Wednesday, July 7, 2010

All in the Air...

INDIA - All set to FLY
Has Airline space in India revived? What’s the future of Aviation Industry in India? How will the Airline companies survive in a cut-throat competitive market and with negligible infrastructure resources?

These questions are ever-prevalent among analysts from the past few years. The waves of positive and negative predictions have even increased confusion on the outlook of this sector. There were prophecies saying that majority of the companies in this sector will go bankrupt; and there would be serious consolidations taking place. Even the acquisition of Sahara Air by Jet Airways and Air Deccan by Kingfisher added fuel to the fire. Analysts went bullish on their calculations and they still doubt revamp in this segment.

But the Airline companies have a different story to tell. They are taking no chances to prove that Indian Companies can work even in the most adverse circumstances and are re-defining success paths based on delivering their promises incessantly and by outshining themselves. The players in the Airline sector have understood that they have to be uprightly competent and Innovative to survive and prosper. They proved how a price-sensitive market like India could be taught “How to fly…!” Apart from pricing innovations, they had to innovate in Service delivery and differentiation. The low-cost Airlines did what they were meant to do.

Earlier no-frills airlines had pathetic service delivery, poor pricing, improper communication and hence GREAT losses. Soon they recognized that they needed to get better, right from upgrading to the food served on the board to being accurate to the time-table, from getting the right staff (yes yes  the air-hostesses too….!) to building an up feel brand. And now, these airlines are steadily making profit and are hoping to rise back from the abyss. It wouldn’t be wrong to say that the best is yet to come.

The concepts such as higher turn around time of the aircraft and absolute no-frills (but superior service delivery) of cult airlines such as Northwest Airlines and Ryan Air were already well-known. The Indian Air operators learned well and our own Spicejet demonstrated novel concept of “sweating its assets more than usual” by increasing aircraft utilization. This metric refers to the number of block hours that an aircraft flies in a day and is a key way for airlines to maximise revenue. By focusing attention on ground-handling and refueling times, and re-jigging airline schedules, SpiceJet was able to raise aircraft utilisation to 12.5 hours a day from 10.5 hours in 2008-09 — significantly higher than Kingfisher’s 9.5 hours, Jet’s 10.5 hours and Air India’s 8.5 hours.*

Even in terms of infrastructure India is developing, although not at the required pace. We will encounter Asia’s biggest terminal in form of T3, New Delhi. Bangalore and Hyderabad already have International Airport facilities now. Mumbai is sooner gonna have another airport. Tier-2 cities such as Madurai, Calicut, Mangalore, Raipur, Surat, Shimla, Ludhiana, etc are getting well connected now. Even the dynamic and competitive pricing will attract more customers. And as difficult it gets to obtain a train ticket; more people would shift to consider flying, as it’ll save time and money both.

In a way the current Airline companies are changing the style India COMMUTES. It is positive and still has a huge potential to grow. Keeping in mind that the players such as Spicejet, Indigo, Go Air, Jet Lite, Kingfisher, Indian Air, Jet Airways, Paramount are gonna stay on their toes and excel their performance I believe Indian Aviation has a tremendous opportunity to leverage and are going to set benchmark standards and success overall in the coming future. 


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