Times of India

Bangalore, Aug 19: Air Deccan’s Bangalore-Hubli route, which witnessed the low-cost carrier’s inaugural flight four years ago, is proposed to be terminated. Reason: Kingfisher Airlines has proven to be more profitable on this sector, and is seen as a better bet on the route. 

In other words, what many customers feared is beginning to happen. The recent marriages between low-cost and full-fare airlines — Kingfisher-Air Deccan and Jet-Sahara — are leading to some serious rescheduling of flights to improve the profitability of the airlines. For customers, it implies the withdrawal of low-cost options that they have enjoyed for some years. 

“A team from both sides (Air Deccan and Kingfisher) are looking at how best we can service various routes profitably, by drawing on each other’s strengths,” says Capt G R Gopinath, executive chairman of Deccan Aviation. 

Garry Kingshott, acting CEO of JetLite (formerly Air Sahara and now a low-cost airline), says the new schedule for JetLite, which will come into effect from September 1, “has been developed with Jet Airways to ensure that there is no cannibalisation”. 

Intense competition has led to most airlines bleeding, and rationalisation looks inevitable. The routes likely to be hit the most are the high-traffic ones between New Delhi, Mumbai and Bangalore. These three cities alone account for 60% of the country’s passenger traffic, with over 80% of the traffic being corporate travellers. 

“When you are catering to a business market, frequency of a full-service carrier plays an important role in staying competitive,” says Kapil Kaul, CEO of Centre for Asia-Pacific Aviation (CAPA) India. 

According to sources, Jet and Kingfisher will increase frequencies on these routes during peak hours (morning and evening), even as JetLite and Air Deccan reduce their frequencies during these hours. However, the latter frequencies during lean hours may increase. 

Just a few months ago, Air Deccan was planning to make itself more attractive to business travellers. But at least on high-density business travel routes, Deccan is unlikely to take the idea forward. High-traffic routes are witnessing near 30% rates of growth, fuelled by corporate travel and small enterprise business travellers. 

Says Gaurang Shetty, VP (marketing) of Jet Airways, “We would like to introduce flights every half hour between Mumbai and New Delhi as that is the densest route in the country.” 

Low-cost airlines are expected to focus more on tier II towns, where demand for lowcost travel is seen to be rising by 25%. JetLite, in its new schedule, has increased its number of flights from 90 to 134, but 60% of the increase is into tier II cities. 

Air Deccan has recently increased frequency on its Chennai-Coimbatore and Chennai-Madurai sectors. These sectors that were earlier serviced by ATR aircraft, have now been upgraded to one ATR, and one Airbus A320 aircraft for each sector.

STRATEGY RETHINK

Intense competition has led to severe bleeding by airlines, and rescheduling looks inevitable

The Bangalore, New Delhi and Mumbai sectors are likely to be hit most as they constitute 60% of all airline business

Jet and Kingfisher may increase frequencies on these routes during peak hours (morning and evening), even as JetLite and Air Deccan reduce their frequencies during these hours. However, the latter’s frequencies during lean hours may increase

Jet Air says it will introduce flights between Mumbai and New Delhi every half-an-hour