Budget carriers fail to expand market

Only 9% of passengers on such airlines are first-timers: CAPA survey.

If you thought low fares were expanding the aviation market by bringing in first-time travellers, think again. Despite low fares, just 9 per cent of budget carrier travellers in a survey said they were flying for the first time.

This was one of the key findings of the survey conducted by Centre for Asia Pacific Aviation, which interviewed 2,000 budget carrier passengers of key Indian airlines, including Air Deccan, Spicejet, GoAir in Mumbai, Delhi and Bangalore. To mark the contrast, it also surveyed some passengers of full-service carriers like Jet Airways and Indian Airlines.

The survey gave budget airlines some leeway to raise fares without losing customers. Half the survey sample said they were willing to fly budget carriers even if tariffs were doubled as long as fares were transparently presented (including taxes and other charges) and free of marketing gimmicks like tickets for Rs 0 or 99 paise.

However, this does not mean that low pricing was not an issue. For 38 per cent of budget carrier passengers, price was still a key decision for buying a ticket, compared to only 9 per cent of full service carrier passengers, for whom the key driver is a "convenient schedule".

Of course, Indians' great buying habit cuts across passenger segments. As many as 44 per cent of passengers of full service carriers and 40 per cent of budget travellers said they would like to buy goods at airports.

Passengers flying domestically have a high propensity to also travel internationally and the popular destinations they want to go to also seem similar. 59 per cent of passengers on full service airlines and 50 per cent of budget travellers say they are planning an international trip in the next 12 months.

Their hottest destination is Singapore: 30 per cent of passengers on full service carriers and 31 per cent of budget passengers said they planned to travel to Singapore in the next 12 months. Dubai was the second preference.

FACTS ON THE WING

50% of budget carrier travellers are ready to pay double the air fare but demand transparency in tariffs

For 38% of budget carrier passengers price is still the key issue for buying a ticket to fly

40% of budget carrier passengers would like to spend at airports

50% of budget carrier passengers want to travel abroad in the next 12 months

Their favourite destination is Singapore, followed by Dubai