Airlines fly into sunny skies

The Indian skies have never been so crowded. By the end of 2004, the number of people travelling by air on domestic routes is projected to touch 22 million, up 25 per cent from 2003, while international traffic is expected to breach the 9-million mark, a growth of 20 per cent.

For the first time in Indian aviation, domestic carriers consistently reported load factors of as high as 80 per cent on key trunk routes. What has helped the industry is that a large number of train regulars have taken the aerial route.

Much of this was aided by the price cuts and special schemes announced by the domestic carriers. On certain routes, the fares fell by as much as 40-50 per cent.

Though the airlines raised fares by 20 per cent in two tranches in June and September because of the hike in fuel prices, the reduction in airfares was good enough to attract a large number of travellers.

"There is a new level of enthusiasm in the aviation market," says Kapil Kaul, executive vice-president, Centre for Asia Pacific Aviation.

The revolution in the skies, to a large extent, was brought about by GR Gopinath of Air Deccan. He created a stir by bringing airfares to as low as Rs 500 and this forced other airlines to bring down their fares. Ten more companies are expected to start low-cost airlines in India.

According to reports, the new domestic airlines expected to start service in India are Air One, Indus Air, Royal Air, East West, Wadia, Kingfisher Air, Visa, Yamuna, Air-India Express and the low-cost service by Alliance Air.

Private Indian carriers like Jet Airways

and Air Sahara have also started international operations with flights to Nepal and Sri Lanka in the Saarc region. Next on their radar screen is Asean destinations like Singapore, Kuala Lumpur and Bangkok.

With growth taking off, industry experts project that India will require over 200 aircraft, in addition to the existing 100-plus planes currently in service, over the next five years.

While Indian Airlines' fleet acquisition plan to buy 43 aircraft at a cost of Rs 9,475 crore (Rs 94.75 billion) has been approved by the Public Investment Board, Air-India has finalised plans to acquire 50 wide-body aircraft to boost its fleet strength from 34 to 74 by March 2013. Recently, Kingfisher Air and Air Deccan announced plans to acquire 30 aircraft each from Airbus.

Foreign airlines could hardly be expected to stay out of the action. For the four months starting November, foreign airlines have asked for no less than 3,000 additional flights to India under the government's open skies policy.

Tariffs in key sectors are expected to fall by as much as 15 per cent once the new flights are pressed into service.

Airborne

• FARES Start as low as Rs 500, cheaper than trains; on certain routes fares have fallen 40-50%
• AIRCRAFT India will need 200 planes in 5 years
  Plans: Indian Airlines 43; Air Deccan 30, Kingfisher 30
• INTERNATIONAL ROUTES Foreign airlines apply for 3,000 extra flights in Nov-Feb; fares to fall 15%