Why India has the cheapest flights on Earth
India's airline industry is a mess. Taxesare sky-high, infrastructure is poor and profit margins are razor thin. Astring of carriers have gone out of business, and many others are struggling tostay afloat.
Yet the big winners might beprice-conscious consumers -- and any carrier strong enough to survive the pricewars that have made India the cheapest place to fly on Earth.
Consider this: In India, airlines charge anaverage $10.20 to travel 100 kilometers, according to a survey by GoEuro. Air travelers in China pay twice as much to go thesame distance, and Brazilians pay four times more. Even India's rail linesdemand a higher price per kilometer.
The airlines would like to charge more, butthey are locked in a race to capture market share -- sometimes operatingflights at a loss. Even Air India, the state-owned recipient of seeminglyendless bailouts, offers fares that would be more suited to a budget airline.
Helped along by pricing chaos, privatecarrier Kingfisher Airlines has gone out of business. The government was forcedlate last year to rescue SpiceJet, the country's third largest carrier.
In total, Indian airlines have reportedaccumulated losses of more than $10 billion in the last seven years and therebyincreased their cumulative debt burden to $16 billion, according to a recentreport by industry analytics firm Center for Aviation.
Yet as with many sectors in India, optimismis creeping in around the edges. Funds from foreign investors have provided aboost, and analysts hope that newly-elected Prime Minister Narendra Modi willpush through meaningful reforms.
The potential for rapid growth is hard toignore. India's cities are rapidly growing, and middle-class consumers havemoney to spend on luxuries like air travel.
Anurag Bhatia, Executive Director of BirdGroup, a provider of aviation services to India's biggest airports, believesairlines have a long way to go before tapping the true potential of the market.
"There are 25 to 30 million peoplethat use airplanes in India, whereas there are nearly 300 million that canactually afford to travel but don't because of unavailability of flights or thelack of airports," he said.
existenceonl 8 hours ago
yes its true,....on their economy flightsyou do save a dollar,...you also help peddle ,.......
bradyisback 10 hours ago
The problem with India is as follows:
(a) Illiteracy in villages
(b) Corruption at grass root level while wehope the current administration is taking steps to address
(c) Infrastructure. As soon as youleave the airport, it's quite visible everywhere
(d) Lack of traffic rules, congestion,enforcement
(e) Religion interferes ineverything. There are temples and god structures built on side of mainroads which no one would ever dare to dis-mantle to expand roads.
(f) General lack of cleanliness by citizens- stuff is always on the roads, not enough rest rooms on roads or highways,roads are shared by animals and humans
stevechang64 9 hours ago
@bradyisback Couldn't agree more.