BA withdraws bonanza offer
Our Corporate Bureau
30 October 2001
Mumbai: British Airways (BA) has withdrawn its unbelievable offer of Rs 18,000 return ticket fare between India and London. The International Airways Transport Authoritys billing and settlement plan (BSP) had forced the airline to make this move.
If it had continued, the fare could have been the lowest in the last several years - just before the Gulf War, the return fare from Mumbai to London was around Rs 18,000, with one stop at Delhi thrown in.
While the decision has disappointed the entire traveling community, it has brought a sense of relief to rival airlines - it could have been financially disastrous if they had to charge that fare. But most travel agents feel that low promotional fares are the need of the hour to woo back customers into the airline sector, which has suffered a severe setback in the aftermath of the 11 September attacks.
Last week BA had made an announcement to introduce this biggest lowest offer to compete with rival airlines and to improve its liquidity position. BA had decided to bypass IATAs BSP by using the following modus operandi:
1) Instead of tickets the airline had sold vouchers to travel agents for cash upfront. Each agent was asked to buy a minimum of 10 vouchers worth Rs 1,80,000 and pay upfront.
2) If the vouchers remained unsold, the airline might have refunded the money only in April 2002.
3) No direct sale had been made to customers.
The airline is said to have collected about Rs 20 crore, which will be refunded. Sources said pressure on the airline had increased after IATA issued a 72- hour notice to the airline to withdraw its scheme. As per rules all IATA member airlines have to get their accounts settled by IATAa BSP and if the same is not done, then it stands the danger of violating IATA rules.