onenri

In coming years we are going to see more low cost, no frills and cheap flights in India. This trend is clear from the amount of future aircraft orders that Indian carriers are placing recently. India currently has barely 350 aircrafts serving a billion population, compared to 1100 aurcrafts with China. But with current heavy buying of aircrafts by Indian Airlines, this is to change.

Recently Air Asia and Indigo, the two low cost airlines placed record orders for Airbus SAS aircraft. Indigo confirmed a deal for 180 A320s and is going to start overseas flights. Another budget carrier GoAir has placed Rs 32,400-crore aircraft purchase order for 72 NEO Airbus aircraft. The deliveries for these aircrafts will begin from 2015. With 15 aircrafts being added per year, this will provide additional 2,700 GoAir tickets every year till 2020. Supply demand principal dictates that should result in lowering air ticket prices. We will see with increasing supply and competion, these airlines coming up with cheaper fare options for flights in India.

Demand for low cost airfares from no frills airlines is going to skyrocket in coming years in India. For example Dublin-based, low-cost airline Ryanair, sold about 65 million seats last year while the whole of Indian aviation sold only 54 million seats. This shows the tremondous potential in this sector. It looks like a win win situation for both airlines and the travellers.

But there is always the other side of the coin. On the downside it should be noted that low cost airlines operating in Europian markets like Ryanair only operates short and medium haul flights. While Indian carriers like Air India, Jet Airways, Kingfisher Airlines have to do ultra long haul and long haul flights. It’s one thing spending couple of hours without refreshments but altogether another story travelling 5-6 hours with basic amenities.

The recent attempt by International low-cost carriers flying into India was not a big success. The NOK Air, Tiger Airways and Jetstar Asia failed while some of the few remaining players are struggling to generate a decent economic return. A no frills carrier has to contend with low load factors, poor onward connectivity and competitive holiday packages offered by full service airlines. Full-service carriers like Malaysian Airlines, SriLankan, Thai Airways and Singapore Airlines connect passengers to further destinations. They even offer competitive holiday packages. With this passengers don't mind paying extra for a hassle-free travel.