Even though India is the world’s fastest-growing domestic market in aviation, it is not yet known for airlines that are superstars in engaging or offering customer service via social media. Or at least, until now. Last year, SpiceJet, a leading domestic low-cost carrier in India, launched the Bombardier Q400 in a market that’s traditionally sceptical and scared of flying turboprops (popularly classified as the “planes with fans outside”).  What’s more, they chose the untested waters of social media for propelling their route-launch and tasted tremendous success, achieving over 88% load-factor in the first two weeks itself. Moreover, they also earned countless new fans, followers and increasing engagement manifold on their social media channels. So how did they achieve this? We reached out to Pooja and she was gracious enough to give us more details about SpiceJet’s initiatives, the story of its rise in social media, its plans for the future and advice for those looking to taste similar success on social media. It’s worth noting, however, that SpiceJet has a great history of meticulous brand execution, unique positioning and clear brand strategy that have been previously covered by SimpliFlying.

The road to superstardom

Pooja admits that one of the challenges on social media was the specific nature of the target audience. She believes the Indian audiences interacting with brands through social media are extremely enthusiastic. However, at times, there could be a bit more mature behavior while interacting. There are times when the audience can get extremely personal which makes the interaction more challenging. Also, most fans interacting with brands through social outlets belong to a younger demographic and it appears that they are largely interested in freebies and deals. They also seem to be less open to dialogue and resolution as compared to their western counterparts.

At SpiceJet, while digital marketing was active, the preparation to plan and embrace social media was started by commissioning ORM activities. The ORM presented the team with an idea of what the customers thought about SpiceJet’s product and services. This insight led into developing the overall strategy for SpiceJet’s social media. At the time of launching their social media initiatives, Facebook and YouTube were big in terms of the user base. They chose to target Facebook since Indian audiences were spending more hours on it as opposed to YouTube. Though Twitter arrived soon after, it still didn’t have the required user-base numbers (in terms of an Indian audience) required to reach out and engage a mass audience. Hence, Facebook became the de-facto primary channel as it provided lot of flexibility with scope for customization and custom interactions.

Internally, SpiceJet put together a cross functional team that manages various channels across social media and includes members from different departments such as Marketing, Corporate Communication, Human Resources, Customer Services  working together with their digital agency. The Marketing team defines the objectives, defining a role for the each member of the team and ensuring brand synergies.

Given that measurement is crucial to evaluation the success of social media strategies, SpiceJet has adopted several metrics to measure various parameters. In Pooja’s words, they “use an internal rating grid system for each of the parameters which is qualified on a monthly basis. Some of the core parameters measured are levels of engagement, happiness quotient, and of course translation into sales. There are custom scripts running that provides insight on traffic coming from social media and the resulting sale. Social Media is a significant contributor to direct bookings on the brand site.”

The Bombardier Q400 launch initiative

As part of its expansion plan, SpiceJet inducted a fleet of Bombardier Q400 aircraft. The fleet expansion was targeted to cater to short-haul regional sectors. The entire promotional campaign on social media spanned over 2 months. The launch was touted as the most sensational and effective launch campaign as observed by industry and marketing experts. Testimony to this is the fact that the launch delivered 88% load factor within first two weeks of operations. Here’s how SpiceJet achieved success:

Name the Plane Contest

SpiceJet has a naming convention for its aircraft – named after spices. In order to create a brand connect, fans on Facebook were invited to recommend names for the Q400 aircraft that were being deployed. This activity received over 100,000 impressions in a matter of few days and an an equally overwhelming response with hundreds of name suggestions. Apart from having the opportunity to name the aircraft, the winner was also invited to ‘Cut the Ribbon’ of the inaugural flight.

Q400 | Feature Orientation and Destination Awareness

Once the ‘Name the Plane’ activity concluded, the follow-up activity was designed to introduce Q400‘s salient features along with making the audience aware of the Q400 destinations. This was done through the aid of an app and a contest. The community was sensitised of the features through questions posted daily.

The respondents with the right answer were provided with a numeric digit – which eventually at the end of the contest helped the fans crack the launch destination. The numeric digits / keys acted as the clue which revealed the Pin / Zip Code of the launch city when put together in the correct sequence.

This contest received close to 350,000 post impressions, along with 29% increase in the number of fans and 33% increase in post feedback.

The making of Q400 contest | Post Launch

Once the operations commenced, fans were presented with a poser – a random array of visuals which captured the different progressions of the aircraft assembly.  Fans were encouraged to sequence the visuals in the right progression.

The contest received about 400 entries with over 375,000 post impressions. There was 42% increase in the number of fans and 46% increase in post feedback.

This activity was followed by releasing the official video of ‘The Making of Q400’.

The brand’s bottom-line was impacted positively with a load factor of 88%. The Social Media campaign for the Bombardier Q400 Launch was picked up by the media (Huffington Post and AFAQs), demonstrating the impact of the idea and execution. In addition, the campaign also made it to the second position in the “Top 11 marketing and social media innovations by airlines in 2011” published by Simpliflying.

Looking at the future and the success formula revealed

Pooja says SpiceJet’s biggest bet for 2012 is to strengthen and expand customer support on social media. SpiceJet has been carefully studying the patterns of customer interactions and has found social media to be a critical channel for redressals along with being a guiding light for customers through booking and travel planning. Internally, SpiceJet chalks out plans for each quarter in advance. This provides the required flexibility to accommodate both platform changes as well as aligning to objectives & goals.

Tips for those looking to taste success? Pooja says the following are essential:

1. Channel Selection – there exists a plethora of options, but it is always critical to select channels that are apt for your business model and geography. Also, the ability to sustain something you start is crucial.
2. Being transparent and honest – Address any customer issues openly in the respective forums and your audience will appreciate it a lot.
3. A well-defined objective, planned in advance, is critical.
4. Content Strategy is Key – Avoid the temptation of using these channels as a corporate communication tool. Pooja recommends having a  unique content strategy for each of the channels you wish to engage.

Pooja signs off by saying that  ‘consolidation’ will play a big role in the near future. There are new technologies emerging everyday: With internet connected televisions becoming popular, building social experiences leveraging Twitter, Facebook and Youtube on mobiles and tablets around video content will become preeminent. At SpiceJet, they’re “waiting and watching” and expect the coming phase to be a huge leap that will support their expansion plans.

Let us take this opportunity to congratulate Pooja and SpiceJet once again. We look forward to many more exciting initiatives from them in the months to come!

Disclosure: SimpliFlying worked with Bombardier on the social media strategy for this project, which was fabulously implemented by the talented Marketing team at SpiceJet and their agency – iVista Solutions.

Loved what SpiceJet did? Thought they could have done anything differently? Tell us in the comments below or tweet us @simpliflying.

• How SpiceJet launched Bombardier Q400 in India through social media and achieved 88% load factor
• Results announced: The SimpliFlying Hero for January 2012 is Pooja Dua of SpiceJet!
• A revamped SimpliFlying Heroes initiative – Vote for the Jan 2012 Hero now!
• [Video Tour] Bombardier CSeries cabin and cockpit setting new standards at Dubai Air Show #avgeek #dxb11
• Top 11 marketing and social media innovations by airlines in 2011

It started out as an up-hill task, because Indians have typically not been the most keen to fly turbo-props and battling this mindset was the biggest challenge. Moreover, SpiceJet wasn’t flying these planes on major routes like Delhi-Mumbai, but secondary cities like Hyderabad-Goa – and there was a need to create destination awareness in specific segments.

The strategy developed leveraged on potential travelers educating one another about the new aircraft and learning about destinations – all through a series of contests on Facebook and Twitter.

Disclosure: SimpliFlying worked with Bombardier on the social media strategy for this project, which was faboulously implemented by the talented Marketing team at SpiceJet and their agency – iVista Solutions.

• [Video Tour] Bombardier CSeries cabin and cockpit setting new standards at Dubai Air Show #avgeek #dxb11
• Branding 2.0: Top 10 Facebook Contests by Airlines
• Top 11 marketing and social media innovations by airlines in 2011
• For successfully leading SpiceJet’s launch of the Bombardier Q400 via social media, Pooja Dua is the SimpliFlying Hero for January 2012
• Exclusive Video: Bombardier CSeries cabin tour – a glimpse into the future of flying

With about a day still to go for voting (and trust us, a lot of votes come in on the last day), the total number of votes has already crossed 30,000. Moreover, votes have come in from 4500+ cities across the world. How incredibly awesome is that?

1. Freshness and innovativeness are the keywords you need to keep in mind if you wish to drive a really successful social media campaign.
2. If you’re able to engage the interest of the customer, it’s possible to overcome certain price-point barriers. e.g. KLM’s new Economy Comfort option was a hit due to the viral video of a levitating magician.
3. People are looking for instant engagement online – if you’re looking to provide customer service online, don’t do it half-heartedly. Throw everything you’ve got into it and your customers will appreciate you for it. eg. AirAsia’s AskAirAsia.
4. To a certain extent, building emotional bonds with customers will drive long-term loyalty and revenue. eg. KLM Surprises and JetBlue’s glass half-full video.
5. Being “controversial” or disruptive is also a great way of driving buzz, receiving eyeballs and getting new customers as long as it is done right. eg. Air New Zealand have been brilliant in their “provocative” social media endeavours such as “Nothing to hide” etc.
6. Leverage the latest technology as and when it becomes available to engage more customers and to appear to be at the cutting-edge of innovativeness. eg. the Chrome web app by Virgin America, Groupon route-launches etc.

With that said, here’s the case-pack. We hope you enjoy going through it!

• The Best Airlines Driving Revenue Through Social Media – Introducing the Top 5 nominees for the 2nd SimpliFlying Awards for Social Media Excellence
• Best Airports in Social Media: Top 5 Airports nominated for the SimpliFlying Awards for Social Media Excellence 2011
• The Best Airlines Driving Customer Service & Crisis Management Through Social Media: Top 5 SimpliFlying Awards nominees
• SimpliFlying-Airline Business Awards for Social Media Excellence for Airlines – Vote now!
• 2nd Annual SimpliFlying Awards in Social Media Excellence – Vote NOW for best airlines, airports, hotels

But as as we have long suspected, the traditional press release is rather dead and buried. Granted, it’s not dead in the truest sense of the word; however, it is undeniable that social technologies have morphed press-releases beyond recognition. Gone are the boring, wordy releases that used to accompany every major announcement in the industry. Welcome to the new age of social engagement!

Social media for route launches

Airlines these days have begun smartly leveraging the power of social media while making new product and route announcements. Forget the one-page release announcing the nature and benefits of the new route. These days, there are dedicated campaigns being run by airlines (as well as airports) to draw attention to their new routes and planes.

Witness the wide-ranging strategies adopted – as illustrated in this new case-pack – there are examples of special discounts to Twitter followers, elaborate “guess the route” contests on Facebook, contests that challenge the artistic abilities of fans and followers, even “name the plane” contests. All these attractive engagement campaigns are managed wholly online. Some airlines have gone as far as spending nothing on traditional advertising for new route launches. The benefits of social engagement campaigns are for all to see:

1. Immediate access to a very specific group of target audience that is responsive to incentives.
2. Online engagement offers the benefit of two-way conversations that enable easy sentiment-tracking and real-time feedback analysis, rather than one-way broadcasts.
3. The ability to attract and engage the audience where they are most likely to be at (eg. Facebook) makes it more easy to make them willing listeners and customers.
4. The ability for engagement programs to become money-spinners (ie, revenue drivers) is plain to see because of the viral nature that such campaigns can don. Your fans will talk to their friends who will talk to their friends and so on.
5. The ability to fill up the seats sooner for a new route – through all of the above.

With these points in mind, we present to you our new case-pack on the Top 10 Route Launches by Airlines & Airports via social media. Special thanks to Mark Scourse from 3Sixty for his inputs on how airports do it. You can hear both Shashank and Mark speak at the World Routes Forum in Berlin in Oct, 2011.

Let us know what you think of the case-pack. Thought we missed someone? Thought we nailed it? Tell us in the comments or tweet us @simpliflying.

• Branding 2.0: Top 10 Facebook Contests by Airlines
• Best Airports in Social Media: Top 5 Airports nominated for the SimpliFlying Awards for Social Media Excellence 2011
• The Best Airlines in Social Media: the Top 7 nominees for the SimpliFlying Awards for Social Media Excellence 2011
• 2nd Annual SimpliFlying Awards in Social Media Excellence – Nominations now open for airlines, airports and hotels
• The Top 10 Viral Videos by Airlines (plus bonus videos)

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.

• How business lessons from AirAsia can rescue the battered Air India brand
• How SpiceJet launched Bombardier Q400 in India through social media and achieved 88% load factor
• Announcement: February will be “Indian Aviation Month”
• Why Indians need to get over Air India and recognize Emirates as the national carrier
• What makes Indigo Airlines one of the best budget carriers in India?

A little girl’s hand was held by an elegant SpiceJet stewardess dressed in striking maroon. As the two ladies headed towards the galley, I saw tears rolling down the little one’s cheeks. Her ears were probably hurting as we started descending into Jaipur, India. The stewardesses in the galley started playing with her and then opened up one of the carts for her too! She was given a few packets of biscuits and a SpiceJet kids’ coloring kit. The little one was soon beaming from ear-to-ear and ran back towards her parents full of joy.

You must be wondering I’m telling you this story? Not just because the kid in me got excited and requested for one (see pics below), but because such instances of brand execution are an inherent part of every successful airline’s brand strategy.

Something else that happened on my SpiceJet flight was that an elderly lady who was seated in the bulkhead row was reluctant to put on the seat belt because she was hurting around the waist as the belt was too tight. Instead of shouting orders (which often happens on US-based airlines), the stewardess calmly explained to her the importance of the safety belt, got her a belt extension and helped her securely fasten it. All the time, I sensed a dash of patience and graciousness, and not outright exertion of authority.

Now, the next time parents of that young girl fly, or the elderly lady travels alone – which airline do you think they will pick? The answer is obvious – SpiceJet.

Creating emotional bonds – a hallmark of great airline brands

A crying baby. An aching grandmother. A young dad stressed out with his one year old. All these may sound like annoyances to the typical air traveler, but these are exactly the instances where airline brands that have their act together create a long lasting emotional bond with the customer. Singapore Airlines is famous for taking special care of parents with young children, even helping them carry the child and playing with the child when needed (I’ve witnessed this a number of times myself!). And it was great to see one of the most successful airlines in India deliver service that matches the best.

Matters of the heart go a long way in building brand loyalty

When I spoke with SpiceJet’s CEO Sanjay Aggarwal last year, he emphasized that India is becoming an environment where it’s increasingly difficult to differentiate the brand. And emotional connectivity can go a long way in driving loyalty. For example, the fare on a Bangalore to Mumbai domestic flight in India differs by less than $5 for most of the carriers. In that case, if I have a special memory of being treated well by SpiceJet, or even watching someone else being attended to, I will choose them.

Customer mindsets are actually quite simple to understand. You offer + deliver great value, and the customer will happily become loyal, and recommend the brand to his friends too. In the LCC world, JetBlue, Southwest and now SpiceJet and Indigo are doing it. Among full service carriers, people happily pay a premium to fly Singapore Airlines, Virgin Atlantic and Cathay Pacific. It’s not what expectations the brand sets, but more importantly whether the brand execution exceeds the expectations – which makes a successful airline brand.

What do you think? Is it worth for airline brands to put in the extra effort to create emotional bonds? Do you have stories to share where an airline made you happy? Share it in the comments or on Twitter (@simpliflying).

Special thanks to Deepa Dey, Bijender Singh and the Mumbai Duty Manager of SpiceJet for making my flight from Mumbai-Jaipur extra Spicy!

• Building the “spiciest” airline brand in India: Interview with SpiceJet COO
• CEO reveals what makes SpiceJet a leading airline in India in a frank interview
• Announcement: February will be “Indian Aviation Month”
• How business lessons from AirAsia can rescue the battered Air India brand
• Landor Managing Director Allen Adamson reveals that creating a powerful airline brand is the ultimate test

Making SpiceJet one of India’s best airlines

In his interview, Sanjay reveals a number of gems that have made SpiceJet so successful. His clarity of thought is evident in this sentence:

“We want to focus on what we do well, and we will do it better than anyone else out there – which is to provide a quality, safe, clean and reliable transportation.”

Lessons from Marriott

Having worked at Marriott, Sanjay sums up its philosophy as to take care if its people, and ultimately they’ll keep the customer happy. And with 150,000 employees, they still maintain their culture. And this is the culture Sanjay is trying to re-create at SpiceJet, by “finding the right people and motivating them to deliver an unmatched in-flight experience”.

I’ll let you enjoy the succint interview. Please feel free to share your thoughts in the comments.

• What makes Indigo Airlines one of the best budget carriers in India?
• Building a strong Indigo Airlines brand, and outlook for 2009
• Building the “spiciest” airline brand in India: Interview with SpiceJet COO
• To get to the wallet, go through the heart – Lessons in brand execution from SpiceJet
• Announcement: February will be “Indian Aviation Month”

Sam Sridharan, COO, SpiceJet

In the past year, I’ve featured interviews with a number airline executives and branding experts. Here’s one with a person I feel has a very good grasp of the airline industry and is not afraid to speak his mind. In his crisp answers, Sam Sridharan, Chief Operating Officer of SpiceJet, one of India’s foremost low cost carriers, speaks of what makes SpiceJet so good, and why branding is a work in progress.

No Indian LCC has a distinct brand positioning, yet

Sam believes that since LCCs in India are only 3 years old, in the consumer’s mind, they’re all the same. Most of the LCCs are still very price driven, and have not built a distinct brand positioning yet. Full service carriers certainly have cues that come to mind, like Jet Airways signifies efficient service, and Kingfisher Airlines bring forth their flamboyant image. Air Deccan was probably the only one with a strong brand positioning – make the common man fly, but it’s now dissolved.

The SpiceJet Brand

A Work in-progress

Some of their recent promotions have read, “It’s not lonely at the top anymore” for a buy one-get-one-free ticket scheme. On Children’s Day, any child flies for free. Again, parents often accompany their children. The idea is to get people to buy the two adult tickets. The most successful promotions are about value, not just the price.

I’m sure you’ll enjoy this interview as much as I did. Special thanks to Deepa Dey and Mohona Chakrawarti for all their “Spicy” hospitality belted out to me at their headquarters just outside Delhi.

What did you think of Sam’s ideas? Is SpiceJet heading in the right direction with regards to their brand? How would you compare Sam’s plans with that of Sanjay from Indigo, featured last week? Which one if more likely to succeed? Let’s discuss.

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• Etihad Airways charging a second bag fee? Bad idea for a brand trying to establish itself
• Ancillary revenues and airline branding Special in March at SimpliFlying
• Five Reasons for low cost airlines to take loyalty seriously

SimpliFlying: India has a lot of first-time fliers. What’s different about marketing to first-time fliers vs frequent fliers?

Binit: First time fliers may be quite apprehensive, and they require reassurance that the experience will be a pleasant one. Apart from the actual act of flying, in a market such as India flying for the first time can involve crossing social barriers which can in itself be quite daunting. Low cost carriers have made flying affordable for some who might otherwise never have dreamt that they could fly, something which was once a preserve of the elite.

However, apart from Air Deccan, which pitched itself as the common man’s airline (see video below), it is not obvious that any of the other carriers have made an effort to specifically appeal to first time fliers, but end up getting them anyway. Air Deccan’s ethos was built around first time fliers and their marketing included a wonderful television advert that captured the mixture of nerves and excitement that a first time flier feels and portrayed itself as the airline that understood and would take care of such passengers.

SimpliFlying: India is well known for disorganized retail and non-traditional channels. Which are the key channels through which Indian airlines build its brand awareness among the target markets?

Binit: Indian carriers have generally pursued quite traditional channels for brand building, namely print media advertising and outdoor billboards. Television has not been a major medium due to cost. Kingfisher has probably adopted the most diverse approach – the airline has been associated with sponsorship of the Indian Premier League and Formula 1, whilst it also benefits from the fact that Kingfisher is a brand beyond the airline and it benefits from the spin off of initiatives such as the Kingfisher Calendar and promotion of its water and beer. Air Deccan when it first launched made efforts to promote its presence in the smaller towns and villages by sending branded vans into rural India, which also doubled as booking locations.

SimpliFlying: Do you think a strong brand can soften the impact of downturns on airlines?

Binit: In an economic downturn, where people are reducing consumption it’s questionable whether strong brands will prevent travellers from flying less per se. However, individual airlines with strong brands may benefit in two ways 1) they may be in a position to maintain stronger yields because of the value of their brand and 2) in times of uncertainty, passengers may prefer to travel with a brand in which they have greater confidence and trust – therefore a strong brand allows them to increase their market share even though overall industry traffic may be declining.

SimpliFlying: Which Indian carriers will be the first to emerge out of the crises. What puts these in such a strong position?

Binit: At present all Indian carriers are losing money and have weak balance sheets. However, amongst the 3 full service carriers, Jet Airways and Kingfisher, have excellent product, strong brands and loyal followings. Air India on the other hand is facing severe problems with its integration with Indian, and political interference and lack of direction mean that the national carrier is likely to continue to struggle. Amongst the low cost carriers, as most are privately held it is difficult to know the exact state of their health. However, Indigo and SpiceJet have established themselves as consistent and reliable operators.

SimpliFlying: What role does the travel agent play in the Indian Industry?
Binit: In the full service space, travel agents control about 90% of sales. In the case of low cost carriers this figure is probably closer to 70-75%. In fact it is understood to have dropped lower, however aggressive promotion by Online Travel Agents saw the travel agent community reclaim some its market share.

SimpliFlying: How big a constraint is infrastructure in Indian carriers’ growth?

Binit: Airport infrastructure has certainly been a constraint in the last few years – many airports are operating at well beyond their design capacity resulting in delays, congestion and a poor passenger experience. The delays mean that airlines are unable to operate efficiently which increases costs. However, a major upgrade and modernization program is underway and improvements are being seen. It will still be a couple of years before all of India’s major metros have world class airports, but we are on the way.

SimpliFlying: What role will foreign carriers have to play in the Indian market, given the regulations?

Binit: At present foreign airlines are barred from holding any equity in an Indian carrier – although foreign non-airline entities may take a shareholding of up to 49%. In light of the poor financial health of Indian carriers, there is a desperate need to raise capital. The most likely investors in the current environment are those that have a strategic interest, namely airlines. As a result, the government appears to be set to relax the restrictions to allow foreign carriers to hold up to 25% in Indian carriers. There are likely to be a number of interested parties if this was to happen, which apart from capital would bring in much needed expertise into the sector.

SimpliFlying: Do you see more consolidation in the Indian aviation industry?

Binit: There are too many airlines in India at present and with their current financial state, consolidation is inevitable and desirable, either through merger or through market exit.

SimpliFlying: What do you see as the biggest threat and the biggest opportunity in the Indian market?

Binit: The biggest threat is that airlines do not take the necessary steps  to reduce capacity. If they fail to do so, the likelihood is that there will remain an urge to discount heavily to fill seats, the result of which will be to diminish overall yields and revenue. The biggest opportunity is the fact that we are only at the beginning of the growth curve. Even today, after domestic traffic has tripled in the last 5 years, it is estimated that only 2% of Indians travel by air in any given year. The growth potential is enormous.

SimpliFlying: Your predictions for aviation in India in 2009?

Binit: 2009 is going to be another tough year for Indian carriers with demand expected to remain soft for the first half and picking up from around Q3. However, fuel prices are low, airports are improving and if airlines can remain disciplined about capacity they can at least stem losses, even if they can’t return to profitability. The key is to stabilising the situation, raising cash cover to cover requirements and being ready to take advantage of an expected upturn from 2010 onwards.

• Announcement: February will be “Indian Aviation Month”
• Why Indians need to get over Air India and recognize Emirates as the national carrier
• Vijay Mallya of Kingfisher – BBC interview
• What makes Lufthansa a successful airline brand in India?
• Three reasons airlines in India will come out strongest from the recession

…

Jet Airways recently hinted that the worst is over for them and they expect to break even again in the middle of this year. And this is mostly because of the drop in fuel prices (obviously!) as well as the prudence shown by the management in cutting unprofitable routes, including that the San Francisco. And I don’t see this as an isolated case.

After my recent interactions with key airline executives in India, including the CEO at SpiceJet, it is my belief that airlines in India will not only be one of the first few to emerge from the recession, but also come out the strongest. Here are three key reasons for this conviction.

1. Airlines that stand by their customers in bad times win hearts – brand matters

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Just look at what’s happening in the western airlines in this recession. US Airways recently started charging for blankets, and they already charge for water (which can even be a health hazard!). Ryanair is famous for being the most hated airline in Europe, since it hardly takes care of its customers. Interestingly, bad times have not resulted in a disregard for customer service in Indian aviation.

Recently when I flew from Bangalore to Jaipur on Indigo Airlines, I was greeted by my name before being served soem beverages. Now, that’s a first. I’ve never been greeted by my name in an Economy Class on any airline before, let alone on a low-cost carrier! Jet Airways recently won the Best First Class award, and Kingfisher does everything it can to uphold its 5-Star Airline status.

Did someone forget to tell these airlines that “we’re in a recession”? Probably not. But their focus on keeping the customer happy will pay off in the long run. Those who’re still flying will never ditch them. And when good times return, these same happy customers will generate enough brand awareness through word-of-mouth to bring in new passengers.

2. Being nimble and resilient pays off

Unlike other airlines that’re expected to do well in the recession, especially Middle Eastern ones, most airlines in India do not have any special privileges like reduced oil prices or backing from a government with deep pockets. This has forced them to act on their own to cut costs to remain aflot in these difficult times. And they’ve done so smartly too. Instead of bothering the customer with frivolous charges like in US airlines, Indian carrier have cut costs where it matters.

Kingfisher Airlines has swiftly postponed plans for more overseas route launches (Singapore, Hong Kong) – since they tend to be resource heavy at the beginning. Jet Airways too has not shyed away from cutting glamorous but bleeding routes like that to San Francisco. Moreover, they’ve both either delayed the delivery of new aircraft, or leased them to airlines like Turkish and GulfAir. Most airlines in India have switched to focused marketing efforts, rather than blanket campaigns to get more bang for the buck. And Kingfisher and Jet Airways have set aside their competitive aspirations to forge a code-share alliance to save costs – as Lisa Markovic explained in a recent interview with SimpliFlying. It is this resilience and fast action that will pay off well in the end.

3. It’s the economy, stupid!

In the last 50 days, I’ve spent a considerable amount of time in New York, Singapore and Delhi/Bangalore. And the word “recesssion” has disappeared from the local vocabulary in that order too. India’s GDP will grow 7.1% this year, according to data released today. In what way is this a recession? At best it’s a slowdown from previous years’ growth of close to 10%, but c’mon guys…this is not a recession. And if anyone has any doubts, just head over to Marthelli in Bangalore or Gurgaon, just outside of Delhi, to dispell all the myths. And this economic growth translates to the aviation industry too.

Talking about the Indian operations, Kenji Sugino, Director – Sales, Administration and Marketing, ANA recently said “Despite the global slowdown, India is one of the growing markets for ANA. We are positive about this year and are expecting good load factors and sales margins. We are going to play strategically in the Indian market this year.”

More than anyone else, it’s the Indian carriers that will reap the best rewards of a still-active Indian economy, if they play their cards right. And till now, they haven’t let most people down when it comes to crises handling.

What do you think? Are Indian carriers indeed doing it well, or is this a mirage? How soon do you think airlines in India will recover, and which international airlines would give them competition? Let’s discuss…

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