Journey of Air Deccan
CHANGING THE FACE OF INDIAN AVIATION
By Dev Ranjan Diwakar 10DM112
domestic sector : Air India international sector :operating since 1953 • Conducive Indian Aviation Vast airport infrastructure Relied on short haul routes
.INDIAN AVIATION MARKET
• 1995: 6 private carriers were given license all full service airlines(FSA) • Jet airways & Air Sahara have only survived now • 2003: Indian Airlines.
Analysis of Indian aviation industry with respect to Low cast carriers
• Under penetrated market • • Infrastructure Constraints • • Limited Reach • • High fuel Cost
480 millions from angel investors.J.
. leased 48-seater ATR turboprop aircraft. In 2003: Air Deccan was ready with commercial air passenger operating in single route (Banglore-Hubli). Samuelto set up a heli-charter service DAPL(Deccan Aviation Private Limited) which became the largest heli-charter company in India • In 2002 he pooled Rs.GOPINATH -THE VISIONARY
A graduate from Indian’s National Defense Academy. Became an entrepreneur in1978 Won Rolex International Award for eco-farming in 1996 • Teamed up with captain K. retired from Indian Army in 1978.
low cost and safe travel to the common man by constantly driving down the air fares as an ongoing mission
.Vision and Mission
Empower every Indian to fly
To demystify air travel in India by providing reliable.
• There were existing airline carriers though they did not operate on lowcost
• Air Deccan’s main competitor is the Indian Railways
• It wanted to capture the top end of rail and road travel in India
K Laxman’s ‘Common Man’
Free Tickets :
Images courtesy of Air Deccan
. R. the people’s airline is Mr.Marketing Strategy
Common Man :
The Brand Ambassador for Air Deccan.
.How Air Deccan cuts cost?
Quicker turnaround time Lower distributions costs All economy seating configuration No free catering on board • Alternative revenue channels • 100% web enabled bookings – e-tickets • Air Deccan provide air service at costs 25-50% lower than a full service airline.
Jet Airways.How did Air Deccan create uncontested market space. Sahara) • • Low Cost business model is based on following three policies:
§ § §
Low operational cost.
• Existing players (I A. Appropriate Positioning No frills service
• Introduction of “Dynafare”. • Targeted Tier-2 cities. •
. • Ventured into new cities using new routes.Making competition irrelevant
• • Targeting the middle class customer to whom travelling was fantasy.
Corporate (middle-level employees). This can be again divided into two parts: (a) Travelers who dream to travel by air at least once in their life time (b) Travelers who care about time but couldn’t afford the price which was being charged by the full service airline
AC/ Second class travelers (middle class) of Indian Railways. small and medium enterprises (SMEs).
• Tie ups with Café Coffee Day. • Prices are almost 50% lower than the full-service airlines. Direct phone lines avoiding fees and commissions paid to agents.Strategies
• Single Air Hostess per flight. • No-Frills airline but food/beverage can be bought inside the aircraft. HPCL and Relianc Web
. • Unique Online Reservation systems. • A single type of airplane reducing services and training costs. • 48 seater aircraft to lower maintenance and service fee.
Other distinct features of Deccan as compared to Full-Service Airline
Outsourced airport staff Limited menu Paid water Cotton upholstery (unlike leather ones on full -service airlines) Normal coaches No refund for cancellation Charged for special services (like wheelchair and unaccompanied minors)
Vijay Mallya – Vice Chaiman
. Gopinath – Exec.Acquisition and Post Acquisition Issues
• Air Deccan in May 2007 sold 26% stake to Kingfisher Airlines • Combined Market share of 33% Second largest player after JetSahara • Air Deccan will continue to have independent identity • Capt. Chairman and Dr.
• Renaming ‘Air Deccan’ to Deccan • New Tagline: 'The Choice is simple’ • Blue and Yellow theme replaced by Red and White • No outsourcing of check-in-staff Replacement of Ailing aircrafts • Cost incurred in rebranding process: 15 crores •
• Make available flight services in North India • More friendlier and trained ground staff required. • Slow check-in can be removed by using automated check in process • Strengthening the reservation system to handle over booking • Venturing into air cargo • Strengthening it’s position in the industry •