Know your airlines
Air Deccan: Beginning a new phase of fare wars with tickets for Re 1. Has set the model for most low-cost carriers, but competitors say it is suffering on account of frequently cancelled services.
Alliance Air: Don't look now, but IA's small town sibling hopes to metamorphose into a low-cost carrier by year-end. But being a legacy carrier, it could be difficult to do so.
Go Airlines: To take off in September, it's promising the lowest fares in the industry. Time will tell.
Indian Airlines: The state-owned carrier remains a market leader and has ordered a new fleet. But can it manage its costs and service standards?
Jet Airways: Definitely the business executive's preferred choice -- don't look for discounts though. Is now aggressively going international.
Kingfisher Airlines: A mid-priced carrier that bears its promoter's personality, it could appeal to younger age groups and frequent travellers.
Magic Air: A low-cost entrant (consisting of ex-Malaysian Airlines employees), it believes there's room for more.
Sahara Airlines: It hasn't faulted on deliveries yet -- but is gearing up for competition by reducing its costs.
SpiceJet: Originally Modiluft, it's aiming for Air Deccan's jugular by unleashing a fierce price war in the cheap ticket, no-frills segment. Will start operations in end-May, and is hoping to build a reputation for punctuality and reliability.
Fare wars
A PRICE WAR is inevitable, especially given that most new airlines are trying to woo new business and not poach on existing markets.
This has fuelled speculation that Air Deccan, already with the lowest fares, could slash average prices by another 20 per cent, to bring the average ticket price on par with second class AC train travel.
And that's where the bloodbath will occur, as Spice Jet, Magic Air and Go Airlines will be joined by Alliance Air to take on Air Deccan on its own turf.
Sahara too will offer a chunk of its tickets at the same, low price on "discounted" tariffs. Kingfisher's strategy is aimed at pricing 20 per cent below normal scheduled airline economy fares.
A Delhi-Mumbai ticket, therefore, would cost in the region of Rs 6,000, twice the rate of what the low-cost carriers would offer, but with mod cons they don't have, and the flamboyance of an airline that aims at the surprise factor as a great pull.
While Jet Air's plans in this market are not known, Indian Airlines's Bumper Saver Scheme is a big draw among frequent/business travelers -- for Rs 65,000 a passenger gets 16 coupons (tickets) so that the average fare works out to Rs 4,000 -- not bad going for what's still considered a premium product in the domestic market.
http://www.rediff.com/money/2005/may/07spec.htm
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