India’s equivalent of the FAA (which they call the DGCA, the Director General of Civil Aviation) asked lowfare carrier SpiceJet to stop selling its Rs 1 (2 cents) tickets, because it considers the practice to be “predatory” and “a malpractice.”
SpiceJet’s announcement caused a virtual stampede to their website, causing it to crash as Indians looked to grab basically free tickets around the country.
Other airlines have no responded, though none with 2 cent fares.
SpiceJet on Wednesday defended its position, saying market stimulation with low fares is an essential strategy for LCCs. “As a low-cost airline in a market where demand is currently soft, and being in a market where costs are structurally high, we are trying our best to be innovative and adopting best practices from global LCCs in order to attract more customers and improve our revenues,’’ the airline said in a statement.
Wait – costs are high, so the way to combat that is by lowering fares to zero? Obviously!