We Indians get sentimental about anything & everything! Both 'premium' & 'no-frills' are tried & tested business models, and there is no reason an industrialist as savvy as Vijay Mallya cannot pull off both in a high growth market like India. As for Cpt. Gopinath's dream, nobody has stopped him from using the pay-out from this deal as seed capital for a new airline. Then it'll be 'New Deccan' vs. 'Kingfisher Lite', let the best airline win!
it is a marriage of unequals and marriage of convenience bound to last not long cud result in divorce for dreams not wishfully but involuntarily.any way ideas utopian as that of Gopinath's seldom become the realities
The market welcomed Cpt.G's idea. But as time went by, Air deccan's cust. srvc and overbooking burnt the image. That he could recuperate. What he could not the bottomline.
The airline was not profitable. With my limited understanding of economics and the airlines i saw from last years trip to india, only paramount seemed to be a viable business model. They had "business" class only with full service for a few hundred rupees more. Think about it, the cost of the plane, gas, airport berthing charges, aircraft maintenance crew and a couple more big cost items do not change irrespective of whether you are a low cost or not. to deduct food cost and couple of small items is not going cut cost anyway. But i dont know how well paramount is doing financially BTW
I think it was Capt. Gopinath's mistake. He created a brand, created reach and gave the poor people hope of flying. But what he forgot was that every company needs profits to be in shape. Vijay Mallya took over bcoz Air Deccan was in bad financial shape - almost on th everge of bankruptcy, as the article says. In this artice, Mallya is being projected as a villian, but actually Mallya has protected the interests of thousands of Deccan employees, and also brought huge financial support and economic sense for Deccan. As for Gopinath, he has made a lot of money, which this article does not tell.
RE:Bad financial mangement
by arvind kamath on Jan 01, 2008 12:33 PM Permalink
Dear Argentina, I do agree to all your points, one exception being that mallya has protected the interests of the employees, if not for gopinath, mallya would have squeezed all the employees out and would have put them in a limb0 by not paying their legal dues, dont take mallya to be a saint, thousands of his employees in his operations in africa and india can vouch for it. I do have personal experience with one of his loss making ventures, mallya is a moron who is behind the good things of life thats why he is king of good times, he is only successful in those business where the profit margins are above 100%like liquor all his other expansions or new ventures have been great flops like UB air, UB engg, UB Pharma, UB fertilizers the list is endless.
RE:Bad financial mangement
by Sathish N on Jan 01, 2008 12:30 AM Permalink
True that Mallya has protected the interests of thousands of Deccan employees. But, don't attribute it to any altruistic streak. Mallya increased his share of the market pie. No doubt, a good business strategy, but don't give it a hero's spin.
no airline company will work out in India not just Air Deccan concept even Kingfisher airlines will flop miserably simply because India is still a mainly poor country and most of the people travel by bus/rail, and air travel is unaffordable except to a very small number of rich people. No industry can survive just by depending on corporate visits. India will do well on creating better roads where cars/buses can go at 100 km/h at a minimum and by building faster trains ala French TGV
RE:Hello
by Raam Kool on Jan 01, 2008 02:15 AM Permalink
What world are you in Sir ? I travalled many more times in Air Deccan / Jet Airways, even thouh there was a relatively cheaper potion of travelling by train. Esp - I dont think I am "rich". You may say air-travel may not be affordable to poor of India, but its surely affordable to burgeoning Middle-Class and that makes it a economically viable industry.
RE:RE:Hello
by Adnan Aurangabadwala on Jan 01, 2008 02:32 AM Permalink
I agree totally with Raam... If you see the amount of traffic at the domestic terminals, you will be astonished.. the Indian middle class is HUGE.... More than sufficient to sustain the airline... I think forgotten in all this is the Taxation on travel... Many a times you manage to get a ticket for Rs 300, but then, the taxes for that travel are close to 5 times the ticket cost... This I feel is still holding back the domestic passengers...
RE:RE:RE:Hello
by Arvind on Jan 01, 2008 08:51 AM Permalink
It is as simple as get. From Bangalore to Delhi it takes two days to go and fair is around 1,500/- so for a return trip for a couple it would cost around 6,000/-. Now in that they have to spend 4 days in train. At least add the extra cost of eating at stations, books, megazines,etc. etc. It would easily go to 7,500/-
In flight it would take around 12,000/- for return ticket of two. Now even if we consider only husband as working he would loose his 4 leaves for this train. Which can easily be worth another 5K. Now do your math and find out what is better option.
And for even more mathematical satisfaction do check the number of I AC, II AC, and III AC travel data with railways and you would come to know.
I think you must belong to Gandhi-Nehru family who are hellbent on projecting India as poor country so that they can win elections on the basis of "Garibi Hatao" which they never did !!
Dude we are not poors have some self respect and selfesteem. How long you would be under this illusion of poverty do you like being poor, at least I dont want to be poor and would never tolerate if somebody comes and say that India is poor country!
RE:Hello
by Vijay on Jan 01, 2008 01:39 PM Permalink
India is a poor country statistics tell it I dont, what is our per-capita income in India? in US it is around 40K Dollars, here it is less than 2K dollars, so only minority will be able to afford air-travel. Right now it is 4 days to travel to Delhi but with high-speed train it can be easily cut to 2 days. And moreover travel to Delhi is not comparable, yes I agree maybe in such cases Delhi to Bangalore travel by plane travel is better, but what about from Bangalore to Hyderabad from Bangalore to Mumbai Bangalore to Chennai, where distance is less than 1000 kms with faster trains and faster roads we can cut travel time by more than half. If China can have fast trains why not India, after all China is only slightly ahead of India in economic terms, India definitely needs high-speed trains
RE:RE:Hello
by Arvind on Jan 02, 2008 09:58 AM Permalink
Dude,
What was the last time you checked the fare of these bullet trains? You need to relay the entire tracks to sustain such high speed trains!
There are not the only two kind of people in the world Rich and Poor. There is some thing called middle class. Hope now you remove the Gandhi-Nehru spec. from your eyes and see India.
RE:RE:Hello
by Abhijeet on Jan 01, 2008 05:52 PM Permalink
Dear Vijay, Please chck the rates of Fast Trains you are talking about. Bullet train in China cost about 35USD for 45Km run. Do you think that wd be affordable??
It is sad that all are focusing on Capt Gopi when a bad time has come for him.. but there is one thing which all should remember that Capt Gopi is the man who revolutionized air travel in India. Not only he bought a lost cost carrier but also managed to get many tax exemptions for aircraft and parts which has helped aviation to be what it is now.. Well this is an inside story, but i would say that he was a good starter... Cheers Gopi!!!
It's said that a revolution is easy to start, but difficult to sustain. Judging by his actions, GRG must likely be an entrepreneur of the daydreaming, optimistic type. People like that always usher in revolutions, but one needs a tougher stomach to sustain them. Unfortunately for him, his dream was brought down to reality by the unprofessionalism of his employees.
I hope he hangs in there and brings in more revolutions. I also hope all Deccan Aviation employees feel guilty and become more professional - acquisitions can become job killers very fast.
RE:Not a failure by any means
by rexberry on Dec 31, 2007 10:35 PM Permalink
Good post buddy... acquisitions may look good from outside but the employees already working in air deccan are goin to feel the heat...
Recently, I was to take an evening flight from Hyd for Mumbai, and reached the airport directly to procure the ticket there itself. Almost all the airlines had the similar fare structure, depending on the time of flight. All except Deccan, as they were not able to confirm the available fare to me..! Why..? Because their SYSTEM was DOWN...!
I ultimately flew by Kingfisher, but thats not the point here. Why should we believe in Air Deccan? I think there is a lot of "GOPINATH" still left in Deccan. Mallya has to take certain decisions, and fast.......!
