Many low-cost passenger carriers shy away from flying long-distance routes in favour of lucrative short-distance destinations even as they complete five years domestic flying stipulated by the government Experts FE spoke to say carriers? strategy to focus on shorter routes like west and southeast Asia is short-term. Indigo, which flies to west Asia and southeast Asia and SpiceJet, which flies to Nepal, Sri Lanka and Bangladesh, are yet to fly the US and European routes. Unlike low-cost carriers, full-service Jet Airways flies to destinations in Europe and the US since 2004.
?The demand from shorter destinations is much higher,? says PR Srinivas, leader, travel hospitality and tourism at consultancy firm Deloitte India. ?India is an expensive destination and this affects inbound traffic.? When it comes to outbound traffic, people prefer to first go to destinations close to India and then venture beyond, he added. According to him, the passenger numbers are far more for the medium-haul and short-haul routes.
Rival foreign airlines and aviation consultants say connecting longer routes is key to future growth. ?It is time that Indian low cost carriers look to fly long-haul,? says Asia?s largest low cost carrier Air Asia X chief executive Arzan Osman Rani. ?They need to break out of the model of using smaller narrow-body aircraft for medium haul routes.?
?Long haul routes is the natural progression,? says Amber Dubey, director of aviation at global consultancy firm KPMG India. ?Long haul flights may involve change of aircraft fleet, higher fixed costs and higher risks. You have to give credit to the fact that Indian low-cost carriers are being prudent and taking bite-size steps,? he adds.
But flying long routes is still a far cry for low-cost carriers as they purchase planes for short-term routes. IndiGo and GoAir purchased A 320neo and SpiceJet bought Bombardier?s Q400 turbopropeller jets to fly short distance routes.
?We see a huge potential in the domestic market connecting tier-II and tier-III cities,? says a senior GoAir official. ?There is a large untapped demand in that segment. Our decision to purchase the Airbus A320s is consistent with this strategy,? he adds. The airline, in June, signed an agreement with plane maker Airbus to purchase 72 A320neo machines.?
?Even if we go international, we will stick to medium-haul and regional routes,? the GoAir official added.
SpiceJet did not respond to FE?s email queries. Spice Jet is connecting tier-II and tier-III cities and have launched its regional service in September 2011.
The country?s largest low-cost carrier IndiGo says it is far too early to fly long haul routes. The government had allowed the airline to fly international traffic routes in January 2011, a week after it said it would purchase 180 Airbus A320neo, which is used for short-term routes.
The airline plans to fly 15-16% of its fleet capacity to international destinations. ?All these routes, however, will be short to medium-haul international routes,? says Aditya Ghosh, Indigo president.
?The best yields are on long flights,? says Dubey of KPMG India. ?Also, low-cost carriers have a proposition which has universal appeal. Look at the success of Ryanair, JetBlue and EasyJet in the western markets where the average purchasing power of passengers is much higher than that in India,? he adds.
According to him, the success of Jet Airways on international routes, despite stiff competition, also proves that Indian carriers can provide service of global standards?All this will augur well for low-cost carriers as and when they decide to expand to long-haul routes,? Dubey says.