Air Deccan emerges as the second largest domestic carrier

For the second time in a year, Air Deccan overtook state-owned Indian (formerly Indian Airlines) in 2006, making it country’s second-largest domestic carrier. According to preliminary numbers from the aviation ministry, the low-cost carrier’s market share for the peak months of November and December stood at 19.7 per cent and 19.8 per cent respectively against 19 per cent for Indian. Air Deccan’s rise to number two position after Jet Airways continues a trend that began in June last year when it overtook Indian for the first time. In that month, figures released by the Directorate General of Civil Aviation showed that Air Deccan had a market share of 21.2 per cent against 20.8 per cent for Indian. “Air Deccan is the story of a tectonic shift in the Indian middle class, which is now opting for air travel like any other consumer durable. We were able to achieve our dominance through huge load factors and capacity additions,” said Air Deccan Managing Director Capt.Gopinath.

Low-cost carriers have steadily expanded their market shares over the past year. In December, their collective share stood at 32 per cent over 20.8 per cent at the start of 2006. The Centre for Asia Pacific Aviation (CAPA) says full service airlines are losing 1.5 percentage points of market share every month to low-cost carriers. CAPA predicts that low cost carrier market share in India will reach 70 per cent by 2010. This will make it one of the world’s leading low-cost carrier markets in terms of market penetration. The overall market grew 47 per cent in the year to November, representing nearly 29 million passengers. Air Deccan currently has the largest route network covering 61 airports, while Jet Airways connects 46 airports and Indian 43. Industry analysts say Air Deccan has a large market share partly because it enjoys a monopoly on a number of virgin routes such as Hubli, Pathankot and so on. CAPA CEO (Indian subcontinent & West Asia) Kapil Kaul, said: “The primary reason for Air Deccan becoming the country’s number two airline is fleet underutilisation by Indian.”

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