Fourteen years after Air Deccan started the era of budget flying in India, low-cost carriers (LCC) here are finally coming of age and preparing to straddle the entire space — from short regional flights on turboprops to long hauls using wide body planes.
This tectonic shift comes with India’s largest airline by domestic market share, LCC IndiGo, declaring it will have turboprops in its fleet for regional flying. And, SpiceJet — which already has turboprops — saying it is looking at medium to long haul budget flights on wide-body planes.
“The LCCs are open to changing their old business models. IndiGo, which till recently maintained it would have a single aircraft fleet of Airbus A-320s, is inducting ATRs. And Spice-Jet, which had both turboprops and Boeing 737, is working out the math for having wide body Dreamliners in its fleet,” said a top aviation ministry source with whom airlines have held these discussions.
The top ministry source said apart from SpiceJet, some other LCCs are also examining medium to long haul flights. “We are now looking at LCCs having a hub and spoke model where their turboprops and single aisle planes get traffic into their metro hubs from where their wide body planes offer connectivity to destinations that are eight to nine hours away,” the source said. Led by IndiGo, budget airlines account for almost two-third of all domestic flyers today.
Airbus has for years been trying to convince IndiGo to look at its Airbus A-330 for longer flights but the profitable LCC remained firm to its one-type-ofaircraft business model. While announcing its decision to have ATRs in its fleet, IndiGo president Aditya Ghosh said the airline is “embarking on a journey to build a nation-wide regional network and connect cities that have not benefitted from the growth in Indian aviation.”
“SpiceJet continues to study the viability of low-cost long haul travel and a decision will be taken in due course,” said Ajay Singh, when asked if and by when the LCC will start flights to western Europe. The airline said it is looking at London, Birmingham, Paris, Amsterdam, Frankfurt and Zurich as possible destinations.
The reason for the shift by India’s biggest LCCs is not surprising. The big growth in air travel is coming from small towns and the Modi government’s subsidised regional flying model to ensure reasonable tickets will provide a further push to that. Secondly, Indian travellers to rest of the world are increasingly opting for foreign LCCs which offer connections to as far as Australia and eastern Europe through their hubs in Dubai and Singapore. Indian budget airlines want a share of this growing pie.
The biggest foreign LCCs currently operating to India are Singapore-based Scoot and Tiger (both part of Singapore Airlines’ Group); Kuala Lumpurbased AirAsia; Dubai-based flydubai and Sharjah’s Air Arabia. While the SIA budget carriers offer connections to China, Southeast Asia and Australia from their hub, the Gulf LCCs do so to eastern Europe, West Asia and Africa. In fact, flydubai gets a significant transfer traffic for its Europe flights from India.
A recent study by Cox & Kings showed overseas travel for leisure has doubled in last one year from tier 2 cities like Lucknow, Ahmedabad, Amritsar and Kochi as foreign airlines now offer direct connections from these places to their hubs in the Gulf and Southeast Asia.
Source: http://timesofindia.indiatimes.com/, 12 May 2017
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