India’s low-cost carriers such as SpiceJet and IndiGo are certain to face challenges with the entry of AirAsia and other foreign partners. AirAsia’s foray comes at a time the airline industry is in turmoil with passenger traffic sliding. The number of passengers in fact shrunk 7.3 per cent in November on a year-on-year.
The suspension of operations by Kingfisher has benefitted both Jet Airways and low-cost carriers. This is reflected in their break-even seat load factor, a measure of the minimum capacity needed for an airline to make profits.
After the grounding of Kingfisher, Jet’s India break-even seat load factor improved to 73 per cent in the December quarter from 82.2 per cent in the June quarter.