Click to play videoNew Delhi: The low cost air travel concept has hit an air pocket and losses of nearly $2 billion have left domestic carriers high and dry.
With Jet Airways deciding to lay off 1,900 employees in a massive retrenchment drive, is seems the concept of low cost carrier is coming to an end.
"When we say low cost, it is low fare as everybody pays same charges for navigation, landing, fuel, technical manpower," was what jet Airways Chairman Naresh Goyal had said in 2007. But just six months later things started seeming different.
"Over all increase in prices and the way the prices of seats are going up will all combine to have a fairly strong negative impact on the overall travel and tourism industry," Ashwin Kakkar, travel industry expert, said.
The Indian aviation industry will suffer a loss of about $2 billion in 2008-09. The latest alliance between aviation giants Jet Airways and Kingfisher have only added to the woes.
"They never had a chance to start with and now with this huge curios alliance, it skews the market even further because as competition reduces prices increase," Ajay Prakash, aviation analyst, said.
But Captain GR Gopinath, who brought the low cost carrier concept to India, is still keen on reviving Air Deccan that had set the trend of low-cost flights.
"I think it is a complex situation right now. That's exactly why I want to sit with Vijay Mallya and figure out what he has in mind. If he says he wants to exit the space that's the reason why I said maybe there's an opportunity here to get Deccan back into the air," Gopinath, who currently the Vice Chairman of Kingfisher Airlines, said.
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