AIR INDIA Pricing strategy

National carrier Air India has positioned itselI clearly between the Iull-service airlines
(KingIisher and Jet) and budget carriers (IndiGo, Spice and JetLite).
KingIisher and Jet raised Iuel surcharge by up to Rs 300 in early April because jet Iuel had
become expensive. But Air India reIused to Iollow their example. As a result, its Iares are
now up to Rs 300 below those oI Jet and KingIisher, and 5-10 per cent higher than the budget
carriers. (The budget carriers too did not increase the surcharge.)
On top oI that, Air India has come out with discounts oI up to 70 per cent on 41 short-haul
routes like Agartala-Guwahati, Agatti-Kochi, Chandigarh-Delhi, Mangalore-Mumbai and
Hyderabad-Tirupati.
The scheme is graded. Travellers who book 30 days in advance on these routes can get 70 per
cent discount. Booking the ticket 20 days in advance can get 50-60 per cent discount. Lower
discount is on oIIer iI it is booked 10 days in advance.
Air India has recovered market share Irom Iull-service as well as budget carriers in the last
one year. At the end oI March 2009, its share stood at 17.1 per cent, up Irom 15.7 per cent in
March 2008. The current pricing strategy and the discounts, say Air India oIIicials, will help
it regain a larger share oI the pie.
Travel companies say the move by Air India has been eIIective at least in the short term. 'Its
numbers have increased and there has been some shiIt Irom the other Iull-service carriers to
its Ilights. Advance bookings have also improved, said Bhawna Aggarwal, the co-Iounder oI
travel portal Yatra.com.