The advent of low-cost carriers (LCCs) has led to a rapid growth in the aviation market in India. Today, LCCs have captured a majority share of the market.
Globally, LCC growth is often associated with a boom in tourism, growth in air traffic and increased frequencies to smaller cities. And it has been led by new entrants like Ryan Air, South West Airlines and Air Asia, which have also shown healthy bottomlines, while the traditional airlines have floundered.
This is mainly because globally, LCCs have a totally different model – right from choice of routes, ticketing, check-in, passenger service, baggage rules, labour engagement to aircraft configuration. Unfortunately in India, our LCCs have only a slightly better cost structure (primarily aircraft configuration, salaries), but they mirror full service carriers (FSC) on all other parameters. No wonder, the LCCs in India are struggling to survive and are essentially “lower priced carriers”.
Full report here Business Line