Indian Aviation: Price Wars & More

            
 
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Case Details:

Case Code : MKTG029
Case Length : 12 Pages
Period : 2002
Pub Date : 2002
Teaching Note : Available
Organization : Indian Airlines, Jet Airways, Sahara Airlines
Industry : Aviation
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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"There are no riders and no undercutting involved. It's all very transparent. We are targeting an entirely new passenger segment through this novel scheme."

- Uttam Kumar Bose, CEO, Air Sahara, Commenting on the 'Steal a Seat' campaign, August 2002.

'Everyone Can Fly' Through 'Steal A Seat'

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.

Marketing Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

Thus, when JA launched its promotional campaign 'Everyone Can Fly' that offered special fares on select routes, industry observers commented that such a move was long overdue. Immediately, IA responded by launching its 'U Can Fly' scheme with similar conditions as that of 'Everyone Can Fly.'

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.

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