SPICEJET last week applied for official approval to offer low-cost, non-refundable fares to customers, undeterred by AirAsia India's rejection for a similar proposal.
Sanjiv Kapoor, COO, SpiceJet, wrote to the Ministry of Civil Aviation: “There are occasions when we fly with a lot of empty seats and customers complain (about costly last-minute fares). We are unable to discount our distressed inventory close to the date of travel as current regulations do not allow us to offer restricted non-changeable, non-refundable fares.”
The airline intends to sell such fares at less than half the price of spot fares, but they will also be available for advance purchase.
Existing laws state that all airlines must refund taxes and surcharges when consumers cancel their journeys, though this does not extend to the flight fares itself.
Rajendra Churiwala, director-eastern region, IATA Agents Association of India, agreed with Kapoor: “Empty seats are not only a loss but depress overall profitability of seats sold. Airline seats are a perishable commodity, so a customer buying restricted, non-refundable tickets knows that it is a trade-off of risk against very cheap fares.”
Other restrictions that LCCs have baulked at include the mandatory free 15kg of baggage for each passenger. AirAsia India’s application to charge for each kilogram of checked baggage was also turned down by authorities.