Indian low-costs will battle on the ground

CEOs and Managers of India’s new fast growing LCCs, predicted the real battle for passengers will be based on the most innovative and widest distribution channels.This conclusion came at the Low Cost Airline panel discussion at the Centre for Asia Pacific Aviation’s (CAPA) 2nd Annual Middle East and Indian Subcontinent Aviation and Tourism Investor Summit.

“The real battle will be in the air, not in the sky. Distribution has to be available very close to the customer. Any passenger will be able to transact a GoAir ticket within 20 metres of their home or workplace,” promised Mr Wadia, Managing Director of Go Air, at the CAPA Investor Summit.

Mr Wadia was speaking on a panel of LCC CEOs, including Ajay Singh, Director of SpiceJet and Warwick Brady, COO of Air Deccan at the CAPA Summit held in Mumbai last week.

GoAir has introduced a range of innovative and exclusive distribution channels, including cyber cafes, public phone booths and petrol stations, to reach a potential travel market of 250 million people. This strategy contrasts with SpiceJet, which, given the low levels of credit card and internet penetration in the India, sells an impressive 70% of its fares online.

“Indians are extremely innovative people. If they know there is a cheaper fare on the net, they will find a way of to get it. They will use the internet at work and borrow their friends credit cards,” explained Mr Singh, Director of SpiceJet, which has grown rapidly to a 6% market share since launching in May 2005.

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“Indians will climb through hot coals to get low fares,” said Mr Brady, explaining the 30% growth rate in passengers experienced in India. Brady, previously with Europe’s largest LCC, Ryanair, described as “explosive” the potential of Indian air travel as low fares stimulate demand across the country.
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