India's budget airlines leave rivals in the cold

Mumbai: India's low-cost airlines are set to go from strength to strength as they grab market share from ailing premier carriers such as Air India, whose debts and losses continue to pile up, experts say.
Big airlines such as Jet Airways, Kingfisher and Air India are being hit by falling revenues due to tough economic conditions and high air fuel taxes.
The smaller, "no-frills" carriers such as Spicejet or Indigo, set up to open up the skies to the country's burgeoning middle classes, have dealt better with the turbulent business conditions of the last year, analysts say.
At least seven budget airlines fly across India's skies, with a 40-percent market share.
A sign of the predicament facing India's private airlines -- which carry 80 percent of local air traffic -- was seen last month when bosses threatened to ground planes for a day unless the government gave them a bailout.
The demand was denied but a strike was averted when the government promised to take steps to reduce the burden of steep fuel taxes.
Air India posted a 1.03-billion-dollar loss last financial year and has appealed for nearly 620 million dollars in state aid to keep flying.
03/09/09 Salil Panchal/AFP

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Categories: Low Cost General Sep 2009