bangalorebeats

Is the Dream Low Cost Air Fares Over?

This decade opened the flood gates for many Indian who never flyed before or would not have flyed in their life time. The low cost airlines like Air Deccan, Spicejet, IndiGo etc has made it possible for many middle class Indians to experience flying. With inflation crossing over 11% and fuel prices touching sky high, the honeymoon period for Indian middle class to fly may be in jeopardy or is almost over. In a short span all major low cost airlines in India has increased their fare. Vijay Mallya of Kingfisher Airlines openly said that low cost airlines is not viable. From the beginning it was clear that Kingfisher airlines was not categorized as a low cost airlines but a medium range which Mr. Mallya described as Kingfisher class. It may be anticipated that the happy run of low cost airlines may not be a easy one after the hot and cold take over of Air Deccan, which holds the largest market share in this segment.

Skyrocketing fuel prices and infaltion has black clouds over this sector. Premium air flyers will always fly, there is not going to be any let down on that. But a total new segment of middle class flying with affordable prices from the low cost airlines, has added a new dimension to the airlines sector. If the trend of air fare hikes continue, then there is indeed a fear of missing the middle class flying more often that not. As India is more than 75% dependent on imported oil, it adds to the problem. Recently, the Union government increased after huge delay to save the Oil companies which were bleeding to death.

So what does this mean? Well, fewer people may want to fly now. With fare hikes which is likely to continue for sometime will decrease affordability. Previously a flight between Bangalore and Kolkata would cost as low as Rs 4000 to 5000. Used to even lower than that, if bought before 3 months. Naturally, with reduction in number of passengers, airlines will reduce the number of flights. Ultimately, affecting connectivity.