Because that’s their pricing strategy. Because that’s how they want to stay competitive in the market. And because that’s how they want to pull in more profit.

indigo-airlines-letsdiskuss (Courtesy: India.com)

There are many pricing strategies out there. One of the ways to increase your profit is that you lower the price of your product so much (below your competitors) that it increases the sales volume very high, which pushes the overall revenue. Also called lowering your markup, this is a model that is championed by Walmart.

Also read: How can I book cheap domestic flights in India?

The Indian airline sector is more competitive than ever today. The airlines are battling each other with major price cuts. Earlier this month, for domestic flight tickets, GoAir put up 13 lakhs seats for a price starting from Rs 1,000. IndiGo followed the same footsteps, putting its 10 lakh seats up for grabs for the price as low as Rs 899. (There are many terms and conditions to the offer though).

More and more people are flying today. Till October this year, the cumulative travel demand has increased to 20 percent. Meaning, there’s a big market demand and it’s only increasing. So, airlines know to effectively deliver on this demand, they can cut back on their price up to a point where their sales are so high that makes up for their price cut.

(Luxury airlines like Emirates, Etihad, and Virgin Atlantic do the complete opposite. They bring more revenue and profit by having their tickets priced very high; they serve a whole different segment of travelers.)

IndiGo was offering cheap domestic flight tickets to boost its immediate term sales. Although, the seats were limited, and the booking period was very small. So, their sudden spike in sales might not sustain.

One thing that’s currently playing in the favor of these budget carriers is the easing global crude prices. This is providing them with more flexibility in playing with their discounts and offers. As the international price of crude oil is expected to remain in greens in the coming weeks, you can expect more of such interesting offers and deals from airlines on domestic flight tickets.