An Assessment of Competitive Strategies Implemented by Low-Cost Carriers in India

Abstract India, home to one-sixth of the worlds population, is quickly becoming one the worlds economic engines. Its bureaucratic and outdated regulatory policies have been reformed resulting in a four-fold increase in the number of scheduled airlines and a five-fold increase in the number of aircraft operated. This study attempts to examine, in the light of the success of the low-cost model first adopted by Southwest Airlines, the competitive strategies based on cost-leadership and product differentiation that have been deployed by low-cost carriers (LCC) in India. . In addition, this paper attempts to review how the new regulatory roadmap has transformed the supply of domestic air services in the Indian Aviation industry. A passenger survey conducted in Mumbai investigated the acceptance of LCCs in India. In addition, it assessed the sensitivity of passengers to a change in fare and which factors or attributes would encourage them to distinguish between LCCs. The study finds that there is immense growth potential for LCCs in India on account of low fares leading passengers to convert from rail to air traffic. However, infrastructural bottlenecks leading to delays and cancellations are hindering the mindset of current or potential passengers. Hence, creating value by attaining customer satisfaction and differentiation in product or services offered is the most effective way for LCCs to gain market share and, with time, be able to sustain it