LCCs made skies more democratic & gave wings to middle-class dream

In a country that can perhaps boast of the world’s most fickle and price-sensitive customers, low-cost flying got off to a slightly late start.
Not surprisingly, when Capt GR Gopinath launched his budget airline, Air Deccan, in 2003, he started a revolution of sorts.
The airline's credo—SimplyFly—opened up the floodgates for India's aviation industry. Business travellers, who were by and large using state-owned Indian Airlines and Alliance Air for travelling to tier-II cities, now had an option. People who had never flown before too got to experience the convenience of the world's fastest commercial transport system.
And if they had to pay for food and drinks, some didn’t seem to mind. Others had an ingenious solution. Stories about families merrily settling down to home-cooked meals on Air Deccan flights were quite common—after all many were first-time fliers who were used to doing the same on train journeys.
Air Deccan was soon joined by Spicejet (formerly Modiluft and RoyalAir), Jeh Wadia's GoAir (2005), and Interglobe founder Rahul Bhatia's Indigo (2006). The low-cost carrier (LCC) was now mainstream.
However, unlike other countries where such carriers operate from separate airports and pay lower charges to aviation authorities, Indian LCCs have operated from existing airports, paying similar airport usage fees and ATF costs as full-service carriers (FSCs) like Jet Airways and Kingfisher. That put the business model of the Indian LCC under question.
But working with lower sales costs through Internet bookings, greater number of seats per aircraft, and high seat utilisation factors (a critical factor for profitability), they began to bring in the numbers. FSCs too joined in with their own versions.
31/12/10 Vikas Kumar/Economic Times

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Categories: Low Cost General Dec 2010