Air Deccan’s cheap tickets, and those of rivals such as SpiceJet Ltd or GoAirlines India Pvt. Ltd, helped the number of air passengers surge. The volume nearly trebled to 43.3 million in 2007 from 14.5 million in 2003. (Passenger numbers fell in 2008 to 40.7 million as high fuel prices and mounting losses took their toll.)
Rajnish Kumar Verma was one of those converts to aviation. The first time the software engineer at a travel firm took a flight was in April 2007 when he flew on an Air Deccan turboprop plane between New Delhi and Ranchi. The flight, under two hours, was chosen over a 12-13 hour train journey. The price difference—Rs1,650 for a ticket in an air-conditioned train coach versus Air Deccan’s Rs3,500 ticket—helped him spend more time with his family on what was a short vacation.
At least 180 aircraft have been added to India’s fleet since Air Deccan’s launch. Flights to smaller airports in predominantly rural regions became possible on short-haul aircraft. By 2007, flights were available from 82 airports in the country, compared with just 50 in 2000.
To be sure, Verma, faced with an economic slowdown, is flying less often these days and Air Deccan does not even exist today—it’s been bought by full-service carrier Kingfisher AirlinesLtd. Airlines are slowly shedding ultra-low fares and some destinations have gone off the aviation map as carriers curtail operations to cope with costs. But the Re1 fare and low-cost airlines have made a lasting impact on the Indian economy and consumer psyche.
And, the Nano?
At a starting price of Rs1 lakh, the Nano has the makings of a game changer. Even if the diesel model—only the petrol variant is likely being unveiled on Monday—costs about Rs1.5 lakh, it will be a tempting option for a consumer who until now has not been able to afford a vehicle more expensive than a two-wheeler.
With volumes, Nano’s frugal engineering-driven design and parts sourcing could have a bootstrapping effect on the domestic automobile industry at a time when global consumers are looking for fuel-efficient and inexpensive vehicles, says Xavier Gunner, head of research at Arbuthnot Securities Ltd.
Graphics by Ahmed Raza Khan / Mint
tarun.s@livemint.com
Vijaya Rathore and Samar Srivastava also contributed to this story.