A jewel in the crown: LCCs can fly higher with strategy and support - Airliners-India

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TOPIC: A jewel in the crown: LCCs can fly higher with strategy and support

ArtofZen

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Posts: 88

Date: Nov 25, 2006

A jewel in the crown: LCCs can fly higher with strategy and support	Permalink Closed

A jewel in the crown LCCs can fly even higher with strategy & support With the passenger traffic of low cost carriers (LCCs) poised to double to more than 10 million in the calendar year, the civil aviation industry is on its way to becoming a growth driver for the economy. It is not just addition to the aircraft that accounts for this performance. LCCs have been working hard to reduce turn around times, improve load factors, aircraft utilisation and reliability, apart from connecting destinations that’ve been outside the ambit of the full services airlines. LCCs’ share in domestic passenger traffic has gone up close to 40% from less than one third over the first nine months of the calendar year. Lead player Air Deccan’s share alone has grown by 50% to touch one fifth of the market. India’s private airlines’ performance stands out especially when mapped against China, one of the fastest growing aviation markets. Though the Chinese aviation industry has been open to the private sector since 2004, all it has to show is four small airlines with couple of aircraft each, a far cry from the large fleet size and the further aircraft orders by the Indian private players. Neither the churn in the market, nor the declining share of full service airlines, not even its large losses seem to have dampened the industry’s enthusiasm. LCCs continue to be optimistic about further expanding their market shares and are aggressively striking out to skim off the high value passenger segment of the railways. But no industry, however large its potential, can survive if sustained losses continuously erode their net worth. It is now for the government to step in. A good beginning can be made by reducing the cost of aviation fuel by lowering both the central and state levies that escalate costs far beyond reasonable limits. The other important step would be to ensure the speedy construction of low cost terminals at all major airports in the next one to two years. This would lower congestion levels at existing terminals, apart from helping LCCs to reduce costs. And the LCCs can also do with a little more of mutual cooperation. Important areas where the LCCs can tie up among themselves, and even with other full service airlines, to reduce costs would include joint use and better coordination of ground handling and maintenance facilities and joint purchase of supplies. Private airlines in many countries have successfully used flight code share agreements and joint promotion schemes to reduce costs. India’s LCCs would do well to forge mutually gainful ties even as they lobby with the government for policy support. Link Here __________________ My favourite poem is the one that starts 'Thirty days hath September' because it actually tells you something. - Groucho Marx

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