40 per cent of low-cost flyers are first-timers

AVIATION INDUSTRY SPREADS WINGS WIDE

First-time passengers are giving a fresh lease of life to country's low cost carriers (LCCs). Over 40 per cent of total passengers flying in LCCs had never flown before, according to a survey conducted by Delhi-based low fare airline SpiceJet.

"Low fares by LCCs have put flying within the reach of the common man. Entry of new airlines and aggressive marketing campaign have made flying as better option. As a clear indication, the passenger growth in January and February was in excess of 50 per cent in the low fare market," survey revealed.

Significantly, the market share of LCCs has increased from 10 per cent in May 2005 to 23 per cent in February 2006, while full service carriers lost 18 per cent market share in the same period.

Leading low cost carriers are Air Deccan, SpiceJet and GoAir, while full service carriers include Jet Airways, Indian Airlines, Air Sahara, Kingfisher and Paramount Airways.

SpiceJet director Ajay Singh said: "Recent reduction of second AC rail fares is a clear indication that railways are losing passengers to LCCs of the country." Air Deccan managing director G R Gopinath said low fare airlines are targeting passengers who were earlier flying in train, car and luxury buses.

"In each flight, majority are first time passengers. Indian middle class mental attitude is changing and they tend to travel frequently. However, it will take four to five years for complete shift," Gopinath said. Singh said low fare airlines are targeting loyalty factor as over 28 per cent passengers who flew in February on SpiceJet have flown more than four times.

GoAir managing director Jeh Wadia said the strong business model and better management coupled with low cost and low fares will attract more AC passengers of train in coming days. "This is evident that GoAir has managed to grab nearly two per cent market share in five months," Wadia said.

"India has witnessed 24 million air trips by March 2006 compared to 18 million air trips in 2005. This 24 million air trips translate into only eight million flying passengers. With a population of one billion,

potential market exists of at least 100 million passengers," Singh said.

However, industry analysts cautioned constraints such as airport infrastructure, spiralling aviation turbine fuel (ATF) price, availability of aircraft, ability to reduce cost and stimulate with low fares are going to pose problem to LCCs.

"Moreover, handful of low fare carriers are set to enter into Indian market. These include Jagson Airlines, Indigo Airways, Air One, Indus Airways, Premier Airways, Star Air and Easy Air. To add, full service airlines are dropping fare to recapture passengers lost to LCCs," they added.