The Low Cost Airline industry in India.

@indiantravelandlife

The low cost airline industry has changed the definition of airlines that air travel is a luxury and it is only for the upper segment of the population. The key objective of low cost carriers is to increase their reach and provide the services to a large segment.

The Aviation industry has changed during last five years. The market has been a very high level of competition in the field of Aviation many new players entered into this industry. So it becomes very difficult to Aviation companies to reduce the cost & earn good profit.  In India, low cost carriers came into existence in 2003 when Air Deccan launched its first low cost airline and that was the first move to open the doors of the airlines industry for middle class. The  Indian  Aviation  Industry  has  been  going  through  a  turbulent  phase  over  the  past  several  years  facing multiple headwinds–high  oil  prices  and limited pricing power contributed by industry wide over capacity and periods of subdued demand growth. Over the near term the challenges facing the airline operators are related to high debt burden and liquidity constraints -most operators need significant equity infusion to effect a meaningful improvement in balance sheet. Improved financial profile  would also allow these players to  focus on steps to improve long term viability and brand building through differentiated customer service. Over the long term the operators need to focus on improving cost structure, through rationalization at all levels including  mix of fleet and routes, aimed at cost efficiency. At the industry level,  long term viability also requires return of pricing power through better alignment of capacity to the underlying demand growth.  Due  to  growth  in  tourism,  there  has  been  an  increase  in  the  number  of  international  and  domestic  passengers. Growth  in  the  number  of  domestic  passengers  is  estimated  at  50 per  cent  per  annum,  while  growth  for  international  passengers  is 25 per cent. National Aviation Company of India Limited (NACIL):-is a company incorporated under the Companies  Act,  1956 and  has  the  functions  and  responsibilities  of  providing  safe,  efficient, adequate,  economical  and  properly  coordinated  international  air  transport  services.  It  has been  set  up  after  the  merger  of  Air  India  and  Indian  Airlines  in  2007.  This  merger  aims  to create  the  largest  airline  in  India.  The  name  of  the  new  airline  is  Air  India  and  its  logo  is Maharaja. NACIL is carrying its operations under two operating permits, viz., NACIL-A and NACIL-I.  It  has  following  wholly  owned  subsidiaries,  namely, Hotel  Corporation  of  India Limited,  Air  India  Charters  Limited  (AICL),  Air  India  Engineering  Services  Ltd  (AIESL); Air India Air Transport Services Limited (AIATSL); and Alliance Air. Airports  Authority of  India  (AAI):-was  constituted  in  1995  for  creating,  upgrading, maintaining  and  managing  civil  aviation  infrastructure,  both  on  the  ground  and  air  space  of 5the  country.  It  aims  at providing  world  class  airport  services  for  efficient  operation  of  air transport  in  the  country.  It  manages  127  airports,  which  include  16 international  airports, 8 customs and 79  domestic  airports and 24  civil  enclaves at  defense  airfields.  It  controls  the entire Indian airspace of 2.8 million square nautical miles. The  players in the Indian aviation industry can be categorized into  three  groups:  public,  private and  startup.  Public  players  include Air India,  Indian Airlines  and  Alliance  Air.  Private  players  include Jet Airways, Go Air, Air Costa, True Jet,  Spice  Jet, AirAsia India, Air Pegasus,  and many more. Conclusion: In the last few decades the infrastructure of the country has undergone severe change and development especially in the civil aviation sector of India. To manage  the enormous growth in the airline  industry of India modern airports have introduced  in  all over the country.  Thus  in  the  recent  years  several investments have been made in the air industry  to  make  use of its large unutilized air transport network. Low cost air terminal  have also introduced in the  Indian Market  in last  few  years. This creates a boom in the Indian economy and thus causes huge benefits in the tourism industry in India.

Disclaimer: Indian Travel + Life has made every effort to ensure the accuracy of the information contained in this Article. The Blog does not accept any legal responsibility for consequences that may arise from errors, omissions or any opinions given. This Article is not a substitute for specific professional advice on commercial or other matters.

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