Till recently, Aude, a sleepy region in the south of France, was known for only two things: the Tour de L'Aude, the premier event on the women's cycling circuit, and the glorious spectacle of migratory birds visiting every summer. Today, hundreds of British tourists flock to the villages and beaches of Aude every year. Property prices have also begun to boom as more and more Britons buy summer houses. Aude's depressed economy is taking off, fuelled by a rise in flights arriving at its airports led by budget (low-cost) carriers of Europe.
Much like in L'Aude, budget airlines are changing the face of other regional economies in Europe. India shouldn't be any different. In fact, one of the catch phrases of Air Deccan, India's pioneering low-cost airline, is "every time we fly, the economy looks up". As social and economic barriers to flying break down, more things change than earlier imagined. This is evident in continental Europe where many regions are reporting brisk sales in products as diverse as shellfish, wines, cigarettes and houses. In India, Air Deccan's zeal to cover the length and breadth of the country has brought back several airports from the dead, with a positive ripple effect on the respective region's economy.
The question is: will budget airlines work in India? Everyone thinks so. Well, almost everyone. Vijay Mallya, chairman of Kingfisher Airlines, is one who doesn't (see 'I'm Not Exactly An Orphan', BW, 19 December 2005). But his is a lone voice of dissent in a sea of aye-sayers. Ray Webster, the former CEO of easyJet, who established the efficacy of the low-cost model in Europe, is bullish: "In Europe, the number (of passengers) is far lower, journeys are short, and travelling by train is a nice experience. Yet, the ...