Fly the slightly less unfriendly skies of Air Koryo
North Korea’s Air Koryo is cleaning up its act
“I’m sick of all the same footage of marching, pictures of Kim”
After years of being ranked by business travel site Skytrax as the world’s worst airline, North Korean national carrier Air Koryo is undergoing a revolution of sorts. New planes, in-flight entertainment options, smart uniforms for the cabin attendants, and even an upgraded business class are coming to the much-maligned operation. It’s all part of supreme leader Kim Jong Un’s effort to boost tourist numbers 20-fold, to 2 million, by 2020 and supplement the nation’s meager foreign exchange.
That may mean adventurous travelers—like those who boast they trekked to Mongolia’s Ulaanbaatar back when they had to pack their own toilet paper—should book tickets now, before the thrill of flying the world’s only one-star airline vanishes.
The main draw for many is to peek inside the world’s most isolated country. As Singaporean Mindy Tan put it after a visit last year: “I’m sick of all the same footage of marching, pictures of Kim. I just had to witness it for myself.”
For those not put off by the odd nuclear test, missile launch, or party purge, there are options aplenty. Where else can you run a marathon down the same Pyongyang streets frequented by young girls with replica grenades hanging from their belts
or watch 100,000 kids do a synchronized dance? North Korea wants to eventually open attractions such as the Masikryong ski resort and Lake Taesong golf club. Neither Colorado’s Aspen nor Scotland’s St. Andrews needs to worry yet.
It’s been said that the real draw of travel is the journey rather than the destination, and for that Air Koryo doesn’t disappoint. The video screens that drop down from the ceilings of its planes entertain guests with propaganda broadcasts and concerts by supreme leader Kim’s favorite all-female band, Moranbong, which sings patriotic songs about, well, him. Bring noise-canceling headphones. It’s a communal experience, and there’s no volume control.
Air Koryo recently acquired two Russian-built Tupolev Tu-204s for international routes, with an economy ticket costing about 900 yuan ($138) for the two-hour journey from Beijing. But U.K.based Juche Travel Services is offering an aviation-themed tour of North Korea from May 9-13 for those who want to fly on the older Soviet-era aircraft the airline is famous for. Choices include buzzing across the picturesque Myohyangsan region on a Mil Mi-17 transport helicopter and a ride on the last passenger Ilyushin IL-18 still in scheduled service. “It’s a very different experience, traveling back 20, 30 years,” says Sam Chui, an aviation enthusiast who’s flown Air Koryo about 20 times.
Fliers may endure long check-in lines and immigration hassles on their way to North Korea, but things should be copacetic after arrival in the Democratic People’s Republic. No longer do tourists have to shuffle through the temporary shed that masqueraded as an airport terminal for the past five years. The capital has a sleek new building. With fewer than a half-dozen international flights a day, the airport bus may deliver passengers on time to the almost deserted building.
The food, especially in the new business-class lounge, has improved, but the most-photographed part of any Air Koryo trip remains the in-flight meal. “The burger has been going on for so many years, everyone’s making fun of it,” says Chui, who’s eaten at least 10. When contacted for details about the comestible, representatives at Air Koryo’s Beijing office didn’t respond.
The bottom line Air Koryo is upgrading its service as part of North Korea’s plan to increase tourist arrivals 20-fold. It may be too aggressive a target.
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With outlets mostly concentrated near Mumbai, D-Mart squeezes more revenue from its stores than competitors—an estimated 24,000 rupees of sales per square foot, vs. 9,200 rupees at Future and 14,100 at Reliance. “Other big retailers, they start hiring from the top, set up the head office, warehouses, and then eventually hire for the store. That kills it,” Noronha says. “When you start building from the top, the cost will be too high.”
India requires makers of packaged goods to set a maximum retail price, or MRP, for every item. Selling products— whether bath soap or cooking oil— for more than this published price is illegal. The statute is meant to protect consumers from wanton profiteering, but it also makes it “incredibly difficult” to profitably run a retail business, says Ashok Deenadayalu, a consultant at Mithras Retail Services. That’s because chains can’t charge more based on where items are sold—even when real estate or distribution costs are higher.
D-Mart’s draw for consumers is its promise to sell goods below this price, some by as much as 12 percent; it sells groceries plus a wide assortment of cheap household items— school bags, cooking utensils, and the like—akin to a dollar store. “If you give cheap prices on basic and common products, the perception gets built that everything in the store is cheap,” Deenadayalu says. “Customers come for the food but also buy a whole lot of other goods that have high margins.”
Growth will come from new stores and trimming costs, but margins are unlikely to increase much, Noronha says. “When you are in the business of value retail, it’s stupid to expect anything more,” says the former Unilever manager. “In a developed country, you can get away with making 30 and 40 percent gross margins. Not here.”
The bottom line Foreign retailers have had a tough time in India. A local, D-Mart, uses supercheap prices to win business.