Indian Market for Low-Cost Carriers to Double

The Indian market for low-cost carriers (LCCs) is expected to double by financial year 2023, riding on rising incomes, tourism and a shift to air travel from rail travel. Interestingly, a study by Goldman Sachs indicates that the high-growth market serviced by the low-cost carriers in India is the third largest globally. “LCCs have been the only successful airline industry model in India over the long term. With faster turnaround and lower unit-cost, LCCs dominate the domestic market and are gaining share in shorthaul international routes. While we expect profitability to remain levered to aviation turbine fuel which constitutes 40 per cent of the operating cost of airlines, slowing global demand should keep oil prices low, while domestic air-traffic growth should remain decoupled from global trends,” the Goldman Sachs study said.