As is well-known, following the opening of the Indian skies to private airlines in the early 1990s, 5 or 6 new private carriers had started operations. However, most of these new carriers went out of business around 1995 and 1996. Since the demise of these carriers, till recently only two private airlines, namely Jet Airways and Air Sahara have served the Indian domestic market in direct competition with the state-owned Indian Airlines.
It is only in August 2003 that a new entrant, namely Air Deccan, entered the Indian domestic market, initially serving only the regional routes in South India with 40-42 seater turbo-prop aircraft. The airline expanded into trunk routes with medium capacity jet aircraft in August 2004. Thereafter, only recently did several entrepreneurs and business houses announce plans to set up new scheduled airlines on domestic sectors. Whilst some of them such as Kingfisher Airlines, Spicejet and Go Airlines plan to operate on trunk routes in competition with the incumbent airlines, other promoters, such as Air One have indicated plans to operate only on regional routes to and from destinations with low traffic volumes and/or those not connected by air services at present. Of all the above, only two air carriers, namely Kingfisher Airlines and Spicejet have actually begun operations so far.
As already mentioned, the air travel market in India is showing great buoyancy and is expected to grow rapidly in tandem with the country's economic growth in the coming years, in fact experts foresee as high a growth as 20% per annum in the Indian air travel market, both international and domestic, in the next few years. Based on the above, it would appear that there is significant potential for additional traffic for the carriage of which both the existing players and the newcomers would need to provide additional capacity.
The only limitations to the rapid growth of the existing players and the new entrants would appear to be the infrastructural bottlenecks and limitationsnotwithstanding the projects already initiated by the governmentand the shortage of skilled manpower, namely qualified and trained pilots and engineers.
In the event, however, the market growth and capacity expansion by both the incumbents and the new entrants do not match each other, there will possibly be a shake-out in the industry some time in the future, enabling only the strong carriers with realistic business and growth plans and, of course, effective management, to survive, as it happened in the mid-1990s. |
