Is Kingfisher's return raising hackles of Jet and IndiGo?

New Delhi: Is it the possibility of a bounceback by Kingfisher Airlines raising the hackles of its competitors?

Jet Airways and IndiGo say they have pulled out inventory from travel portal _ www.makemytrip.com_because the website continues to sell Kingfisher tickets under ‘opaque fares’. This means Kingfisher tickets are sold at very low prices but the consumer does not get to know the identity of the airline till he has paid for the ticket.

Kingfisher Airlines, which reduced capacity (or the number of seats it offers per week) to a fourth some time back, is still offering tickets which are cheaper by Rs 1,000-2,000 compared to other airlines, even the low-fare ones. And its flights are still running near full.

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This could be one reason why Jet and IndiGo have raised objections to Makemytrip.com’s practice of selling Kingfisher tickets on the sly.

[caption id=“attachment_280085” align=“alignleft” width=“380” caption=“Kingfisher has paid two installments of its tax dues and is showing a possibility of a marginal improvement in its operational performance.Reuters”]  [/caption]

Now, with Kingfisher having paid two installments of its tax dues and the possibility of the airline showing a marginal improvement in its operational performance, perhaps Jet and IndiGo see a hot summer of domestic competition ahead.

Already, leading travel portals point out that domestic demand is down by 10-15 percent this summer over last year because there has been a 20-25 percent increase in fares on an average.

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The Chief Operating Officer of Makemytrip.com, Keyur Joshi, told Firstpost that only IndiGo has withdrawn from the portal; Jet still continues to sell tickets through it. He also asserted that the practice of opaque fares was discontinued three weeks back. “We don’t know why Jet is talking of withdrawal. We are in discussions with them,” he said, adding that overall domestic fares might stabilise if Kingfisher operations start returning to even keel.

Kapil Kaul of the Centre for Asia Pacific Aviation agreed that Kingfisher operations are stabilising but said the “key (to any turnaround) remains immediate capitalisation. Continued delay in raising capital is increasing risk to a critical level”.

As per the data released by the Directorate General of Civil Aviation (DGCA), Kingfisher closed March with the lowest domestic market share of 6.4 percent when Jet Airways and IndiGo each commanded 21.9 percent. If we take Jet together with JetLite, its domestic market share is 29.2 percent. So perhaps the controversy over Kingfisher’s opaque fares is a smokescreen to quell further competition from a once-worthy foe.

Also, airlines like Go Air and SpiceJet have been holding market share despite a decline in the number of passengers booked. Joshi of Makemytrip.com says the fare strategy is decided by every airline and the portal merely follows it. “We even honoured the Re 1 price of Air Deccan when they began the low-cost airline”.

An IndiGo spokesperson merely said her airline has withdrawn all content from Makemytrip. “The arbitrary display of fares and opaque pricing is anti-consumer and in violation of DGCA directives.” Jet officials were unavailable for comments.

Himanshu Singh, Managing Director of another travel portal Travelocity.com also voiced concern against opaque fares, calling it “hoarding”. On the issue of a Kingfisher bounceback, he said this will take time. “This airline had 25-26 percent of the market but now its share is down to 6.4 percent. A lot of fundamentals need to be put in place before any bounceback is seen.”

Singh also pointed out that the overall market is down in terms of number of passengers boarded but ‘sale levels’ have gone up. “This means yields as well as toplines are better even when less passengers are travelling on domestic routes. The sales levels have improved by 5-7 percent.”