How budget airlines keep their costs low
• A plane ticket that costs less than half the regular fare.
• A plane ticket that costs less than the train fare to the same destination.
• A plane ticket that costs Re 1.
Even two years ago, if someone had offered these prices to you, chances are you'd have asked them what banned substance they were on. Today, they all exist. You can fly SpiceJet from Delhi to Mumbai for Rs 99 or Air Deccan from Delhi to Bangalore for Re 1.
But before you rush to buy your ticket, stop to consider for a moment:
Aviation turbine fuel is 2.5 times more expensive in India than anywhere else in the world.
Navigation charges are 60 per cent higher than in other countries.
Landing fees at Indian airports are 70 to 80 per cent higher than at airports round the globe.
Given that these costs are fixed and the same for all airlines that fly in Indian skies and account for close to 40 per cent of total costs how do low-cost carriers earn their name?
"Perhaps it would be more fair to call them low-fare carriers," muses Faisal Wahid, director, East West Airlines. His company was India's first private sector domestic airline (between 1992 and 1997), and is now working towards a relaunch later this year.
The new version of East West was to have been a low-cost carrier (LCC), but Wahid's now keeping his options open. "It's going to become a dirty business. There will be a shakeout among Indian LCCs," he says.
That's a thought echoed by Kapil Kaul, the Indian subcontinent and Middle East CEO of the Sydney-based think tank, Centre for Asia Pacific Aviation. "By 2010, there will be just three large LCCs in India, with another three or four smaller, regional pl ...