Himalayan News Services

Mumbai, May 9:

A fierce battle for market share is set to unfold in the Indian sky as a number of budget airlines spread their wings in the months ahead to cash in on increasing air traffic and rising income levels.

At least four new low-cost airlines will take off in the Indian domestic aviation sector over the next six months and half a dozen more are likely to be added in two to three years, triggering a severe price war.

After the commercial launch of Kingfisher Airlines today, the rank of budget airlines will have other new entrants like Magic Air, Spice Jet, Go Air, and Air One in the coming months.

“The Indian aviation sector has really entered into a very exciting phase after years of over-regulation,” said Kapil Kaul, CEO of Centre for Asia Pacific Aviation, an international research organisation, “The potential for budget airlines is huge for a country like India with over a one billion population. Even after the launch of the new airlines this year, there will be room for many more players in the years ahead.”

According to the Centre for Asia Pacific Aviation, the new low-cost airlines will help add at least five million new passengers every year taking the total number of air travellers to 50 million by 2010.

Currently, the four main domestic airlines — state-run Indian Airlines, Jet Airways, Air Sahara, and low-cost Air Deccan — carry some 19 million passengers among themselves every year.

In comparison, a staggering 14 million people travel by trains every day. Most of the budget airlines are betting on growth by encouraging railway passengers to fly at fares that are, at times, cheaper than train tickets.

Although Kingfisher Airlines — the aviation arm of Bangalore-based liquor giant UB Group — is being positioned as a ‘full service’ airline, it will

have just one class for all passengers. The tickets for Kingfisher Airlines will be sold in three different slabs on the first-come-first-serve basis and the lowest level will be cheaper than the fares of other full-service airlines.

“It’s to the new India that we offer Kingfisher Airlines,” said Vijay Mallya, chairman of the UB Group that makes the largest-selling Kingfisher beer, “We will make our own mark in the domestic aviation market by offering extremely good value proposition to the customer. We understand consumers’ needs and aspirations.”

Mallya says his airline is betting on the 150 million ‘consuming class people’, who are being added to the Indian economy every year, for grabbing a larger share of the Indian sky.

Air Deccan, the pioneer of the budget airline market in India, is not worried by the impending competition.

“The launch of many new budget airlines is good for all of us. The new players will help grow the market size and as the market size grows so will the revenues of all airlines,” said GR Gopinath, CEO of Air Deccan, said. “I think the aviation sector has all the ingredients to replicate the success of the booming mobile telephone business in India. As the competition heats up and prices come down, more and more people will prefer to fly.”

“India’s aviation sector is very small as compared to its population. The country handles some 600 flights a day whereas the Singapore airport alone handles 3,200 flights. Air travel in India should be as fundamental as breathing.”