Changing use of the self- services kiosks

A kiosk is a free standing computer screen which is used by the passengers to print baggage tags or air tickets, scan the printed boarding pass, seeking confirmation of flight information, review and change the assigned seats and even tell you which gate to approach for taking the flight. The emergence of online commerce in travel industry, whether on your computer or on the mobiles, is fast changing the way the traditional kiosks are used by the airline for performing a variety of functions like doing the check-in, getting boarding passes and offering a few other services. With most of these services being offered on the internet to the customers and the once long queues now becoming a thing of past, the airlines have started mulling the usefulness of the kiosks afresh since it does require considerable expenditure on its maintenance.

As per IATA, there are about 5000 kiosks around the world and some of which have been closed by the airlines as they feel that the time is up for these kiosks. But, with about 20 percent of passengers still using these, most of the airlines feel, it is time that these are put to other uses as well.

The experts point out that the relevance of the kiosks will continue for the passengers with the hold baggage. These will continue to hold immense importance in the processing of the self service baggage and flight tickets processing.

Another likely use of the kiosks, as per IATA, is in the verification of the documents. One specific requirement pointed out in justification of this use of kiosks is that of passenger passport scanning. Though there are efforts at developing a mobile scanning and verification solution, it will take time to develop it and, in the meantime, the kiosks can be used for this purpose.

It has also been suggested that the use of kiosks as the first point of call for the passengers can be changed to provide a more comprehensive set of services and products. So, these can be used, as per IATA, as multiple channels product and service offer points. 

Qatar Airlines announces plans to join OneWorld Alliance

Qatar Airlines has become the latest Middle East carrier to announce its plans to join the OneWorld Alliance. This announcement comes close on the heels of the Etihad also joining the OneWorld Alliance grouping and after a month of Emirates going to the fold of the SkyTeam Alliance. The Middle-East region is fast becoming a strong hub of airline operations as the crucial connectivity is provided by these airliners to the passengers from Asia to the destinations in Europe and USA using the long haul fleet of aircraft. In fact, the airlines of the region have been the game changers in providing flight tickets to USA and Europe by making Middle East hub of their activities, reducing the importance of the traditional European hubs. Qatar Airlines already has a pact with the Malaysian Airlines and it needs to have more pacts with the other members of the alliance before is formally joins to grouping.

These three instances indicate that the old players of world aviation, who had once rued the emergence of gulf carriers as prominent players, are now coming around to the reality of these carriers being here to remain for a long time and the shedding of inhibitions related to them. What the customers get in return is the international flights to newer destinations, privileges and benefits associated with the frequent flier programs on a much wider numbers of airlines, coordinated schedules and common access to airport lounges.

Environmental Costs To Increase Prices Of Cheap Air Tickets

Global aviation faces many challenges and foremost among these is the challenge of meeting the environmental concerns related to aviation. With increasing demand for cheap air tickets and the rapid growth of the global aviation on one hand and the deepening environmental concerns on the other, the aviation industry is caught between two opposing forces. Since fuel prices and factors for improving the fuel economy are responsible to a large extent for price determination of tickets, airlines do not have commercially viable alternatives to bank upon for meeting environmental concerns. 

It has been understood that rapid technological development which encourages conservation of fuel and increases the fuel economy of airplanes is the only solution to meeting both these seemingly divergent ends. Other mechanisms such as carbon trading are also aimed at quantifying the aviation emissions, determining the best practices to minimize these emissions and even trading these by seeking to cut down these emissions from other emitting products by infusing technology.

Skeptics fear that if the technological measures to control emissions are incorporated in airlines, then the prices of the flight tickets are likely to rise. This is so because the technology is expensive. Though the running costs will increase due to higher fuel economies, the cost of manufacture and, hence, of its financing will increase, more than offsetting its gains. Further, if the alternative fuels are to be used, the question of sustainable use to a large extent will not be easy to address.

So, as of now, there does not seem to be a way ahead which could address both these issues of technological infusion and of meeting demand for cheap air tickets on a commercially viable scale.

Air ticket booking and pricing gets more transparent with OFT enforcement

Airlines have long been accused of not making proper disclosures of the prices of air tickets to consumers at the time of starting the booking process. Often, there is a difference between the prices which are advertised and what the customer eventually has to pay at the end of the air ticket booking process. Besides, some charges are hidden, meaning that the exact heads in which these are broken are not disclosed to the passengers. The Office of Fair Trade (OFT) in UK has sought to put an end to one of these practices. It has issued an enforcement action to put an end to the practice of hiding the debit card surcharges until the payment is about to be made.

Twelve airlines have agreed to include the charges of debit card in the headline prices instead of mentioning these as surcharges at the end of air ticket booking. The charges for credit card can still be allowed to be charged as surcharge but these need to be mentioned at an early stage of the booking process. With more transparency in the pricing structure, passengers would be able to know how much are they being charged for and by mentioning these clearly in the marketing materials, advertisement and websites, the airlines would not be able to surprise them at the end of booking process.

This issue was a longstanding demand of consumer groups who wanted airlines to tell the actual price of ticket clearly in the initial stages of booking cheap flight tickets by including the card charges in the fare rather than charging these as surcharge close to the end. Even before the ruling was out, the airlines are including these charges in their front-end prices, be it their websites or marketing materials. 

Indian Ministry Suspects Foul Play In Price Rise of Cheap Flight Tickets, Orders Investigation

With the chips being down for Kingfisher Airlines and Air India that has led to crunch of seats availability for meeting the demand of air travel in domestic and international sectors, the prices of the other operating carriers have been rising steeply. The rise is particularly steep as compared with the similar prices last year and even after discounting the factor of fuel price rise.

The office of Director General Civil Aviation (DGCA) had issued advisories in past for airlines to keep prices within reasonable and rationale limits. The pundits of economics refuse to see anything fishy about this price rise and argue that due to the market conditions of more demand and less supply, it was natural for airlines to increase the prices of air ticket booking. However, the Ministry of Corporate Affairs sees it differently and has suspected formation of cartel by the airlines for increasing the prices under the usual alibi of market conditions. Thus, it has asked the Competition Commission of India (CCI) to investigate into price increase.

The main reason of suspicion is the coordinated price rise of otherwise cheap flight tickets by all airlines in last couple of months which give hints of cartel formation. The air fares have soared to about 50 percent on many routes in the past two months and this has been done by all the airlines. While the law draws distinction between the coordinated price rise and cartelization, both of these activities are prohibited under the law since these are unhealthy for competitive market conditions. Formation of cartel for increasing prices is done deliberately as a well considered measure to ward-off competition since there is a mutual collusion among the players. However, this puts customers at a disadvantage since instead of getting competitive cheap flight tickets, they get the rigged prices. 

How are interline agreements for air ticket booking are different from the code share agreements?

You must have heard of the code share agreements between the airlines. As a result of these agreements amongst the airlines, you do air ticket booking on one flight but are flown on the other airline, which might surprise you when you take the boarding pass. The code share agreements are quite common among the airlines. These give the benefits of extended market reach and better seat factors to the airlines. However, the interline agreements are relatively rare as compared to code-share ones. Both these types of flights can have flight numbers different from the one of primary airline. But, there are some basic differences between the two.

In case of the code share flights between the source and the destination in a multiple-leg trip, the flight number of each airline with passengers is different. But, in a similar situation, the interline agreement provides the same flight number for all the airlines.

Another major difference between the two is that the code share agreements allow for honoring the frequent flyers programs of airline on which cheap flight tickets are booked with the code-share partner carriers. So, when you are flying on the code share flight, your miles will keep on getting aggregating. Further, you can redeem these points on these carriers as well. But, in case of interline agreements, the rewards programs of booking airline are not honored for those segments of journey whose flights do not have code share agreement with one another.

Yet another difference is with respect to the baggage which needs to be checked-in. In case of code-share agreements, the baggage needs to be checked-in at each segment of flight since these are treated as separate flights. However, in case of the interline agreement, the baggage follows you wherever you go obviating the need for checking-in all the time.

Price of Cheap Air Tickets Soars As DGCA Says All Is Fine

For all the airlines to operate in India, it is mandatory to provide to DGCA information about the price band within which these would be offering their flight tickets to the customers. While the airlines supposedly strive to provide cheap air tickets, it might not be the case in reality always. India has liberalized the aviation sector and allowed the private bodies to operate airlines.

 However, it has not yet allowed the foreign direct investment in the sector. The entry of private players was allowed for reasons of catering to the increasing demand of flights in the domestic sector and for developing a healthy competitive playing ground.

However, airlines operating in Indian conditions have often flown into rough weather due to a number of challenges arising out of environmental factors which many of the carriers find difficult to operate in. The high rates of taxation on aviation fuel, a generally price-sensitive market and labor-management issues have all led to exit of many carriers from domestic operations, leaving only a few in the fray. This has reduced the competition and also led to reduction in the number of seats available to the people. These market conditions have led to situations of less supply and high demand which has contributed to increase in air fares as compared to same period last year. Even the low-cost carriers have revised the prices of their tickets upwards substantially as compared to last year.

The steep increase has led to DGCA looking into the matter. It has been found on random checking that the airlines are still operating in the price-band which they had submitted to the DGCA. Earlier, the DGCA had asked the carriers to reduce the prices of tickets since the prices of oil had come down but there was no marked reduction in air fares. DGCA has been acting as a watchdog to ensure that the flight booking does not become prohibitively expensive for travelers with the curtailment of flights by Air India and Kingfisher. 

Indigo Airline becomes first to use RNP for saving fuel

Low cost carriers operate on a no-frills approach and their chief concern is to provide cheap air tickets to passengers. To meet this end, these carriers always aim to operate with maximum efficiency by minimizing wastages. IndiGo Airlines, India’s premier LCC with overall second largest market share has not hesitated to use effective measures which lead to efficient operations. The latest move of using the RNP, an acronym for required navigation performance, to make significant fuel savings has further corroborated the proactive approach of airlines in adopting new technology that can increase efficiency levels.

The use of RNP will not be beneficial only for Indigo airlines but it will also herald a new era in the air traffic management at the airports in India. By enabling the airlines to operate in an environment of contained and secure flight trajectories, RNP reduces the flight path leading to greater savings on fuel. The test flight of Indigo using RNP approaches at the Kochi airport has demonstrated that as much as 75 kilometers of flight was reduced from one approach. This means that fuel up to 400 kg can be saved on each such landing. This is quite a significant figure and when the number of flights landing each day at various airports of the country is to be considered, this becomes an enormous saving of fuel. This saving results in reduction of greenhouse gases and promotes the cause of greener environment. For the passengers, this could also mean further lowering of flight tickets prices.

But, how does RNP work? Actually, it is a performance based navigation system which utilizes on-board facilities for navigation monitoring and alerting. This system allows the aircraft to fly between two defined points using GPS systems. This also facilitates easier management of air traffic in non-radar environments. Another important feature of RNP is that it provides necessary flexibility for overcoming terrain obstacles in trajectories. 

LCCs lose the cheap air tickets advantage in long run

Low budget airlines have been a successful business model worldwide by and large. The biggest impact that these airlines have made is to create new aviation markets worldwide, opening up new sectors of air connectivity as well as increasing the customer base of existing ones. Their main USP of cheap air tickets has made the hitherto reluctant people to take to aviation for reaching different places. While low fare flight tickets give the push into the new markets, there have been statistics to show that these airlines are not always able to maintain their price advantage in the long run.

Competition

The low budget airlines (also called LCCs) operate on simple pricing structure and on small margins of profits. Any factor which has the impact of increasing the prices of flight tickets puts these airlines in a difficult position as compared to network carriers. LCCs do face competition from other LCCs as well as network carriers. The latter, in order to protect their customer base, might respond with reduction in prices to a certain level. With considerable space for maneuvering the prices of cheap air tickets due to their yield management practices, the full service carriers are in better position to withstand the unfavorable times as well offer reduced air fares with better amenities and services. So, LCCs make regular carriers rationalize their tickets prices by raising the level of competition. In the long run, as the market matures, the LCCs tend to face stiffer competition from full service carriers and the magic of cheap air tickets does not work to their advantage to same extent as it happened in initial period.

Consumer Behavior

LCCs also see their cost-competitiveness being eroded over a period of time due to rise in incomes of the people as they seek more comfortable and luxurious flight experience. In the price sensitive markets, this might factor might not play a big role but there is a definite tendency to move to carriers with better amenities and services as the income levels rise. This change in consumer behavior is associated with the fast developing regions where prosperity levels increase. For the other sectors where economic growth is stagnant or laggard, there is no perceptible change in consumer behavior in long run.  

iPads replace TVs- A smart move towards more fuel economy

Fuel is a major concern for any airline since it accounts for roughly 40 percent of the operational costs. For this reason, airlines strive to adopt an operational methodology which is as fuel efficient as possible. Being fuel efficient makes it possible for the airlines to meet the demand of cheapest air tickets from the customers. Reducing the weight of the aircraft, either by using light weight but robust materials in its manufacture or by careful selection of the in-flight fitments, airlines strive to achieve maximum fuel economy.  A recent smart move by one of the budget airline to make use of the iPads instead of the LCD or LED TV screens is further aimed at reducing the weight of in-flight fitments for more economical operations by saving more fuel. Interestingly, the airline was able to cut the weight of aircraft by about 7 percent even after adding 40 percent more seating capacity. 

The use of iPads, which would be loaded with the music, videos, games and other multimedia products, will help airlines in two specific ways. While it will help improve the fuel economy since total weight of TVs amounting to tons of kilograms would be shed, it is also going to help the airlines raise crucial add-on revenue by way of charging a fee for its usage. So, while the flight tickets would be cheaper, it will also rake in more revenue for airline. Since iPads are quite popular among the people, these are likely to see good demand in the flight as an entertainment device.

With increasing aviation fuel prices, it is becoming increasingly incumbent upon the airlines to devise innovative measures of achieving operational efficiency. With demand for cheap international flights also increasing and many low-cost carriers seeking entry into new markets using their USP of providing low cost international flights, smart moves like the one of replacing the TVs with iPads would save more fuel, enable operation of longer haul flights and generate more revenues. 

Bio-fuel and Solar Energy based cheap flights: The Future of Aviation

Aviation is undergoing fundamental transformation in the wake of increasing concerns for environment and developing feasible commercial alternatives. The recent, trans-continental flight of a solar powered plane and some experimental flights using bio-fuel as an alternative indicate that the future of aviation will be powered by alternative fuels which are eco-friendly and sustainable. For the consumers this would usher in an age of cheapest air tickets where the proportion of fuel cost is reduced to insignificant levels.

The maiden flight of solar powered plane might still be far off from commercial use but it has been demonstrated that airplanes can be flown day and night on solar power.  The solar airplane made use of about 12000 solar cells on its dragonfly-like wings to power the flight which operated day and night. This means that the price element of fuel will be replaced with that of the depreciation of the capital investment done on the solar cells and their maintenance. However, this experimental flight is not being considered as a precursor to cheap flights of future on a commercial scale since the present flight was on a single seat plane and the aircraft weight was about that of a family car. Commercial planes are of altogether different dimensions in size. But, it did amply demonstrate that day and night flights are possible on solar power.

Bio-fuels, on the other hand, are the only feasible and sustainable alternatives at present which can be used for commercial purpose. There have been many experimental flights using this fuel type. However, these would require large tracts of lands for growing the plants which provide bio-fuel. With EU bringing aviation sector within the emissions trading program, there is a likelihood of making a shift towards using bio-fuels. Though marked reduction in the prices of flight tickets might still not be possible due to less usage of these fuels initially, the costs of tickets are expected to go down after attaining optimal levels of usage. 

New Application Allows Using Social Media for Seating

It was quite common for the fliers to make use of social media resources to seek views, tips, suggestions, feedback and review of friends and contacts for planning your travel better. Similarly, there have been many useful mobile applications which have been developed for making your travel easier. There are the GPS route finders, trip planners, linguistic aids and many other applications which can be helpful for meeting your travel needs. The intervention of technology and social media has added altogether different dimension to your travel. Right from flight searches and flight booking to getting information on almost anything that you need, technology and social media have impacted the way you travel.

Social Media and Airplane Seating

Social media is also being used by the airlines in an innovative way. There has been development of applications which allow the passengers to utilize their social media profiles (such as Facebook and LinkedIn) to get seated to next to their friends or with someone who shares common interests. The procedure of using the application is quite simple as it involves logging into your social media profiles from the airlines website and then specifying your interests and flight details. The application will search for any person in your network of friends who shares same interests and find out whether that person is also flying on the same flight. If you do find any such person, you can opt for seating next to him or her. This innovative application shows the picture of the person who is on same flight and his or her seat number. You can also check the seat map of airplane and choose your preferred seat.

So, social media resources can be used for preferred seating after identifying whether any friend is travelling on same flight or not. Therefore, there would no longer be surprises to find that your friend was travelling on the same flight. You would know it in advance when you do booking of flight tickets and use the application to search for friends flying on same flight.

While this application gives users a good way of utilizing their in-flight time by engaging in conversation, it will also help airlines to get more customers since passengers are likely to flock to the airline which uses this application.

To Increase Or Not To Increase The Air Tickets Prices-That Is The Question

If Shakespeare had been into air tickets pricing, he would not have said “to be or not to be”. Rather, he would have always been befuddled by “to increase or not to increase”. Indian aviation is a perfect stage of Shakespeare play where different quarters are mooting their own reasons for increasing or decreasing the prices of the flight tickets.

The Ministry of Civil Aviation is trying to find ways of reducing the prices by cutting down on Central and State level levies on the aviation fuel so that the sector remains financially viable for the airlines to operate the flights by rationalizing the policy and taxation measures. While these cuts are not going to lead the airlines to offer cheap air tickets to the customers immediately, it will help the airlines improve profitability by controlling the effects of fuel price-rise.

Interestingly, the airlines have been demanding the same from the government but when it comes to taking the advantage of situation arising out of the poor condition of competitor airlines, the prices of the flight tickets are increased. Be it the requirements of yield management or making the most of the seasonal high demand for air travel or call it simple opportunism, the airlines take advantage of even a slight chance of making the profits.

And, there are influencers outside the airline-government-customer triad which suggest that the cheap flights need to be taxed so that the funds can be used for social sector. The recent advocacy of some minor levy on flight tickets by UN for aiding the purchase of AIDS drugs for the poor is an example of how the pricing of cheap air tickets gets influenced by various bodies and motives.

Since there are many pulls and pressures on the pricing of flight tickets and most of these have resulted from the extremely dynamic environmental factors, the attempts to achieve a rationalized, simple and perhaps more predictable system of flight prices determination have not been totally successful. The riddle “to increase or not to increase” the fares of flights continue for the modern Shakespeare. 

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. 

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.