It's the best time to fly high in India
Six more low-budget airlines plan to enter the market, setting stage for a price war, reports Lalatendu Mishra.india Updated: Aug 06, 2006 03:57 IST
Fasten your seat belts, the joyride has begun. Six more low-budget airlines are planning to enter the aviation sector, setting the stage for a price war in the skies.
On Friday, IndiGo made its entry, with plans to induct 100 aircraft. Waiting in the wings are six new players - Jagson Airlines, King Air, Mega Airways, Indus Air and Megapode Airline.
According to analysts, airfares will continue to nosedive as nearly 200 new aircraft will be added to the existing 250 aircraft.
"This is irrespective of some of the players bleeding due to unviable operations in an era of rising fuel and overhead costs," said aviation expert Yashraj Tongia.
"As more planes are added, this is bound to happen. Low fare is an international phenomenon," he added.
Today, nearly 80,000 seats are being offered every day by all airlines catering to the domestic sector and an equal number of seats are likely to be added in the next two years.
"It is a matter of demand and supply. When supply outstrips demand, fares are bound to crash. The scene is the same in the international sector," said Clarence Fernandes, co chairman, tourism committee of the Indian Merchants' Chamber.
Undeterred by the rising number of players entering the field, Air Deccan, the pioneer in the low-cost sector, is bullish about the future.
"I find no competition from any air-taxi operator as my main competition is Indian Railways. But competition is good for travellers," said GR Gopinath, managing director of Air-Deccan. More people who travel by train are certainly going to catch a flight instead, Gopinath said.
Air Deccan, which currently offers 20,000 seats per day, is planning to increase the number by 800 seats per day every passing month, taking its fleet strength to 112 by 2012 as compared to 35 now.
Equally bullish is Spice Jet's CEO Ajay Singh. "We don't care who enters the market. The market is huge and we will only improve."
All this translates to further downward revision of fares and packaged offers for passengers. Spice Jet, which also offers tickets at nearly 40 to 50 per cent discount, has six aircraft serving 12 sectors by operating 49 daily flights. Five more aircraft are to be added by December, which means more seats at cheap rates.
Kingfisher Airlines, currently operating 97 daily departures, plans to enhance the number to 175 in 10 months.
Similarly Go Air, with a fleet of three aircraft, has plans to make it 33 by 2008. As of now, it offers 5,000 seats per day.
Low-cost airlines are certainly giving a tough time to full service carriers whose market share has dipped, as has their revenue. Fares have been slashed drastically and both Jet Airways and Indian are wooing the consumer with special schemes.