It is a known fact that more and more people are flying these days than ever before. One of the main reasons for the numbers of flyers increase so dramatically is the fact that the Airfares have become much more affordable than they used to be, even a couple of decades ago. Whereas travelling on a commercial airliner used to be the privilege of the select few, the ones who were in the higher echelons of the wealth ladder, these days almost everybody is able to fly. As a matter of fact, the highest fares of some trains are now actually more than an air ticket for the same segment. Let us try and find the reasons behind the emergence of cheap flights to India and see where we are heading in terms of the airline tickets and whether or not we will continue to enjoy these money-saving flights:
- Competition: In the earlier years of India’s civil aviation history, the air travel segment was completely dominated by a single public sector player and other companies were neither interested nor encouraged to delve into space. Needless to say, the complete monopoly of a single player meant that it had complete control over the pricing and behaved arbitrarily in fixing the prices resulting in those being formidably high, accessible to only the richest in the society. The early nineties saw the economy of the country move towards an open market economy where the private Industry was promoted and encouraged to invest and run the businesses of public transportation. This led to the entry of various low-cost airliners into space and the stiff competition meant that the best deals on domestic fights are now available easily and the choices of Airliners was also much wider.
- Use of technology: The use of the internet for accessing information regarding Air travel has meant that a k=lot more information is now available in the hands of the potential customer than ever before. Most Air companies now also have mobile apps that have made flying that much simpler and efficient. This advancement of technology has meant that more and more people can now access the various information and can take travel decisions quicker and with more transparency and trust. This has resulted in more and more people, especially the youth to use the air travel more and more frequently.
- Falling Oil Prices: One of the main components that make up the ticket pricing strategy of the Airline companies is that of the aviation fuel. Over the last few years, the oil prices have fallen globally and the consumption of gasoline or diesel as fuel for the transport vehicles is also gradually coming down in the western world. This has resulted in windfall gains for the airline companies and some of these have passed those on to the customer, helping them get the cheapest tickets online. The decreased ticket prices have shown a substantial increase in the number of flyers.
- Increase the Number of Airports.: In the last few years, the air connectivity in India has seen a huge change. In fact, the passenger traffic at Indian airports has more than quadrupled in the last decade alone. This is direct fallout of the positive change in the number of passengers as well it is the number of serviceable airports that this country now has. The growth of airports in smaller cities has also meant that the airlines have started connecting flights from these cities resulting in the airfares being very cheap, many times even cheaper than a first-class rail journey for the same segment.
- Rising incomes: With the rising incomes and prosperity levels, it is no surprise that more and more people are now being able to fly than ever before. Since Airline pricing is dependent on the number of passengers’ volumes and is impacted positively by more people taking their services, it has become easier for these airliners to be able to moderate their prices and offer their services to smaller cities and towns where the major income growth is happening. The low fares have also meant that the aspirational middle class that associates air travel with a lifestyle upgrade took to flying, thereby bringing economies of scale for the airliners and helping them moderate their fares.
- Government Incentives: Over the last few years, the government is very keen to invest and develop the aviation sector in India. From allowing private partnership in the construction and maintenance of airports to actually coming out with incentives to Air flyers, the government of India has been proactive in formulating policies that have been instrumental in more and more people flying. Earlier this year, the Government launched a fixed fare incentive that saw many people that have never flown before taking to airline travel. The government is also providing tax incentives and infrastructure support for airliners that are willing to operate in low-density areas. Overall, the policies of the Government of India and their sharp focus on Aviation and Infrastructure development has meant that more and more private operators now find the untapped potential of Indian aviation sector quite lucrative and the resultant competition has meant that the air travel is not as expensive or exclusive as it once used to be.
- The growth of the internet: More and more people now turn to the internet to book air tickets and other travel products. Since the internet is fiercely competitive and one search of ‘cheapest tickets online’ returns thousands of results, it has meant that the customer is the ultimate gainer. With many of these online operators heavily luring the customer through extremely lucrative deals, promotions and cash back, the Air Traveler now feels like the king that has multiple options to choose from and finding his/ her favourite domestic flight deal at the price suitable to him/her.
Although as a percentage of the population that actually travels by Air, India is the lowest ranked country in the world, the number is steadily increasing. The strong 300 million plus middle-class population of India holds a remarkable potential for the use of the erstwhile elite products across sectors, including air travel and more and more airlines are putting their best foot forward to capture that significant market that is growing rapidly.