How Indian airlines took off

After getting nationalised in the fifties, private domestic airlines began re-emerging in India in the nineties. The popularity of the new private airlines went up fast as they provided better service and on-time performance with new aircraft. Then the concept of low-cost carriers (LCCs) was introduced and it found great acceptability. By the late nineties, LCCs had evolved from being marginal players in the market to occupy a dominant space, with their share of passenger traffic overtaking the full service airlines. The DGCA of India also did away with price control of tickets. A liberalised domestic market offered flexible pricing of tickets. Since airline seats became perishable like vegetables,ticket prices started varying from day to day and hour to hour. Internet sales helped.
This brought in a social revolution that was second only to the telecom one—wherein cheap cellular phones became a social and business necessity—in terms of impact. With airline tickets hitting bottom, the middle class discovered new freedoms—to travel for business and pleasure by air. The profile of air travellers was transformed. An experience largely restricted to government and corporate travellers opened out to students, housewives, self-employed small and medium entrepreneurs. New demographics were won over by LCCs’ charms.
The next advance took place at the start of this century, when private airlines were permitted to fly abroad—albeit with the unnecessary condition that it would take domestic airlines five years to qualify for foreign operations.
09/09/10 Sanat Kaul/Financial Express

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Categories: NACIL Sep 2010