5 Trends That Will Redefine Indian Air Travel

The Indian air travel industry is in the middle of a significant metamorphosis and not the last one that we will witness in a lifetime. From bankruptcies and desperate measures to raise survival equity to market share fights driven by price wars (not customer experience), we have seen it all. Change is good and is often inspired by the experiences of the recent past. Some may question the viability of the sector where 4 out of 5 national carriers are in the red, but as Oscar Wilde said “We are all in the gutter, but some of us are looking at the stars”. There are five broad themes likely to play out as we see the sector emerge into a developed sub-economy.

Clearer market segmentation and better customer experience
For the first time in 10 years, we will finally experience the difference between a low-cost and full service airline as new airlines such as Vistara look to redefine what a true full service experience should be. This will have a trickle-down effect on both full service and low-cost carriers who will become crisper in defining their service positioning and experience for the travelers. The challenges in clearer segmentation, however, would still remain as most domestic flights are 2 hours long and there is only that much wow factor possible in a short duration flight where 15 minutes each side are spent on taking off and touching down.

Price neutralization will become a viable short-term marketing strategy
Full service carriers will match prices with low-cost carriers to eat into their market share by offering more value per buck. Jet Airways is likely to lead this trend as it has already consolidated all its three sub-brands into a unified full service identity from December 2014 emerging as the de-facto market leader in full service operations. This should gradually erode the market share of democratic airlines like Indigo who get a significant number of affluent travelers mainly because of their consistent on-time performance and lack of differentiated alternatives.

New challengers will emerge in each category as incumbent leaders strengthen their hold
We are not likely to see new market leaders in the short term, but new entrants like Air Asia and Vistara will emerge as strong challengers to the struggling number 2s and 3s in each category. They will have the benefit of learning from more than one case study of ‘how not to run an airline company in India’. They will work efficiently from grounds up from day one making the Indian airline industry more broad-based and sustainable.

Indian aviation sector will become more international, globally-owned and sophisticated
With 49% FDI allowed in domestic airlines by foreign carriers, there would hardly be a performing Indian airline that is not internationally owned. This will not only enhance efficiencies in operations through learning from global operators, but will also infuse in the much needed financial strength to scale up in a fast growing sector. Indian origin airlines will also become more visible in international skies and some of them will have the opportunity to transform themselves into global brands. 100% foreign equity allowed in airport development should see some of the Indian airports emerge as global hubs in the coming years, which in turn will enhance the viability, resilience and reputation of the Indian aviation sector.

Rise of the regional airlines
After several futile ventures, perhaps, the most ignored and likely to be the most dominant trends of the times to come, will be the rise of well-funded, well-branded regional airlines. Not that we haven’t heard of South-based Air Costa and Air Pegasus, a slew of others like Turbo Megha, Air Carnival and Zav Airways are looking to establish regional air prints in India. It is in no way going to be an easy ride for them as trust is hard to come by in airline travel. However, if they can convince travelers and other stakeholders about their efficacy and long term sustainability, we will finally see affordable regional travel take a sky leap forward in India.

(About the author: The article has been written by Saurabh Uboweja, CEO Brands of Desire.)

Image: indiatimes