Dear Friends:
There are the following India-related items of news in the New York Times today (07 03 2012) 1. Lessons to be Learnt from IndiGo Airlines 2. Supreme Court to Hear Dispute on Drug Patents 3. 'I paid a bribe' website Inspires others I am copying out the first item below in full for your convenience -bhuban How to Stand Out From Your Indian Airline Peers: Be Profitable By REUTERS Published: March 6, 2012 RECOMMEND TWITTER LINKEDIN SIGN IN TO E-MAIL PRINT REPRINTS SHARE NEW DELHI — It is not all doom and gloom for the beleaguered Indian airline sector. Add to Portfolio Go to your Portfolio » IndiGo, a low-fare carrier started in 2006, has climbed to second place in market share at the expense of Air India and Kingfisher Airlines and is the only one of the six main Indian carriers making a profit, for now at least. While Kingfisher and the market leader, Jet Airways, have bought rivals, fly multiple plane models and have struggled to mix full-service and low-fare options, IndiGo offers one class of no-frills service on a single type of plane, the same strategy pioneered by the U.S. carrier Southwest Airlines. IndiGo also sells and leases back its planes, sparing its balance sheet and allowing itself to maintain a young fleet. Kingfisher, headed by the liquor tycoon Vijay Mallya, has never made a profit and has grounded more than half of its planes as it struggles to pay staff members and creditors and scrambles to find investors. Last month, the tax authorities froze its bank accounts. “IndiGo has done everything right which Kingfisher has done wrong,” said Rajan Mehra, executive director of the Asia Pacific Academy for Aviation & Hospitality in New Delhi. Industry watchers say there is no great secret to IndiGo’s success, which they attribute to rigid adherence to a disciplined business plan, a task that grows more complex as the airline, which now has 50 planes, adds a new aircraft every month. Still, IndiGo is not immune to the industry’s myriad headaches, which include fierce competition, the weak rupee, high taxes, rising airport fees and the high cost of oil. “IndiGo so far might have been doing better than the others, but they are facing the same operational costs, the same infrastructure constraints,” Mr. Mehra said. Airfares are low in India, where carriers compete with trains and buses for passengers. For instance, a one-way ticket for April 18 from Mumbai to New Delhi, a distance of 1,160 kilometers, or 720 miles, starts around 3,935 rupees, or $79.50, on IndiGo, GoAir or Jet Airways’ subsidiary, JetLite, according to a popular travel Web site. Kingfisher and Jet Airways have learned the hard way that travelers do not want to pay for frills on India’s short domestic flights, leading them to set up low-fare offshoots to compete with IndiGo and its budget rivals, SpiceJet and GoAir. “What the customer wants is on-time performance,” said Mr. Mehra of the Asia Pacific Academy. “He wants good service onboard, he wants consistent on-ground and onboard services. He doesn’t mind paying for the food.” IndiGo’s rise mirrors that of Jet Airways in the 1990s, before Jet Airways became a sprawling international carrier that has lost money in the past four quarters. “Jet also came from nowhere, took on Indian Airlines and succeeded to become a big market-share holder,” said Mahantesh Sabarad, an aviation analyst at Fortune Equity Brokers. IndiGo has 21 percent of the domestic market, behind the combined low-cost and premium operations of Jet Airways and up from its 17 percent share at the end of 2010. The Center for Asia Pacific Aviation, an analysis firm based in Sydney, expects IndiGo to take the top spot from Jet Airways in a few months in an aviation market that grew 17 percent in 2011 and is expected to expand by 12 percent annually over the next few years. Last year, IndiGo placed what was then the biggest-ever commercial airline order, for 180 Airbus A320s worth $16 billion. They are to be delivered starting in 2015, when an earlier 100-plane order is completed. It also began flying to a handful of foreign destinations using the same narrow-body plane type. “Our only big objective is to prove that low-cost is not low-quality,” IndiGo’s president, Aditya Ghosh, told a group of management graduates in New Delhi recently. Based outside New Delhi in Gurgaon, IndiGo was founded by InterGlobe Enterprises, an aviation and travel services company owned by Rahhul Bhatia, and a former US Airways chief executive, Rakesh Gangwal. The airline has said it would consider an initial public offering, but Mr. Ghosh said recently that it had no current plans to do so. A version of this article appeared in print on March 7, 2012, in The International Herald Tribune. _______________________________________________ assam mailing list [email protected] http://assamnet.org/mailman/listinfo/assam_assamnet.org
