Budget airlines take off in battle for global skies

New Delhi: After bringing air travel within reach of the common man, low-cost airlines are set to replicate the model on international routes. Apart from domestic low-cost carriers like SpiceJet, foreign airlines like Air Asia and Flydubai are gearing up to take on full-service carriers in international air travel.
The expansion by no-frills airlines across borders comes at a time of capacity expansion by carriers like Emirates, which recently ordered 32 Airbus A380s for $11 billion.
With SpiceJet on the threshold of international operations and Air Arabia, Air Asia and Flydubai strengthening their distribution networks, budget airlines are ready to chase full-service carriers on short-haul international flights. Considering the success of no-frills air travel in India — budget carriers have cornered 68% of the market in seven years — low-cost carriers like SilkAir of Thailand, Tiger Airways of Singapore and Dragonair of Hong Kong are expected to expand their wings in India. Industry sources say Air Arabia is planning to tie up with a Global Distribution System player to strengthen its ticketing system in India and make it accessible to more passengers.
The entry of low-cost airlines—which offer tickets at almost half the price of their full-service counterparts – is expected to kick off a price war in international air travel and increase competition among budget carriers.
09/07/10 Nirbhay Kumar, Vishakha Talreja/Financial Express

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Categories: Foreign Jul 2010, Low Cost General Jul 2010