Vistara says last-minute discounts are long-term disasters, slams rivals

Sanjiv Kapoor, chief strategy and commercial officer of full-service carrier Vistara, has flayed the last-minute discounts offered by a slew of rival airlines, saying the strategy is not sustainable in the long run. In a tweet, Kapoor, who was earlier chief operating officer of SpiceJet, said the fares offered by budget carriers IndiGo and GoAir and Air India in the New Delhi-Mumbai sector were ‘simply crazy’ and unsustainable regardless of the business model. [caption id=“attachment_2901406” align=“alignleft” width=“380”]  Extra inventory should be sold off in advance, said Vistara’s Sanjiv Kapoor[/caption] On one of the travel sites, the fares quoted by these airlines were as low as Rs 2,893 for one-way travel. The fare war was kicked off by Air India when it started offering fares matching Rajdhani AC-II tickets in select routes, including the metros, for last minute travel. The Air India strategy has prompted other budget carriers to follow suit and offer discounted fares for last-minute travel. Kapoor, however, has said in his tweets that discounts were always for advance purchase, never such last minute fares. According to him, extra inventory should be sold off in advance, and not used to trash last minute fares. “Last minute deep discounts are like a drug - short term false fix, long term disaster,” he has said.

.@vppati No such guideline, the days of Govt set fares long gone And the DELBOM flight is 2 hours.

— Sanjiv Kapoor (@TheSanjivKapoor) July 18, 2016

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.@craditya NO airline can sustain such low last minute fares, regardless of business model.

— Sanjiv Kapoor (@TheSanjivKapoor) July 18, 2016

.@RohitESS No. Discounts were always for advance purchase, never such last minute fares.

— Sanjiv Kapoor (@TheSanjivKapoor) July 18, 2016

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.@shachinb @RohitESS @SagarBedmutha Doesn't work that way in the long run. And impossible to teach airline revenue management in 140 chars.

— Sanjiv Kapoor (@TheSanjivKapoor) July 18, 2016

Earlier, aviation industry experts had told Firstpost that Air India’s strategy to offer cheaper last-minute tickets could increase the passenger traffic but is unlikely to improve its revenue. According to them, while the strategy may help the airline fill every fourth seat which otherwise goes vacant on its domestic flights, it may also change passenger booking behaviour as well. If one knows that tickets are sure to be available at significant discounts to the average air fare four hours before every flight, why would one want to book a ticket on normal fares at all? However, by offering cheaper last-minute tickets through Air India, the government seems to be trying to rein in the airlines fares as such. An Air India official had told Firstpost that the scheme has been launched to check exorbitant last minute fares, a practice followed by airlines world over. Clearly, it looked like an indirect way of regulating airfares.