As Asian aviation undergoes a transformation amid high fuel prices, India has allowed foreign airlines to acquire stakes of up to 49% in domestic carriers. Though structural issues and cost challenges remain, the sale-and-leaseback model is boosting the international aspirations of the country’s low-cost carriers (LCCs).
Short-haul international traffic from India to South and Southeast Asia as well as the Gulf states and Central Asia is projected to grow by 10% in 2012-13. IndiGo and SpiceJet are changing the market dynamics by opening up new international routes to low-cost competition as the federal government grants private carriers additional access to bilateral entitlements.
While incumbent network carriers Air India and Kingfisher Airlines have cut back their international networks, SpiceJet, IndiGo and Jet Airways are planning to expand after being granted additional international seat allocations.
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