The aviation industry has achieved a number of milestones in last few decades, and this has led to fall in the pricing of airline tickets by almost 50 per cent. Introduction of new technologies have made long-haul journeys a lot more convenient and quick. This whole process of cutting down the cost started from late 1970s; before this time it was quite high. A number of reasons contributed to this change, including global economic growth, introduction of latest technologies, new investors, increasing need for travelling due to changes in business scenario and new laws. It not only made air travel economical, but also made it as the best mode of transportation for a huge population. The democratisation of air was the most crucial step taken in the history of aviation.
Democratisation of Air
Apart from high maintenance and acquisition cost, airlines had to pay access fee, which was determined by government of respective cities and countries. As per rule of business, this extra cost is to be borne ultimately by customers, which lead to increase in airfare. There were limited airlines and hence, had sort of a monopoly over the pricing and services offered by them. As per economists, except for necessity products, price tends to fall with increasing competition in the industry. Deregulation attracted new entrants to join the industry, which significantly brought down the price, and people enjoyed air travel at a modest price, if not on the lowest airfare, and this significantly raised the number of fliers over the years. As per industry reports, last year airline revenue reached to a new level of over $700 billion worldwide.
Role of Mechanisation and Internet
The trend of online air ticket booking was not set in one day; it took years to start the whole process of ticket booking, check-in and other steps. This has helped airlines in cutting their cost along with along with maximum accuracy. Travellers, on the other hand, enjoy transparency, adding to customer satisfaction. The internet gives out all the possible information related to flights, prices and amenities, which help a traveller in taking rational decisions. Now, people can check best times, when airlines offer tickets at low fare, packing essentials while flying, the best seat for a comfortable journey and a lot more.
De-bundling of Products and Services
Earlier, price of meals, headsets, Wi-Fi accessibility and other services was added with the air ticket cost, and passengers had to pay for all of them, irrespective of their choices. De-bundling of products and services allowed travellers to pay only for services they are willing to avail. For instance, if it is a short-haul journey, a passenger can avoid paying extra for the meal. Duties and taxes charged may irritate many fliers, but as per experts, it actually saves fliers a lot of money. This allows airlines to keep fix price really low, and people who wish to avail extra services can pay for them. All these factors simultaneously have tripled number of fliers in last few decades and reduced the cost considerably.
Martin Wynn
