Airlines have declared a full-blown price war to entice more passengers this festival with budget carriers IndiGo becoming the third to offer up to 40% discounts on a month's advance booking, after Air India and Jet Airways did so a few days ago.
SpiceJett the third-largest airline in terms of market share, is also expected to announce a similar move shortly, two travel industry sources said.
Though these discounts are a much-needed respite for passengers who have either reduced air travel or have shifted to other modes of transport due to high airfares this year with the removal of Kingfisher Airlines' capacity, airline players think this may impact their financials.
"Discounting fares in an already depressed yield market when costs are rising is not welcome news and it will put a lot more pressure in the airline sector. But I don't believe it will impact our financials as much as last year due to the fact that capacity has come down across the industry and we expect a strong holiday season in both international and domestic markets," a senior executive of Jet Airways told ET.