I don’t know how many of you remember ModiLuft? It was an India airline started in 1993 in collaboration with Lufthansa, after the relaxation of economic policies by the government lead by PV Narasimha Rao. The airline ceased operations in 1996 after relationship turned sour between Lufthansa and S. K. Modi, the Indian promoter.
ModiLuft Boeing 737-200 Martin. ModiLuft used a similar livery as Lufthansa
ModiLuft was the only airline in India to fly three classes in domestic network using the then advanced Boeing 737. It soon became a darling of travelers for its on-time performance. Thanks to Lufthansa Technik, the ground handling arm of Lufthansa. ModiLuft’s license was used to create what is now SpiceJet, and apart from that there is nothing in common between them. So why did I bring in this history?(more…)
Spice Jet kicked it off, and everyone else followed the suit. Creating a stir with a 50% discount on base fares and fuel surcharges for tickets bought 30 days in advance, Spice Jet let the cat amongst the pigeons of air, which let to a cascading effect. Within hours, IndiGo and Go Air introduced similar fare discounts, so did Air India later in the day and by late night, Jet Airways did the same.
The best part was that this came without any warning and took everyone by surprise. I was anticipating a price-war when Air Asia would eventually launch, which is a given in any case. Tony Fernandes, the Air Asia CEO has already announced that his Indian operations would provide dramatically low fares which perhaps would be lower than the current prices being offered by low-cost carriers. I was thinking may be the airlines would like to cash in the money they can now and prepare for the bloodbath once Air Asia comes along.
But this move certainly surprised me. The discounted tickets are only available on carefully selected routes, and the entire inventory is not part of this. In all probability, they only have 50% of their inventory open for these cheaper fares.
The fares from SpiceJet also do not come with a catch – oh yes, there is something that is free (or discounted in this case). These tickets are refundable with applicable cancellation fees. Which means, you can cancel the ticket and will be getting money in return upon cancellation. Now that is real bold move. In real world terms, this is a discount sale.
Apparently, the initiative is to ensure that they have enough load factor in the coming months which is a typical lean period for airlines. So if you have not planned, do it today – it is the last day.
I was planning for a week-long trip this November, and my plans started falling apart after I saw the airline ticket prices going up rapidly. The day (23rd Sept) I checked the fares, return tickets for two adults from BOM (Mumbai) to IXB (Bagdogara) via DEL (Delhi) travelling in November on Air India (1 stop with the lowest layover time) costed Rs. 19,601. The fare for the same flight went up to Rs. 22,408 the very next day. On 3rd day, the fare again changed to Rs. 24,402. Today, the same flight tickets would cost me Rs.36,282.
Woot! That’s a rock solid increase of Rs. 16,681 in ticket fare in just 4 days for a flight trip planned almost 2 months in advance. I had to wait for my salary to come to book trip tickets for this huge amount, and it now does not make any sense. As you might assume, I backed off from booking the ticket. (more…)
Air India is improving its performance, thanks to a tighter control on its bad practices, which is a good news. Although it has the 4th largest Market Share in India out of 6 Airlines is never a biggie, the best part is that it has started making profits in certain sectors. Profit or not, I strongly believe that Air India should be able to compete on par with all Private and International Players on almost every aspect, and not only Price.
I am tracking Air India’s progress on my blog as it is and will be my favorite airline for reasons unbeknownst to myself.
Below is the chart with Market Share of all Domestic Scheduled Airlines in India (except Air Mantra). (more…)
What’s with the pilots of Air India? They go on strike, refuse to let ex-Indian Airlines pilots to train on 777 Dreamliner, ground staff issues, lack of cost saving measures etc. have plagued the troubled carrier. An INR 30,000 crore infusion of equity from Government of India is by no means a small amount! And before you forget, that is the money we pay in taxes. We slog harder to make more money, only to pay more taxes.
Air India – flagship, in doldrums
Now the latest in the never-ending saga of turbulence in Air India is another Union, that of ex-Indian Airlines pilots. AI or Air India, has tried to revive itself step by step. This time, it is because of new flying rules for its Airbus fleet (many from its Indian days) which helps in saving fuel.
The airline recently modified its acceleration altitude while taking off for their Airbus fleet. This is a method followed by many of its international competitors of repute. But the Indian Commercial Pilots Association (ICPA) has instructed its members not to follow the new flying rules, citing safety concerns.
Well safety has to be most important of all, but to cry over a proven method is a bit uncalled for. Another thought around this action also calls for pilot’s inability to adapt to newer generation of its planes. Officials recount that if they fly newer generation aircraft in old generation way, what is the point?
Having followed two of country’s biggest aviation debacles of this decade, I have started accepting the fact that they may not last long. Of the two, Kingfisher is already in doldrums and I have already covered it many a times on my blog. And the other one is Air India.
Why Air India now? Because I was just imagining what if today’s Air India was not backed by Government? It will just exactly be another Kingfisher.
What is plaguing aviation sector in India today? Is it higher fuel costs or inefficiency? If it was the former, then how come IndiGo Airlines is in profits today after just 6 years into its operations and also be the market leader? Jet Airways had always ruled the roost in India and is on top during last two decades among Private airlines and to topple them, you need meat! And thats exactly what IndiGo did.
What makes the airline different? For starters, it only uses one type of Aircraft, the Airbus A320. This keeps its cost in check and second, has outsourced its aircraft maintenance operations to SriLankan Engineering, a subsidiary of SriLankan Airlines. This is due to excessive taxations imposed on local MRO providers. Then it sticks to its low cost model and really does not experiment out of its core operations or have a business class on its planes. Except for its IndiGo plus services which offer on board meal and predefined seating at a small fee. While keeping the costs low, it has a very strong emphasis on on-time performance which makes it really likable for a frequent traveller. And hardly comments have come my way about rude IndiGo staff or unsatisfactory services as compared to other airlines, including Jet.
What surprises me even more is the fact that Indigo is rapidly expanding its fleet at the same time and is currently adding a new A320 every 6 weeks!
Now think about this with Air India and Kingfisher, both Airlines currently in doldrums while former is walking on a blanket of tax payer’s money. Air India has both Airbus and Boeing Fleet for its operations and Kingfisher is operating Airbus and ATRs, with a Boeing 727 exclusively used for UB Group. The maintenance costs for multi-make aircrafts goes significantly up as the airline has to hire specialists for a type of air craft or invest in months of training for its engineers. Air India has multi-make Aircrafts for political reasons too. India has been promoting foreign investment in India by the manufacturer in exchange of confirm orders for Airbus or Boeing.
I am reiterating my earlier post about Air India and its treatment of employees, its Internal customers. And Kingfisher is just following suit. Strikes, delay in payments. I wish to see the aviation sector continue to grow. And I will read these very words back again.
What led me to write about it? I stumbled upon a wikipedia article on Concorde and had the time to read it through. The most interesting part is what I read afterwards. Over the coming weeks, I am planning to research a bit about these and compose them for all of us to read. I am sure this is going to be interesting for all of you here.
The Wright Brothers were the first ones to be able to commercially build an aircraft as we know today, but our history is star studded with aviators of folkfare. Leonardo DaVinci, Issac Newton and instances or references to those in Indian vedics who enabled Lord Rama and Ravan to fly across seas are just a few examples.
But that is not I am thinking right now. There are already many who have read and written about them. I am more amazed by the fact that having formally invented an aircraft for our industralized age in 1900’s from non existance, we still had pioneers who started thinking about Supersonics in early 1950’s. A Boeing 747 was planned nd the first model manufactured by late 1960’s and it still rules the roost. And dont even think that by 2025 an Airbus A380 will be grounded. And now what I read is by 2050, we will possibly see a hypersonic (breaching speeds of Mach 8) aircraft.
Can you imagine a world that has grown so fast. Consider space exploration for example where what was invented in 1970 is what we are using today. Or for that matter, this very medium. Internet. Being invented in 1990’s it has grown so fast.
Whats truly amazing about avaiation is that it has enable humas to fly, and travel at twice the speed of sound.
This is one of the many times Oil marketing companies have refused fuel to troubled Kingfisher airlines. In the past, they have done and they are doing it now too. The airline is pretty much grounded with 50 to 100 cancellations. I wonder how other airlines are able to cope up.
Vijay Mallya, the face of Kingfisher has even gone out of his way to seek help from government which has assured him of considering any sort of help possible, however not a bailout. I don’t think Kingfisher deserves a financial bailout but yes, any assistance other ways should be considered thinking of the fate of many employees who are at the risk of losing their jobs. It is the last thing aviation industry wants to see. As well, Kingfisher has sought to import fuel directly and use it for its airline operations. Hmm, that way he can save state taxes? I need some law people to help me understand how?
Having keenly observed the rise of aviation industry, a correction was due and airlines started responding by increasing the prices where possible and then seeking independence in pricing strategy from government. Mandates to fly non-profitable routes from government is hitting all airlines badly given the constant raise in the fuel prices. Plaguing issues like depreciation of rupee making expenditure in US Dollar or Euro terms even more costly.
I don’t think media has the right to sensationalize the issue linking up personal lifestyle of Vijay Mallya. He is the face of the airline, which doesn’t mean he is the only one running the airline. And the state of Indian aviation does not paint a rosy picture at the same time. Linking up to personal lifestyle is like linking up our Politicians to their chairs. Politicians cannot lavish on tax payers money and neither should.
Yes there are airlines which posted profits, like IndiGo. And if anyone asks me personally, I would like to Fly Kingfisher than IndiGo for the pure lure for luxury and something I could afford. After gobbling up Air Deccan and turning it into a Frills Low cost airline, Kingfisher Red, what Mallya has done is to give luxury to middle class. If Captain Gopinath has given Indians an airline to simply fly, Mallya gave it luxury.
I don’t align with the theory of Mallya’s decision to shut down Kingfisher Red. One business where you have volumes, where you have more opportunities to cut costs, gets much better efficiencies. Extracting profits, leveraging your prime slots, get back to the fight with medium fares to low fares. If I was in Mallay’s shoes and I had to shut down Kingfisher Red, I would have done that differently.
I would have brought back Captian Gopinath and ask him to manage this business separately with keeping 51% stake for myself and giving rest of the 49% for his company. And from the money I gain from the sale of 49% stake, I would have bailed out my airline. Or Captain Gopinath would not agree, I would have gone for someone else who is able enough.
From the recent news I hear, Kingfisher is in talks with an Indian Company for a stake sale. Yay, why did it took so long?
Air India has everything it possibly can, except for productivity. Majority of the airline work force are working like typical babus who work from 9 to 5 with more than 180 off days in a year.
The recent cash crush is caused by inefficient management of resources and underling assets that are not utilized. There were question raised on why does not sell 25% of the stake to a Private company so that Air India can clean up the mess.
If any wants to see an example of a world class company that is fully government owned, look for Temasek. It is Singapore Government’s investment company that has around 350 employees and manages assets around US$130 Billion. And it is a multinational. Or look at Singapore Airlines. A Government controlled airline that is now the best airline in the world.
Why can’t National Aviation Company of India pull up their socks and start working? By stopping pay cheques, isn’t touching employee’s loyalty any where? Or just because its government money and people will keep paying taxes, you don’t have performance responsibility?
I would like to mention what I had read in DNA news paper where the author (sorry, forgot the name, can some one send that story link or the name of the author) who is an ex-board member of Indian Airlines mentioned what changed in Indian Airlines that is not happening in Air India or now NACL.
It’s the Employees motivation factor. Employees are the internal customers and if you don’t treat them good, the external customers are going to suffer.
If you are wondering that airline has old staff (Air Hostess) as a reason, that you would be wrong. I have only travelled twice on Air India and it has been a pleasant journey for me, with Air Hostess and Stewards giving proper attention and treated everyone equally. Even the sister airline, Air India Express was very good and comparable to some of Private airlines.
The problem is not onboard aircraft; it’s with the management and its work culture of a typical babus. The managers are not chosen on merit or are under performing because once you become permanent, no one can push you out. Or if that happens, the Worker association starts an agitation and strike, further dampening the airline.
If you plan to privatise, then employees start an agitation. They do that because then they become accountable and which is bad for their leisure.
This is the culture that needs to change in Air India and only then will be there any hope revival for country’s premier airline. Brining on board Ratan Tata may help in getting more money from Government, but I guess even Tata will not be interested in taking reins on the Airline with no control over the staff performance.
This Blog post was selected for the Tangy Tuesday Picks by blogadda.com Tangy Tuesday Picks – July 28, ’09
Budget airlines are now introducing new flight service and schemes to either expand the aviation pie or wean away passengers from other players.
Kingfisher Inside
Almost all the no-frills airlines are going all the way to woo fliers with service offering that leaves little difference between full service carriers such as Jet Airways Kingfisher airlines, Air lines and Paramount Airways. SpiceJet Ltd had started offering tea and coffee about a month ago, will now be serving breakfast onboard its aircraft. The airline has also done away with the charge of Rs 500 on unaccompanied child and extra baggage fee for overseas travellers that have connecting international flight within 24 hours.
The trend that started off when Kingfisher Red started offering snacks fliers.
