Indian Aviation on the rise
Giorgio De Roni, CEO, Goair gets into an animated discussion with about the challenges faced and the potential of Indian Aviation.
ANITA JAIN Currently
operating 7.6 flights per day per aircraft, the carrier operates 720 direct flights a week through 13 A320 aircraft. With the addition of one more aircraft (A320) by January 2013, the airline expects to increase another 54 flights a week and 700 additional flights per week through the extension of network. The airline also aims to carry 5.5 million passengers in this fiscal year. Moving further, the airline will take the delivery of four more A320 aircrafts in 2013-14 and two more in 2014-2015 and starting 20162020, it will take the delivery of 72 A320neo aircraft. The airline expects to save 15 per cent on fuel and lesser impact on the environment (less emission) through the neo aircraft. After which we transfer the saved cost to passengers through appealing fares. out efforts on retail shopping. And we target corporate or SME traffic only through the support of travel agents/DMCs or retail partners as they represent more than 80 per cent of our revenue source.
India is a very different market. The LCCs in Europe get more than 90 per cent of their bookings from direct sales ( web)/ call centres. However, this model can not be replicated in India and it would be a great mistake from my side if I try to do so. Definitely, going via travel agents puts additional cost in our revenue but at the end of the day, the results are pretty positive. the volume. In fact, the Indian Aviation industry has recorded a significant decrease in demand in July 2012 further after the decrease in June 2012. One of the reasons we want to enter the international arena is to further increase our aircraft productivity. Talking about aircraft productivity, I suppose we have the highest aircraft utilisation per day with roughly 13 hours per day per aircraft. And this contributes to keep our cost structure efficient. where the air- travel demand has just doubled. There is a gap of demand, supply and space to induct more aircraft to meet the rising demand. Also, the purchasing power of middle- class population is growing in India leading to the increased demand in air- travel. Additionally, in India we are talking about five to six per cent GDP while in Europe it’s somewhere close to minus two per cent. Thus, I’m confident that we will be able to grow in the future.
It’s difficult to operate on low cost structure due to high input cost. Our target is to deliver value for money and to serve better to a price sensitive market. We are the only ‘LCC’ in India offering Business Class. In fact, the added value in our Business Class (ease in boarding/deboarding procedures, middle seat empty for passenger comfort, dedicated cars, hot meals, extra baggage allowance, etc) is significantly appreciated by our customers. With just a difference of 2,500 in Economy and Business Class, the price is much lesser than the traditional carrier with similar value propositions.
Also, in my view, I don’t see a huge gap between traditional and low cost carriers. Low cost carriers are not offering Business Class, loyalty programmes, entering GDS, etc. So, there is now, a very thin line between the two models. At the end, we all are striving to deliver value for money, on-time performance, comfortable experience, etc.