Analyze the impact of low-cost airlines sector on the tourist market in India.

The purpose of the article is to present and analyze the impact of low-cost airlines sector on the tourist market and especially its contribution to the development of tourism in India.

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Air transport in the world in recent years is the fastest growing sector of transport. It is one of the major sectors of the global economy, which generates annually about 420 billion dollars in revenue. In the last years the airline industry has changed tremendously. The world airline industry has gone through a rollercoaster ride for the past few years. The aviation industry has been identified as one of the more intangible service industries and plays an important role in the global economy. The Indian airline and aviation infrastructure industries have experienced major changes to their policy and operating environments in the past decade. Air transport has always been considered as a very special sector in the international context. It facilitates global economic and social growth international and domestic tourism, world trade growth. It has been a dominant factor in the process of globalization.  Low-Cost Carriers (LCCs) have had a significant impact on the aviation industry developing their unique business model and establishing their point to point route network and are regarded as having revolutionized the way people travel. The development of low-cost international carriers in India such as Indigo, go Air, Spicejet, Air Costa,  will assist in  nourish financially viable traffic growth. The low cost carriers have established that there will always be a market for those who wish to pay as little as they can for a vacation and that for the right price, such consumers are happy to travel anywhere in order to have a different experience. A low-cost carrier (LCC) or low-cost airline (LCA) is a new business model in airline industry , it generally has lower fares and fewer comforts in exchange for eliminating many traditional passenger services. To make up for revenue lost in decreased ticket prices, the strategy of LCCs is that they pursue “low cost” in every aspects of their services, including opening new routes, choosing airports and all the consumers’ service on plane. Their potential to encourage increased traffic through highly attractive fares is particularly important in the current worldwide climate. The current operating environment of the regional airline industry is unusual in that a relatively large proportion of carriers operate in a stand-alone fashion, fairly independently of the trunk route airline companies and outside the global airline alliance system. The air transport industry has been highly regulated throughout the whole of its history. Technical and operational standards have been strictly controlled worldwide in the interests of safety and security, with the necessary collaboration between all actors involved at international level, led by the International Civil Aviation Organization (ICAO).

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 When the cost of transport was the most significant aspect of a holiday cost, the destination was an important choice and often a limiting one. With transport costs right down, there is now a much greater choice of destination. Also, with the significantly reduced flight costs of the airlines (and the low cost carriers in particular), consumers are now able to spend more on their accommodation, frequently upgrading their accommodation choices. There is a growing realization that there are a number of key stakeholders in the route development process who stand to benefit from new air services. Tourism authorities which exist to bring more visitors to a destination, and airports which exist to bring more airlines to their airport, both have much to gain or lose as a result of the route development process. Route development and the airline relationship is now accepted as the starting point for a destination’s capacity growth and it is now accepted that tourism organizations, as key stakeholders, must share the responsibility for the route development function of a destination. Low cost carriers (LCC) focus on cost reduction in order to implement a price leadership strategy on the markets they serve. The use of a young and homogenous fleet of medium-sized aircraft (usually Boeing 737- 700/800 or Airbus 319/320) usually leads to a reduction of fuel, maintenance, staff, overheads and  if large orders at discounted prices are placed  capital costs. High-density seating leads to lower unit costs of all categories, as fixed costs can be attributed to more seats and passengers. Only variable in-flight seating costs (and some fuel costs) increase when more passengers are onboard. Like LCCs, leisure carriers achieve low costs per seat mile in focusing on direct point-to-point flights using homogenous fleets of medium to large aircraft with high-density seating. However, leisure carriers usually offer full tourist class onboard services (meals, non-alcoholic drinks, inflight entertainment on shared video screens, newspapers and magazines, toys for children). The main differences between LCCs and leisure carriers can be observed in the fields of network and yield management. While the yield management of LCCs follows an increasing price curve, leisure carriers generally charge average cost prices, complemented by seasonal surcharges or discounts and by occasional promotional fares.

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Summarize the analysis presented in this Article, It can conclude that low-cost carriers influence the development of tourism in Indian cities  in several different ways. To cut costs low fare airlines fly to secondary and regional airports with lower landing fees and taxes and less congestion. The growth of low cost carriers (LCCs) in the India and elsewhere is arguably the single most important factor currently shaping the airline industry. Indeed, over the last decade, LCCs have emerged as a national phenomenon that are fundamentally altering the market structure and competitive landscape of the Indian airline industry. As LCCs continue to grow, many markets with high traffic density have become more “contestable” than they have ever been.

My name is Vikas Acharya and I am a freelance writer, ghostwriter, Blogger and Travel writer. Click here to find out how I can help you create high-quality blog Articles,  contents, lead magnets Posts, ebooks, and web copy for your business.


4 Comments Add yours

  1. Alok Singhal says:

    Very true, I like the concept of no frills as long as prices are cheap!

    1. Thanks for your comment

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