30th October, 2016 (CSAT)


70% of the operating costs of low-cost airlines in India are the same as that of full-service carriers, leaving only 30% to juggle with to gain an overall advantage over full-service carriers. Many of these costs like fuel are above global levels. Exorbitant state and central government taxes and duties are the main culprits. Few secondary airports and fares falling faster than their costs have hurt low-cost airlines more than others, as they have to achieve higher fleet utilization. Allowing low-cost airlines to utilize non-metro airports at lower charges during off-peak hours while providing full-service airlines peak-hour slots but at higher rates could help. Low-cost airlines can aid economic development and the current economic boom has been the right time to launch India’s low-cost revolution through in their efforts to achieve economies of scale and greater market share they have been reckless and have gone deep into the red. India has to await second-generation low-cost airlines to deliver the goods.

1. The author’s view of Indian low-cost airlines is that

(a) they are based on global models allowing them to compete with railways

(b) they benefit from certain exemptions on tax and duties

(c) with only 70% of the operating cost being the same as full-service airlines they have a major advantage

(d) they are loss-making enterprises as their efforts to expand have been hasty


2. Which of the following measures can boost the low-cost carrier business?

(a) Increasing rail fares to allow low-cost carriers a change to compete

(b) Government should own a stake in low-cost airlines

(c) Preference for low-cost carriers during peak hours at major airports

(d) Developing adequate secondary airports


3. Why are in low-cost airlines, India is currently experiencing difficulties?

(a) Over-ambitious plans for expansion

(b) Recession in global airlines industry

(c) Monopoly of government-owned full-service airlines

(d) None of the above

Tomorrow: Next questions for practice

For previous questions refer yesterday’s post

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