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For decades, air travel in India was meant for the rich. The 'Maharaja' (emperor) mascot adopted by Air India (state-owned airlines plying overseas routes) symbolized this attitude. It was mostly the rich and the powerful who patronized airlines, while the majority - who could not afford the prohibitive air travel fares - preferred to journey on trains and buses.
In ten years of competition in the aviation sector, private airlines have changed the rules of the game, and they now account for more than 60 per cent of the domestic aviation market.

The entry of budget airlines the introduction of cheap airfares by other domestic carriers, combined with incomes rising and growing aspirations has created a new paradigm: air travel is no longer for the elite. Anyone with any knowledge of recent aviation history will know how, the world over, low-cost airlines have begun to radically change the rules of the business. In market after market - be it in the US, Europe and, now, Australia and South-east Asia - the low-cost model has expanded the market. This has now started happening in India as well.

Changing Paradigm in Indian Aviation

New price points Meanwhile, increasing competition has pulled down fares across the Board - bringing aboard a slew of first-time air passengers. With low cost carriers like Air Deccan setting new price points, full service carriers like Jet Airways and Air Sahara have had to prune prices fares on a proportion of seats on their full service flights so they run up to optimal capacity. Three years ago this would have been unheard of. Then, a one-way flight ticket from Mumbai to Chennai would have set the traveler back by US $ 115-120. Now, full service airlines offer the ticket for about $ 55-60 if it is booked three weeks in advance. In fact, it is now even possible to buy the same ticket for as low as US $ 16 in Air Deccan, provided it is booked two months in advance. The Air Deccan offering costs less than half of the cost of train travel between Mumbai and Chennai which costs around US $ 30.

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* Contributed by -
Manasi Panigrahi,
Pursuing MBA, Batch of 2006,
ICFAI Business School, Hyderabad.