S. airlines are slashing prices dramatically in an effort to fill up empty seats.
Travelocity, an online booking service, estimated that airfares for the 100 most popular domestic and international routes have fallen to 24-month lows and are 40 per cent lower than last June, when they peaked.
Some round-trip tickets between San Francisco and Boston, New York or Washington cost less than $250 at UAL Corp.'s United and AMR Corp.'s American, down from $350 to $400 a year ago; some round-trip tickets between New York City and Amsterdam, Madrid or Frankfurt have fallen below $400 on Continental Airlines, from between $600 and $700 a year ago; and tickets between Chicago and Sydney can be had for less than $1,000 down from more than $2,000 a year ago, according to industry fare trackers.
Price-cutting is not what airlines had hoped to be doing in 2009. During the recent surge in oil prices, which peaked above $140, a barrel last July, air carriers axed thousands of jobs, streamlined operations and cut capacity. Through it all, they systematically avoided price wars. As a result, most of the big U.S. carriers appeared well positioned for a payoff in profits once oil prices began falling.
With consumers reluctant to fly, fare sales are proliferating. "I don't remember a year other than 2001 that we've seen this kind of commotion in airfares," says Tom Parsons, chief executive of Bestfares.com, a discount travel web site.
Last week, discount airline AirTran Airways launched a domestic fare sale with one-way tickets as low as $39 between American cities. Two days later, American began trumpeting one-way fares to some European cities for around $200 and a one-way price of $75 between Los Angeles and Los Cabos, Mexico. Rival airlines were quick to match offers.
Northwest Airlines, now part of Delta Air Lines, and other carriers are hawking round-trip fares for as little as $125 to fly between Minneapolis and Chicago, after fares rose as high as $350 last year.
Multiple airlines recently have begun offering special roundtrip fares to Dublin, Ireland, from cities such as Dallas and Los Angeles for around $700. The same seats cost more than $1,000 last year. U.K.-based British Airways announced a new fare sale under which American travellers can fly from New York and other major U.S. cities to London for less than $500. The airline is also giving two free nights at hotels in various European cities to buyers of some discounted airline tickets.
Also, private Indian carriers Jet Airways, JetLite, and SpiceJet have slashed airfares by about 48 per cent in an effort to boost load factors on domestic routes. With a rapid increase in air fares passengers went back to the railways for inter-city travel and so the latest move by private carriers may be an effort to woo them back.
Low-cost carrier, SpiceJet, has slashed fares by up to 45-48 per cent for passengers travelling between July 1 and September15. It now offers passengers an all-inclusive one-way fare of Rs1, 830 on the Mumbai-Delhi, Bangalore, Collate, Hyderabad, and Chennai sectors.
Even with fares dropping, many consumers are proving reluctant to fly with the news of the recent crashes in the airline industry. A lot of people prefer to travel by road with the public busses or get into their cars to take a short or long trip, rather than get on a plane.
