When Will India Have Low-Cost Airports?

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MUMBAI – About six to seven years ago when low-cost carriers went all out to woo the Indian flyer, some with single-digit fares others with zero fares, there was a line that one often heard in aviation conferences, media briefings etc. It went something like this: “There is nothing called a low-cost fare in India.” If I remember it right, all of them have said it__owners of full-service carriers, ministers, aviation consultants, that is__at different occasions, using different words. What it meant was that India does not have the kind of infrastructure that supports the low-cost airline model. Ergo, there is nothing called low-cost fares. They said, “the low-cost fares were actually high in cost for the airline concerned”. A lot of that was, and still is, true.

The biggest grouse was that India did not have a single low-cost airport. Like say, Kuala Lumpur, London, Paris or Berlin has. If you are flying from say, Milan to London on Ryanair (Dublin based low-cost airline), you do not board the flight at Malpensa or alight at Heathrow, the big international airports of these two cities. Instead, the low-cost airline flies from Milan’s Bergamo airport to London’s Stansted. Stansted has basic facilities like forex counters, internet access and in fact even a prayer room. Both these airports see a rush of low-cost flights. It all about cutting costs, wherever possible, so that the airline can price a certain percentage of its tickets cheap and still maintain a healthy balance sheet.

Last week, the dearth of low-cost airports was again bemoaned in India, this time, by the operators of IndiGo and Spice Jet. These two carriers have sought government nod to move their international operations away from Delhi’s T3 to domestic terminal 1D. The carriers reasoned that they cannot afford the higher cost of operations in T3. And very rightly so. Why should a low-cost airline be forced to operate from a high-cost terminal? IndiGo, with about 24 percent market share, is currently the largest LCC in the Indian market. Spice Jet’s market share is 18.5. IndiGo operates eight flights per week to Bangkok, Singapore, Dubai, and Kathmandu from Delhi. SpiceJet operates to Kathmandu from Delhi and it will be launching services to Dubai from next month.

If anything, these airlines should be at least not forced to operate from a particular terminal when there are other cheaper options to go to. A PTI report said that the overhead operational charges that low-cost airlines have to pay for operating from T3 are around 300 percent higher than same from the domestic terminal. Besides, they have to park aircraft at two places and along with that other paraphernalia such as engineering facilities and ground-handling staff, etc. Operations from one single place will also bring synergy besides reducing costs. In the end, the benefit will be passed on to the passenger.