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India Is Fertile Soil For Budget Airlines

Companies See Vast Market In Middle Class

By John Lancaster
Washington Post Foreign Service
Tuesday, February 22, 2005; Page E01

HUBLI, India -- As Air Deccan Flight 204 soared away from the runway, Ramana Murthy looked out the window and chatted animatedly on his cell phone. Never mind the rules. At 40, the boyish-looking railway contractor was taking his first airplane trip -- and his wife, on the other end of the line, was demanding a full report.

"Is good feeling only," he said in faltering English a few minutes later, a broad grin lighting his face. "No fear. Just like sitting on a bus."

Air Deccan chief G.R. Gopinath, right, with Bell Helicopters executive Max Wiley, got into aviation after he realized that India had only 50 helicopters. (Gautam Singh -- AP)

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Once regarded as the province of tycoons and maharajahs, air travel is taking off in India. A booming economy and the emergence of no-frills service -- modeled after that of low-cost U.S. carriers -- are opening the skies to middle-class Indians eager for the conveniences of prosperity and globalization.

With Air Deccan offering fares as low as $11 -- and other airlines scrambling to catch up -- many Indians now have an alternative to the dirty and overcrowded trains that have long been synonymous with travel in this vast nation of more than 1 billion people.

A similar phenomenon is taking hold in Brazil and other developing countries, where the emergence of low-cost carriers is democratizing air travel and linking far-flung communities in a trend with significant implications for social and economic development. China, where regulatory barriers have delayed the arrival of no-frills service, is slated to get its first such carrier this year, according to Kapil Kaul of the Centre for Asia Pacific Aviation, a Sydney-based consultancy.

For the 12-month period ending March 31, the number of people taking domestic flights in India is projected to surpass 19 million, an increase of nearly 30 percent over the previous year, according to Kaul. Five new low-cost carriers have announced plans to begin operations during the next year.

Major cities are not the only beneficiaries. Here in Hubli, a farming and commercial center of just under 1 million people in the underdeveloped hinterlands of southern India, the inauguration 16 months ago of daily service by Air Deccan, India's first no-frills carrier, has sparked a surge of interest among businesses looking to relocate or expand, according to local officials.

"I didn't want to connect just Bombay and New Delhi," said Air Deccan founder and managing director G.R. Gopinath, an ebullient former army officer whose airline has shaken up the Indian travel industry with practices such as charging passengers for water. "I wanted to link across the country, leave my footprint."

"For me," he added, India "was no longer a billion people to be fed and subsidized, put on the dole. For me it was a billion consumers -- a billion hungry consumers."

The overwhelming majority of Indians, of course, have never set foot in an airplane. Only about 50,000 people travel by air each day in India, compared with about 15 million who take the train, according to government statistics. And the number of domestic commercial flights remains minuscule by the standards of the industrialized world -- just 500 or so each day compared with more than 20,000 in the United States, which has about a fourth of India's population.

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