Price War in Aviation Industry
Price Wars in Aviation Industry – Boon or Bane?
Introduction
Aviation Industry in India is a significant one among those industry segments that have experienced a phenomenal growth across the globe over the past years. The open sky policy of the Indian government is one of the key factors that have allured international players into the aviation industry in India. Since long, the aviation industry in India has been growing in terms of number of air travel firms and number of aircrafts. Today, private airlines alone bear the burden of not less than 75% of the domestic aviation requirements.
Indian aviation industry is the 9th largest in the world. As per the statistics released by the Ministry of Civil Aviation, in the year 2008 alone not less than 29.8 million people travelled to and from India which was a 30% surge from 2007. Industry experts have predicted that not less than 50 million passengers will be served by the India aviation industry by 2015. Widening opportunities in India will create room for over 69 foreign airlines entering the Indian aviation sector from about 49 countries.
What is a Price war? A price war is a period in which the firms in an industry or market set prices that are significantly below the usually prevailing prices, generally implying a change in strategy within a set of oligopolists.
The concept of low cost carries: A low-cost carrier or low-cost airline (also known as a no-frills, discount or budget carrier or airline or cheap flight) is an airline that generally has lower fares and fewer comforts. To make up for revenue lost in decreased ticket prices, the airline may charge for extras like food, priority boarding, seat allocating, and baggage etc.
The term originated within the airline industry referring to airlines with a lower operating cost structure than their competitors. While the term is often applied to any carrier with low ticket prices and limited services, regardless of their operating models, low-cost carriers
Introduction
Aviation Industry in India is a significant one among those industry segments that have experienced a phenomenal growth across the globe over the past years. The open sky policy of the Indian government is one of the key factors that have allured international players into the aviation industry in India. Since long, the aviation industry in India has been growing in terms of number of air travel firms and number of aircrafts. Today, private airlines alone bear the burden of not less than 75% of the domestic aviation requirements.
Indian aviation industry is the 9th largest in the world. As per the statistics released by the Ministry of Civil Aviation, in the year 2008 alone not less than 29.8 million people travelled to and from India which was a 30% surge from 2007. Industry experts have predicted that not less than 50 million passengers will be served by the India aviation industry by 2015. Widening opportunities in India will create room for over 69 foreign airlines entering the Indian aviation sector from about 49 countries.
What is a Price war? A price war is a period in which the firms in an industry or market set prices that are significantly below the usually prevailing prices, generally implying a change in strategy within a set of oligopolists.
The concept of low cost carries: A low-cost carrier or low-cost airline (also known as a no-frills, discount or budget carrier or airline or cheap flight) is an airline that generally has lower fares and fewer comforts. To make up for revenue lost in decreased ticket prices, the airline may charge for extras like food, priority boarding, seat allocating, and baggage etc.
The term originated within the airline industry referring to airlines with a lower operating cost structure than their competitors. While the term is often applied to any carrier with low ticket prices and limited services, regardless of their operating models, low-cost carriers