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Kingfisher, Royal Air, GO race to the sky

Skies light up for airlines in India. More are coming in, the established ones are gaining speed. Dancewithshadows gives a window-side view

BY JM

 

If we thought air travel could not get any cheaper without towing the plane with a train engine, we were wrong. Air fares will come down further and we are going to benefit. Wait till April-September, when three new winged beauties take to the sky -- Royal Airways, Kingfisher Airlines and GO Airlines. It is expected that the entry of the new carriers will hammer down airfares by about 15%.

Kingfisher Airways is already revving for a takeoff. Its operations are expected to start in April, with fares which are expected to be mid-way between standard airfares and Air Deccan's Udipi fares. Vijay Mallya, chief of the UB group which owns Kingfisher Air, plans to take to the sky with 8 aircraft initially, and then add 14 more. Another 4 will come later. Await the King of Good Times to ring in better fare news.

Royal Airways has come out of the cold, after eight years in the hangars. Royal Airways is the new avatar of the erstwhile ModiLuft Airlines, which was grounded in 1996. The airline had fallen into financial problems, which are sorted out now. The Modis are now bought from the company and Royal Airways is owned, among others, by the Kusagra family of London. Royal Air licence has been renewed and they too plan to take off by end-March or early April. Very recently, ABN Mauritius and Citigroup jointly picked up a 5.2% stake in the airline. The Royal Airlines stock (one of the few listed Aviation companies) has been going up on the stock exchanges, seeing good weather ahead.

GO Airlines is another, promoted by the Bombay Dyeing group. Nusli Wadia, chairman of the Bombay Dyeing group says that he's planning a long-term operation. He does'nt want to be "just another airline", he says, whatever he means by that. The airline has received a licence to fly and has secured aircraft on lease.

Two more airlines, Yamuna Air and Indus Air are expected to have submitted applications for a flying licence.

Meanwhile, there has been silence from the Tata Group, which is keen on flying. The group, which had even formed a consortium with Singapore Airlines to bid for Air-India (which was, incidentally, started by the Tata Group and later nationalised) had been disappointed with the cancellation of Air India privatisation programme. The group has kept out of the recent air rush. One wonders if the Tata group's aerial ambitions are limited to Air India.

Jet Airways, India's long-standing private airline, too has several cards up its sleeve. The company has decided on an IPO, to mop up funds for expanding its operations. Merchant bankers for the Jet Air IPO are being shortlisted. Naresh Goel, chairman of the company is in high spirits. Meanwhile, Air Deccan, the upstart no-friller that altered the rules of the flying game in India are also zeroing in on an IPO. Air Deccan (the Udipi restaurant on the sky, as its chairman Captain GR Gopinath says) has already raised money from a stake sale and is buying more ATR planes. Air Deccan, India's cheapest aerial operator, now plans to expand into the metro segments too. Till now, it was largely a non-metro player.

Meanwhile, Jet Air and Air Sahara are on a high. The new civil aviation poliy allows only established private airlines to fly to foreign locations. In short, it means that Jet Air and Air Sahara can fly overseas while those skies will be closed to other upstarts. Way to go for Royal Air, Air Deccan, Kingfisher.

Currently, several airlines are following a dynamic seat pricing model, where tickets are variously priced based on demand. Innovative frequent flier programmes are also being hatched, which are expected to forge customer loyalty.

Experts say that airlines compete primarily on three fortes -- low fares, customer service and value-added services. While no-frillers fight the price war, service is tom-tommed by their larger peers.

We have no complaints -- The more the merrier! All aboard!

BY JM



 

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