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Air Deccan plans 'very low-cost' flights
M D Riti in Bangalore |
July 02, 2003
We will be the Udupi hotels of the airline business," declares Captain Gopinath, founder promoter and chief executive officer of the new private airline, Air Deccan.
Why Gopinath uses the metaphor of the hugely popular Udupi cuisine is not hard to find: he and his wife, Bhargavi, own and run Butter Sponge chain of bakeries in Bangalore.
But, now he plans to shake up the Indian airline business.
Come August 15 and this small airline will roll out over 50 flights every day at very low rates. Air Deccan plans to fly daily from 0600 hours to 2400 hours.
Soon, you will be able to fly from Bangalore to Chennai or Kochi to Hyderabad for just about 20 per cent more than what the first class train fare would cost.
And just how will the airline be able to do this?
By providing the flier with a bare bones airline. No frills whatsoever. No fancy food or drink. Just juices in cardboard cartons and colas in cans. Possibly, packets of sandwiches, cakes and biscuits. But these at a price, of course.
The airline plans to have just one airhostess per flight. No fancy connecting flights. No frequent flier miles. No plush business lounges. Not even liveried staff. And certainly no cutlery whatsoever! But if you want to get from point A to point B safely and quickly, and get back in the same evening, you can do it on Air Deccan.
This new company is owned by Deccan Aviation, India's premier air charter company, that now has a fleet of aircraft stationed at eleven bases.
The chairman of the company is Lieutenant General N S Narahari (retired). Its most high profile promoter and director is Indian tennis legend Vijay Amritraj who lives in California, US.
The airline, however, is the brainchild of Capt. Gopinath, the enterprising Indian Air Force officer who retired early from service and decided to get into the business he knew best: the business of flying.
He got together with a colleague, Captain Samuel, and started Deccan Aviation at Jakkur aerodrome on the outskirts of Bangalore. Gopinath is now founder and managing director of Deccan Aviation, while Samuel is executive director. Another old friend of Gopinath's, Jayant Pooviah, is both vice president and a pilot.
Gopinath was inspired by the success of South West Airlines in the United States and Ryan Airlines in Europe, both economy airline services, that are doing very well.
"Their business strategy is simple enough. If you can increase your volume of business, you can lower your fares," he says.
Gopinath's fares are based on an expectation of 100 per cent occupancy of every 48-seater aircraft that he will fly.
"The US has 40,000 flights a day to service a population one-fourth the size of ours," explains Gopinath, talking to rediff.com from the office of the yet-to-be-launched Air Deccan in Bangalore.
"There are just 400 flights a day now all over India. If I can even grow at the rate of one per cent a year, I would be doing tremendously well."
While he is unwilling to reveal the exact turnover projections now, in monetary terms, Gopinath puts it across in terms of passenger volume. He hopes to transport 50,000 to 60,000 passengers a month, thereby flying about 600,000-700,000 passengers in a year.
Next year, he hopes to increase that number to one million passengers. Calculating at a very conservative estimate of Rs 500 per passenger, that amounts to a turnover of Rs 3.5 crore (Rs 350 million) in the first year alone.
He already has a letter of credit to buy six ATR turbo-prop aircraft from France. The planes will arrive by the end of July. They are not new, but old machines.
However, Gopinath is confident that they will be in excellent flying condition. The firm has recruited 42 pilots already, and they are all right now being trained on ATRs in France. There are also 20 airhostesses on the rolls.
Ticket booking will be particularly simple. E-tickets can be bought over the Internet through a computerised reservation centre using your credit card. This reservation will give you an identification number. If you give that number at the ticket counter at the airport just before the departure of your flight, you will be given a boarding pass.
There will be a 24-hour call centre with a globally toll-free number. This will be answered by real human voices, not machines. You can book a ticket through the call centre, then pay within 24 hours in cash into the firm's bank account, if you do not wish to use a credit card, he says.
Eventually, you will also be able to book your air tickets on this airline at food store chains, just the way you buy your groceries .
Air Deccan plans to fly to all the unconnected areas of the country, like Rajamundri, Belgaum and Hubli. It will also provide better connectivity between places like, say, Madurai and Bangalore or Mumbai and Hubli, with direct flights. Return flights to fly passengers back the same day too are available.
Gopinath calculates that if his airfare is less than a first class train ticket and a night's hotel stay, he will have captured this one-day visitor market.
Bangalore will continue to be the firm's headquarters. At present, it will operate out of air bases at the four capitals of the southern states. Once this market has been saturated, the firm will start spreading bases to north India. This should not be hard to do as the parent company, Deccan Aviation, already has bases everywhere.
Flying time will, of course, be more in these small aircraft than in the jets used by the bigger airlines. This is why Gopinath does not plan to fly long distances, like Bangalore to Delhi, for instance.
But for shorter distances, the additional flying time will also be small, and considering the huge difference in fares, it will be attractive to the passenger.