Indian Aviation: Price Wars & More

The months of July and August 2002 witnessed unprecedented development in the commercial aviation industry in India. For the first time in the history of the industry, efforts were made to make air-travel affordable for a larger section of the population. With air-travel fares being much higher than rail and road travel fares, the average Indian traveler rarely traveled by air. However, in these two months, the companies offering air-travel changed the market dynamics completely. The reason for the above was not very difficult to understand. Though there were only three major players in the Indian aviation market, namely Jet Airways (JA), Air Sahara (Sahara) and the state-owned Indian Airlines (IA), competition was getting fiercer by the day.

Thousands of seats were to be offered by both JA and IA between August 1 and October 31 at rates, which were comparable with rail fares. The special fares could be availed of booking at least three weeks in advance. Though JA claimed that its campaign was a move to commemorate the first flight of 'Wright Brothers' in 1902, there were few takers for this.

In August 2002, Sahara surprised its competitors and customers alike, by announcing the 'Steal a Seat' campaign. Beginning August 26, 2002, customers could bid for 10% of Sahara's unsold seats for as low as Re 1. However, customers would have to plan their journey 25 days in advance.