Aggressive competition forces Indian to reduce fares
NEW DELHI: If you can't fight them, join 'em. That seems to be the survival motto for Indian, the country's national carrier. Faced with aggressive competition from low-cost airlines in the past six months, the carrier has been forced to drop its price line, in some cases even lower than the low-cost airlines.
"We haven't been able to fill up the aircraft at higher fares. Every time we've upped fares, forward bookings have fallen. Plus, customers have come to expect lower fares, thanks to the deals from low-fare carriers," said a senior official from Indian on condition of anonymity. Three months ago, Indian was merged with Air India to form National Aviation in the search of better economies of scale.
But to make matters worse, airline capacities have gone up by 35% in the past one year. While traffic, too, has grown during the same period, airlines have been under constant pressure to fill the demand-supply gap.
Speaking on behalf of travel agents selling Indian tickets, Madhav Oza, a Mumbai-based consolidator, says with its new fleet, the airline should have been able to go in for higher revenues. Indian is currently in the middle of a massive $2-billion fleet-induction programme to bring in 43 new Airbus planes. However, it has completely failed to capitalise on this.
There is very little advertising on the new planes or service quality, and not too many people even know how many of the new planes are part of the fleet. The last media communication by the airline about its operations was on June 23, when it claimed to have got back market leadership. Since then, according to the latest DGCA figures on market share, Indian's share has come down from 21% in the April-June quarter to 19.8%.
The result: the full-service airline - with its full complement of food, service and passenger comforts - hasn't been able to command a premium over low-cost carriers. Passengers are now able to buy seats on par with and even lower than low-cost carriers like Indigo, GoAir and SpiceJet. A study of fares quoted by the eight domestic airlines on the 10 busiest routes in the country shows that Indian fares are about 10% to 25% cheaper than the full-service carriers Kingfisher and Jet Airways (Deccan has already begun upgrading its fares, marginally higher than competing low-cost carriers).
Indian's last minute 'Unchecked fare' system, where unsold ticket inventory is sold at prices usually lower than the regular fares till two hours before departure, has also contributed to lower realisations. Some savvy passengers have begun converting their higher fare ticket to these last-minute fares. Cancellation charges are only Rs 750 and changing over to these fares makes sense if it is available cheaper, says an Indian frequent flier.
One-way economy fares for morning peak hour flights during the post Diwali week beginning 13 November, for instance, show Indian pegged at Rs 4,573 on the Mumbai-Delhi route, while Kingfisher and Jet are both selling at Rs 5,221, a difference of over 10%.
Low-cost airlines Indigo, JetLite and Deccan are pegged higher at Rs 5,044. SpiceJet is the only airline on this route selling lower at Rs 4,340. This pattern holds true for at least 10 other routes, which account for a significant chunk of domestic air traffic. It's the same story on corporate fares, which is a major source of income for full-service airlines, said a senior travel executive with a large oil major.
The repercussions aren't hard to guess. But so far, unlike the other listed airlines, it is impossible to figure out the impact of the lower realisations on the Indian balance sheet. The company has yet to file its results for the financial year 2006-07; there are also no quarterly or half-yearly result updates on performance. While there is no clear indication of when the full picture of Indian's performance will finally emerge, the pricing pressures offer a sneak preview of the turbulence that the country's national carrier is flying through.
http://economictimes.indiatimes.com
Kashmir witnesses 30 percent increase in air traffic
Low-cost airlines make travel affordable
Srinagar, Nov 10: With a number of private airlines foraying into Kashmir, the air traffic in the Valley has witnessed a sharp increase over past some time.
Presently seven airlines viz. Spicejet, Jetlite, Air Deccan, Kingfisher, Indian Airlines and Go Air and Jet Airways operate daily flights from Srinagar-Jammu, Srinagar-Delhi and Srinagar-Mumbai.
“There has been around 30 percent increase in the air traffic this year so far as compared to the last year,” said Manzoor Ahmad, authorized agent of several private airlines.
He said the air traffic has increased due both to local rush as well as increase in tourist flow through out the year.
A travel agent said the traffic witnesses more increase between October to March. “Many people from Kashmir during these months go outside for business and other purposes which in turn increases the bookings manifold. During this period the airlines ferry a huge number of passengers from Srinagar to Jammu and Srinagar to Delhi,” he said.
The introduction of low cost airlines like Spicejet, Go Air and Deccan has made air traveling affordable for small budget passengers.
“The budget airlines do provide a good option to the passengers especially during the winters when the Srinagar-Jammu highway often remains closed,” Javaid Ahmad, a travel agent said.
He said many people who earlier would travel Jammu by road now prefer budget airlines. “This season too we expect a good number of bookings. Many people have booked the tickets one month in advance,” he added.
He said the Go Air and Air Sahara, which was recently acquired by Jet Airways and named as Jetlite were operating direct flights from
Srinagar to Delhi and Srinagar to Mumbai and offering good connectivity to more destinations.
Usually customers prefer budget airlines to the normal fare airlines, but the high cost airlines too have a good market. “The only difference between the two is that the budget airlines don’t provide refreshment to passengers. While the no-frill airlines provide no free refreshment,” he added.
Apart from this the airlines offer several discounts from time to time. “A couple of low-cost airlines are offering attractive offers during the current festive season on some routes. Many airlines are offering discounts on the advance booking,” Javaid said.
http://www.greaterkashmir.com
Simplifly Deccan's Destinations
This is a list of airports served by Simplifly Deccan.
India
Andaman and Nicobar Islands,Port Blair,Andhra Pradesh,Hyderabad (Begumpet Airport),Puttaparthi,Rajahmundry,Tirupati,
Vijayawada,Visakhapatnam,Assam,Dibrugarh,Guwahati (Lokpriya Gopinath Bordoloi International Airport),
Lilabari,Silchar,Bihar,Patna,Chandigarh,Chhattisgarh,Raipur,Delhi (Indira Gandhi International Airport),
Goa (Dabolim Airport),Gujarat,Ahmedabad (Sardar Vallabhbhai Patel International Airport),
Bhavnagar,Jamnagar,Kandla,Rajkot,Surat,Vadodara,Jammu and Kashmir,Jammu,Leh,Srinagar,Jharkhand,
Ranchi,Jamshedpur,Karnataka,Bangalore (HAL Bangalore International Airport) Hub,
Belgaum (Belgaum Airport),Bellary (Bellary Airport),Hampi (Hampi Airport),Hubli (Hubli Airport),
Mangalore (Mangalore International Airport),Kerala,Kochi (Cochin International Airport),
Kozhikode (Calicut International Airport),Thiruvananthapuram (Trivandrum International Airport),
Madhya Pradesh,Bhopal,Gwalior,Khajuraho,Indore (Devi Ahilyabai Holkar International Airport),
Jabalpur,Maharashtra,Aurangabad,Kolhapur,Mumbai (Chhatrapati Shivaji International Airport),
Nagpur,Nasik,Pune,Manipur,Imphal,Mizoram,Aizawl,Orissa,Bhubaneswar,Punjab,Amritsar (Raja Sansi International Airport),
Pathankot,Rajasthan,Jaipur,Tamil Nadu,Chennai (Chennai International Airport), Coimbatore,
Madurai,Tiruchirapalli, Tuticorin, Tripura,Agartala, Uttarakhand, Dehradun,Uttar Pradesh,
Kanpur, Lucknow (Amausi Airport),Gaya,West Bengal,Baghdogra (Bagdogra Airport),
Kolkata (Netaji Subhash Chandra Bose International Airport)
Airbus hopes to sell 55 A380s in India
Wednesday, May 09, 2007: European aeroplane maker Airbus Industrie hopes to sell 55 of its A380 planes, including 10 freighter aircraft, in India in 20 years.
A source close to the development said low-fare carrier Air Deccan, domestic carrier Jet Airways and state-owned Air India and Indian Airlines have evinced interest in the A380.
Thus far, Kingfisher is the only Indian carrier seeking the plane, which has 853 seats in an all-economy configuration and 475-525 in a three-class configuration.
Airbus is hoping that even budget carriers and short-distance fliers will be able to see the cost benefits of flying a large number of passengers in one plane.
"This is ideal for budget carriers in India as A380 can be deployed on short-haul routes with minor changes in the engine structure," says a senior Airbus executive.
Boeing 747-400 and 747-800, favoured by many international air carriers, have 370 and 405 seats, respectively. Air Deccan managing director G R Gopinath said A380 was a superior airplane, but "we have no immediate plans".
Boeing operators beg to differ. "Operating the A380 would be too costly and not viable for a budget carrier. This airplane is designed for long-haul services," said an executive with an airline that runs a predominantly Boeing fleet. Boeing representatives could not be contacted for comment.
An airport executive said no airport was ready to handle commercial flights of A380 in India. "Airports will have to invest heavily to become compatible with A380.
Moreover, there could be natural restrictions to other carriers when an A380 is taking off. This will shoot up the cost of carriers and increase delays at airports," he added.
Kiran Rao, executive vice-president (marketing & contracts, customer affairs) of Airbus said, "All major airports of India are capable of handling A380 as it requires 10 per cent less runway length to take off and 5 per cent less to land compared with a Boeing 747." He said it also burned less fuel. Sources said Kingfisher was planning to convert its five options for buying A380 into firm orders, taking its total order to 10.
However, Vijay Mallya, the airline's chairman and CEO, said: "I am yet to take a decision in this regard. We are planning to deploy the plane on the India-US route for non-stop services. I will be offering US flights 30 per cent cheaper with A380."
Source: rediff.com
Web Design: The arrangement and creation of web pages that in turn make up a web site. There are many aspects to this process, and due to the rapid development of the Internet, new aspects are continually being added. As far as business oriented web sites go, the basics currently consist of (in order of importance):
|