Budget carriers fail to expand market

Mumbai: If you thought low fares were expanding the aviation market by bringing in first-time travellers, think again. Despite low fares, just 9 per cent of budget carrier travellers in a survey said they were flying for the first time.
This was one of the key findings of the survey conducted by Centre for Asia Pacific Aviation, which interviewed 2,000 budget carrier passengers of key Indian airlines, including Air Deccan, Spicejet, GoAir in Mumbai, Delhi and Bangalore. To mark the contrast, it also surveyed some passengers of full-service carriers like Jet Airways and Indian Airlines.
The survey gave budget airlines some leeway to raise fares without losing customers. Half the survey sample said they were willing to fly budget carriers even if tariffs were doubled as long as fares were transparently presented (including taxes and other charges) and free of marketing gimmicks like tickets for Rs 0 or 99 paise.
However, this does not mean that low pricing was not an issue. For 38 per cent of budget carrier passengers, price was still a key decision for buying a ticket, compared to only 9 per cent of full service carrier passengers, for whom the key driver is a convenient schedule.
13/06/07 P R Sanjai/Business Standard

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Categories: Low Cost General Jun 2007