Tuesday, March 15, 2005

Indias budget airline markets flying...

Air Deccan is Indias first budget airline. Why is this a big thing? Deccan airways is not very big, not yet, but it has got noticed.

India had been dominated for a while by the state owned carriers (Indian Airlines and its subsidiary Alliance air) in airlines until this sector was opened up in the 90s. In the initial euphoria there was an East West Airlines, a Modi Luft, a Damania, NEPC and a few other small players all of which turned belly up at some point in time.

The second wave saw the emergence, from the ashes of these airlines, two carriers, Jet Airways and Air Sahara and each of these alongwith the Indian Airlines and Alliance air have their own set of customers today. They have, recently, started or are in the process of flying to foreign locations. Things were set for a dogfight in the Indian skies even as each of these above airlines fought on the same turf.

Air Deccan was launched as Indias first budget airline. Air Deccan is a unit of Deccan Aviation Private Limited, India's largest private heli-charter company. And instead of targetting the regular metropolitian cities fliers (For example, the Bombay Delhi airline route has a flight almost every 45 minutes) it targetted the second rung cities which the regular airlines have tried their best to avoid.

Air Deccan has minimal flight pursers/Air hostesses on board. It opened its seats/flights for inflight advertising and its planes are nearly flying bill boards. Snacks are not served on board, those who want some have to pay for it. There are no online auctions or periodicals to read. It also positioned its fares just a little over the Airconditioned class on railways, pretty much the only other mode of travel. Road travel in India is not as comfortable as the railways and driving can get very stressful on roads, where traffic can flow in any direction.Average speeds of both roads and railways are quite low.

Besides betting on the non metro traveller, Deccan also launched a super low fare of 500 bucks for select seats if booked sufficiently in advance. 500 bucks (The undiscounted fare via regular airlines is about 6000 rupees) for a Bangalore Delhi flight, translated into dollar terms is about 12 dollars for a distance that is the roughly the equivalent of the distance between Boston and Chicago. Needless to say, the tickets were snapped up in no time. With its slogan of "Simplifly", Deccan has simplified the business of flying.

How to change the mindset of people bought up on socialist moorings where being rich was a crime and where flying was done by just the rich? I have written here, here and here about the effects of online buying in general in India and about the innovative marketing practices of Deccan Airways in India.

Deccan has a good (not great) online booking application, but India has few people with reliable and fast connection online other than those in the tech industry. That leaves a huge segment to be tapped. Deccan has tried mobile ticketing shops, tied up with Petrol bunk owners, mobile phones (whose ownership significantly exceeds those with a computer and a net connection) and billboards at some fairly pedestrian locations.

It may not be that easy to break the socialist mindset and move it to something as radical as, people buying tickets as easily as a kilo of potatoes or a litre of petrol. "Honey, I bought a return ticket to Bombay while I filled petrol in our bike" may be a while away, but by making the airline aware and accessible to a vast segment of potential travellers, Deccan Airways may lure more people to the skies.

A lot has been written about innovative marketing practices in India by cellphone providers (with among the lowest cost of services in the world they still make profits). Windows is launching a stripped down version of its software. Nokia came out with its "Made for India" handset that sells for some 3000 bucks (80 dollars or so). Deccan still has some way to go before it gets its punctuality and service to the levels of the other carriers, but it has rewritten the rules of the market for the time being.

Competition on the budget airline front in India is hotting up with a host of airlines slated to take to the air in the coming months.

1 comment:

Venks said...

Awesome article dude..have been reading ur posts on the evolution of Indian aviation quite fascinating.....

Keep the blogs coming...maybe if u post more often..u will find a plethora ..or maybe u suffer the same fate as me..unless we post filthy soaps....and pretty women..we might be left appreciating our own articles...