Budget air travel, present and future

After making its mark in the United States and Europe, the low-cost airline carrier arrived in India in 2003 with the first flight of budget airline Air Deccan. In the aftermath of the attacks of 11 September 2001, the SARS epidemic and a general worldwide economic slowdown, traditional airlines saw a drop in their profit margins and passenger volume, a downturn that also hit India's carriers. Entering the market during this period, the budget airlines have boosted their operations, turning the industry's crisis to their advantage.

Besides Air Deccan, the demand for competitive fares has been filled by SpiceJet Airlines, GoAir and Air India Express, particularly on short-haul routes. The explosion in the number of carriers is spurred by the 25 percent per year increase in domestic air travel, fuelled in turn by the country's economic growth. The number of airline passengers in India rose from 12.8 million to 19.4 million annually in just three years, through 2004. The market share of budget airlines, meanwhile, has increased by 30 percent since 2003, and the Australia-based Centre for Asia Pacific Aviation projects the figure to be 70 percent by 2010. Air Deccan has already cornered about 21 percent of the domestic air-travel market, bringing it almost at par with the state-owned carrier Indian (previously Indian Airlines), which until the early 1990s had a monopoly over the Indian skies.