Low-cost aviation in India has seen phenomenal growth in the last couple of years and the role of market-friendly government policy in this has been well acknowledged. So the official diktat that mandates seat numbers on air tickets is quite jarring as it is an intervention in the industry’s business model. It cuts into an important source of cost-containment—lower flight turnaround time, and hence higher aircraft utilization. This has been widely tapped by globally known success stories such as Ryanair Ltd.
It’s ironical that the government will thus prune the scope for cost control and also be lax in facilitating the infrastructure support low-cost airlines need in order to be truly competitive—such as the option of low-cost terminals in existing airports and secondary airports in key cities. The approach seems odd when sustained growth in this model is sure to expand economic activity across smaller towns, as it enables wider access to air travel across income groups.