LCC dominated Indian market may set the trend for the region: CAPA
26 June 2008
With Indian low cost carriers taking their market share from 26 per cent to 49 per cent, and legacy carriers, Air India and Jet Airways resigned to little, or no, growth, industry consultancy CAPA predicts that Indian aviation will set the trend for the entire region.
CAPA says that India's booming low-cost carrier market is now one of the largest in the world with market share shooting up from 26 per cent of the Indian domestic aviation market in May 2007 to 49 per cent by May 2008. ''The Indian experience could be instructive for other Asia Pacific travel markets this year as inflation impacts on the travel decisions of increasingly price sensitive consumers,'' says the Centre of Asia Pacific Aviation (CAPA).
''The strain on the flag carrier – and its owner – is showing, with the civil aviation ministry last week reiterating that Air India would remain in state ownership, but would be strengthened.
''Jet Airways CEO, Wolfgang Prock-Schauer, stated another 20-30 per cent hike in airfares would be required to offset losses, adding that traffic growth could ''even be zero'' in coming months, as a result of rising fares,'' CAPA said.
It also said that overall growth in the market had slowed with domestic traffic numbers dropping 9 per cent for the first five months of the year, as compared to the corresponding period in 2007.