Are low-cost airfares really low-cost? A reality check

In this era of low-cost flying, when a majority of airlines are vying against each other to slash prices and lure customers on board, passengers really find it hard to resist the temptation to fly cheap and fall prey to the marketing gimmick played by the carriers.

Blame it on the cut-throat competition prevailing among various airlines, such as SpiceJet, IndiGo and Jet Airlines, the news of frequent fare-cut and discount flying keeps pouring in at regular intervals. The spur in this competition can be attributed to the recent entrant in the aviation industry, the low cost flying sensation—Air Asia.

But in this rat race to slash price and attract customers, one wonders if the customers are really benefited from such schemes? Well, analysing the actual fare structure, gives a different insight.

For instance, airlines floating such schemes always keep their window for booking as narrow as possible, say between 2-3 days. However, a close look at the fare structure clearly shows that 30-50% of the total fare happens to be charges and taxes of airport, government and others, which do not belong to them, but are collected much in advance along with the base fare. This 30-50% comes totally interest-free for their financing of operations and debt.
And to make things worse, even in cases such as cancellation of booking, the airlines charge a hefty fee which pricks a hole in the pockets of the customers and comes free to the airlines.

Hence, going by the analysis one is forced to think, that whether the low-cost airfare is really a low-cost or is it a blessing in disguise for the carriers floating the scheme.

It is for the regulators to answer whether such mobilisation of other’s charges, free of interest is in public interest or not.