New Delhi: Low-cost, no frill airlines are giving bigger airlines like Indian Airlines, Jet and Sahara a run for their money.
Not just first timers, even frequent fliers are shifting to low cost airlines. They don't mind the no frills service as long as they get cheaper tickets.
"Yes cost is a big factor. And because of competition services are also getting better," Arvind Katara, frequent flier, said.
There are many others like Katara. Low cost airlines are eating into the market share of legacy carriers.
The launch of two new budget airlines this year has accelerated the process. Starting with a 7 per cent share at the beginning of the year, budget carriers controlled nearly 20 per cent of the market by September.
"Our estimate is that this number which is 17 per cent to 18 per cent will reach 25 per cent by April 2006," Kapil Kaul, aviation analyst, said.
"CAPA estimates that going forward by 2010 low cost airlines would have almost 50 per cent market share," Kaul added.
Jet and Indian Airlines are the biggest losers in the process. Jet has lost a 4 per cent market share between March and September. Indian Airlines' share has come down from 34 per cent to 29 per cent over the same period.
Air Deccan's share, on the other hand is up from 7 per cent to 11 per cent. Kingfisher and Spicejet, both of which started operations this summer, already own 3 and 5 per cent of the market respectively. But there's a silver lining for full service airlines.
Low cost airlines are not only taking away passengers from full service airlines they are also doing something else. They are encouraging millions of first timers to fly and expanding the market substantially.
Which means that despite falling share, the market itself is expanding. Estimates say 23 million airline tickets will be sold this year, a fifth more than last year.
Comments
0 comment