Experts say that airlines compete primarily on three fortes - low fares, customer service and value-added services. While no-frillers fight the price war, service is the main thing provided by their larger peers.
The critical factor will be (depending upon the model followed) the ability to keep costs low & the offer of an on time service at an affordable price, despite the infrastructure constraints, for survival.
The next issue to tackle is to properly position itself in the aviation market.
The Indian customers are not that much mature as compared to their American contemporaries. They will not pay more for just mere entertainment or watching TV in a flight of one / one & half hour journey.
Poor airport infrastructure such as: few landing slots, Inefficient Air traffic controllers, not yet automated systems prone to human delays & errors etc. & shortage of skilled personnel.
The revenue per seat is lower in low cost carriers.
It cannot rely solely upon the direct selling model for sell of the tickets as the Internet & credit card penetration is not that remarkable.
The dishonesty of travel agent who usually do not push their seats vis-à-vis a rival's.
A certain amount of churn & turmoil for players who don't have the deep pockets (as happened in USA. many smaller airlines with out deep pockets fell by the wayside unable to sustain the predatory pricing techniques adopted by their strong opponents).
The outdated Aviation rules in India which compels the low cost carriers to add more to their operating cost, which could have been easily do away with.
Taxes like passenger service fee (PSF = Rs. 221 on one seat) looks ridiculous for a ticket worth Rs. 99.
Overhauling costs is another major hurdle.
Current number of pilots in India is over 1,500.
According to aviation ministry sources, the money that is coming to the sector is from dubious origin in several cases & is from investor seeking quick returns. So it may be possible that some of the players may not even be in the game for long. They may sellout after listing on the stock market or get bought out, once the market starts consolidating.
