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New Low Cost Airlines Take Flight in India


People buy tickets from the budget airline Air Deccan counter at the airport in Bangalore, India
In India, a host of new low cost airlines are rapidly changing the face of domestic travel. These airlines are catering to a growing middle class in the country of a billion plus people.

A 20-year-old college student in New Delhi, Aman Gupta, recently purchased an air ticket for $80 on a low cost airline and flew to Bombay to attend a weekend conference. The fare was marginally more than for an air-conditioned train, which has been the standard for middle class travel.

Air travel for Aman would have been impossible just two years ago. But a company called Air Deccan has changed travel options by offering budget tickets. It started with a single route between two southern cities. It now links 35 cities with more than a million passengers last year.

Air Deccan's runaway success has prompted more than a dozen companies to either start operations in recent months, or announce plans to launch new airlines.

Kapil Kaul, at the Center for Asia Pacific Aviation in New Delhi, says the potential is vast in a populous country with a growing middle class.

"If you look at a low cost airline business model, it is ideally designed for markets like India," said Kapil Kaul. "Price is always a factor in a developing economy. It basically makes aviation, air travel, affordable to a common man."

Budget airline fares are often as much as 50 percent cheaper than those offered by state-run airlines, which dominated the aviation business until a decade ago.

But the new boom in air travel is putting huge strain on India's air facilities. Analysts like Mr. Kaul say airports in major cities like Delhi, Bombay, and Bangalore, are congested and understaffed.

"We believe that the infrastructure shortages to some extent are almost reaching a crisis stage, especially as all our gateways are concerned," he said. "We have almost a crisis as far as lack of manpower is concerned… pilots, engineers, and flight dispatchers."

Indeed the voracious demand for staff ranging from cabin crew to pilots has pushed up salaries and even prompted airlines to sign anti-poaching agreements. The government has also announced plans to revamp several major airports.

Passenger traffic is expected to rise by five million people every year growing to 50 million by 2010.

International aircraft manufacturers are already benefiting from the boom as Indian airlines rush to buy planes. Last month, private Indian carriers placed orders for 125 jets worth $13 billion at the Paris Air Show - aviation's biggest gathering. Most of them were for jets made by European manufacturer, Airbus.

India' state owned airline, Air India, placed an order for 50 Boeing aircraft in April.

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