Air India's turn around plan
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HOGWASH
If one were to read thru this in it's entirety it is a sorry pathetic lame finger pointing exercise. They don't have the guts to either assign blame or give a realistic solution.
Have they ever flown their own premium service and compared it to other airlines? Premium does not mean a large seat up front but the entire experience.
Cargo load factors declining, Well they don't have options or accessibility and their staff work like govt officers on tea breaks.
1) New Aircraft are needed and old leases and older aircraft retired, but they say the opposite as there is huge austerity drive and save money drive the govt has in place.
2) Parking space for lifetime employees who are in many cases counterproductive, instead they are saying manpower agreement review.
I am sure many more shallow and kinder garden like business strategies will be put forward by good people who are living under a populist shadow of an incumbent government that is scared of the vote bank and bad publicity
In order for this airline to rise it needs to first fall. Govt should not step in when 30,000 employees start screaming bloody murder and then start it as another carrier with the govt a minority stake holder.
Guess what the removal of AI capacity will do to boost the other airlines bottom lines.
Have they ever flown their own premium service and compared it to other airlines? Premium does not mean a large seat up front but the entire experience.
Cargo load factors declining, Well they don't have options or accessibility and their staff work like govt officers on tea breaks.
1) New Aircraft are needed and old leases and older aircraft retired, but they say the opposite as there is huge austerity drive and save money drive the govt has in place.
2) Parking space for lifetime employees who are in many cases counterproductive, instead they are saying manpower agreement review.
I am sure many more shallow and kinder garden like business strategies will be put forward by good people who are living under a populist shadow of an incumbent government that is scared of the vote bank and bad publicity
In order for this airline to rise it needs to first fall. Govt should not step in when 30,000 employees start screaming bloody murder and then start it as another carrier with the govt a minority stake holder.
Guess what the removal of AI capacity will do to boost the other airlines bottom lines.
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the removal of AI capacity will do to boost the other airlines bottom lines.
let AI die and the pvt airlines can pickup the quality staff and the routes...drop the stupid 5 yr ban on pvt airlines to go Intl routes...
let AI die and the pvt airlines can pickup the quality staff and the routes...drop the stupid 5 yr ban on pvt airlines to go Intl routes...
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i agree left wing. but, nothing will be done until they suck every drop of blood from the country for themselves, like they have been doing for 30 years.
India has a market for around a 100 widebodies immediately, and possibly another 150 in the years to come.
until A/I and the DGCA are immersed in the Bay of Bengal, Emirates, SIA, Qatar, Etihad, etc, etc, are, and will be laughing all the way to the bank.
India has a market for around a 100 widebodies immediately, and possibly another 150 in the years to come.
until A/I and the DGCA are immersed in the Bay of Bengal, Emirates, SIA, Qatar, Etihad, etc, etc, are, and will be laughing all the way to the bank.
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Same problem in all PSU's and life in India. People get so used to the freebies and handouts, that they cry bloody murder when they are asked to work for it. Yes I am sure there are some quality people there in AI, but you knwo as they say, a few bad apples!
And not to forgot gopi and his 1 buck fares that are part of creating this hand out culture
And not to forgot gopi and his 1 buck fares that are part of creating this hand out culture
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And not to forgot gopi and his 1 buck fares that are part of creating this hand out culture
On what basis are you saying that all this was started by Gopi.
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air india is in the unenviable position of being the favorite punching bag of the customer(which in majority of the cases is well deserved) on one hand and the scapegoat for all the misdeeds of the ministry and its own bosses on the other.
i agree it was never a lean mean airline capable of holding its own against other competitors without the government support, but i feel its current state is not entirely its own fault. a loss figure off around 5000 crores annually is unprecedented, it has a wage bill of around 3000 crores annual which is higher than say jet airways which i guess is in the neighborhood of 1200 crores( and hiring roughly a 1/3 of air india employee, so it gives u an idea that the salaries are more or less at par). so even if we were to have their employees as bonded labor and work for free, this airline still would make a loss of 2000 crore annually. so something isnt quite right when we blame just the over paid employees. in my view the following points are worth a consideration
the routes it flies, for eg. emirates operates 5 wide body flights daily to mumbai, and air india operates a 321 and a 777 flight daily to DXB out of BOM, not to mention the mind bogling destinations air arabia flies to india, and our national carrier flts to SHJ can be counted on your fingers.air india actually curtailed operations to middle east their cash cow, when the private airlines started flying there.
a airlines which never had turnover over 300 crores decided to purchase aircraft worth over 20000 crores at one go and the guys in the ministry who did this expect it not to make a loss?
so, you saddle it with aircrafts brand new ones, but it they arent deployed on competitive routes cause u want to benefit your bum chums airline and when the loss starts piling up u point at the employees and say- dude there are over 1200 guys in air india making over 25 lakh a year,well im curious whats that figure for any private airlines with a similar fleet, those numbers have to be 99.9% flight crew only.
what it needs is the same as any other airline would. honest leadership and a good weeding of non performing employee/and assets unfortunately it has none of the former and plenty of the latter
i agree it was never a lean mean airline capable of holding its own against other competitors without the government support, but i feel its current state is not entirely its own fault. a loss figure off around 5000 crores annually is unprecedented, it has a wage bill of around 3000 crores annual which is higher than say jet airways which i guess is in the neighborhood of 1200 crores( and hiring roughly a 1/3 of air india employee, so it gives u an idea that the salaries are more or less at par). so even if we were to have their employees as bonded labor and work for free, this airline still would make a loss of 2000 crore annually. so something isnt quite right when we blame just the over paid employees. in my view the following points are worth a consideration
the routes it flies, for eg. emirates operates 5 wide body flights daily to mumbai, and air india operates a 321 and a 777 flight daily to DXB out of BOM, not to mention the mind bogling destinations air arabia flies to india, and our national carrier flts to SHJ can be counted on your fingers.air india actually curtailed operations to middle east their cash cow, when the private airlines started flying there.
a airlines which never had turnover over 300 crores decided to purchase aircraft worth over 20000 crores at one go and the guys in the ministry who did this expect it not to make a loss?
so, you saddle it with aircrafts brand new ones, but it they arent deployed on competitive routes cause u want to benefit your bum chums airline and when the loss starts piling up u point at the employees and say- dude there are over 1200 guys in air india making over 25 lakh a year,well im curious whats that figure for any private airlines with a similar fleet, those numbers have to be 99.9% flight crew only.
what it needs is the same as any other airline would. honest leadership and a good weeding of non performing employee/and assets unfortunately it has none of the former and plenty of the latter
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Gopi
He started a non viable low cost model that never made money, sold and ran when he could. In the bargain others were forced to follow suit and it became a situation which is hard to get out of.
His dream to make every Indian fly is now making it a nightmare for every airline that has to cope with a passenger who demands the Rs 1 fare. Once you give a handout it is very hard to take back.
It is my opinion that people who come in for a short while and do stuff like this spoil the business for other serious players. I am willing to bet his cargo business will go the same way.
Again purely my views which are strongly biased against fly by night players like Gopi.
His dream to make every Indian fly is now making it a nightmare for every airline that has to cope with a passenger who demands the Rs 1 fare. Once you give a handout it is very hard to take back.
It is my opinion that people who come in for a short while and do stuff like this spoil the business for other serious players. I am willing to bet his cargo business will go the same way.
Again purely my views which are strongly biased against fly by night players like Gopi.
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Deccan 360
Hey,
I mean it's a little unfair to say this guy didn't know what he was doing. I don't think anybody would predict a ton of airlines to instantly emerge and go crazy. Remember, LCC in India are the only ones making money. Wait a minute, in most countries LCC are the only one making money? You can't fault the guy, he had a GOOD business model, that needed time to make money. Why is it that everybody is going back to LCC? OKay, they are all bleeding, but the big international carriers don't really make money on their economy passengers, they make it on their high paying Business/First Class tickets. I think Sydney to LA is something like 20gs first class. Yummy!
His cargo ops will do well. He's setting it up for foreign investors, hence the name 360 -worldwide. Fedex, intel, IBM, and singapore airlines are all making a bid. He's setting up the infrastructure in the country, and he knows what he is doing.
However, when you deal on cargo "contracts" thats when things can go south. Fedex/UPS don't contract other shipping companies to the large scale that say Korean Air Cargo, Singapore, Evergreen, ATLAS, Polar, or any of the other big carriers do. So when the contract goes, they are stuck with a very expensive fleet of paper weights.
I think the key in Deccan 360 is that they have both Domestic and Foreign industrial and manufacturing interest in the company, therefore locking the investors in. It's more then just an airline, but a cost reducing improvement in Indian's infrastructure, which will benefit people worldwide.
India has suffered more then any other country from threethings, and it shows in every aspect of life, especially the current Airline Industry:
Over-population, over taxation, and poor infrastrcture. All three seem to hurt each other. Deccan 360 looks to be combating the poor infrastructure, and there are no other players in the market so they'll have a monopoly. Once you establish a monopoly in the cargo industry ( UPS/Fedex) and grow to a certain point, it's impossible for other carriers to enter.
Just my 2 cents.
I mean it's a little unfair to say this guy didn't know what he was doing. I don't think anybody would predict a ton of airlines to instantly emerge and go crazy. Remember, LCC in India are the only ones making money. Wait a minute, in most countries LCC are the only one making money? You can't fault the guy, he had a GOOD business model, that needed time to make money. Why is it that everybody is going back to LCC? OKay, they are all bleeding, but the big international carriers don't really make money on their economy passengers, they make it on their high paying Business/First Class tickets. I think Sydney to LA is something like 20gs first class. Yummy!
His cargo ops will do well. He's setting it up for foreign investors, hence the name 360 -worldwide. Fedex, intel, IBM, and singapore airlines are all making a bid. He's setting up the infrastructure in the country, and he knows what he is doing.
However, when you deal on cargo "contracts" thats when things can go south. Fedex/UPS don't contract other shipping companies to the large scale that say Korean Air Cargo, Singapore, Evergreen, ATLAS, Polar, or any of the other big carriers do. So when the contract goes, they are stuck with a very expensive fleet of paper weights.
I think the key in Deccan 360 is that they have both Domestic and Foreign industrial and manufacturing interest in the company, therefore locking the investors in. It's more then just an airline, but a cost reducing improvement in Indian's infrastructure, which will benefit people worldwide.
India has suffered more then any other country from threethings, and it shows in every aspect of life, especially the current Airline Industry:
Over-population, over taxation, and poor infrastrcture. All three seem to hurt each other. Deccan 360 looks to be combating the poor infrastructure, and there are no other players in the market so they'll have a monopoly. Once you establish a monopoly in the cargo industry ( UPS/Fedex) and grow to a certain point, it's impossible for other carriers to enter.
Just my 2 cents.
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It's always the early bird that gets the worms. Gopi had a brilliant business idea which could only work based on certain underlying factors remaining in his favour. Of course, the idea of LCC is not his, he simply copied success stories from the US and Europe and adapted them to Indian conditions. That his concept spawned so many copycats who followed him blindly speaks volumes about the "professionalism" of all these MBAs no doubt involved!
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He started a non viable low cost model that never made money
If it's non viable then why is AI planning to go this way.
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Schumi: the only reason AI is considering the LCC way is that they have been reduced to a domestic (or best regional) role. You can't do LCC on long haul, that's why even Ryanair won't touch it.
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the only reason AI is considering the LCC way is that they have been reduced to a domestic (or best regional) role. You can't do LCC on long haul, that's why even Ryanair won't touch it.
Spice jet, Indigo all made some profit last quarter but Jet and Kingfisher didn't.
My point is that why is LCC considered non viable by some people here. I might be missing something but would like to know more about it.
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Air Deccan Non Viable
Gopi's model was non viable. Currently if one were to check the low cost models of other airlines such as Indigo and Spice jet (the 2 that have just declared profits apparently), they are not selling their tickets at rock bottom prices like he was. Deccan was looking at alternate sources of revenue as an income churner (ads painted on the aircraft, strict 15 kg baggage, endorsements etc, and I doubt he broke even on operational costs on even one route. This in my lingo is a subsidy something what the Indian public has gotten used to living with ie: Frequent handouts like our govt keeps giving us
Indigo and Spice jet fares as always lower than full service but not by such a huge gap as Deccan was. Eg 9W is 20000 r/t they will be 16000. Deccan was probably trying to sell at 6000, which is plain idiotic.
Yes Schumi I am not an aviator, but I clock about 10,000 miles a month at times. To my untrained aviator eyes, but trained business eyes, Indigo is actually getting a better yield per aircraft with some of the following
1. Fewer crew and staff per aircraft
2. Simple straight forward Paid food service ( removal of hot beverages, if one of you could share how much that saves in fuel and time I would much appreciate as I would like to tell the next co passenger off with this educated info when he/she argues with the crew and complains there is no tea on a 45 minute flight).
3. Mind boggling rapid turn arounds. (At GOI yesterday Indigo was last in first out 22 mins by my watch, followed by spice, jetlite jet, KF and then AI which was first in last out 3 hours on the ground and counting when I left).
Overall while people might make noise etc, I feel Indigos service, aircraft (their crew seem to refresh the toilet after every 2 passengers use it) and no frills no mess service as well as only marginaly lower fares (yet enough) is enough to make it a correct LCC model for the Indian Environment.
And oh yes I can live without the pan walla who put his feet up and spat into the seat pocket on the Deccan flight. He was there because the ticket to Chennai was only 21 bucks round trip and he wanted to fly. Came back on the next flight for the price cheaper than a 3 hour Hindi movie as told in his words to me That to me is a non viable model and no tall claim to let the common man fly.
Just my Rs 1 plus fuel surcharge thought!
Indigo and Spice jet fares as always lower than full service but not by such a huge gap as Deccan was. Eg 9W is 20000 r/t they will be 16000. Deccan was probably trying to sell at 6000, which is plain idiotic.
Yes Schumi I am not an aviator, but I clock about 10,000 miles a month at times. To my untrained aviator eyes, but trained business eyes, Indigo is actually getting a better yield per aircraft with some of the following
1. Fewer crew and staff per aircraft
2. Simple straight forward Paid food service ( removal of hot beverages, if one of you could share how much that saves in fuel and time I would much appreciate as I would like to tell the next co passenger off with this educated info when he/she argues with the crew and complains there is no tea on a 45 minute flight).
3. Mind boggling rapid turn arounds. (At GOI yesterday Indigo was last in first out 22 mins by my watch, followed by spice, jetlite jet, KF and then AI which was first in last out 3 hours on the ground and counting when I left).
Overall while people might make noise etc, I feel Indigos service, aircraft (their crew seem to refresh the toilet after every 2 passengers use it) and no frills no mess service as well as only marginaly lower fares (yet enough) is enough to make it a correct LCC model for the Indian Environment.
And oh yes I can live without the pan walla who put his feet up and spat into the seat pocket on the Deccan flight. He was there because the ticket to Chennai was only 21 bucks round trip and he wanted to fly. Came back on the next flight for the price cheaper than a 3 hour Hindi movie as told in his words to me That to me is a non viable model and no tall claim to let the common man fly.
Just my Rs 1 plus fuel surcharge thought!
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AI to go LCC
If it's non viable then why is AI planning to go this way.
Lets discuss only if AI LCC becomes a money churner for them and that too in the exact formula that gopi adopted.
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I definitely would like to buy some extremely valuable points from wannabe.. especially about indigo..
infact in my opinion spice jet also aint doing bad..
Aviation is more or less a pretty straight forward industry..
What matters the most is planning and execution..
Now when we start talking about India..
We must first understand that the guys who actually were a support
of the boom were IT industry folks.. Now Aviation is a dependant industry meaning, our growth is directly proportional to the growth of other industries and this law holds good for any where across the world..
Now when we talk about Indigo..or even Spice to an extent..
They fly a relatively new aircraft.. their cabin crew are trained to please ..
food for sale.. water for free.. Pricing is modestly done enabling an upper middle class guy to actually consider shelling down his money than travel by train for days and nights..
Now thats exactly what an low cost airline should look for..
The pricing has to be done in such an way that the customer should think that he deserves to travel by air than in the train..
This is the exact strategy that an low cost carrier should adopt..
Now let us look at Full Service Airlines..
1. Full Service Airlines must realise that they are in for the gamble
in the industry more than the low cost carriers as primarily the passengers who travel on these routes are executives travelling on their company paid tickets.. And when the economy strikes hard.. u have cost cutting done by companies.. and full service airlines are obviously meant to see an fall in load..
2. The most important aspect with FSAs timings and aircraft utilization.
Now though both the points apply even to low cost carriers .. FSA dont have any kind of freedom for wrong planning..
Look at this ..
U ll have an Jet Airways 737800 departing bangalore for bangalore at 6.00am followed by an Kingfisher 320232 departing at 6.15am while an IC would be leaving on the same route at 6.30 am..
(timings are slightly exagerated)
Now the point is why operate two medium haul planes with just 40 pax on both ? As a result both face losses ..
Am not talking about IC here as no body cares about what they carry..
Also by 7am number of LCA crews are getting ready with their preflightchecks..
The point here is..
1. Change your aircraft to something smaller.
2. Be more sensible with your timings.
Now one fella that has been clever according to me here is
Paramount..
They call Y class as J class and as a result a lot people think they get to travel in business class with higher than Y class price .. they dont realise that they ve just paid for the costliest seat in the economy class on the same route..
Now when i am an airline owner and I have so many unemployed young CPL s around.. what would I do.. I would obviously try to make a profit out of it..and thats exactly they are doing..(am not justifying btw)
I would say 70 seats airplanes are the most idealistic for indian full sevice airlines unless they have deployed their 150 seater planes on high density routes such as DEL-BOM or BLR-BOM..
At the end it all comes down to proper planning and strategy execution..
If only I had the money to start an airline..
infact in my opinion spice jet also aint doing bad..
Aviation is more or less a pretty straight forward industry..
What matters the most is planning and execution..
Now when we start talking about India..
We must first understand that the guys who actually were a support
of the boom were IT industry folks.. Now Aviation is a dependant industry meaning, our growth is directly proportional to the growth of other industries and this law holds good for any where across the world..
Now when we talk about Indigo..or even Spice to an extent..
They fly a relatively new aircraft.. their cabin crew are trained to please ..
food for sale.. water for free.. Pricing is modestly done enabling an upper middle class guy to actually consider shelling down his money than travel by train for days and nights..
Now thats exactly what an low cost airline should look for..
The pricing has to be done in such an way that the customer should think that he deserves to travel by air than in the train..
This is the exact strategy that an low cost carrier should adopt..
Now let us look at Full Service Airlines..
1. Full Service Airlines must realise that they are in for the gamble
in the industry more than the low cost carriers as primarily the passengers who travel on these routes are executives travelling on their company paid tickets.. And when the economy strikes hard.. u have cost cutting done by companies.. and full service airlines are obviously meant to see an fall in load..
2. The most important aspect with FSAs timings and aircraft utilization.
Now though both the points apply even to low cost carriers .. FSA dont have any kind of freedom for wrong planning..
Look at this ..
U ll have an Jet Airways 737800 departing bangalore for bangalore at 6.00am followed by an Kingfisher 320232 departing at 6.15am while an IC would be leaving on the same route at 6.30 am..
(timings are slightly exagerated)
Now the point is why operate two medium haul planes with just 40 pax on both ? As a result both face losses ..
Am not talking about IC here as no body cares about what they carry..
Also by 7am number of LCA crews are getting ready with their preflightchecks..
The point here is..
1. Change your aircraft to something smaller.
2. Be more sensible with your timings.
Now one fella that has been clever according to me here is
Paramount..
They call Y class as J class and as a result a lot people think they get to travel in business class with higher than Y class price .. they dont realise that they ve just paid for the costliest seat in the economy class on the same route..
Now when i am an airline owner and I have so many unemployed young CPL s around.. what would I do.. I would obviously try to make a profit out of it..and thats exactly they are doing..(am not justifying btw)
I would say 70 seats airplanes are the most idealistic for indian full sevice airlines unless they have deployed their 150 seater planes on high density routes such as DEL-BOM or BLR-BOM..
At the end it all comes down to proper planning and strategy execution..
If only I had the money to start an airline..
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Also a small clarification..
I belive NACIL is not becoming an Low Cost Carrier..
It will only offer an low cost service on low density routes
while it will continue to remain an Full Service Airline on High Density Routes..
If properly executed.. Air India is all set to reach great heights..
I belive NACIL is not becoming an Low Cost Carrier..
It will only offer an low cost service on low density routes
while it will continue to remain an Full Service Airline on High Density Routes..
If properly executed.. Air India is all set to reach great heights..
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Its funny the way these wise and highly intelligent chintoos talk of Air India
as a non-entity in this forum. if it didnt get them medically down, they would
readily give their right arm to be in this kachra airline !
as a non-entity in this forum. if it didnt get them medically down, they would
readily give their right arm to be in this kachra airline !
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Also a small clarification..
I believe NACIL is not becoming an Low Cost Carrier..
It will only offer an low cost service on low density routes
while it will continue to remain an Full Service Airline on High Density Routes..
I believe NACIL is not becoming an Low Cost Carrier..
It will only offer an low cost service on low density routes
while it will continue to remain an Full Service Airline on High Density Routes..
Business restructuring
– low cost model
– Subsidiaries for Cargo, MRO etc operational
- Brand building & Makeover
Indigo and Spice jet fares as always lower than full service but not by such a huge gap as Deccan was. Eg 9W is 20000 r/t they will be 16000. Deccan was probably trying to sell at 6000, which is plain idiotic.
the top officials in AI (or any other airline or company) are not paid to copy others but to use their own mind and take good appropriate decisions.
Its funny the way these wise and highly intelligent chintoos talk of Air India
as a non-entity in this forum. if it didnt get them medically down, they would readily give their right arm to be in this kachra airline !
as a non-entity in this forum. if it didnt get them medically down, they would readily give their right arm to be in this kachra airline !
You are right and I bet when you grow up you will be one of those in the queue.
As for me, well I am a helicopter pilot. So, i can't work for AI.
As for me, well I am a helicopter pilot. So, i can't work for AI.