Gone are the days when flying was only for the elite, for the people who could afford it. With players like Deccan and Spicejet entering the scene, the whole market is divided into Premium fares and low fares. Even today there are people who fly by paying a premium not because they can afford it may be because they find it a differentiating factor. Flying is by itself a totally exhilarating experience and kudos to all those low fare players for bringing the same to the aam janta.
Inspite of all the good things that these players have bought, I am still troubled by the fact as to how long can these low cost players sustain themselves in a market they have themsleves created - Low fare market segment. The competition is cut throat, margins are low and operating costs are high and the oil prices are not making things any easier. Big players like
Jet have the cashflows to operate flights at low fares because they have the steady cashflows from their premium market to support the negative cashflow that the low cost segment will generate initially.
Low cost players are yet to break even even after years of operation and if the trend continues, consolidation is not far behind, just like in the IT sector where its all about size, the same will happen with the aviation industry...its only a question of time and all that will remain to be seen is who takes over whom....!!!! Well whatever happens, rest assured we the aam janta can still afford to fly the blue skies!!!!!
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