- 1. The self Made Titan of Indian Industry: Gorur Ramaswamy
Iyengar GopinathPioneer of Indias low-cost airline Air Deccan.
Ex-army officer turned farmer thenentrepreneur, in 1997, along with
another colleague from the army, foundedDeccan Aviation - Indias
largest Private Helicopter Charter Company. In 2003 hebecame the
pioneer in launching Indias first low-cost carrier Air Deccan -
thecommon mans airline.A former army officer and an award winning
Seri culturist, Capt G.R Gopinath,made his foray in the aviation
sector way back in 1995; at a time when domesticaviation was
monopolized by a handful of Full Service Airlines (FSA) and
strictgovernment regulations were the norm. He identified the
potential which thehelicopter charter business had in
India.Combining his entrepreneurial skills and vision with the
technical skills of his ex-army friends, he launched Deccan
Aviation a dedicated, customer focused heli-charter Company. Today,
Deccan Aviation, headquartered in Bangalore has 11helicopters and 2
small aircraft and operates out of nine major cities and
locations,spanning the entire length and breadth of India. The
company is Indias largest andmost reputed private air charter
company including Sri Lanka.
2. Early life & EducationCaptain G. R. Gopinath, Founder and
CEO at Deccan Aviation and Air Deccan is agraduate of the National
Defense Academy and has served the Indian Army. He isconsidered the
father of low cost air travel in India. He created a whole new
marketwhen he launched India`s first low cost airline, Air
Deccan.Capt G R Gopinath or Gorur Ramaswamy Iyengar Gopinath or
`Gopi` as he isaffectionately called was born in a Hassan Iyengar
family of the remote village ofGorur, Karnataka. Starting his
studies in a village school, he completed his furtherschooling at
Sainik (military) School, Bijapur. Thereafter he joined
thedistinguished National Defence Academy and later graduated from
the IndianMilitary Academy as a commissioned officer in the Indian
Army. He then went onto serve the Army for eight years.Sometime in
1995, the Govt. of India started the reforms process by
encouragingentrepreneurship. This inspired the entrepreneur in him
to identify the tremendouspotential Helicopter Charter had in
India. Along with an old Army friend hedecided to start a private
sector commercial helicopter service in 1996. Startingwith just one
helicopter, today Deccan Aviation boasts of 10 (Ten) Helicopters
andtwo charter jets operating from eight major locations
criss-crossing the entirelength of the country. This company is
Indias most reputed private Air CharterCompany with a presence now
in Srilanka also. 3. Never Give Up!For six years Captain Gopinath
slept under a thatched roof and tried to make livingby growing
bananas, cereals, coconuts, and vegetables in the government
providedland when his ancestral land was eaten up by a dam. It was
in 1985 that heswitched to silkworm rearing. And he had to wait for
four more years to see somesuccess. Yes, thats ten long years of
toil, and it didnt end with farming.When he launched Deccan
Aviation, it took Captain Gopinath four years to get onehelicopter
on lease. At every step he faced new bundle of challenges whether
theyemanated from government controls, competition, or something
else. His first AirDeccan flight caught fire and everyone wrote his
company off. But he says thathes been an optimist who always
refused to give up. He faced all challenges headon, to give India
Air Deccan that boasts about fastest aircraft turnaround time,
costefficiency, wide connectivity, and ticketing access.Pursue Your
PassionCaptain Gopinath stresses that one should pursue his passion
and never let fear offailing come in the way. The problems will
come and failures are unavoidable buthaving single minded focus,
determination, and ability to assimilate failures is theonly way
forward, he believes. From army, farming and deals, to
aviation,Gopinath has had one dream that is to make a difference
and in spite of all odds hecontinues to pursue that.Captain
Gopinaths Success MantrasSuccess hasnt been an easy sail for any
successful person you speak to. CaptainGorur R Iyengar Gopinath,
Chairman and Managing Director, Air Deccan didnthave a smooth
flight either. A graduate from National Defense Academy,
CaptainGopinath served in Indian Army for 8 years. He left army in
1979 when he was 27years old and ventured into farming. 4. After
tasting success as a Seri culturist he moved on to launch his
DeccanAviation, a heli-charter firm. The man gave India the lowest
fare airlines, AirDeccan. Recently, he sold his Deccan Aviation to
Kingfisher and now launchingyet another venture Deccan Cargo. He
doesnt believe that there is any set rule forsuccess but reveals
some mantras that has worked for him. Air Deccan Journey Leading
the pack was Captain Gopinaths Air Deccan that promised to
revolutionize air travel by allowing everyone to fly by offering
hitherto unheard of fares. Gopinath was a serial entrepreneur who
had earlier been a commissioned officer in the Indian army. After
discharge from the army he took up the challenge of farming barren
land given to his family as compensation for land that had been
submerged due to a dam project. Since it proved to be difficult to
grow conventional crops in this land, Gopinath finally turned to
sericulture and developed environmentally-friendly and innovative
ways of cultivating silk worms. He won the Rolex Challenge award
for his work, and his farm became a destination for governments and
NGOs seeking innovations in farming. Gopinath entered the aviation
business as a response to a pilot friend who did not have a job as
he felt that there was good scope for a charter company in India
given the distances and the economic development taking place. He
started Deccan Aviation 5. in 1997 providing chartered helicopter
and small aircraft across India. Many timespeople would approach
Gopinath (at Deccan Aviation) to travel to smaller townsbut back
away when they found out the price of the cha rter. He saw
tremendouspotential for aviation in India if flying could be
brought down to a reasonable price(everyone can fly). Inspired by
the low-cost airline model pioneered bySouthwest Airlines in the
United States (see Exhibit 2 for the Southwest model)and later
emulated by other successful carriers such as JetBlue and Ryan Air,
AirDeccan sought to cut the frills out of airline operations and
pass on the benefit tocustomers.Starting in August 2003 with
turboprop aircraft that connected small towns to largecities, Air
Deccan soon expanded to Airbus A-320 jet operations connecting
majorcities. Air Deccan offered a single class point-to-point
service, did not serve freemeals or even free water on its flights,
sold all tickets only through the internet orits call centre, did
not pay commissions or give credit to travelagents (thereby
avoiding the expensive process of managing credit andreconciliation
with the travel trade), had limited staff, and outsourced as
manyoperations as possible. To reach more customers, Air Deccan
created a newnetwork of travel intermediaries who would sell their
tickets. The airline also tiedup with a major oil company and the
Department of Posts (Post Offices) toenhance reach.While Air Deccan
was able to capture the imagination of the public and demandgrew
rapidly for its services thanks to its throwaway fares, the airline
itself wasplagued by operational problems as it sought to
aggressively expand its networkand fleet size. In the process, it
developed a reputation for delays, poor service andlack of
reliability. While the established players Indian Airlines, Jet and
Sahara -initially ignored Air Deccan, the obvious demand for air
travel at lower fares andthe urge to fill vacant seats prompted
them to start discounting fares as well. Thistook the form of a
limited number of seats sold at lower prices. Later, asother
low-cost carriers entered the airline industry, discounting without
the pre-purchase requirements of the Apex fares became the norm.By
September 2007, AirDeccan had reached a fleet size of 40 aircraft
(10 ATR-42, 8 ATR-72, and 22A-320 aircraft). It had achieved some
success in connecting distant places it wasthe only carrier
offering service to twelve of its destinations, and one of only
twocarriers offering services to six others.xii Air Deccan had 75
aircraft on order fordelivery by December 2012. 6. Awards &
honors Rolex International Award for Enterprise - 1996,
Entrepreneur of the year-National Academy of
Management,Entrepreneurship Indomitable spirit of enterprise &
outstanding achievements-Ernst & YoungIndia - 2004 Centennial
Excellence Award-Rotary International - 2004, Best Entrepreneur of
the year-Hutti Gold Mines - Peoples skill foundation -2005,
Personality of the decade-K.G Foundation, Coimbatore - 2005
Business Leader Award-World HRD Congress - 2005, Startup
entrepreneur of the year-NITIE - Entrepreneurship ExcellenceAwards
- 2005 7. ABSTRACTAir Deccan is the amazing story of Indias first
low-cost airline. It hasbecome one of the nations largest airlines
in less than four years. Theyhave done this through a cleaver
combination of innovation andoutsourcing. More importantly, from a
strategic perspective, it givespowerful evidence to how technology
can be a key factor in changingindustry dynamics, even in what were
once considered fairly stable orconservative industry.While Air
Deccan was able to capture the imagination of the public and
demandgrew rapidly for its services thanks to its throwaway fares,
the airline itself wasplagued by operational problems as it sought
to aggressively expand its networkand fleet size. In the process,
it developed a reputation for delays, poor service andlack of
reliability.Business modelThe elements of Air Deccans no-frills,
low-cost air carrier business modelinclude: Offering low fares to
stimulate demand. We believe low fares will help Air Deccan
generate new business throughout India not only in new and
under-served markets, but also in established markets that have so
far failed to offer Indian middle-class consumers and
cost-conscious businesses a choice of sufficiently cost-effective
fares. Air Deccan targets leisure, small business and corporate
customers, and seeks passengers from the Indian middle class as
well as from the cost-conscious segments of more well off 8.
classes. Selecting routes to stimulate demand. As of November 30,
2005, Air Deccan offers passengers a choice of 62 routes and 44
destinations. As at November 30, 2005, it is the only carrier
providing service to 9 of its destinations and one of only two
carriers providing service to 7 of its destinations. We believe
that Air Deccans route strategy will help it grow new markets for
air travel in India, as well as help it serve major urban centres
with cost-effective fares. As it grows, we expect Air Deccan to
increase the frequencies of its flights on certain existing routes,
connect new city pairs among destinations it already serves and
initiate service to new destinations, including some already served
by other airlines and some currently not served byairlines at all.
Reducing costs, increasing utilization. To help make its low-fare
strategy as profitable as possible, Air Deccan strives to:(i)
reduce the costs of its operations. It does so in part by seeking
towhen such use can complicate operations, such as in passenger
check-in,and outsource non-core business processes.(ii) provide a
no-frills service.Air Deccan seeks to provide a simple service in
exchange for its lowfares. Product and service extras that are
notReasonably necessary to the core task of flying passengers
safely and efficientlyare eliminated. Practices that many other
airlines engage inregularly, such as providing help to passengers
during layovers or offeringFrequent flier programmers, are not
offered. Air Deccan passengersexperience a pared-down version of
flying compared to what many otherairlines offer. But, they can pay
less for an Air Deccan ticket and still get the basictransportation
service they require.(iii) seek high aircraft utilization. Air
Deccan employs dense, single-classseating arrangements in its
aircraft andfollows scheduling, ground handling andoperational
strategies designed to keep its planes in the air as long as
practicalevery day. These measures help Air Deccan to increase
itsavailable seats flown. Air Deccan then uses load factor and
yieldmanagement techniques in order to help maximise the revenues
earnedfrom, and help minimise the operating costs associated with,
those available 9. seats flown. providing a safe and on-time
service. We consider the provision of safe travel tobe of essential
importance to our service. We believe that customers also
demandon-time service and expect a minimum of delays, flight
cancellations, baggagehandling Increasing ancillary revenues. In
addition to charging for tickets, Air Deccan earns revenues from
charging for in-flight food and drink, selling advertising space on
theInterior and exterior of its aircraft and in a number of other
ways. The airlineregularly seeks to earn ancillary revenues where
opportunities exist and thesimplicity of its operations will not be
compromised.Routes Strategy and NetworkAir Deccan operates from six
bases located in the largest urban centers in India:Mumbai, Delhi,
Chennai, Bangalore, Kolkata and Hyderabad. Air Deccan flies
itstrunk routes among these bases, and flies routes that connect
its bases with variousregional business, leisure and religious
locations and state capitals, which are oftenunderserved. In
certain cases, it also flies routes between regional locations.As
part of its strategy of simplifying its operations in order to
reduce costs andattract a high volume of passengers, Air Deccan
flies point-to-point routes only.That is, it does not seek to time
some of its flights to connect with other of its 10. flights, to
deliver passengers at times convenient for connections with
otherairlines flights or to facilitate the movement ofPassengers or
baggage from one plane to another. Air Deccan flies
point-to-pointroutes among major cities, where it seeks to capture
a high volume of passengertraffic and where it provides a
relatively high frequency of flights. It also fliespoint-to-point
from these large cities to smaller regional destinations, and in
certaincases point-to-point among regional destinations, in each
case seeking to capture acost-effective passenger volume and to
grow the demand on such routes as theirregional destinations grow
in economic importance. 11. Cost managementIn order to help
translate its low-fare strategy into positive results of
operations,Air Deccan strives to reduce the costs of its
operations. It does so in part byseeking to simplify operations,
use technology when it can reduce costs, rejecttechnology where it
can complicate operations and outsource non-core businessprocesses.
Simplifying operations can remove layers of costs, not all of which
areobvious. For example, by arranging flight schedules so that an
aircraft ends eachcrew shift at the same airport where it started
that crew shift, Air Deccan caneliminate the cost of putting crews
up overnight away from their homes, reduce theneed for the airline
to monitor crew locations between flights and streamlinemaintenance
and other procedures related to the aircraft itself because the
aircraftcomes back each day to the place where it started.In
addition, Air Deccan has outsourced non-core operations in an
effort to cut thecosts of such operations. The food and drink that
is sold on board our aircraft isprovided by a third party supplier,
as is the in-flight magazine and in-flight screenentertainment.Air
Deccan also seeks to manage costs (and to create revenues) through
sales andbarter exchanges for advertising space. A variety of
internal aircraft spaces, such asstorage bins, headrests, tray
tables, baggage tags and boarding passes, have beenleased for
advertising. In addition, Air Deccan leased advertising space on
theoutside surfaces of aircraft. The Air Deccan Internet site,
electronic newsletter ande-brochure are also used for advertising
space. In flight, the airline currently offersdrop-down TV screens
which show freely provided video content and which canalso support
advertising. Air Deccan provides an in-flight magazine to
passengers.The magazine is outsourced at no cost to the airline and
is revenue-generating on ashared basis through advertising sales.
As a result of advertising barter exchanges,Air Deccan is also
accumulating advertising time on national television
channels,newspapers and a radio channel. 12. Working capital
managementAir Deccan sells tickets almost entirely on the basis of
payments made in advanceor within 24 hours of booking. As a result,
it can reduce its need to financeworking capital requirements. Air
Deccans ticket payment system also reducescustomer credit risk for
the airline. For a description of Air Deccans sales anddistribution
channels, seeMarketing and Distribution. Air Deccan requiresworking
capital to fund its payments for fuel, airport charges, personnel,
aircraftlease payment finance and some maintenance operations. Air
Deccan generallyreceives credit as a purchaser of goods and
services for up to 15-30 days, except inthe case of aircraft lease
payments, which are payable in advance. Advance ticketsales
receipts fund a substantial portion of the working capital needs.
Many airlineshave substantially less beneficial sales and payment
arrangements. For example,airlines that deal with traditional
travel agents or that take reservations through oneof the global
GDS reservations systems may need to wait 30 days or more to bepaid
for tickets sold.Marketing and distributionAir Deccan targets three
market segments, which it refers to as follows: leisuretravelers,
business travelers and corporate travelers. Each segment
exhibitsdifferent characteristics and needs, and presents Air
Deccan with differentopportunities to develop its business. Leisure
travelers. Leisure travelers travelfor holiday / pleasure, or to
visit friends and relatives, or make regular visits totheir native
regions or for a religious pilgrimage. Leisure travel includes
advance-planned travel, generally as part of a longer break and
generally booked well inadvance and shorter trips, such as
three-day weekends, which are planned closer tothe travel date and
on which a leisure traveler may be willing to spendproportionately
more. As a general matter, we believe leisure travelers are
highlyprice conscious, making them an important market for Air
Deccan.Weekend getaways are also becoming increasingly popular and
many newdestinations have opened. We believe these trends are the
result of a growth indisposable income coupled with a desire for an
upgraded lifestyle.We believe that as Air Deccans India network
grows, non-resident Indians whoreturn to India to visit family will
become an integral part of our customer base. In 13. an effort to
reach out to these non-resident Indians cost effectively, bookings
canbe through www.indiatimes.com. Business travelers. Air Deccan
uses the termbusiness travelers to refer to travelers working for
small and medium enterprises,who engage in business travel at their
own cost (as part owners in their business) orwho are otherwise
highly cost- and time-conscious due to the size of the business,and
are used to travelling in, for example, air-conditioned classes on
trains.Because they pay for their travel themselves or work for a
small cost-consciousorganization, we believe business travelers are
likely to be careful with travelexpendituresAir Deccans is strongly
focused about its value proposition, which is low fares.Air Deccan
seeks to communicate the value proposition through:public
relations, advertising, direct marketing and the Internet.Air
Deccan regularly evaluates its branding and position in the
marketplace inorder to constantly refine communications strategy to
relate to its target customers.It targets both existing air
travelers in its three customer market segments, focusingon the
value and services it can provide to each segment, and customers
whocurrently travel by rail or road, emphasizing that the airlines
low fares translateinto flying made possible and a better lifestyle
through air travel.To help convey its desired brand message, Air
Deccan has been granted the right touse Mr. R.K. Laymans celebrated
Indian mascot the Common Man as its brandambassador. We believe
that the use of the Common Man helps communicate tothe mass of the
Indian middle-class that Air Deccan is working hard to make
thedream of routine air travel a reality for Indians, and helps
those same peopleassociate themselves with that dream. Air Deccan
directs customized marketinginitiatives at certain of its targeted
customer segments. For leisure travelers, itoffers a ticket package
called Value Flier, which provides multiple tickets useableover
time by up to four members of the same immediate family. The
airline is alsoin the process of developing leisure packages with
bundled hotel offerings.Air Deccan advertises principally through
media channels such as print, radio andbillboards and also, to a
lesser extent, through television. The airline seeks to
usetelevision advertising to build emotional connect and print and
billboardadvertising to hammer out its low fares message. Air
Deccans marketing effortsbenefit from sales and barter exchanges
for advertising space.A variety of internal aircraft spaces, such
as storage bins, headrests, tray tables,baggage tags and boarding
passes are used for advertising. In addition, Air Deccanrents
advertising space on the exterior surfaces of the aircraft. The Air
Deccaninternet site, electronic newsletter and e-brochure are also
used for advertisingspace. Air Deccan provides an in-flight
magazine to passengers. The magazine is 14. outsourced at no cost
to the airline and is revenue-generating on a shared basisthrough
advertising sales. As a result of advertising barter exchanges, Air
Deccanis also accumulating advertising time on national television
channels, newspapersand a radio channel.Human ResourceAir Deccan
places great emphasis on the selection and training of
enthusiasticemployees with the potential to add value to our
business and whom we believe fitin and contribute to our business
culture. It has a preference for employees whohave an
entrepreneurial spirit and are motivated. Air Deccan maintains a
relativelyflat management structure to avoid wasteful layers of
reporting and oversight.Pilots are generally in short supply in
India. Under DGCA requirements, firstofficers (co-pilots) must be
Indian. Also, non-Indian captains (pilots) must havepreviously
flown 50 hours on the type of plane they are piloting. To address
thepilot shortage caused in part by these rules, the DGCA has
recently passed a newrule requiring pilots to give 6 months notice
before leaving an airline. In addition,the mandatory retirement age
for pilots has been increased to 65 years.In general, an airline
needs five flight crews, or ten pilots, per aircraft, although
AirDeccan can, for shorter periods, operate with four flight crews
per aircraft. Weseek to employ a sufficient number of qualified
pilots to be ready to staff newaircraft as they are deployed, at
least four months in advance. Air Deccan hasinstituted a continuous
sourcing project to recruit pilots. It also seeks to fill
pilotpositions by training co-pilots, and, in the case of Airbus
A320 pilot positions,existing ATR pilots. Air Deccans in-flight
cabin crew members pay for their owninitial training. Their
compensation is 20% fixed and 80% variable depending onhow often
they fly and any additional incentives they earn. Air Deccan seeks
tomake sure that in-flight service costs are kept to a minimum.
Therefore, the foodand drinks served on board must be paid for by
passengers. 15. Market Share of leading airlinesIndian domestic
airlines, including Air Deccan, also compete against other formsof
transport, including rail and road transport. Terrorist or other
incidents that leadto the imposition of tighter security measures
for air travel are just one of thepossible future developments that
could hinder the competitive effectiveness of airtravel. The Indian
Railways are the largest transport entity in India and in
fiscalyear 2004, carried approximately 52 million passengers
travelling first class and airconditioned second class.Any failure
compete effectively, including in terms of pricing,
marketing,operations, safety, security, providing services, helping
the Indian market toembrace our no-frills product offering or
otherwise, could have a material adverseeffect on our business,
financial condition and results of operations. In particular, itis
to be expected that as competition in the Indian market increases
and low-fareairlines compete head-to-head more often, competing
airlines may engage insignificant fare reductions and discounting,
or price wars. It is difficult to predicthow long or how aggressive
any such price wars might be, or how well or poorlyAir Deccan could
sustain its business, financial condition and results of
operationsduring any such price wars. 16. The Indian airline
industry is very competitive and we expect competition toincrease
in the near future. Air Deccans market position will depend upon
ourability to anticipate and respond to various competitive factors
affecting theindustry, including pricing strategies and the
emergence and growth of other lowfare carriers. We expect that
increased competition may further shorten supplies ofpilots and
engineers, making them costlier to employ.Currently, Air Deccans
most direct competitors are the airlines Spice Jet and GoAir.
SpiceJet is a relatively new entrant into the low-cost carrier
market. GoAir, aprivately owned low-cost carrier, began operations
on November 4, 2005. Othercompetitors include the Indian
Government-owned Indian Airlines (including itssubsidiary Alliance
Air) and the private companies Jet Airways and Air Sahara. Allof
these airlines are full-service carriers offering flights on
domestic routes andcertain international routes. In addition,
Kingfisher has recently begun a domesticairline that currently
appears to be following a full-service strategy.Furthermore,
Paramount Airways, an all business class, economy-fare
scheduledairline, commenced operations in September 2005. There are
also variouspublished reports of other airlines being set up or
commencing operations as eitherfull service or low-cost airlines.
As and when such airlines commence operations,they would compete
with us and other existing airline operators. 17. Growth Analysis -
Year on Year1. No. of destination2. No. of flights 18. 3. No. of
Passengers 19. Financial Performance 20. Merger with Kingfisher
AirlinesAir Deccan airlines merged with Kingfisher Airlines and
decided to operate as asingle entity from April, 2008. It would be
known by a different name-KingfisherAviation. The merger is based
on recommendations of Accenture, the globalconsulting firm. KPMG
was asked to do the valuation and the swap ratio wasdecided
accordingly. The merger came through on as Vijay Mallya
fromKingfisher airlines bought 26% of the stake in Air Deccan. The
unification of thetwo carriers had to be sanctioned not only by the
two panels, but also by theinstitutional investors, independent
directors, and other shareholders. Air Deccanhad four independent
directors-which included prominent persons like IIM ProfThiru
Naraya, Tennis player Vijay Amritraj, and A K Ganguly, Former
MDNabisco Malaysia.After the merger, the company has a combined
fleet of 71 aircrafts, connects 70destinations and operates 550
flights in a day. The combined entity has a marketshare of 33%.
Gopinath would continue as the Executive Chairman and Malaywould
take charge as Vice Chairman. The charter service of the respective
airlineswould be hived off and operate as a separate entity. Post
merger, KingFisher wouldoperate as a single largest (private)
airline in the sub-continent. Besides,operational synergies
(engineering, inventory management and ground handlingservices,
maintenance and overhaul), the management and staff of both the
airlineswould be integrated. They would be stronger vis-a vis
lessors, aircraftmanufacturers (Airbus in this case), and will also
spend less on training andemployees. 21. Costs would also reduce
which is associated with maintenance of aircraft. Thesavings in
cost would be lower by about 4-5% (Rs 300 crores) (Business
Standard,June 3, 2007, 4) which is a large sum. It would result in
a saving of 3 billion in thefirst year itself through the sharing
of aircraft and workers. (Business Standard,June 13, 2007, p-13.)
Further, by devising a more optimal routing strategy it couldhelp
in rationalizing the fares.Before the merger Air Deccan recorded a
net loss of Rs 213.17 crores on revenueof Rs 437.82 cores for
2006-07. The company had also raised Rs 400 croresthrough an IPO in
May 2006.The merger will create a more competitive business in
scale and scope to emergeas market leader. Air Deccan began its
operations with one aircraft and with oneflight but after the
alignment with Kingfisher Airlines, has a total fleet of seventyone
aircrafts-41 Airbus and 30 ATR aircraft (Business Standard, June 7,
2007, p-8). It operates 537 flights (Business Standard, June 3,
2007, p-4) and covers 70destinations. It offers point to point
service. IAfter the merger, it is expected that Kingfisher will
focus more on the internationalroutes while Air Deccan will give it
a wider domestic reach. Also Air Deccan plansto continue as a low
cost carrier while Kingfisher will function as a
full-servicecarrier. There will be immense synergies as both
operate Airbus. The average ageof the Air Deccan fleet is 6.1 years
as of Apr 2006.* Air Deccan operates a fleet of43 aircraft
comprising 20 brand new Airbus A320 aircraft and 23 ATR
aircraft.The Airbus aircraft serve metro routes while ATR are
utilized for Tier II and IIIcites and also for small airports. The
newly formed company plans to revisit theirfleet plan in
coordination with each other to rationalize the fleet structure.
Workingon these lines the company has already placed orders from
the European aircraftmajor, Airbus Industries for about 90
aircrafts. These include five of the largestaircraft-A380, the
first of which is slated to be delivered to Kingfisher by 2011.It
is also Indias largest private sector helicopter charter company,
which pioneeredhelitourism in India. It offers point to point
service. It has a secondary hub atChennai.*Deccan Aviation is the
largest private sector helicopter charter companyin India. It has a
fleet of 12 helicopters and small aircraft deployed in 8
basesacross India. These bases are at Bangalore, Mumbai, Delhi,
Ranchi, Hyderabad,Surat, Katra and Colombo (Sri Lanka). There are
many changes that have takenplace. This period of consolidation in
the sky gives a good signal to the airlinesindustry. It may lead to
reducing the over-capacity existing in the market and 22. thereby
stabilizing prices, increasing yields and bringing down costs. The
era ofcheap fares might also come to an end.