The Directorate General of Civil Aviation (DGCA) in India has asked SpiceJet airline to withdraw the recent discount scheme where tickets were being offered at a base fare of Re 1. The is the fifth time that Spicejet made such an offer in the past six months.
The low cost carrier SpiceJet had kicked off another fare war on Tuesday when it announced a three-day-only sale with fares starting at Re 1 for domestic flights. These tickets were applicable only on direct flights of SpiceJet from July 1 in the domestic network with extra statutory taxes and fees.
The offer was available for limited seats bookings from April 1 to April 3, 2014 only. DGCA had learnt about the offer and immediately issued a notice asking the airline to withdraw the discount offer.
In the past, the DGCA raised concerns over the excessive discount on fares. This is the first time the DGCA has cracked down and asked the carrier to stop. SpiceJet said that the response was huge and all seats under that quota have been sold and the the offer is discontinued.
SpiceJet has been asked an explanation by DGCA. The airline responded by saying that the offer was limited to only 1.7 per cent of the total seats. This is roughly about two seats per flight. Hence the revenue loss incurred due to the sale of ticket would be offset through other means. The carrier claimed that these seats would have gone empty otherwise.