Get Cheap Air Tickets But Pay For Everything Else

Airlines have a tough time balancing customer aspirations for having cheap air tickets on one end of pendulum and earning sufficient profits so as to grow, on the other end. The airlines worldwide have been taking measures to improve their revenue earnings by offering the cheap flight tickets to the customers and charging them for most of the facilities which were earlier included within the price of the air tickets. So, the list of services being offered complimentary is being pruned.

Some of the key products or services being charged are:

1. In-flight movies: The in-flight entertainment systems were free for use on all the airlines, barring the low cost carriers which did not have these. Now, some airlines have begun to charge for their usage. So, if you want to hear a particular number or watch a movie, then there are charges to be paid for the same.
2. Bottle of Water: The charges for a bottle of water were associated with the budget carriers but the same is also being adopted by the network carriers. Some airlines might give you one bottle as complimentary but for the next ones you need to have
3. Seats of own choice: If you want to have a seat of choice, then some airlines will ask for paying extra sums. If you want to save on money, simply do not describe which seat you prefer to have. Just take what is offered.
4. Pillow and Blanket: If you are looking to make your travel more comfortable, then that will come with a price tag attached to the pillow and blanket which you might require during the flight.
5. Using overhead compartment: This is another service where the some of the airlines charge extra.

Besides these, the extra charges are also being paid for the carry-on bags and for the baggage carried over and above the free allowance (some are not even allowing the free allowance). Some of these charges are to be paid when you do the flight booking such as the baggage fee while some are paid in-flight such as the ones for using the facilities provided in-flight.

By de-linking these charges from the flight tickets and asking for these separately, the airlines seek to provide them with their most cherished wish of cheap air tickets and at the same time, giving them the option to avail the services and facilities if they need by paying separately. 

Why Credit Card Companies Do not want to tie-up with the airlines in India?

When you have to do a flight booking, it is quite natural to search for the best airfares prevailing on that day across all the airlines and travel companies. It is very seldom that you would not search for the cheap air tickets but rather go for your preferred airline at the very first instance and do the booking. It is precisely this reason of an agnostic consumer behaviour which prevents consumers from being brand loyal that is prompting the credit card companies to end their alliances with the airlines. The recent move of the Citibank and Jet Airways to put an end to their 13 year long alliance of co-branded cards is the result of this consumer behavior.

India being a price-sensitive market, the people in India are willing to leave one airline for the other if that other airline is offering better air tickets rates and deals. Customers are not loyal when it comes to buying the flights. Further, the fragmentation in the industry has restricted the growth in the customer base of a single airline. There is a demand from the customers that they shall be allowed to accumulate their rewards points from the different airlines and redeem the same. The co-branded cards fall short of the customer expectations in this regard since the customers are not given the desired flexibility of accumulating the points and getting these redeemed.

The moves also points to some other facts, such as:

1. No single airline has been able to gain customer loyalty due to deep fragmentation of the industry.
2. Credit uptake is again on the upswing and the card companies might be willing to be more flexible for earning greater revenues.

Indian Govt Plans Mandatory Regional Cheap Flights

If the government will have its way, it is almost certain that the current scheduled airlines operating from India might have to increase the connectivity of the regional hubs with the adjoining smaller cities. The government is likely to make it mandatory for the airlines to provide services from these areas, connecting with the regional hubs. This rationale behind the plan lies in the increasing demand of flight booking by the people from these areas to reach the hubs by using the air mode of transportation rather than the road or rail based one. But, since these areas are considered to be less lucrative by the airline companies, the government plans to make this mandatory, just as flying to the north-eastern region is made mandatory.

Currently, the people come to the hubs of the airlines using the road and rail routes and the journey becomes quite long and exhaustive. By opening the flight booking from these areas and operating the cheap flights, commuting will become less tiring and time consuming and will even suit the budget of many people. This is in consonance with the policy of balanced regional development of all parts of the country.

The move is likely to make the airline companies change their plans a bit to accommodate the mandate of flying to and from the nearby regions of the hub. The budget carriers such as IndiGo airlines, which mostly operate on the Airbus aircraft and for whom the fuel efficiency and overall operational efficiency matters a lot, might have to maintain the turboprop airplanes in their fleet for meeting this requirement. The turboprops are efficient due to the lower velocity of propeller and exhaust. These would fit well in the overall business model of the IndiGo airlines and other LCCs as it would become possible to provide the cheap flights to the people.

With all airlines, barring Go Indigo, reporting losses in current financial, the plan will further add financial burden as it will require capital infusion to buy the turboprop aircraft. There might also be shift in the operating strategies of the airlines to accommodate the government requirements. 

HSBC Bets On Spicejet Despite Losses

Spicejet might not have earned profits in the financial year 2012, but it is well poised to become a top player in the Indian aviation space. HSBC has recently upgraded the outlook on the stocks of this airline, making it a more attractive bet for the stock investors. The positive vibes being sent to the stock market are despite the losses incurred by the airline in the FY 2012. These losses are expected to continue in the next year also. So, what has made HSBC favour Spicejet more than its peers?

The positive points which have gone in its favour are:

1.    IndiGo Airlines is not listed on stock exchange: If IndiGo would have been listed, it would have been the preferred choice due to its history of successful and profitable operations of selling cheap flight tickets to the customers. But, since it is not listed, Spicejet is the next best bet in the Indian aviation market to put your money.

2.    Approval for more international destination: After the addition of 6 more overseas destinations, it will have more international coverage than any other Indian low-cost airline. More coverage would mean that the Spicejet flight booking would increase on newer international routes increasing its revenue base.

3.    Equity Infusion by owner: The infusion of the equity by the owners gives a positive signal of the intent of the owner to see the airline through the troubled times. While Kingfisher has failed on this score, Spicejet has won. The reflection of the seriousness of intent of owners to keep the airline going given more strength to the future plans of the airline. Kalanidhi Maran, the Spicejet owner has invested twice in 2012 to rid the airlines of its troubles.

4.    Permission to import fuel directly: Spicejet is one of the few airlines which have been allowed by the government to import the fuel directly which will mean savings of 20 percent on fuel costs. This can be passed on to the customers doing flight booking as the cheap flight tickets.

5.    Better FDI prospects: Since IndiGo Airlines is already having foreign investment, it is ruled out as a major beneficiary of the foreign aid. This makes Spicejet a hot favorite for the same.

GAGAN Satellite Navigation System To Reduce Prices Of Flight Tickets

That improvement in technology helps in reducing the prices of flight tickets can be explained with the recent launch of the GAGAN satellite by India. GAGAN is a joint project of ISRO and Airports Authority of India which aims to replace the land-based navigation systems currently being operational at the airports in the country with the satellite-based ones in order to improve the navigation of the airplanes in the domestic skies.

By implementing the GAGAN project, India will become the fourth country in the world to have such a system. This system will help in accumulating the GPS data of the position of the airplanes, for which the country has been currently dependent on US till now. The current land-based navigation systems do not allow the airplane to be in contact with the Air Traffic Controller till the time these come within a particular range of the ATC tower. The ATC cannot locate the airplanes if these are not within its range. With satellite navigation, the ATC will be able to establish location of airplane anywhere and will be able to aid better navigation in skies. But, how does that help in getting the cheap air tickets?

The use of this system will help the pilots to follow the linear path to fly between the two airports. The planes will be able to save on the wastage of the fuel which gets spent unproductively for being within the range of the ATC towers while flying from one destination to the other. And, since fuel prices are quite a big proportion of the air tickets prices, these savings can be passed on to the customer, fully or partly, by reducing the prices of the flight tickets.

Besides helping in providing cheap air tickets, operation of GAGAN will also be beneficial in other ways. It will also result in major savings on time. Also, there will be lesser levels of stress for the flight crews. The GPS data will be far more accurate than the one which is currently being obtained from the US. The greater accuracy of the coordinates of the planes will make the air travel even safer for the passengers. Further, the mandatory distance between the two aircrafts in-flight will be reduced, freeing the airspace for more flights at a point of time. Due to this, the airplane carriers will be able to add capacity in their fleet. 

Preparing For A Long-haul Flight Journey

While travelling does require planning in advance, travelling for longer distances requires special preparation. The preparation holds even more importance when the travel is to happen on a long-haul flight, rather than on any other mode of transport. Here are some of the points worth noting before you do the flight booking:

Know More About The Aircraft

When you are flying on a long distance flight which is going to take considerable time to reach the destination, you shall try to find out which aircraft would be the most comfortable and convenient to travel. Most of the people check for the prices of the air tickets and the airlines they would like to fly with, but do not care to know much about the aircraft which is being used. To determine which aircraft would be good, you can seek advice of the friends or near and dear ones who have flown on that sector. Further, you can also check about the same from the internet through the blogs and discussion forums. Even the websites of the airline show the pictures of what type of in-flight experience you would get in a particular airplane. This can be checked before doing the flight booking.

Prioritize Comfort Ahead Of Cheap Flights Prices

You just cannot afford to keep comfort factor secondary since a long-haul flight could be quite taxing if you chose cheap flights that are not as comfortable as you require. If you are not experienced, do not make a mistake of assuming that short and long-haul flights are all the same. If you are having some miles to redeem and these are sufficient to get you an upgraded level of air tickets, then it is time to utilize these to get more comfortable seating that has more legroom, reclining chairs convertible into full length beds and good entertainment facilities.

Avoiding Boredom

The long-haul flights do have the entertainment systems to prevent boredom. But, you need to have a couple of things which will keep you engrossed all through the flight time. The working people can make good use of their time by engaging in office work. If the children are travelling with you, it is good to carry some of their favorite items along which can keep them busy. When it comes, taking a good nap of a couple of hours is a good thing that lapses the time, rejuvenates you and prevents the boredom.

Comparative Analysis of Spicejet, Indigo, Go Air and Jetlite

The Indian LCC market has come of an age. About a decade or so back, no person would have thought that the newly formed private airline companies will take on the government held Air India and Indian Airlines and give them stiff competition on the domestic turf. The emergence of low cost carriers such as Spicejet, JetLite, Go Air and Indigo, promising cheap air tickets and adopting a no-frills approach to operations, has shaped an altogether different future of the Indian civil aviation. Here is brief account of their inter-comparisons on parameters of operations such as beginning, reach, market share, punctuality and occupancy levels.

Beginning of Operations

JetLite, previously Sahara Airlines and then Air Sahara, was the first one to be established among these four airlines, in the year 1991, before being taken over by Jet Airways in 2007 and getting rechristened as JetLite. Since March 2012, it has been merged with Jet Konnect.

Next airlines to be set up were the Spicejet and the Go Air in the year 2005. Indigo Airlines began the operation in 2006. So, all these three were set up and began operations at about the same time.

Reach and Market Share

Though Jetlite, or Jet Konnect, began operations far earlier than the other Indian LCCs, it has a market share only at about 7 percent. But, when combined with Jet Airways operations, it has a share of about 29 percent. However, it connects 56 domestic destinations and only 1 international destination with about 430 flights in a single day, which proves that it is essentially focused on providing cheap air tickets to passengers in the Indian market.

Spicejet Airlines is the next major airline in terms of the number of destinations reached, since it reaches 35 domestic and 2 international destinations. It has recently got the approval for 6 more international destinations. However, despite this reach it has the market share of 17 percent, less than that of Indigo Airlines.

Indigo, also called Go Indigo but different from another airline Go Air, is the dominant player in terms of the market share as it holds about 22 percent of domestic share. It flies to 27 domestic and 5 international destinations with 347 daily flights. Interestingly, its growth rate has been the fastest among the LCCs of the world.

Go Air touches 22 domestic destinations with no international operation till the time this article is being written. With less than half the reach of the Jetlite, the airline has almost equal market share to that of Jetlite, at about 7.5 percent.

Punctuality And Occupancy

Airlines need to have good credibility and reliable operations for the customers. The history of punctual and safe operations, besides the offering of cheap air tickets to customers, determines the extent of loyalty that the airline will be able to generate for itself.

The on-time performance of Jetlite and Jet Airways combined shows and average level of 90.7 percent from the 6 major airports of India: Mumbai, Hyderabad, Bangalore, Delhi, Chennai and Kolkata. Also, there has been an average occupancy level of 74 percent.

The on-time performance of Spicejet has been an average of 87.7 percent and load factor of 73 percent, a little lower than that of Jetlite on both counts.

For Indigo Airlines, the on-time performance is rated at an astonishing 94.7 percent which clearly shows the level of punctuality and efficiency with which it has been operating. However, the occupancy level of 76.5 percent is comparable to that of other LCCs.

The Go Air airline has shown an impressive occupancy level of close to 80 percent, the best among the scheduled domestic LCCs. Its on-time performance has also been one of the best, second only to Indigo, at about 93 percent (but operating from four airports: Bangalore, Mumbai, Delhi and Kolkata).

These LCCs have been growing significantly in their reach not only in the Indian market but also in the adjoining countries. Further, the efficiency levels in operations, the customer-orientation and good occupancy levels have fuelled their growth ambitions.

Spicejet Adds More International Flights

Spicejet, a low cost carrier (LCC) from India, has recently got the approval from the government to fly cheap international flights to the six more destinations. After JetKonnect and Indigo Airlines, Spicejet is the next major LCC which currently operates the flights to 35 domestic and only 2 international destinations. Whereas Indigo operates flights to 28 domestic and 5 international destinations, JetKonnect flies to 56 domestic and 1 international destinations. With the addition of 6 more overseas destinations, SpiceJet would be able to have more international destinations to its kitty as compared with the other competitor LCCs.

The six destinations which have been added are: Male in Maldives, Kabul in Afghanistan, Hong Kong and Guangzhou in China, Dubai in United Arab Emirates and Bangkok in Thailand. All of these destinations are much sought after by the Indian people and have a good demand. The addition of these 6 with the existing 2 of Colombo and Kathmandu will make it the only LCC to have 8 overseas destinations. Spicejet booking can now be done on any of the 63 newly added overseas flights operating in a week, instead of only 14 per week.

Adding these new routes, despite the loss burden of over Rs 1000 crores, is expected to help Spicejet in a number of ways. SpiceJet will be able to increase the aircraft utilization time, which currently stands at 12 hours a day. The increase in utilization will bring it more revenue and profits. The second advantage is that it will be able to deploy the new aircraft, which it is going to acquire soon, on these routes. However, by far, the most important advantage will be that it will be able to generate more revenues by taking advantage of the increasing traffic to these destinations. Instead of focusing solely on price-sensitive and fast maturing Indian market, a combination of domestic and cheap international flights will hedge the risks better and also help it in making more profits.

Three-pronged IATA Strategy On Safety This Year

IATA has come up with a plan to focus on three key safety areas this year. The basic rationale for this plan is to inform the governments worldwide on what are the basic things which contribute to effective airline safety rather than the unnecessary regulatory measures. IATA believes that many countries worldwide ignore or do not take appropriate steps on some of the crucial factors that can help in improving the safety. So, there is a need for developing a common approach that can be applied worldwide, both on the domestic and the international flights. The benefit of these measures will be that the governments will be able to rationalize and simplify the measures related to the safety aspects and save the associated costs.  However, some other analysts are of the opinion that while the governments might save the costs, the cheap air tickets might become a little costlier as these measures will entail their own costs. There three areas are:

Pilots and Engineers Training

IATA plans to work along with the ICAO, IFALPA and regulators for facilitating the implementation of the IATA training and Qualification Initiative (ITQI). ITQI is a comprehensive approach to the modernization of the training of pilots and engineers.  

Enhanced IOSA Program

 In order to ensure that the operational safety is never compromised and the airlines do not fall back on the requirement of the safety audit of their fleet for offering cheap air tickets or any other reason, the Enhanced IATA Operational Security Audit Program ensures that there is continued compliance with its standards and recommended practices for providing cheap international flights to the customers.

Ground Operations

The Ground Handling Committee of IATA focuses on improving efficiency and safety and is supported by a dedicated ground operations team. This committee is instrumental in making the ground operations of the airlines worldwide more efficient and simplified, thereby resulting in the airlines saving more due to minimization of wastages and timely runs of the aircrafts. Efficient ground operations are one of the main factors for the airlines to provide cheap international flights to the customers. This is even more relevant for the successful operation of the international flights by the low-cost carriers which already provide cheap air tickets to the customers.

Dubai: A Lucrative Market For Indigo Airlines

After achieving considerable success on the domestic aviation turf, India’s low cost airline- Indigo Airlines - has begun to focus on the international markets which hold good potential for expansion. With the benefit of experience and the confidence of operating successfully in the Indian skies which are considered particularly profitable for the airline companies, Indigo is slated to use all its expertise in providing cheap air tickets on the international flights to Dubai.

What makes Dubai such an exciting new opportunity for the airline? There is no doubt that Indians form a good proportion of the population based in Dubai and they make frequent movements between the two countries. Dubai has long banked upon the skills of Indian IT and infrastructure professionals for its own economic development. Further, the Indian entertainment industry is a hot favorite for the people of Dubai which also helps in strengthening the bonds between the two countries. All these multi-dimensional connections depend on the civil aviation for connectivity and this makes Dubai a lucrative market for the Indian airlines.

For Indigo, Dubai provides the opportunity of testing the efficacy of their business model by providing cheap air tickets to the travelers to and from that country. Dubai is only a few hours flight from Delhi or Mumbai, the two main airports from which the flights are operated to the emirates nation. Along with the sizeable Indian population residing there which propels the demand for travel on this sector, the no-frills approach of the Indigo airlines is likely to take up significant chunk of the market share as it provides cheap air tickets to the customers. The reputation that it has developed in the domestic market for its punctuality and credibility is further going to help it significant numbers of middle and upper middle class customers.

MRO Operations In Indian Aviation Market

MRO refers to the maintenance and repair operations of the aircraft. As everyone would acknowledge that it is not the cheap air tickets of the airlines but the safety and security of the passengers which is of paramount importance both to the passengers as well as the airlines, this makes role of MRO vitally important. It is due to the efforts of the dedicated MRO that the aircraft retain their airworthiness and are able to promise total security and safety to the customers. The Indian aviation market, which has grown leaps and bounds in the past few years banking on the strong foray of the LCCs such as Indigo, approved the setting up of dedicated MRO at Hosur for commercial  aircraft in 2008.

Pre-requisites of MRO

You certainly do not set up an MRO for a few aircraft since it will become prohibitively expensive and unviable. So, for setting up a dedicated and world class MRO, it is important to have some critical mass of the aircraft or a minimum fleet of aircraft. This will ensure that there is sufficient work on regular basis for the MRO people so that there is no time loss and the costs of maintenance and repair work are kept at optimal levels. India has developed its current fleet in a short span of time in the last few years only and this has now reached that stage where the MRO services can be used most efficiently.

Further, it is also required that the aircraft shall also need the maintenance and repair works. And, this happens when the aircraft are sufficient old. Since India has a relatively young and new fleet of aircraft, there is not much of maintenance work required. However, as the time progresses and the fleet becomes old, it become important to get the regular MRO done.

The third important requirement for the MRO is that of reasonably priced infrastructure which includes the hangar space for the aircraft. This also requires continuous training of the aircraft maintenance professionals and giving them the technical knowhow of the aircraft maintenance. The element of price is foremost consideration since an overly dear price will ultimately be charged to the airfares of the airlines and the cheap international flights from India might get costlier for the customers. LCCs such as Go Indigo might also require to increase their airfares due to additional MRO requirements of an ageing fleet in future.