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India’s real low cost battle is on the ground not in the air

(Mumbai: 27 April 2006): The heads of India’s rapidly emerging LCC sector predicted that distribution would be the key to success in the highly competitive market.

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“Distribution has to be available very close to the customer. Any passenger will be able to transact a GoAir ticket within 20 metres of their home or workplace,” Mr Wadia, the Managing Director of GoAir, told the Centre for Asia Pacific Aviation’s (CAPA) 2nd Annual Middle East and Indian Subcontinent Aviation and Tourism Investor Summit.

Mr Wadia was speaking on a panel of LCC CEOs, including Ajay Singh, Director of SpiceJet and Warwick Brady, COO of Air Deccan at the CAPA Summit held in Mumbai.

GoAir has introduced a range of innovative and exclusive distribution channels, including cyber cafes, public phone booths and petrol stations, to reach a potential travel market of 250 million people. This strategy contrasts with SpiceJet, which, given the low levels of credit card an internet penetration in the India, sells an impressive 70% of its fares online.

“Indians are extremely innovative people. If they know there is a cheaper fare on the net, they will find a way of to get it. They will use the internet at work and borrow their friends credit cards,” explained Mr Singh, Director of SpiceJet, which has grown rapidly to a 6% market share since launching in May 2005.

“Indians will climb through hot coals to get low fares,” said Mr Brady, explaining the 30% growth rate in passengers experienced in India. Brady, previously with Europe’s largest LCC, Ryanair, described as “explosive” the potential of Indian air travel as low fares stimulate demand across the country.

The Centre’s 2nd Annual Middle East and Indian Subcontinent Aviation and Tourism Investor Summit, held in Mumbai, features high level participants, including the Hon Shri Praful Patel, Minister for Civil Aviation and CEOs from across the region’s airlines. The Summit, with Kingfisher Airlines as the presenting sponsor, concludes today.