SimpliFlying » Air India

How AirAsia is rocking it in India, and how airlines in India can leverage their entry

Shashank Nigam — Thu, 27 May 2010 16:51:14 +0000

AirAsia’s India market entry has recently created waves and lots of discussion about what this means for the future of the industry in India, specifically local airlines. I was interviewed by a leading business newspaper in India on this, and here are excerpts from that interview.

How do you think Air Asia permeates a market and wins it? Some interesting anecdotes?

When it comes to new market launches, AirAsia is one of the most innovative, not just in the region, but in the world. And I can say that confidently, having worked with a lot of airlines around the world. They don’t just have advertisements, but connect with the customers at a deeper level, having conversations about topics relevant to them, and yet creating a splash.

Take the recent Mumbai flights launch, for example. Not only was there pomp and show during the first flight, and even Bollywood was invited, at the same time, over the last couple of months, AirAsia built up a lot of interest about Mumbai and India through candid articles on its very popular blog, Planely Spoken, like “Mumbai in 3 days and 2 nights“. On the day of the launch, there was even a special Twitter hashtag #AAroxMumbai where followers could participate in the happenings.

Moreover, when AirAsia enters a market, it tries to dominate it, first by entering multiple cities, then by adding frequencies to those cities such that it is the dominant player. Trichy, AirAsia’s first Indian destination has three flights a day to Malaysia. The airline will have almost 150 weekly flights to India before the end of the year, which will make it the 2nd most dominant airline in India, after Emirates.

It is this out-of-the-box marketing strategy, coupled with complete route dominance that makes AirAsia a formidable player in any market.

They have openly admitted loss in Middle East market entrance. Do you think all other next door markets are pretty exhausted by them so India will be key to there future?

Personally, I don’t think they’ve “admitted loss”. What they’ve done is retracted out of the market – for now. That because just a single route to Abu Dhabi couldn’t be sustained on its own, without dominating other nearby destinations. They will probably re-enter when their new A330s arrive. So, it’s not really exhaustion, but the opportunity that’s leading them to India. They’ve already conquered Southeast Asia, China and even the Australian cities they’re in.

India is the next logical choice, with AirAsia’s destinations like Bangkok, Singapore, Bali and Kuala Lumpur already popular among Indian tourists. The Indian tourist is price sensitive, and time insensitive. This means they will hunt down the cheapest bargains, even if the journey takes a little longer. This fits in very well with AirAsia’s model.

How can the Indian government promise a level playing field?

I think AirAsia entering India is a double-edged sword. While its entry is a boon for the Indian traveler and tourism in India, it might spell doom for some of the Indian airlines. Already, Air India and Jet Airways have had to slash prices to destinations AirAsia flies to. The onus now lies not on the Indian government, but the individual airlines themselves, to innovate and come out on top.

Two airlines I have confidence on are SpiceJet and Indigo. Especially the latter, given its grandiose growth plans for the next couple of years. Both airlines can soon fly internationally, and though SpiceJet is muted about its destinations, Indigo has expressed clear desire to head down to Southeast Asia – where Air Asia and Tiger Airways loom. On the west, it’s the threat of Air Arabia and FlyDubai.

A smart move by the Indian budget carriers would be to forge some sort of an alliance with AirAsia. Though code shares to India are a remote possibility, assuming the purist LCC models, a much more likely scenario would be to synchronize timings of their flights, or have a marketing tie-up for destinations beyond those the Indian carriers will fly to. For example, a passenger might fly Indigo from Delhi to Singapore (a route AirAsia is not authorize to fly), and AirAsia from Singapore to Bali. This becomes a win-win situation then.

Have you flown the NEW Air India yet? I have. Here is my brand experience from Toronto to London Heathrow.

Shashank Nigam — Tue, 08 Dec 2009 09:48:38 +0000

Why I had never flown Air India before…

I had never flown Air India till yesterday – intentionally. And I had my good reasons.

Last year, I booked my mom on a Singapore-Delhi Air India flight and the A310 was delayed by over 3 hrs, ensuring that she missed her onward connections. Moreover, a lot of friends who tried to save money had horror stories to tell. One of them once asked for water and the stewardess replied in Hindi, “This is not my lane. Ask the other woman“. That ensured that I never tried the Indian national carrier even though I had the opportunity to, multiple times. So I had really lowered my expectations.

Why I finally flew Air India – the new plane and the new partnership

This time I had the choice of flying from Toronto to Greece either on LOT Polish’s ageing B767 via Warsaw, or Air India to London and then Aegean to Athens. I went for the latter option, because I could fly the B777-300ER of Air India and then the brand new A321 of Aegean. Moreover, I could earn Singapore Airlines Krisflyer miles on Air India due to their recent partnership. May be if CrankyFlier had tweeted me his recommendation to try LOT earlier, I’d have probably given that a shot.

Getting on-board the plane is part of the experience

Air India had the most stringent security process I’ve been through – separate security personnel just for the airline, in addition to the airport security officials. All of whom spoke English, Hindi, Punjabi and probably French! Every single electronic device had to be turned on in front of them. Old ladies had to take out achaar (Indian pickels) and laddoos (milk-flour sweet round dumplings) from their handbags, regretfully. But trust me, I felt REALLY safe. So did others.

The most intriguing take-off ever!

I was in a plane full of Indians. And it was very fascinating. Ladies praying, some closing their eyes (in fear!), children clapping and adults joining in. All just as the plane took off. I had fun watching all this. And it was an on-time departure.

As soon as the seat belt sign was turned off, people started congregating in different sections of the plane, mostly near the toilets (I was glad I didn’t choose the bulkhead seats!). Soon, dads were standing up in the aisle and feeding the kids. Literally a quarter of the flight was kids less than 5 years old. And a third of the passengers were elderly – over 55. The lady next to me spoke to me only in Punjabi. Luckily, in my recent trip to India, I was able to brush up mine while in Chandigarh, and could carry on a conversation with her. Made up for an interesting mix!

Air India’s new 777s rock!

The product was world-class. The economy seats second to only Singapore Airlines’ A380 product. They had a good pitch, felt very wide (I even squeezed my Macbook next to me!). They even had USB ports, newly-designed remotes and a dual IFE which had a touch-screen operation too. If you’re an Indian, I think you’d love the IFE. There were tons of Bollywood movies, both Classic and the latest hits. I just passed my time with some bollywood music videos – wasn’t ready for a 3hr melodrama at 2am! So, the hardware was well beyond my expectations.

But bad habits are hard to change…

Let me clarify. The service wasn’t bad. But it was very basic and functional. Like that of a United. Children were served first, and I could see urgency. And that’s where the good stuff ended. The rest of the service was lethargic. Some of the male flight attendants looked like they had run out of razors a month back. Doesn’t Gillette still produce them?

The food was not bad. But out of the 10-12 flight attendants, only one managed a smile. That too, occassionally. When I intentionally beamed at the one serving me, she avoided eye contact. As if they’d be fined for smiling at passengers! Later, when I went to the galley, I saw them having a ball of a time among themselves, talking about the latest Bollywood movies. Their policy seemed to be to get out of sight as soon as possible. With an Indian crowd of 377, I think that’s understandable.

By the time we landed in London, the toilets were filthy and wash-basins flooded. I wonder what would happen on the next London-Delhi leg of the flight. The software just met my (already lowered) expectations.

Even disembarking was not normal

One word to describe it. Chaos! It’s not the clapping that I was disturbed by. But the moment the plane pulled to the gate (not stopped), stow bins were pulled down and some men even climbed on seats to get their stuff out! It was as if they were going to jump out of the windows! Just see the photo for yourself.

In conclusion, Air India has a brand new product worth experiencing – but in isolation. Go check out the plane at an air show or something. It’s nice. Unless it’s an overnight flight (like mine was) and you can sleep over what’s going on around you, I’d suggest you fly others like Jet Airways, Continental or one of the Middle-East carriers from North America to India.

How’s your experience with Air India been? Yes, they’ve got new planes on international routes, but has anything else really improved? Can it be improved? I’d love to hear your stories in the comments, or over on Twitter (@simpliflying)

Why Indians need to get over Air India and recognize Emirates as the national carrier

Shashank Nigam — Tue, 11 Aug 2009 04:40:35 +0000

I’m not suggesting Emirates should become the national carrier of India. I’m asserting that it is already the de-facto national airline of the sub-continent. And Indians need to tell their politicians to get over the rescue-Air-India-at-any-cost fever, save some tax rupees and let the market decide which airline survives and which doesn’t.

Game over, Air India

As I mentioned in a previous article, Air India contributes 10% of global airline losses with just 0.35% of global traffic (stat. from Bangalore Aviation). To rescue the airline, hundreds of millions of taxpayers’ rupees are required over a long period of time. And even then, a profitable airline cannot be guaranteed, especially one that is mostly run for, and by the government and bureaucrats.

Even if you can gloss over the fact that lots of money is required to rescue Air India, the ideas for the turnaround that have been proposed till now have been far from convincing. Repositioning Air India as a low-cost carrier, with sky-high employee-to-plane ratio, aging fleet, poor plane utilization and lethargic execution, is at best an ill-conceived dream.

Till date, Air India has filled its planes either with politicians, or by selling dirt-cheap tickets that hardly cover the costs of flying. And these are both unsustainable practices. And with the uphill battle to rescue the airline, I suggest Indians let go and move on.

Why Emirates is the de-facto national carrier?

Emirates not only operates many times the frequency to all of Air India’s international destinations, it offers way better service and is already the leading international airline out of India from a number of major cities, ahead of Singapore Airlines, Lufthansa and KLM.

For the true aviation geeks among us, let me share some statistics* about Emirates’ operations since they started the daily Dubai-Los Angeles (LAX) and Dubai-San Francisco (SFO) services on May 1, 2009.

EK is the leader in market share to MAA/BLR/HYD/COK to/from LAX.
Outsold CX, AI, LH, BA and SQ to BOM from LAX. Has # 2 market share on this route behind Korean Air.
Ranked #6 in market share on LAX-DEL route behind OZ/LH/CX/SQ/CI.
On SFO-BLR sector, ranked #3 in terms of market share; outsold LH and BA on this route even though LH has a daily same plane SFO-FRA-BLR flight operated with a B 744.
On SFO-BOM sector, ranked #3 behind CX and KE in terms of market share; outsold SQ/BA/LH/AI.
Market share leader on SFO-HYD sector, outsold LH 3:1 and SQ 2:1.
On SFO-MAA sector, ranked #3 in terms of market share behind SQ and CX; outsold LH/BA each by 2:1 margin.

Imagine what will happen once Emirates starts flying its high-capacity A380s to Indian routes, connecting seamlessly to all over Europe and North America in the next few years. No other airline, even if they’re part of alliances, would come close to beating Emirates in terms of capacity to India. Hence, I rest my case that Emirates is serving the purpose of a national carrier to India.

What about the residues from Air India?

The Hindus in India submerge the ashes of someone who’s passed away in the Ganges river. Metaphorically speaking, the same should be done with Air India.

The Indian government should take a leaf out of the Aussies. When Ansett perished, the good parts were taken up by Qantas and the rest forgotten. Similarly, once Air India stops operations, the planes can be sold to other Indian carriers like Jet Airways and Kingfisher. Most of the additional capacity would certainly be absorbed by the slew of quality LCCs in India, like SpiceJet and Indigo.

As for the large number of employees, if they can’t find jobs with local or foreign private airlines, I’m sure the Indian Railways can come to the rescue, which is already the largest employer in the world. And the railways still carry more people per day in India, than the airlines do in a year.

Indians should realize that by forcing Air India to stay alive, they’re not helping anyone. Good money is chasing bad money. The politicians are still making merry and the service standards still remain hopeless compared to competition.

What are your thoughts about how Air India should be dealt with? Is letting the airline fizzle a practical solution, or do you have better ideas? Let’s discuss in the comments or over on Twitter (@simpliflying)

*Statistics: Special thanks to Ojas for sharing this data on Airlines.net