Bangkok--2 Oct--Asia Pacific Aviation
Andrew Miller, CEO of the Centre for Asia Pacific Aviation, predicted, at the Centre's Third Annual India and Middle East LCC Symposium, that consolidation and market exit would be the consequence of continued pricing irrationality in Indian aviation. Mr Miller, speaking on a panel of LCC CEOs and executives including SpiceJet CEO, Ajay Singh and Air Deccan COO, Warwick Brady, blamed irrational pricing on a lack of market and product differentiation.
"In India there is no price leader due to the fragmented market. No one carrier dominates and maintains pricing discipline. This has led to the ridiculous and internationally unprecedented situation where fares before departure are cheaper than when purchased 21 days out," stated Mr Miller at the CAPA Symposium.
Mr Miller told the audience of local and international delegates that India's domestic aviation market is characterised by a lack of brand and product differentiation, which has led carriers to fight over the same markets. Full service carriers are also reacting to loss of market share by lowering fares to try and sustain demand.
Mr Miller predicted that this is unsustainable and will eventually self correct. He applauded the Indian Government for resisting the temptation to regulate the industry by preventing new entry.
"The current rapid growth/low yield environment is unsustainable and will self correct. This will happen through consolidation, market failure and increased cooperation. There will also be a full service challenge in the next three years as carriers restructure leading to further competition and market correction", concluded Mr Miller.
The Third Annual India and Middle East LCC Symposium in Mumbai continues today. Featuring CEOs from full service and low cost carriers from across the region, as well as senior government and industry representatives, the Symposium is covering the challenges and opportunities facing the sector. Indian aviation is undergoing unprecedented growth, but profitability is being undermined through intense competition stimulated by new airline entry and significant new capacity being added by incumbents. Programme highlights today include:
Air Deccan: Warwick Brady, COO
Jet Airways: Wolfgang Prock-Schauer, CEO
Rak Airways: Jack Romero, CEO
Sama: Andrew Cowen, CEO
SpiceJet: Ajay Singh, Director
Viva Macau: Andrew Pyne, CEO
Ryanair: Patrick Murphy, Former Chairman
Ohio State University: Prof Nawal Taneja, Aviation Department Chairman
IATA: Julian Carr, Manager New Product Development
Landor Associates: Bill Larsen, Director
PhocusWright: Ram Badrinathan, Asia Pacific Analyst
Ginger Hotels: Prabhat Pani, CEO
CAPA Consulting: Andrew Miller, CEO
Centre for Asia Pacific Aviation: Peter Harbison, Executive Chairman
Key details about India & Middle East LCC Symposium 2006:
Date: 29/30 September 2006
Venue: Grand Hyatt Mumbai
Attendance:
250+ Delegates
25+ High-level Speakers
50+ Global Media Representatives
Media Exposure: Global newswire press coverage
Broadsheet newspaper coverage on three continents
Global television coverage: Over 50 website listings and advertising
Live web streaming of interviews to over 500,000 people
The event will also feature an extensive supplier exhibition and enhanced sponsor offering, with over 10+ hours of networking time.
For more information, please visit: http://www.centreforaviation.com
For sponsorship details, please contact Misty Cambray, Marketing Manager [email protected] Ph: +612 9241 3200.