The Hindu : Business : Low cost carriers make mass air travel a reality

Online edition of India's National Newspaper
Monday, Jun 06, 2005

Business

Business

Low cost carriers make mass air travel a reality

`There are opportunities for a no-frills operator ready to fly to smaller cities'

The next six months will see a shortage of trained pilots, commanders and ground staff as well as airport and traffic infrastructure.

MORE AFFORDABLE FLIGHTS: Low cost carriers like Air Deccan offer single economy class seating and cut down on expenses without compromising on safety.

WITH NEW generation private low-cost carriers expanding at breakneck speed, India's aviation scenario promises to make flying affordable for the teeming middle class families. Only last month, two new carriers donned their flying colours — liquor baron Vijay Mallya's Kingfisher and SpiceJet — and there are about ten more lined up for launch later this year.

Suddenly, the domestic aviation scenario is exploding like never before. If it promises intense competition among the carriers and more choice to the travellers, it also makes a great demand on trained pilots, ground staff, and engineers.

Aviation industry watchers feel that the next six months will see a shortage of trained pilots, commanders and ground staff as well as airport and traffic infrastructure. Poaching of pilots has already become a hot issue among private carriers and major players can even go in for tie-ups with foreign airlines to lay their hands on a pool of foreign pilots for their operations. Jet Airways and Air Sahara have already begun their international operations flying to Southeast Asian destinations and now look forward to launching flights to the U.S.

Huge domestic market

"We need more low cost, no-frills carriers which fly people point-to-point at much cheaper rates. About 40 per cent of the people taking our flights are first-time flyers. There is this 250 million strong Indian middle class which is undergoing a tectonic shift in its purchase pattern and lifestyle and are ready to take flights,'' Captain G. R. Gopinath of Air Deccan, who launched India's first low-cost domestic carrier told The Hindu.

Starting with just one aircraft 18 months ago, Air Deccan now flies 18 aircraft, a mix of Airbus A-320s and 50 to 70 seater turbo-prop ATRs to smaller towns. Capt. Gopinath says there are opportunities for any low-cost, no-frills carrier which is ready to fly to towns like Jabalpur, Kanpur, Jammu, Dehradun, Chandigarh and Madurai. "This is precisely what Air Deccan has done and all our flights, including ATR flights, are operating to their full capacities," Capt. Gopinath said.

Robust business model

Is the low-cost model a sustainable one for the Indian aviation sector? "Certainly, it is a robust business model where you cater to the people who need to fly. It is like comparing Udupi restaurants and five star hotels. People go to Udupi restaurants because they offer neat, clean, tasty food at affordable prices but five-star hotels are also co-existing. Low cost carriers book tickets on Internet, offer single economy class seating and cut down on expenses without compromising on safety,'' Capt. Gopinath said. Air Deccan, flying to and from 33 airports, is poised to fly four million passengers in 2005-06 fiscal as compared to 7.6 million flown by public sector Indian Airlines and 7.8 million by major private carrier, Jet Airways.

As against the Air Deccan model, the latest private carriers — Kingfisher and SpiceJet — are focussing on point-to-point services, mostly on metro sectors. Mr. Mallya has modelled his airline a couple of notches above the low-cost model, offering individual video screens and audios in economy class. Like SpiceJet, his airline is also flying single economy class. "We have just three fare baskets and the fare structure is kept very simple and easy without any frills. We do not want to confuse passengers,'' Mr. Mallya said.

Last fiscal, nearly 16 million Indians took domestic flights and the trend shows that the figure could easily touch 20 million in 2005-06 but the penetration of air travel in this part of Asia is considered low, offering more opportunities to new carriers.

Aviation sources say that Indian skies are seeing what the European open skies witnessed in the Nineties where a large number of low-cost airlines stirred up air travel within Europe by dramatically cutting fares. Clearly, boom time for cheap air travel, like Europe, seems to be on cards for the Indian travelling public.

VINAY KUMAR

in New Delhi

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