The International Air Transport Association (IATA) reports revealed the fact that the Middle Eastern and Asian aviation markets are full of opportunities. It has been observed that the demand in these markets is increasing at a great pace; hence global operators are setting up their business in these countries. For instance, AirAsia recently commenced its operations in India. The Singapore Airlines also initiated services in association with the giant business conglomerate – the Tata Group. In addition to this, the Emirates also invested a huge sum in the full-service carrier of India – Jet Airways. As soon as the government of the country opened its markets for foreign investment, many operators showed their interest, and are in talking terms with existing carriers for deals and mergers. It is expected that options regarding booking cheap international flights will increase in the coming months.
The Onset of New Operators
The entry of global operators in the market may bring some changes in the existing rules. The civil aviation authorities of India may consider eliminating the 5/20 rule. It states that airlines have to operate for at least five years in the domestic market and own 20 aircraft in order to commence international flights. This clause was added to ensure that the service providers gain enough of experience and own sufficient resources to carry global operations without any hindrance. As per experts, these laws were made years back and do not seem to fit in the current scenario. When talked of AirAsia, it has been in the industry for quite some time, and including all its subsidiaries owns more than 100 aircraft. Hence, technically it fulfils both the criteria and waiting for five years may be sheer waste of time.
Existing Carriers
However, if this rule is eliminated, it can be quite unfair to existing carriers, which waited for years in order to commence their global operations like Mumbai to Malaysia or Delhi Kathmandu flights. For instance, the Wadia Group-owned GoAir started operations back in 2005, and will soon launch its first international flight. Similarly, SpiceJet and IndiGo also went through the wait period despite of having the required resources. Hence, airline officials and aviation authorities are under the discussion phase and may soon announce their decision regarding the same.
AirAsia and Vistara
Vistara – the Tata-Singapore Airlines (SIA) joint venture – is all set to commence its functions in India. As per reports, this airline has already received its permit and other legal documents required for operations in the Indian skies. It is a full-service provider; hence directly competes with the likes of Jet Airways and Air India. Industry watchers are of the opinion that as soon as it will initiate operations, the cost of domestic and international flight booking may drop. It is introducing a new class of travel in the country – Premium Economy, which falls between the Business and Economy Class. The price-based competition will rise, compelling rivals to bring down the cost of their operations. Similarly, AirAsia entered in the Indian market and catered to the niche market in the southern part of the country. Now, travellers can travel in that region at a comparatively lower cost. This Malaysia-based airline is planning to operate on metro routes soon in the coming months. In addition to marketing strategies and fuel-efficient aircraft, the reduction in the Aviation Turbine Fuel (ATF) is also playing an important role in bringing down the price of air tickets.
Martin Wynn
