The Kingfisher-Air Deccan consort demystifi es much for Indian aviation…
I’m
penning this piece aboard what I believe is the grandest thing to have happened to our country’s aviation ambience after liberalisation and in the wake of that veritable ‘opening of the skies,’ which enabled a whole new world of populace to sample the experience, ease and expediency of flying, in a deliciously ironic way at once exponentially reducing – and increasing – the notion of distant ‘privilege’ that has long since prefixed sitting strapped atop a plane.
So, while I revel in the luxury of this lavish airliner... oops, I mean Kingliner, in the backdrop of the just declared 26% stake acquisition in Deccan Aviation by Dr. Vijay Mallya’s United Breweries Holdings, resulting in the creation of an entity that will wield authority over a share of approximately 38% of India’s domestic aviation sector pie, I feel a hark back to the soaring developments in the very dynamic (dynamic it is in every context, or call it aerodynamic if you would!) vista of this industry would only be appropriate. A decade ago, when the air wasn’t as thick with competitive activity in our skies and the wallets went thin more often than not, so far as ticket pricing was concerned, a select audience of air travel kept itself content with barely half a handful of operators (but of course, a significant few among them made no bones about underscoring the elitist aspect associated with this act).
A few years into the new millennium witnessed what will truly go down in our country’s corporate, consumer and societal history as a revolution, in terms of the magnitude it spawned and the impact it disseminated across the periphery of a strata that was, let’s say it best, only ‘waiting in the wings’ for a lift off. As an armada of low-cost carriers marched into the blue, they ushered in a direly required whiff of fresh air in an industry that was way over the threshold of complacency and unleashed the aspirations of an entirely unattended segment of audience by promising an opportunity to savour much beyond their staple diet of rail and road at a price well within their means.
And while the likes of Air Deccan, SpiceJet, GoAir and IndiGo went about cementing their space of mind and market in the consciousness of consumers, giving full-service players a battle for their buck, another two years down the line, somewhere amidst the freebies and the euphoria, the present was begging for a reality check… in one word, consolidation.
Given the increasingly iffy scenario for low-cost operators of late, with untenable pricing and selling-below-price mechanisms gradually catching up with market fundamentals, perhaps, it was only a matter of time before a semblance of pragmatism dawned.
The acquisition of Air Sahara by Jet Airways two months back, the merger between state carriers Air India and Indian Airlines in February this year and the latest Kingfisher- Air Deccan combine are all indicative of the phenomenon of integration that every airline worth its mettle is realising as the path ahead – a trend of functional effectiveness that rings in sync with that prevalent in the global aviation market.
And while many may argue that the heydays of the average flier may have scraped the beginning of their end, with more realistic pricing models being evolved by the likes of the Mallya-Gopinath amalgamation, that’s definitely not to say that all of it may be glum. In fact, any of it is probably better in the long scheme of affairs, when you consider the implications of a host of low-priced airlines biting the dust due to infeasibility of operation and the market leaving itself vulnerable to monopoly all over again. Quite the contrary, with mergers of the sort that have manifested themselves recently, the portents of healthy competition blink bright on the horizon.
Of course, the regulator needs to ensure that connivance is kept afar. The idea of enhanced infrastructure and lesser duties on jet fuel reducing the pricing yoke on airlines, besides increased foreign direct investment in the aviation industry will further lend impetus to economies of scale being leveraged by the more modest players, sparking off a greater growth trajectory. Well, like the familiar sign at a place we’ve all been frequently reading - Work in Progress…!!
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
For More IIPM Info, Visit Below....
IIPM - Admission Procedure
IIPM, GURGAON
The Indian Telecom Sector
The Sensex rise and fall means
Ambitious Ambanis!
Warming up for doomsday?
IIPM is A World of Career
I’m
penning this piece aboard what I believe is the grandest thing to have happened to our country’s aviation ambience after liberalisation and in the wake of that veritable ‘opening of the skies,’ which enabled a whole new world of populace to sample the experience, ease and expediency of flying, in a deliciously ironic way at once exponentially reducing – and increasing – the notion of distant ‘privilege’ that has long since prefixed sitting strapped atop a plane.So, while I revel in the luxury of this lavish airliner... oops, I mean Kingliner, in the backdrop of the just declared 26% stake acquisition in Deccan Aviation by Dr. Vijay Mallya’s United Breweries Holdings, resulting in the creation of an entity that will wield authority over a share of approximately 38% of India’s domestic aviation sector pie, I feel a hark back to the soaring developments in the very dynamic (dynamic it is in every context, or call it aerodynamic if you would!) vista of this industry would only be appropriate. A decade ago, when the air wasn’t as thick with competitive activity in our skies and the wallets went thin more often than not, so far as ticket pricing was concerned, a select audience of air travel kept itself content with barely half a handful of operators (but of course, a significant few among them made no bones about underscoring the elitist aspect associated with this act).
A few years into the new millennium witnessed what will truly go down in our country’s corporate, consumer and societal history as a revolution, in terms of the magnitude it spawned and the impact it disseminated across the periphery of a strata that was, let’s say it best, only ‘waiting in the wings’ for a lift off. As an armada of low-cost carriers marched into the blue, they ushered in a direly required whiff of fresh air in an industry that was way over the threshold of complacency and unleashed the aspirations of an entirely unattended segment of audience by promising an opportunity to savour much beyond their staple diet of rail and road at a price well within their means.
And while the likes of Air Deccan, SpiceJet, GoAir and IndiGo went about cementing their space of mind and market in the consciousness of consumers, giving full-service players a battle for their buck, another two years down the line, somewhere amidst the freebies and the euphoria, the present was begging for a reality check… in one word, consolidation.
Given the increasingly iffy scenario for low-cost operators of late, with untenable pricing and selling-below-price mechanisms gradually catching up with market fundamentals, perhaps, it was only a matter of time before a semblance of pragmatism dawned.
The acquisition of Air Sahara by Jet Airways two months back, the merger between state carriers Air India and Indian Airlines in February this year and the latest Kingfisher- Air Deccan combine are all indicative of the phenomenon of integration that every airline worth its mettle is realising as the path ahead – a trend of functional effectiveness that rings in sync with that prevalent in the global aviation market.
And while many may argue that the heydays of the average flier may have scraped the beginning of their end, with more realistic pricing models being evolved by the likes of the Mallya-Gopinath amalgamation, that’s definitely not to say that all of it may be glum. In fact, any of it is probably better in the long scheme of affairs, when you consider the implications of a host of low-priced airlines biting the dust due to infeasibility of operation and the market leaving itself vulnerable to monopoly all over again. Quite the contrary, with mergers of the sort that have manifested themselves recently, the portents of healthy competition blink bright on the horizon.
Of course, the regulator needs to ensure that connivance is kept afar. The idea of enhanced infrastructure and lesser duties on jet fuel reducing the pricing yoke on airlines, besides increased foreign direct investment in the aviation industry will further lend impetus to economies of scale being leveraged by the more modest players, sparking off a greater growth trajectory. Well, like the familiar sign at a place we’ve all been frequently reading - Work in Progress…!!
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
For More IIPM Info, Visit Below....
IIPM - Admission Procedure
IIPM, GURGAON
The Indian Telecom Sector
The Sensex rise and fall means
Ambitious Ambanis!
Warming up for doomsday?
IIPM is A World of Career
No comments:
Post a Comment