Playing all sides

 

How some domestic Airlines have used their dominant presence at an important Gateway Airport to align across the board. And why must it make sense

An incredible number of International Airlines (more than a dozen), all over the world, chose to join one of the 3 large alliance groups (Star, One world and Skyteam) over the last 2-3 years. Analysts differ in exactly what has precipitated this sudden change, in a kind of second wave (the first wave was when mega carriers formed alliances) of relatively smaller carriers rushing to join a global alliance- some may have used the opportunity available due to the loosening of the anti-trust laws but most were motivated by the imminent threat from the Middle East and the desire to protect their businesses in the face of this onslaught.

However, there is also another distinct pattern emerging, either as a reaction to increased grouping of carriers or just driven by individual business model of the carrier in question. More than one carrier now uses it or a variation of it as a calculated response, an anti-strategy, to further their business interests.

Let us start with the Americas. Take Jetblue. Based out of JFK, it made a conscious decision to depart from the establish stand alone 'LCC with a good product model' to code share with International carriers. Towards this end, it underwent, what some would regard as considerable risk of changing its existing Navitaire passenger reservation system to Sabre that allowed greater flexibility in code-sharing.  Let's look at the list of International carriers that it code shares with: Lufthansa, Emirates, South African Airways, El AL, TAM & LAN. I understand they are also pretty close to signing a code share deal with Jet Airways, India. So there is no selection of carriers from any particular global Alliance. Why would it make sense for Jetblue to do so? The answer perhaps lies in Jetblue's location: It has the largest presence at the JFK Airport. JFK still is the largest gateway Airport for many non-US Airlines irrespective of the Alliance they may be part of and serves a very important catchment area that cannot be effectively served from Newark. So despite, Continental's dominant presence in Newark and it being a member of Star Alliance, a presence is required at JFK.  While Jetblue's bread and butter is in US domestic operations, it does not hurt to get International feed onto the domestic network, if it comes as a by-product of being in the dominant carrier position in the most important gateway Airport of the country. Therefore it makes perfect sense to accept feed from whichever International source it comes from, without having to chose one alliance over the other and restrict your options.

West Jet, the second largest carrier in Canada after Air Canada, does the same- using its presence at Toronto, it code shares with the likes of Emirates, KLM, Cathay and American, as it prepares to enter even more code shares.  

Take GOL, the Brazilian carrier based out of Sao Paulo. Exactly the same story with the only difference being, TAM, is the dominant carrier. But it is part of Star Alliance. Sao Paulo is the most important gateway Airport for International traffic into South America. GOL realizes that in absence of any other alternate carrier, which forms part of the other alliances such as Sky team or one –world, it can use its sizable although not dominant presence, at the Sao Paulo Airport to collect/distribute International feed. GOL therefore code shares with Delta, KLM and a number of other European carriers.

Elsewhere in the world, there are more examples- Virgin Australia, primarily an Australian domestic carrier based out of Melbourne, has recently announced its code share and partnership with Singapore Airline, a Star Alliance member to serve Asia, while in a code share agreement with Delta, a Sky team member to serve the US market.  Its chief competitor Qantas is of course a one-world member.

So the jist of the matter is this: If a carriers' primary business is domestic in a vast country like US, Canada, Brazil, Australia etc., but it happens to have a large presence at an important gateway Airport city that has a lot of international traffic, it does no harm to accept high yield code share traffic from International carriers. Additionally, at least 2 of the carriers mentioned above already had a hybrid model, with a better in flight product, & fewer seats than a typical LCC has. This helps in aligning passengers traveling on the full service international leg with the domestic product.  

So, the question is, which carrier/s in India or China, other than those that are already part of a major alliance or planning to become one soon, could take this route and use it as a strategy? I know one carrier, but I am not going to name it.   

Good Reads- 2011

 

 Just a short synopsis of what comprised my reading this year. When I compare my list of intended reading to what was in fact read just as the year is coming to a close, it is no doubt full of surprises.  So, while the intended list was meant to comprise more and more on Africa and its history, the actual list ended up looking like this:

1.     59 Seconds- Psychology is a popular subject now- more and more books are being written on consumer psychology and other related areas. 59 Seconds was gifted to me by a friend while we were still holidaying at Clarens, a lovely little hill town in Drakensberg. An old lady runs a smallish bookshop with an above average collection at this town of may be 5000 people. The book overturns some conventionally held psychological beliefs such as  "..Imagining being thin.." and talks about some effective measures one could take, based on real research, to improve one's life. I got through it, but can't say how much I am convinced with its conclusions.

2.     Jetlag -SAA in Andrews Era – Written by Dennis Beckett, A South African Journalist, this just came my way in the local Bedford view community library. For someone working at SAA, this can and did elaborate on a very important period in SAA's history giving insights into what has happened in the past and how it affects the future.

3.     Cry the beloved Country- This needs no introduction. I saw a glimpse of the movie based on the book on TV one night and instantly decided that I wanted to read the book- it has to be the first novel I ever read (Ok, second. The first one was Memoirs of a Geisha). One could almost imagine how life must have been during the apartheid era.

4.     India Yatra- Sometimes a book just mysteriously comes your way. India Yatra is a collection of short essays of local issues that fare in an election in India. If you think you know India, or can ever know or understand it fully, read the book and the illusion will wear off.

5.     Deciding who leads- What was I thinking? Corporate bull. I forgive myself, everyone makes mistakes.

6.     Diagnosis- Tanvi was born. Our world would never be the same. Diagnosis is a good peep into the medical world. How we expect that doctors will be perfect, they will never make any mistakes. The book tells the reader how doctors are still human beings and how diagnosis of a disease is still the most difficult part.

7.     Dubai- This book, which I picked up from the local book shop explained a great deal about Dubai's history- that helps explains its rise. Dubai= no rules.

8.     The case of exploding mangoes- This is a book about Pakistan's ex-dictator's assassination by CIA. While the book is written as fiction, but its plot seems so real.

9.     The Seychelles Affair- Picked from the local library, this is a story of a coup attempt by a South Africa based mercenary soldier on the communist leaning Seychelles government in 1978. If you think about the events today, with a recent invitation to China to set-up a Naval base in this Indian Ocean Island, the story is not just relevant, it seems it could be just as easily written today. Nothing has changed in geo-politics except the state actors. Yesterday it was USSR, today it is China.

10.            Better-   Atul Gawande is a great writer. This book, like diagnosis, is a peep into the medical world, explaining how hospitals and doctors work.

11.            Chile- Death in the South- Every country has had to go through a dark chapter. Chile had its own under General Pinochet. The book describes how people were brutally tortured and murdered during his reign and why it happened. It gives one an insight into Chile's political past.

12.            Fly by Wire- Finally, a book on Aviation. And a great read on the US Airways incident of landing into the Hudson River due to a bird hit.  Great insights into what goes in the cockpit. Can't wait for the Qantas A380 engine failure event to be written into a book.

13.            Following Fish - This book submerged me, gently into slow nostalgia. It is a travelogue along India's coast, starting from West Bengal and ending in Gujarat. Almost written like RK Narayan would have written it.  Simple, elegant, touching on day to day rhythm of life in great detail. I felt I am reading RK Narayan's own travelogue called The Emerald Route.  

14.            Super Freakonomics-  A sequel to the first best seller by Steven Levitt, it started with great promise into examining economics behind every day behaviors of people and patterns but then fizzled out towards the end. I had to make an effort to complete it.

15.            Inflight Science- Finally, the last book of the year too was on Aviation. Great for explaining concepts of physics to a school going child. 

Kingfisher Airlines- A clean sheet approach

 

 

Much has been said and written about Kingfisher Airlines in the recent press articles. No doubt that Kingfisher squandered, in fact spectacularly squandered a perfect opportunity to become India's premier airline, it is not the intention of this article to add to the already ubiquitous post-mortems of the company. Instead the approach is to see if Kingfisher were to play a second innings, a sort of re-birth, a resurrection with a clean sheet, what would be the opportunities. In a sense, this article starts off, where the previous article on Bangalore Airport ended.

Let us go back to mid-2005, when Kingfisher launched its operations. The original intention of the company was to base its operations at Bangalore, the Holding company- UB groups' Headquarters. This could not be accomplished as HAL was absolutely full with no parking bays to spare and little incentive to entertain more requests for civil operations. The new Bangalore Airport mired in controversy and with its scheduled opening then 3 years away in April 2008, Kingfisher decided to move its Airline head office to Mumbai. However, it continued to nourish ambitions of flying International routes out of Bangalore, including its bizarre, flashy plan to connect India's silicon valley to America's which meant starting a 19 plus hour flight between Bangalore to San Francisco route. A model replica of the aircraft was even erected at the entrance to the Bangalore's new Airport in 2008. There was just one small problem- A340-500 bought for the job, 5 of them infact, could not have accomplished this without payload restrictions, multiple flight deck crews, filing special DGCA exemption for the ULR status of the flight and several other problematic issues. Technically, the aircraft has an endurance that extends well beyond 20 hours, but any commercially oriented airline inherently knows that flying that long most definitely is beyond the profitable range of a commercial flight, as far too many cheaper options are available. Kingfisher only had to look at the experience of Singapore Airline and Emirates with the A340-500 (publicly available information) but the decision was made.

But I digress from the main point. Let us assume if Kingfisher was start again today, with a clean sheet, no wide body aircraft on order other than the A330-200's already in possession. Would starting off at Bangalore be a good idea? Statistics seem to suggest so. Kingfisher continued to be the largest domestic carrier out of Bangalore (beating Jet & Jetlite combined), just before the major downsizing of last 2 months. More Kingfisher ATR's were deployed at Bangalore than at any other station in the country, until Bangalore Airport failed to provide more capacity and parking bays forcing Kingfisher to deploy aircraft elsewhere. Bangalore provided and continues to provide a perfect opportunity to build an ATR based hub with opportunities to tap into the major North-South traffic flows and secondary South to West and South to East flows. With an ATR's effective range of about 300 nm, almost all South Indian cities in the states of Tamil Nadu, Kerala Karnataka and parts of Andhra Pradesh are within the payload-range an ATR had to offer. What is more, many of these routes were dense enough to be self sufficient by themselves and even allowed use of larger aircraft. This however, proved to be counter-productive, as the airline planners never felt the need to build a hub structure, or were discouraged by the availability of capacity and slots. In addition, many Airline planners tend to get too taken by utilization statistics of the aircraft, instead of looking at profitable utilization. Whatever the constraints may have been, the fact is that lack of effort in building a structured hub bank flight schedule led to a situation where slowly as lower cost competition emerged willing to aggressively flood the market with capacity (such as Indigo), stand alone routes were no more profitable. Kingfisher could have concentrated on building a hub structure at Bangalore instead of being over-ambitious in trying to conquer all markets, including the international ones. It failed to realize that there are ATR markets that are naturally protected as their Airports could not take the code C aircraft LCC's like Indigo were operating.

I believe this can still be done (ignoring of course the mess that is the accumulated debts and fleet on order etc. As I said, following a clean sheet approach). Kingfisher has to bring clarity to its thought process- a better product it has enjoyed right from the beginning. If it could rebuild its network, offering an advantage over its competitors through a true Hub network structure and its alliance membership, it can sustain itself profitably. It also has to learn to pick & chose opportunities and let others be sacrificed to compete selectively rather than be everywhere. Just like Spice jet has used the Q400's out of Hyderabad (with typically twice the range of ATR's) to connect major South and Central Indian cities, Kingfisher could replicate it with its own ATR hub out of Bangalore with 2-3 distinct advantages- denser routes ,better fuel efficiency and shorter distances.    

On the international side too, as the market grows, Kingfisher could use its A332 to operate flights to London (& Hong Kong) as it did before. (More so now, with BA's feed available. BA too, could use a second bank evening departure out of Bangalore). You may notice that multiple European carriers including the smaller ones like KL, Swiss, Austrian and Finnair (other than the 3 large ones- LH, BA and AF-KL) fly to Mumbai and Delhi. However, carriers such as Finnair (and even JL) could easily consider Bangalore in future if there was a large enough feed available from a local partner such as Kingfisher collecting and disseminating traffic from all over South India. Currently, Kingfisher does provide this feed to Finnair out of Delhi. As an example, Nokia runs the largest cell phone manufacturing plant at Chennai that generates demand for travel and cargo. Similarly, Toyota's plant at Bangalore has continued to grow. Similarly, many seasoned travelers would seek to avoid the mega hubs of Frankfurt or Paris, preferring to transfer through quieter, more efficient Europeans transfer hubs such as Finnair's Helsinki hub.    

There are other big advantages for Kingfisher in operating out of Bangalore- Young MBA analysts are taught to do PEST Analysis and from that point of view, there is no other place than the state of Karnataka, where Dr. Mallya has greater political clout. Infact, he is an independent Member of Parliament from Karnataka. Therefore, politically for UB, no city even comes close to Bangalore. Economically, no market has beaten Bangalore for the last 5-8 years with over 40% growth in traffic recorded in multiple years. That Bangalore is UB's headquarter means complete synchronization between the administrative functioning of UB and its fully owned subsidiary Kingfisher (which is mostly amiss) and  convenience and coordination of office space (Kingfisher is currently talking of selling its high cost Mumbai office real estate).

Too late now – A good opportunity is lost. Forever. 

Bangalore- Gateway to South India?

Bangalore International Airport (BIA) has, in many of its promotional campaigns and adverts claimed it is the "Gateway to South India".  Let us verify that claim. An Airport can truly claim to be a gateway to South India, if it provides connectivity to more South Indian cities than its immediate competitors- In Bangalore's case, these are Hyderabad and Chennai and Kochi to a lesser extent. Bangalore's claim rings hollow, as it only connects 13 destinations (counting Chennai & Hyderabad) and in these terms is no better than Hyderabad and Chennai who connect 13 and 12 destinations each, respectively. 3 of the 13 destinations are infact 1-stop flights either via Hyderabad or via Kochi. The only 2 unique destinations (over HYD and MAA) from Bangalore are Agatti (which is a one-stop destination via Kochi and in danger of being withdrawn as it is operated by Kingfisher which is in financial doldrums) and Calicut.

Hyderabad has continued to focus on domestic connections and develop itself into a domestic hub with capacity to spare as an Airport that can effectively connect East to West traffic flows, South to North flows, South to West traffic flows to cities like Baroda, Ahmadabad and Aurangabad, as well as South to Central India traffic flows by taking advantage of capacity constraints of current Mumbai Airport.

Bangalore, on the other hand failed to do so, because it has lagged behind in developing capacity. A key to developing air services is to have developed Airport capacity in advanced, allowing time for Airline planners to plan induction of new aircraft and the resources that go into launching new routes.

On the International side, historically, bilateral agreements have left out Bangalore (and Hyderabad) as these were never planned as International Airports whereas Chennai was included in most of them, as the Southern Gateway city as part of the 4 gateway cities to India, the others being Delhi, Mumbai and Kolkata. Given the slow pace of change in anything related to the government, this is a clear disadvantage in developing air services to either of these new Airports. Meanwhile, the situation is likely to get worse, as the development of the new Airport in Chennai and the second Airport at Navi Mumbai would take away reasons for Airlines to consider Bangalore as a 'gateway' city.

Bangalore has a large established market to North America with relatively higher yields (compare to Chennai and Hyderabad which have a higher percentage of VFR market pulling yields down). Hyderabad could not sustain many newly launched International services such as KLM, BA and Lufthansa. Despite this, unfortunately, for Bangalore, it lies just outside the operational range of the B 777-200LR/A340-500 Aircraft that is the only aircraft that can be considered for non-stops flight to US Gateway cities. At 17 plus hours, New York- Mumbai is already at the very edge of the available range that the aircraft offers with standard payloads and even when it is operationally feasible to operate this non-stop service, profitable operations is a far-fetched goal. Non-stop operations require a premium on fares being charged (fewer seats being flown longer, no cargo). Generally said, India is a low fare, high volume market. Even on regular mid-haul, via large hub flights, it is difficult to break even, leave alone breaking even on non-stops. What is more is that the customer does not find value in paying a premium for a non-stop, where a dozen other cheaper options are available without much sacrifice on elapsed time. Notwithstanding Kingfisher's immature, laughable belief in 2008 that it can use an A340-500 to connect Bangalore to San Francisco, realistically US market from Bangalore can only be addressed through a one-stop service either through Europe, or via Middle East or Far East.  This explains why European (and now Middle Eastern carriers) thrive at Bangalore (BA and Lufthansa both come in with a 744) and no US or Indian carrier has ever succeeded flying to/from Bangalore. The remaining traffic is carried to the US West coast via the Pacific and on Asian carriers like Singapore Airlines and Thai.

Some believe Bangalore's geography can be used to participate in the vast Australia-Europe market. This would have been an opportunity 40 years back. Today, with at least 7 major hubs and their respective airlines competing for that traffic, Bangalore's chances (with or without a hub carrier) are non-existent and delusional.    

All of the above factors, limits options for an Indian carrier to develop Bangalore as an International Hub. Not just this, the self sufficiency European & some Asian carriers to use Bangalore as a destination on their network, without needing any supporting feed/defeed from a local carrier, hinders the development of a domestic feeder carrier. So what really are the options Bangalore has?  

 

Aero-Dhaba

 

 

Dear Patrons,

Welcome to the Aero Dhaba, a unique culinary experience developed for travelers (and accompanying friends and family).

You may have heard of 'Dhabas' on highways all across India. Aero- dhabas is the first chain of dhabas established at the Airport premises. Had regulation permitted, we would have liked to be right besides the runway. However, such liberties sadly not permitted even in our democratic country, you can find us right outside the terminal.

Note that I say, it is a chain- We are so confident of the success of our concept that we have simultaneously opened shop at Nagpur (our flagship restaurant), Kanpur (very popular) and Ahmadabad. We also have a special branch at Mumbai, mainly for export of frozen meat (processed at world's largest slum based Enterprise Dharavi (another unique concept) to Europe. This is self loaded live mostly in cargo holds and arrives frozen ready.   

Menu Card:  

Note to our customers:

-         Due to the nature of our butchery, all our meat is 'Zatka'; No Halal meat available. We regret this inconvenience, but it is more than made up for in the freshness of meat we serve

-         We are very proud of our culinary creations. The name of the dish is accompanied by a short history/background on how each dish is created and garnished.

 

A.    Nagpuri ghost ka keema

This is an extremely popular dish, available almost on a daily basis at our Nagpur branch. Wild boars, specially trained by our experienced ATC staff, cross the runway just as the aircrafts are landing. These 'Jehadi' wild boars, as our staff likes to classify them, normally aim for the front landing gears to sacrifice themselves. As soon as the aircraft passes over safely (god is great, we have never had any crash), our staff scoots to the runway with special equipment to scrap the meat off the runway. (You may recall this equipment was donated to us to scrap the tire rubber marks off the runway).  We challenge our patrons to find such a unique dish, even in famous game meat restaurants of Africa. Our German guests love it.   

Self garnished with smell of freshly burned rubber from imported Dunlop aircraft tyres, you will love it.

B.     Raan-e-Kanpuri

Our take on Raan-e-Sikandari, the famous dish you may have seen on some other menus. Now sample, a version you are unlikely to forget soon- Prepared from jungle fresh cuts of wild Neel Gai that roam our premises, it is unlikely to disappoint you. Note that the entire Raan is served as a single large portion for a family meal, because the Airport is served only by smaller ATR make of aircrafts that maim the animal, without causing any damage to the main edible portion.

C.     Kebab-Kukkura ke (KKK in short)

An extremely popular dish amongst our visiting patrons from Korea, China and Vietnam, this is a seasonal creation from street dog meat. We must clarify that unlike on the roads of major Indian cities; our dog meat is processed in extremely hygienic runways, swept clear of 'FOD' every 6-8 hours.  

D.    Rodent –do-pahiya ( aero dhaba's take on chicken-do-pyaza)

Not to be mistaken with the do-pahiya as in the 2-wheeler, this refers to the double bogie of the rear landing gear. So called because assorted field rodents that are used for this dish, have a special preference for the rear landing gear when making the extreme sacrifice. This delectable dish finds particular favor in Eastern UP and Bihar.

 

E.     Assorted Fowl from our Aviary

What can be said about this- it is the finest in culinary history of Indian Aviation with a long tradition. Every Airport offers a fine variety and selection in every possible season. Even visiting migratory fowl are not spared. Notably, this is offered to the customers taste in 2 different preparations- A- la- flambé or just plane-hit.  The a-la flambé preparation is obviously garnished with A1 Aviation turbine fuel as the bird in question passes through the engine. Please note that this an extremely difficult dish to prepare, with considerable skill required for the flambé version. Aviation fuel is highly inflammable and roasting the tender bird meat is a delicate art that requires constant practice.

Note to our customers: Since the dish is obviously garnished with ATF, we cannot guarantee the price. Price is subject to change without notice. Please check with your waiter before ordering it.

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Author's note: Grotesque as this article may read, it is intended this way as a protest against lack of basic Aviation safety at our Airports that is shameful. Aside from being ' the killing fields' for so many animals, that in itself is cruel and worthy of being taken up as a cause.

 

Invictus

 

 

Anyone can start a revolution. It takes greatness to stop one.  

"…..I'm thinking about how you spend 30 years in a tiny cell, but come out ready to forgive the people who put you there…."

-           From the movie Invictus

Oct 02, 1992: The only cinema hall at Mbabane, the pretty hill capital of Swaziland, a country of less than 1 million people, played Richard Attenborough's GANDHI the whole day, all 4 shows.  It didn't quite made sense to a teenager, why Gandhi should be an important subject in a nation 8500 miles away from India. A vast ocean separated the 2 continents of Africa and India, and my passport read – 'not valid for entry into South Africa', but there was an unexplained link between the destinies of these nations.

Later that evening, my father had invited all his office mates for an evening together at a local Pizza restaurant. It was bitterly cold outside, so diners were all huddled together around a large rectangular table that hosted our entire group. There were other diners on the single corner tables. The evening discussions were centered on the ongoing Barcelona Olympics and the medal tally. Invariably, the discussions moved to how South Africa- allowed back into the games for the first time since the Apartheid era, was performing. I seem to remember that I said something to the effect that South Africa's performance was disappointing and even Kenya were doing better in the medal tally.

"…But it is still better than India.. at least we are assured of a medal.."

 I heard a very sharp retort coming from behind me. Completely shocked from someone unexpectedly interrupting our conversation, I looked back to see a straight-faced white man staring at me and from what it seemed like, very eager to take the debate further. My father's Swazi colleague signaled to me to ignore the man and we all got back to concentrating on the pizza as if nothing had happened. Again, I did not quite understand, what made the white man take such grave offence.

A few weeks later, I was strolling down the local Swaziland mall, wearing a black color t-shirt with a large red color Nazi Swastika on it. Sold on Bangalore street corners, Hitler and Nazi symbols, while poorly understood, were sure to add to a teenager's cool quotient ratings. As I crossed the street corner, I saw a large black man, presumably Zulu, twice my height and width, coming towards me. He was looking straight at me and as he came closer and closer, I could sense, that we were not just crossing each other on the street, instead he was coming at me. No evasive action was possible, and before I knew, I sensed being picked up into the air with large blood-shot eyes in my face. The man could perhaps sense my fear because he said nothing and put me back down on the ground. I was shivering by now. He then pointed to the red sign on my t-shirt telling me if I were smart, I would not wear that t-shirt again and that he was telling me this for my own good.  Completely hysterical and confused I ran back home and narrated the incident to my mother, who called my father at office. It was only later, that we learnt that AWB, the right wing, heavily armed and very often militant, Afrikaners Party used a version of Swastika as their symbol.

The early 90's were extraordinary times in South Africa and as a teenager one couldn't have learnt there significance until much later.

 12 June, 1998: The blue red and white Filipino flag with a golden sun slowly went up the pole as tears filled the eyes of my office colleagues who watched the ceremony to commemorate 100 years of freedom. The birth of a free nation is always a solemn moment and its celebration even more so. I stood witness too as the Filipino national anthem played. At my graduate school, our dean quoted Gandhi, and related the Filipino freedom struggle to his thoughts. While the Filipino Freedom struggle is replete with violence, Gandhi's thoughts, he said, were relevant to them. While no longer a teenager, one wondered why nations that won their freedom through an armed struggle still regarded Gandhi's thought as central to their manifestos.

12 December, 2009:   I attended a special screening of Invictus, a movie that describes true events before and during the South Africa of 1995. Apartheid is long since dead, at least in the law, if not completely in the spirit just yet, for vestiges of an evil, once created, die slow and even in dying leave behind relics that threaten to manifest themselves all over again in newer forms.

In South Africa of today for instance, it appears that, Indian, (or any other community) is not a race nor a nationality, not even a mistaken identity christened by an explorer. It is a category, for all people must be categorized for their rights to be determined and apportioned. One morning, a 5 year old, my son, posed to me a question as to whether he is Indian. Isn't it odd for a toddler to be that aware of his category at such a young age?  

In their naivety governments, not just here in South Africa, still believe they can somehow go back in time and reverse the excesses of the past. And how? By doing exactly that, what was deemed unfair and unjust even back then, except, this time to a different category of people.  It is an excellent example of how in trying to correct the past, we can't embrace the future.

The laws of physics govern that every action must have an equal reaction; that a pendulum, once swung to an extreme, must swing back to the other, opposite extreme. Those are irrefutable laws of our physical world.

It is exactly in this context that Gandhi's thoughts but what is even more so- Mandela's actions, which came much later in time, define true leadership. Almost anyone can start a revolution when the conditions are right. Make a few inflammatory speeches, cobble together a band of followers and if a cause is deemed worthy, people will sacrifice themselves. Infact, you can buy ready, custom made revolutions off the shelf today with help from some big brother nations. 

Both Mandela and Gandhi, however, managed to STOP a revolution. That is, stopped a revolution going the wrong way. Gandhi stopped Civil disobedience movement when it turned violent. Mandela stopped his people from seeking revenge when Apartheid was demolished. He taught them reconciliation and forgiveness. Both stopped the pendulum midway, refusing to be governed by Newtonian laws. They refused to be subdued by popular sentiments of their own people, instead showing them the righteous path. That takes a lot of courage. They knew it would meet resistant from their own, most loyal supporters but will eventually result in the greater good.

Very few men have achieved this.  

 

The Flying train

 

 

It is just past midnight. After tossing and turning into your bed for an hour (a result of double dose helpings of the extra rich butter chicken that you have had for dinner washed down with Johnnie Walker black), you are just about to enter into the deep slumber when your blackberry (with overused faded keys due to constant SMS's that you send while sitting on the cold toilet seat, lulling yourself to believe that you make the most productive use of your time) starts to ring its irritating ring. You make a mental note to move to the I-phone 4 as soon as the new aircraft deal is sealed.

As you struggle to open your eyelids, sneaking one look at the phone and the other at your wife to check if she has been disturbed, 'Leahy' it announces, is the caller. He is your affable big boss and he has the license to kill,….er… I mean… to call you at any (or all) of the 24 hours in a day. It's minus degrees, but you rush to the balcony, and fake the adrenaline rush into your voice, managing to produce a crisp, enthusiastic greeting masking any signs of yawning. Leahy's voice is merry, dancing with jubilance. It may be your midnight but Leahy is in a mood to wax eloquent about his latest deal with XX airline while the cold numbs your feet. 45 minutes later, somewhere between him going on about his exploits, and you being in a dilemma about letting the wind out loudly (or not, lest the phone's microphone catch it), he suddenly changes the topic – the call is about your bonus. You are being given the India sales territory. You are about to let out a joyful shriek, thinking about moneybags you will bring home, when he drops the big dampener- no bonus on narrow bodies, until you sell A380's. You can't hold anymore, letting out the loud one, just at this very moment. But if any A380's were sold, it would seemingly be worth its weight in gold, the boss elaborates helpfully.  

2 years later, you have tried every trick in a salesman book- arranging champagne and caviar parties, organizing aspiring Bollywood starlets for important people, obtaining secret lists of Swiss bank account holders, sponsoring MBA courses for the half dozen progenies (some unofficially so, born out of wedlock) of the prospective promoters but to no avail! You have even flirted with the idea of financing the coup in the small island nation that could change a few geo-political calculations, pleasing the powers that be. Success is still elusive. Then, as a blessing from god, you overhear your office peon talk about Mamta didi and The Duronto Express and unexpectedly, an idea strikes. What if you were to tell Leahy that Mumbai Airport capacity crisis can be turned into an opportunity? You are already visualizing the first slide of the slick PowerPoint you are going to show Leahy with the Chinese character Wei-Ji splashed over it in red that spells crisis one way but reads opportunity in reverse and just as the opportunity part of the character is displayed on screen, the slide will turn green (indicating greenbacks). Terrific, you think, congratulating yourself. Leahy would be sold on this. This year you are surely buying that Ferrari for your recent Lebanese interest you met at a Dubai bar. You jot down your thoughts and immediately decide to call Leahy on the phone. This is how the conversation goes:

Leahy (nasal American twang) - What have you got for me, son?

You- Well, I am sure of selling some A380's if we position it …er...um...as The Doronto Express. I mean, as a flying train that can carry 853 people in one class configuration mainly between Mumbai-Delhi. A train carries that many people, imagine the impact on per seat price, Leahy!

Leahy- Go to sleep son. I told you to get off Marijuana, didn't I?

You- Please let me explain Leahy. Look Mumbai Airport is bursting at seams. It can't handle any new movement, even though traffic continues to grow. The average boarded figure continues to rise, which means wide-bodies have to be used on domestic sectors sooner or later.  

Leahy- There are a lot of wide bodies between A320 and the A380, now don't waste my time. A380's are optimized to fly long hauls. Are you even aware that our biggest customer has asked us for a higher gross weight variant of A380 so they can offer longer flights to the US West Coast?

You: Yes, I know. But I am proposing using the aircraft at the other, opposite end of the spectrum. After all, Japanese carriers did use high capacity 744-SR to service similar high demand domestic routes, don't they? Even China Southern has decided to test the A380 service between Beijing and Shanghai. Besides, we anyway offer a 1 class 853 seat configuration to Air Austral. All we need to do is to customize the maintenance program for short hauls, to take care of the increased engine cycles. We will need certification for it, but that's small change.     

Leahy (somewhat less doubtful): hmm…The Indians can't even board an A320 in an organized fashion, and you want to compare them to the Japanese. And its not just the maintenance plan. We will have to work on a full variant customized for short hauls – with reduced fuel capacity, recalibrated lower power engines and some other changes such as the landing gears to take the strain of increased landings. Anyway, what figures are we talking about?

You- The Indians can change, Leahy. Really, take a look at Delhi Metro and how even the Delhites have shown discipline in boarding it. Plus we will have Airport bosses salivating just at the mention of A380's doing multiple landings every day.   

Leahy- Figures son, I want figures!

You- Sure, I think we will manage to grow the market 20% every year for the next 10-15 years based on capacity increase multiple between the A320 and the A380. There is no constraint on demand in India except price. Price, is the strategic P in India, not product, unlike Japan. We will be able to offer second tier non- air conditioned train fares on at least 20% of the seats and even the rest would be sold at an incredible 3-tier air conditioned train fares of Rs.2000-2500. It is not unfathomable that we sell 50 of these special variants over a 10 year period.      

Leahy (now almost in agreement) - Well son, I am pleased to hear that. Send me the plan and we'll consider it.  

 

Railway lamb Curry

 

 

You have heard of the 'Military' hotels in India – the name implies that they are eateries that serve non-vegetarian meals.  This weekend however, while grocery shopping at a local grocery store, a pre-cooked meal box that read "Railway Mutton Curry" caught my eye.  I already had an inkling that it had something to do with India. Curious, I picked it up to read the details and sure enough it was a throw-back to the British times in India, in the league of the "mulligatawny soup' and other such British Indian delicacies.

Surely, one can expect a few Indophiles to fall down if you shake a tree in London. What surprises me about these things is the extent to which India influenced that era not just in England but also amongst the various British colonies. This recipe therefore has travelled from the Chennai Central railway station to not just Britain but also subsequently to colonies such as South Africa and is being sold to this day, 100 years later! That is remarkable isn't it?  (Remember, all of this happened without any internet, Facebook or other social sites!)

Amongst other similar surprises that I have had, is coming across a 100 year old Dravidian Tamil Hindu temple right in the middle of Ho Chi Minh City (Saigon). What was even more surprising was that it had a Tamil Pujari ( who could speak Tamil sparingly), was married to a Vietnamese women and still performed the rituals of the Puja, albeit, the Communist government that Vietnam had discouraged people from religious beliefs and had taken over the precincts of the temple for hand making toothpicks and other such things. On my father's prodding he told us the whole story of how he came to be at Saigon, as a little boy who escaped in a ship with his father. The temple however, was already there and he didn't really know much about who built it. ( Subsequently, with donations from a few Indians who were working there, the temple was renovated, the tooth-pick factory was moved out, although it needed some persuasion and the temple is in fine form I am told).  For good measure, the Pujari also pointed us to the other (infamous though) India connection- a house that he said belonged to Charles Shobraj's Mother (the infamous crook, whose father was Indian, mother was Vietnamese).

Then, in the library of the University of the Philippines at Los Banos, I came across a book titled "Indian influences on the Philippines" (See the link below).

http://openlibrary.org/books/OL5345917M/Indian_influences_in_the_Philippines

It was actually a Phd. Thesis in the form of book written by a Filipino gentleman, who did his PhD. from University of Madras.  If you read the book, you will find that many 100's of words that Filipinos use to this day, originated from either Tamil or Sanskrit. (The South African fruit 'Naartjie' at first sounds Dutch but its origins are Tamil) One of the major highways linking the mountainous North of Banuwe to the Bicol region in the East is called Maharlika. "Mukha" in Filipino means face.  Fascinating! At one traffic circle in a small town, somewhere in the Visayas islands, is installed an idol of kali. However, there are no records of how it reached there. Visayas itself is the corruption of the name Vijendra (after King Vijendra, who ruled the parts of the Indonesian Islands).  

Finally, however, one's elation at learning all of this is instantly punctured looking at today's India. Perhaps best explained by the title of the book "The Wonder that WAS India". The operative word being WAS.

PS: For those of you, who may be interested, this is the 150 th year of the arrival of Indian indentured labour in South Africa. Many books have been released on the gruesome history of what South African Indians went through. You may want to read:    http://www.hsrcpress.ac.za/product.php?productid=2277

THE FLAW IN MASLOW'S THEORY

I once attended an interview with a leading Indian IT company. 9/11 had just happened, I was retrenched from a large Airline company and was trying to resume working.

 

No sooner had we finished exchanging very brief pleasantries, than I was asked about my percentile scores from nursery to high School, an explanation on the derivation of the theory of Black Scholes model AND my views on the flaw in Maslow's theory. This was the opening question for a sales position for selling Aviation related services (read outsourced call centers for large airlines).  The interviewer was an IIM graduate ( probably 25 years old), brimming with cocky confidence, clearly relishing the sight of sweat on my brows and the fact that he had 'defeated' yet another 'rival'.

 

Not prepared for such dazzling display of intellectual prowess and faced with questions of such importance that would materially change the existence of human race, I failed the interview, infact miserably failed it- humiliated and red in the face, morale completely shattered and shaking with nervousness, I walked out of the room, head hanging down in shame, in less than 5 minutes of having entered it. Dejected,  I walked back home, as hallucinations of failing math exams in calculus kept appearing with voices of my elderly relatives advising my father that opening a PCO booth at the corner of a busy thoroughfare in our colony would be the best career move for me. It would earn me a lot more than people earned in regular jobs.   

 

However, You could probably imagine that I was curious to know who the bloody hell Maslow was, whose theory (or the flaw in it) was threatening to permanently interrupt my nascent career.

Maslow, a management theorist, (whatever that is), simply put, said this: People aspire for more material things early in their life such as money and gradually graduate to things like self esteem, standing in the society, respect etc. and he drew a pyramid to explain this. The flaw, again simply put, is that it is not necessary that people will follow Maslow's said trajectory and could desire and value self esteem right in the beginning. That is it- that's all that there is to it.  Trust the management theorist and consultants to make common sense sound like rocket science.

 

You get the point I am making- why is there so much obsession with theory and so little with its application?

 

Take a look around you and you will find products with outdated technology everywhere- some very common, low tech, day to day examples- the whole world uses a variety of drip systems as toilet deodorants, we use phenyl balls. Visit the Yelehanka Air force station with machines like MIG-35 at display-the very pinnacle of Aviation technology that we have in the world, and hear about them on 'bhopus' (loud speakers) designed in Circa 1919-the rest of world uses slim smartly designed ones and much much smaller, that produce far better sound. But the technology simply hasn't permeated down. The world decorates its buildings and trees during festive time with special decorative lights, we still use the ones with large plastic beads- I have seen them since I was born- and am inclined to believe there is just one manufacturer of decorative lights in India and 1 single approved design.  If this is the case with low technology items, you can imagine the state of high technology products.

 

Many years later, while talking to my wife, who is studying education, I learnt that Education, comes from the word 'Educe' which means 'to take out', or  'to extract' . We do it exactly the other way around. We drill rather than extract. Well, some amount of drilling is perhaps good, if the motive is to extract, but education cannot be 'planted'.

 

Anyway, back to the flaw in Maslow's theory, I noticed this wonderful signboard in a local grocery store and loved it. Maslow hasn't left me since the disastrous 2001 interview (and I thank my young interviewer for that) but now that I understand the flaw in his theory rather well, I do consciously look for opportunities where it can be applied. You can use Maslow's or other  management theories as ammunition to unnerve and unsettle an unsuspecting interviewee or you could understand and apply them to make things better.      

 

EXODUS

 

Flipping through the Feb 20, 2011 issues of Business India, one statistic caught my eye:

 

Which is the number 1 state in India, in terms sending workers aboard?  The top of the mind answer would be Kerela. And that was the correct answer, until 2009. Since then it has been UP.  Just the first half of 2010 saw 68,375 migrant workers leaving, mostly to the Gulf. 

 

This is a familiar phenomenon observed elsewhere- when Argentina was about to default on its sovreign debt in 2008, there was an exodus of people to UK, Italy, Spain. The flights were full- (one way). It was a short term phenomenon. In other cases however, like Mexico, Philippines and India, there is a recurring exodus- leaving for the US, or Japan and in India's case to the Middle East mostly. There is no prospect of a local job, so migration is forced. Real GDP in UP has been sliding with Behenji (may peace be upon her) at helm.

 

What does it mean for Airlines? Vast swathes of UP are underserved. Places like Bareilly (covered in the media, only when Priyanka Chopra opens her (much talked about) pout to let the world know that she schooled in Bareilly), have a fine airport controled by the Armed forces and can be opened to civilian traffic if Behenji wants it (may peace be upon her).  

 

Those airlines that have been recently blessed (or should I say cursed) with a license to fly aboard, may want to consider launching flights from relatively uncontested territories like Lucknow, rather than do exactly what the others have done, launching yet another flight to Singapore/Bangkok from a Metro city. This is, a rather 'unglaomourous' option but then we have Ms.Chopra to lend all the glamour if a flight from Bareilly was ever launched. We may even have the other behenji (may peace be upon her) grace the occassion, given that elections in UP are near.  Don't believe me? Ask Air Arabia- Where do you think traffic on their Nagpur flight comes from?

 

  

 

Unusual hiring

 

 

The luxurious office of Northwest Airlines was located at the 19th floor of Cosco Tower at Hong Kong's Queen Road in Central Hong Kong. As I stepped into the corner office of the Vice President of Asia, I was stunned by the expanse of the room and the unfolding vista offered by the very large glass wall that overlooked the busy Kowloon bay area, as one got closer to it. That room was designed to portray power. For a brief moment, I felt I had stepped into the scene from 'Dewaar' where Iftekaar (playing Dabur Saheb) offers Amitabh Bachchan his first bundles of currency notes spread on the table and the camera moves to show the Marine Drive down below, clearly visible from the office….

I was there for an interview with the then VP of Asia at NWA (let's call him David). Awed by the set up, I was fumbling a bit when David asked me to take a seat and soon after asked me what it was that I wanted to do. I mumbled something about doing pricing. He smiled, looked at me intently and repeated his question, adding that he meant it in a much larger context, as in, my ambition in life. I hadn't expected the interview to start with this sort of talk, so could not muster any words at all for some time. Sensing my discomfort and nervousness, David sought to put me at ease by telling me his own story. A person with just high school education, he started his career as a baggage loader at TWA and rose to become VP Asia at NWA many years later.  Another example- UPS Airline President Robert Lekites, started his career as delivery truck driver and rose to become president of the Airline company.  There are numerous such examples of people, who were the most unlikely candidates for the top job, but succeeded nevertheless. I have narrated these story to make a point to which I will come to later in the article.

When you step into a 5-star hotel as a guest, unknown to you, the concierge Porter or Bell Boy, as they are called, has not just spotted you, he has noticed the car you got down from and its registration number, people accompanying you-and if these are women, he has judged whether they are your family, your office colleagues or otherwise. He has seen your shoes, the quality of your suit, the make of your mobile phone and the watch you are wearing.  If you are a repeat guest, he has already welcomed you with your last name and reassuringly informed you that the hotel holds a reservation for you, even before you step infront of the reception desk. As a 21 year old, and their Manager, I was continuously challenged by them. They knew the views and vantage points of all the rooms. They knew the staff- all 500 of them by their first names. They could organize just about anything in a matter of minutes. They knew who the General Manager was sleeping with. They knew even whim and fancy of the repeat guests. A bell boy goes to every single room in the hotel and we are talking about 500 or more rooms here and he knows every nook and corner. If a switch wasn't working or there was something wrong with the carpet in the walkway, they were the first people to spot it. Infact, I would say, if a fire broke out, a fireman may lose his bearings, but a bell boy, is your sure shot bet to find a safe way out of the place.  

In short, Bell Boys are far sharper than we think and do far more than their intended role. Yet will you ever think of a Bell Boy when looking to fill a role that requires sharp observation, continuous customer contact, ability to make polite conversation, and solve day to day issues. I would give a serious thought to enlisting them for an eventual role as managers in service organization, like the role of a Airport Manager at an Airline. I am not saying that every single Bell Boy should be made an airport manager, but just being a bell boy, does not exclude them from that possibility, so don't stop looking.

If you are an early riser, take an early morning stroll to the local street corner, where bundles of newspapers are dropped, and the local distributor's boys get down to the task of sorting them and putting the advertising inserts into them. Perhaps there's one boy there, who has done this long enough to help you with your direct marketing/advertising initiatives.

Ever spoken to a TTE (Train ticket examiner) of an express train? Imagine Abishek Bachchan's role in Bunty aur Bubli.  A TTE would have traveled between a sector like Raipur and Delhi 100's of time. Could anyone know the route and the passengers who travel on it better than him? Why then would you want to hire a city boy, with a cozy confined up brining in a life full of luxuries to do a job that legitimately belongs to someone who has spent all his life traveling on trains?  

Take the auto rickshaw drivers. Many of them are rowdy's and so is there public perception. But try talking to some, just to get through the noisy ride, if for nothing else. They go to every part of the city- to the railway station, bus station, city centre, suburbs, bazaars, high streets, red light areas, deal with the traffic police and local goons, who all have to be paid a 'hafta'. Some of them are in fact listed as informants for the police. Wouldn't you include them as part of your city sales team, even if just as the driver?  I surely with responsibility for sales, it does not matter what I call him, but I know he would not fail me.

There are numerous other examples but the point I am making is this: Use imagination to hire. Leave the orthodoxy to the British Royals. They may make a living out of it. Just because someone has done something before is not an indication that he is good at it. You can't etch your designation on your forehead as an example of what skills you have. Infact, usually, if a candidate has done a job before, and you are hiring him for exactly the same job, he/she may bring little enthusiasm to it.

A high performance team needs all kinds of people, greater the diversity of experience, better the chances of achieving success. All fingers are not created equal, Yes you need an IIM graduate to take care of those complicated algorithms; yes you need the good looking bimbo (or brute) to attract some corporate eyeballs perhaps, or so people believe, but what a pity it would be, if you filled your ranks with people who are out of touch with the reality on the ground?

(CAN BE APPLIED ANYWHERE, BUT THE ARTICLE IS WRITTEN FROM THE PERSPECTIVE OF AN INDIAN AIRLINE)

Deccan’s new avatar in Gujarat- Can it work?

Deccan's new avatar in Gujarat- Can it work?

 

 

There have been many serial airline entrepreneurs in the world. It is as much an addiction as any. Branson and Neeleman are the two names that come to mind. Closer home is Capt. Gopinath, who is attempting is fourth Airline venture in Gujarat. With fuel at USD 125 per barrel, this requires considerable nerve. The house is however divided and the jury still out, on whether this will qualify as courage or audacity. Time will tell.

 

I just wanted to examine the possible directions this venture may take and how it could be grown through various stages, (a sort of a business plan, written more from the point of view raising finances):

 

STAGE 1: Getting off the ground-(Intra-State traffic)

Year 1

All the assurances from the Gujarat government mean nothing on the ground.

For a planner to actually implement flights and come up with a financially viable and coherent schedule is a nightmare. When planning them for the whole of India, there are at least a lot of airports available to play with. We are talking of only a dozen Airports here- most of which do not operate at night; many do not have fuel depots (it really matters in summers, when temperatures are high and payload is restricted). Most of all, ATC timings have remained unchanged for years. Just like the Indian courts, they function for a fraction of hours a day and then are in recess. Hopefully, corporatization of ATC will perhaps improve this situation. This isn't the full list of woes. The Airport Authority of India, a central government controlled body, feels no compulsion to lend an ear to what the state government may have to say. We have not even started talking about BCAS and CISF who are perpetually short of staff and only personal initiative from some of the more proactive commandants ensures that the day is saved. The Airport equipment- X-ray machines, Radars, passenger amenities, ground handling equipment….You get the idea of what it takes to get off the ground. Even with this list, the flight completion rate of the operator remains woefully low, because operations are so totally dependent on the elements without proper infrastructure. Passengers aren't likely to patronize a service that anything short of reliable.

 

When however, the above is achieved, the commercial target would be to get break-even traffic on the aircraft. This would mainly come from the point to point Gujarat intra-city, traffic, some from existing services, if any, and other from surface transport. For example, Surat to Bhavnagar is a lucrative route, as traveling by road can take easily upto 8 hours. Train takes longer. If, the promised additional new airports come on line sooner than anticipated, it will help improve Deccan's prospects.  

 

STAGE 2: Growth beyond the state  

Year2- 3

I believe that Deccan is not targeting getting into bigger planes beyond ATR's, if its stated objective is to provide intra-state traffic. I cannot, however, imagine that Deccan can survive independently just on the intra-Gujarat traffic, even if it makes a major break-through in terms of shifting traffic from surface transport modes. The fixed costs are far too high in India (Even if recent developments in third party maintenance provider availability and other related costs are taken into account) and it needs enough scale to cover all of them, which means growing the number of flights. This can happen in 2 ways:

 

1.      Replicate the model in neighboring states: Deccan, can fairly easily replicate the model in Maharashtra, Goa and Rajasthan. They all fall within the range of an ATR and can easily be linked. This takes the scale up to about 30-40 airports. There are enough business linkages to provide sustainable air services, provided they come at the right price. AND, most importantly, the major carriers are too occupied with the trunk routes that it is unlikely that Deccan will find competition. Its real competition would be the railways and what has come to be known in India as 'Volvo' bus services (law of marketing: first entrant defines the category).

 

2.      Become a feeder: I bounced this suggestion off a few people but they weren't convinced. It is true that Airlines that have an established network into Gujarat out of Mumbai have little incentive to change anything. But an Airline like Indigo, with one plane type, could use a feeder at AMD, can it not? Look at the US market- they are full of feeder carriers. Some are part equity owned by the major airlines and share the infrastructure keeping their overheads and costs low. While we are a long way off from achieving the traffic scale available to these feeder carriers, I have at least one very strong reason to believe that the time has come for a feeder carrier in India.   

 

Currently most of the traffic to Gujarat's cities (other than AMD) is flowing over Mumbai. So, if you were coming from Calcutta and wanted to go to Jamnagar, you would have to connect via Mumbai. However, as is very well known, Mumbai is full up to the brim and will have no choice but to push out the smaller planes completely. That plan is dependent on the upgrade of Juhu Airport. Airlines will have no choice but either upgrade their Gujarat flights into larger code C aircrafts or move to Juhu. Looking at the number of hurdles, I suspect neither will materialize. However, the unintended consequence of this could be that traffic to Gujarat from the rest of India, that is today flowing over Mumbai could move to flowing over Ahmadabad, if (Big if), a feeder network is built at AMD. Let me explain: For all the traffic that is NOT local, ie, between Mumbai and Gujarat, there is no need to connect at Mumbai if an alternative was available to connect to any/all Gujarat cities via AMD. Deccan can provide this alternative. It is a great opportunity for AMD Airport if they can see it. They must therefore work with Deccan to make this happen.  

 

On Deccan's part, instead of simply adding more flights to maximize utilization of the aircraft, they must align their departure and arrival schedules to the schedule banks of other major airlines serving AMD, such that their flights can get feed/Defeed flights arriving into/departing from AMD. Even without a formal interline agreement, Indian public is smart enough to figure out connection opportunities. That is not to say, that it isn't important to gear your systems to offer formal interline/code share services, particularly in light of the next stage (STAGE 3).

 

STAGE 3: Become an International Feeder

Year 3-5

We are now really dreaming, getting unrealistic, are we? But assume, 3 years down the line, Deccan Gujarat has been a resounding success, what will it need to continue to grow? Assuming that major airports in Gujarat have been activated for night operations, Deccan could introduce an early morning bank of flights that de feed traffic off the international arriving flights. In addition, the early morning bank can only increase utilization. If the government allows, it is possible that a foreign carrier may want to formalize this interline relationship into a larger role through equity. Deccan must ensure that its mission critical IT systems are geared to offer these services that can add a much required revenue stream and have a very positive impact on the yields. Sure the cost goes up too, but today, these services can be offered at much less overhead than ever before. Airlines like Jetblue in the US and GOL in Brazil are doing it.      

 

STAGE 4: Launch International flights

Year 5 and beyond

You are laughing hysterically by now. But, look, all business plans can be unrealistic. Have you ever come across a business plan that shows negative growth in a given year? No right? Yet there are recession years where companies de-grow. Likewise, there is no harm in being a bit wishful when envisioning the future course.

So, the ATR is ETOPS rated for 120 minutes. A 2 hour (250-300 NMs) flight is more than within the profitable range of an ATR. You could probably offer flights to Karachi and some other destinations in Pakistan but that's about it. For other destinations like Muscat and Salalah in Oman, lesser known destinations in UAE like RAK and Fujairah and Bandar Abbas in Iran, Deccan would need to get into longer range aircraft. All of these are pretty poorly connected and can at max, support 1-operator. This cannot perhaps happen today, but 5 years down the line, anything is possible.  

   

If you however ask the Deccan watchers, they will say, ah…why get into these complicated models, so much thinking is simply not required! The real plan is to get the company off the ground and then sell it off to a willing party! There are plenty of fools out there, who want to get into the Airline business. J