'India set to become world's leading LCC market'

New Delhi, Aug 7: The low cost carrier (LCC) market share in India will reach 70 per cent by 2010, the Centre for Asia Pacific Aviation (CAPA) said today.

This will make it one of the world's leading LCC markets in terms of total market penetration.

Given the growth potential of market and penetration levels already achieved by LCCs, the CAPA said India could see the establishment of a home-grown LCC in the next five years with the size and scale approaching that of easyJet or Ryanair.

The launch of IndiGo in the past few days will keep the market growing strongly in the months ahead, said its CEO for Indian subcontinent and Middle East Kapil Kaul.

Full service carriers are on average bleeding a remarkable 1.5 percentage points of market share every month to LCCs.

''We do not expect this rate to slow in the short term, given the profile of current fleet orders. LCCs could therefore control over 35 per cent of the domestic market by this year-end and pass 50 per cent some time in second half of 2007.'' The Indian domestic market has been growing at almost 50 per cent so far this year. ''The emerging untapped leisure/VFR sector will drive the domestic market to more than double over the next five years (growing at 25 per cent annually) to around 60 million passengers by 2010. And the LCCs will gobble up most of the new traffic growth,'' said Mr Kaul.

''But high fuel costs, low yields and congested airport infrastructure pose major risks to the sector going forward and have the potential to place a major strain on airline finances. While we are not predicting a bloodbath, airlines will need to be careful with capacity and ensure they are well funded,'' he added.

UNI