Monday, May 16, 2005

Simply Fly?

Talk of Air Deccan to Rajeev Pratap Rudy and Venkaiah Naidu, and they would get terrorized recollecting Sep 26’03
Talk of Air Deccan to Capt Gorur Ramaswamy Gopinath, and he is full of enthusiasm and determination;
Talk of Air Deccan to Vijay Mallya or Mr. Thulasidas, and he would scoff at the idea of Air Deccan reaching the top 3 in a couple of years;
But then …talk to a common man, and you would see the glow on his face, the dream-come-true hope reflecting on his expressions, the eagerness with which he would inquire about the availability of next Rs. 500 (now even Re 1) tickets.
No wonder, “Common Man” has been selected as the Brand Ambassador for the 2 year-old airline

India’s low cost airline Air Deccan said on Wednesday that it will sell some of its tickets at Re 1 and named renowned cartoonist R.K. Laxman's `Mr Citizen' as the brand ambassador of the airline.
"The vision of Mr Laxman and that of the airline matched and that's why he agreed to let us use his creation to promote our airline," the Managing Director, Air Deccan, Capt Gorur Ramaswamy Gopinath, told a news conference.
Introduction to the DynaFares is just one of the promotional strategies that the airlines has ventured into, and as is evident from this count from their home page, it SURE was not a bad campaign!

In addition to this, Air Deccan plans to sell tickets by mobile vans and at petrol pumps to tap the middle class segment, with a tie up with Hindustan Petroleum Corporation Ltd (HPCL) to sell tickets at its Club HP petrol pumps.

In a trial run, airliner Air Deccan will sell its air tickets by mobile vans at three places in Bangalore - M G Road, BDA Complex, Koramanagla and outside Woody's on Commercial street.
Maruti vans hired by the travel agency installed with web-enabled services will serve as mobile ticketing counters to sell tickets six days a week (Monday to Saturday) and payments could be made in cash or by cards. The mobile ticketing centers will be connected to a central reservation system to enable providing confirmation of the tickets.

The bulk of the customers at petrol refueling stations were the middle class, the very segment that Air Deccan wanted to tap. The proposal is a win-win situation for both, since the cash earned by the petrol pumps could be rolled over due to the sale of tickets.
But what is it that is driving the 450-odd strong organization, that makes it the second-best brand in the 9th Brand Derby, a survey conducted by Business Standard a couple of months back, which illustrates the brand awareness and the recall value that the brand enjoys !

Consolidated primarily from excerpts from a Businessworld Cover Story and the web-version,
The Managing Director, GR Gopinath avers that his airlines is the Udupi Hotel of the airlines business.
The Business Strategy included:
(a) Quick turnaround, taken from the pages of Ryanair, and Southwest, implying that the aircraft are utilized more thereby reducing the capital and crew costs, apart from the hangar and finance costs.
(b) Target Segments - the travel segments are corporates (middle-level employees), small and medium enterprises (SMEs), anyone who wants to go on leisure, and those visiting friends and relatives (VFR).
(c) They did not connect with the metros initially. They entered the regional areas, which were disconnected, but promised capacity traffic.
(d) They took a leaf from Virgin Blue, thereby relying on another factor – frequencies of flights plying between 2 cities, thus ensuring customer loyalty (It operates 22 flights a day on the Sydney-Melbourne route, the highest number of flights between any two cities. There's a flight every 15 minutes a day, and this has helped Virgin increase occupancy. The business traveler thinks if he misses one, he can take the next one as there are flights every 15 minutes, or the one after that).
(e) Its strategy for East-India expansion was to focus on the long-journey-connectivity, than the 1½ hour connectivity it followed for the other regions ( As covered by Outlook ).

BBC says Air Deccan has modeled itself on European no-frills carriers Ryanair and Easyjet and believes the market for cheap fares in India could be huge. Thus, the USP for Air Deccan, like any other LCA, is the biggest 'P' of marketing.
Industry experts say price remains the biggest part of travel and even though Air Deccan offers no frills it does offer television shows and recorded music to make the journey pleasant. Also in a two-hour journey most travellers don't need more.
What are the ways in which it is controlling costs? Is this system fool proof, or are there loopholes present, which are still unaddressed?
Check out the next post !
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