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SpiceJet, on Monday, announced a tie up with fintech company Capital Float to enable customers to pay for their tickets in instalments.
While banks provide their credit card holders an equated monthly instalment facility for spends, SpiceJet’s partnership will benefit those who do not possess cards.
Shilpa Bhatia, chief commercial officer, SpiceJet, said, “The ticket price cannot be the reason to delay that family vacation any longer and our latest initiative aims to add more convenience and allow passengers to pay in easy instalments as per their budget. Moreover, in case a customer wishes to end the loan before the chosen EMI
period, they can do the same and no foreclosure charges will be levied.”
The airline said no interest will be levied if a customer opts for a three-month EMI period. But if he opts for 6/9/12 months, then the interest payable will be at 24 per cent a year on reducing balance basis. Currently the minimum ticket amount to avail EMI option is Rs 900 and maximum is Rs 40,000 and this may vary in future, the airline said.
SpiceJet reported a net loss of Rs 729 crore in the first quarter of FY22 on account of low market demand due to the Covid-19 pandemic. The airline has also been under pressure from creditors over pending dues. The recent upswing in air travel is a positive and will help it increase its seat occupancy, which has consistently been highest in the sector.
While a “Book now Pay later” scheme in collaboration with a fintech company may be the first for an airline, the concept is not entirely unique. Banks offer their card holders EMI option based on transaction amount and credit worthiness.
Last June IndiGo launched a flexible payment scheme which allows customers to secure a ticket by paying minimum ten per cent of fare or Rs 400. The balance amount has to be paid atleast fifteen days before the departure. The scheme allows customers to lock in fares but has had limited traction.
In June Thomas Cook and SOTC announced “Travel Now Pay Later scheme” offering an EMI facility for their customers. Soon a few other travel companies started offering similar schemes.
An industry executive said that Thomas Cook scheme was floated to inspire customer confidence and address travel disruption challenges caused by Covid-19 lockdowns. “The product was relevant at that time. Now disruption risk caused by lockdowns has subsided,” he said. While the tour operator continues to offer the product it is not actively pushing it, it is learnt.
“The scheme will help travellers make affordable bookings without having to pay the entire ticket price upfront, enabling them to travel for leisure or meet their loved ones after spending several months indoors. This exciting partnership is further testament of our efforts to make formal credit easy and accessible to a growing number of aspirational customers who seek digital-first solutions,” said Gaurav Hinduja, Co-Founder & MD at Capital Float.
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