But a year later, at the age of 52, Gopinath began service in south India with a leased 48-seater, $10 million in investment and a conviction that India's burgeoning middle class, which was already buying color TVs and cell phones, would buy air tickets.
Barely two years into its operation the no-frills airline, Air Deccan, has grown from one aircraft to 19 and from one daily flight to 123. It has placed a $1.1 billion order with Airbus and will get an aircraft a month for the next 64 months. In its first full year of operation, ending in March, the company flew 1 million passengers and had revenues of $75 million. Projected revenue for this year: $250 million.
Also, in 2004 the company raised $40 million in private equity from ICICI Venture Funds Management, India's largest private- equity player, and Capital International, an arm of the huge Los Angeles money manager Capital Group. Air Deccan is looking to go public over the next few months. "This is not the story of Air Deccan's growth--it's the story of the growth of India," says Gopinath.
His success in the fast-growing aviation industry has set off a gold rush. Two new airlines--Delhi-based SpiceJet Limited and beer baron Vijay Mallya's Kingfisher Airlines--started flying in recent months. Several new players are waiting in the wings--including Indigo, backed by U.S. Airways' former chief Rakesh Gangwal, and GoAir, which is backed by Jeh Wadia from the controlling family of the giant Bombay Dyeing & Manufacturing.
"Everybody knew that India was a big market--but Gopinath went out and actually proved it," says Kapil Kaul of the Center for Asia Pacific Aviation, a consultancy. "He led the way--and led it successfully."
The man behind the upstart airline traces his roots to a village in the southern Indian state of Karnataka, where his father was a schoolteacher. His own education veered into nearly eight years in the Indian army. Tired of regimentation, he veered again, into silk farming on a family plot.
The transition from the cocoon to the cockpit came in 1995 when he teamed up with a friend from his army days, Captain K.J. Samuel. The two of them decided over a game of squash that India needed a heli-charter company. So Gopinath and Samuel started one, with the Deccan name (drawn from the plateau upon which Bangalore sits, the company's headquarters then and now).
whether or not that city had enough gates for the new carrier, and whether the
buys out a company in the West and then is able to control prices of fares, because
In 1978, deregulation removed government control over fares and domestic routes. A slew of new entrants entered the market, but within 10 years, all but one airline (America West), had failed and ceased to exist. With long-term growth estimates of 4 percent for air travel, it's attractive for new firms to service the demand. It was as simple as having enough capital to lease a plane and passengers willing to pay for a seat on the plane. In recent news, the story about an 18-yr British...
In today's competitive marketplace, all firms are seeking ways to improve their overall performance. One such method of improvement, recently adopted by many firms, is benchmarking. Benchmarking is a technique used to evaluate internal business processes. "In this analysis, managers determine the firm's critical processes and outputs, baseline those processes, then compare the performance of each process against a standard outside the industry" (Bounds, Yorks, Adams, & Ranney 1994). To effectively improve a business process to world-class quality, managers must find a firm that is recognized as a global leader, not just the industry standard. Successful benchmarking requires tailor-made solutions, not just blind copying of another organization. Measurement and interpretation of data collected is the key to creating business process solutions.
David Neeleman, CEO and director began JetBlue in 1999 and flying since 2000 after his previous airline company-Morris Air was brought by Herb Kelleher, the Southwest Airline founder. He signed a 5-year non-compete agreement not to launch another airline. Kelleher hired Neeleman at Southwest but was not happy with the structured environment he did not control and was fired (Essentials of Entrepreneurship p78).
In lights of the PESTLE model, the political factors bring both opportunities and threats to Jetstar’s new proposal. Since this proposal focus on the Australia-India low price airline market, the analysis conducts involving Australia and India political environments. There are two potential opportunities in this political environment. Firstly, the Australian government has the incentive to boost the development of tourism between the two countries (Tourism Australia 2012). With the support of government, the start of the new route could be easier. For example, American government erects legislation to increase competition of the airport ‘by forcing these airports to increase the availability of scarce facilities’ (Williams 2015). Such legislations and regulations as well as financing investment or subsidies from government could directly help the airline company cut the cost. Similarly, Australian government could also have powerful intervention to influence aviation market. Thus, it is a big opportunity for Jetstar to the new route expansion if it acquires the
The new entry is likely from rich Gulf nations, China, and India of low budget planes around the globe. The airlines from the Gulf nations have placed orders with Airbus and Boeing that are valued in the billions. The deliveries are expected in the next decade. The demand will grow in the production of advanced narrow-body airplanes, such as Airbus, A321 and Boeing, B737 Max. The growth that is expected in the next decade, more consumers will be flying to their destinations. The airlines in the United States are expected to have a profit margin over the next decade. Resulting, from economic growth, and the demand for aircraft service. Buyers are expected to have a lot of power in the next decade, resulting in bargain prices for buyers. The competition will increase with intense rivalry in the aviation industry. The contracts for the aircrafts are totally from airplane
Shortly after World War I, the U.S. Government discovered the abilities of the modern airplane and created the idea of utilizing aircraft to transport mail across the country. In 1917, Congress approved funding to experiment with the idea of delivering mail by air. By 1920, the Post Office was delivering mail across the entire country, eliminating over 22 hours in delivery times of a coast-to-coast route. With the success of the airmail service and the growing popularity of civil aviation, the U.S. Government recognized the need to develop set standards for civil aviation and in 1926 created the Air Commerce Act of 1926. The Air Commerce Act of 1926 called for the government to regulate air routes, navigation systems, pilot and aircraft licensing and investigation of accidents. The act also controlled how airlines were compensated for mail delivery. Later in 1930, Postmaster General Walter Brown made recommendations which were later known as the Watres Act which consolidated airmail routes and opened the door for longer-term contracts with the airlines. Brown handled the situation regarding new contracts poorly by only inviting a hand selected list of large airlines to the negotiation table. This move pushed smaller airlines to complain and the issue was pushed to Congress. Following congressional hearings President Roosevelt later decided Brown’s scandal was too much to deal with and canceled all mail contracts completely and handed over air mail delivery responsibility to the U.S. Army. That decision was a disaster, and one month later, air mail was handed back over to the private sector. This time, however contract bidding was more structured and fair to all. It was then clear that the airline industry was back in full swing...
The main threats to the industry over the next five years are the rise in price of oil, legislation, the TSA, and labor costs. Each of these threats effect the scheduled air transportation industry not only endangers Delta Airlines but the entire industry. As the price of labor increases for ground operations and pilots this creates a burden on the industry by causing them to spend more to satisfy their labor requirements. The price of fuel increasing leads to the price of fuel to increase, which not only affects a single airline but every airline. With each time that the crude oil price rises the prices associated with the costs of refining the jet fuel as well as transporting it. These costs are distributed to each airline as they use this resource to transport passengers. As new politicians are elected to Congress and new administrators take charge of the FAA new regulations regarding this industry. These regulations affect everything from mergers to the airspace that the airlines operate in as well as what hubs and airports each airline operates out of. These factors are not issues that the industry faces, the TSA, the Transportation Security Administration, creates an unnecessary burden for the passengers attempting to travel from one location to another. The TSA inspections required before a passenger is allowed to board their respective flights allows time for each passenger to become frustrated with the amount of time they have to allot for inspection as well as the invasion of their privacy.
Kingfisher Airlines (KFA) was founded by Vijay Malaya and he is the chairman of United Breweries group (UB group) in the year 2003. Its first airplane was launched from Mumbai to Delhi in 9th may 2005. It started as a premium business class airline company. The airlines have a tag line “Fly the good times”. At the launch of airline, Vijay Malaya said “we are committed to achieving our ambition of making Kingfisher Airlines, India’s largest private airline both in capacity and market share. The airline ushered in a new era of luxury in India’s domestic aviation sector and its brand new aircraft with stylish red interiors, and smartly dressed crew and ground staff. Kingfisher was the first Indian airline to have in-flight entertainment (IFE) systems”. (Malaya, 2005). Kingfisher airlines are one of the seven airlines which were awarded the rating of five stars by skytrax. It operates 400 flights daily including the regional and international services. In 2009 it gave the highest market share in Indian airlines industries, carrying more than 1 million passengers. The main mistake was lack of understanding of customer requirements and luxurious facilities in airlines. Organizations focus on reducing costs and usually just CEO’S and top level managers prefer business class travel. Rest of the staff mostly travels by economy class. Moreover, buying most expensive business class tickets doesn’t go down well, when seniors aim to project the image of walking the talk. Secondly, the company is facing financial crisis since Mid-2008. After merging with Air Deccan in 2007, it is a low-cost airlines, provides minimum frills to customers at reasonable rates. Th...
[6] Kripalani, Majeet & Egnardio, Pete. The Rise Of India. Business Week Online. December 8, 2003. http://www.businessweek.com/magazine/content/03_49/b3861001_mz001.htm
In the 1990s, Emirates airlines began to expand its route network to various international destinations including Paris, Rome, Zürich, and Jakarta. With the advancement in aeronautical engineering, long haul flights became more frequent which lead to the airline's route expansion and earned it the name, “finest in the sky”. By 1994, the airline had 4000 employees and netted a profit of about 24 million dollars (The Emirates Story).
Air India airline is one of the biggest airline in the India. It was established by the famous company TATA and since its incorporation. It has grown very well and has spread all over the world in the different destinations. It has become the reputable brand in the airline industry with having the operations over 152 destinations. It has link up connection in the 35 countries and it has currently having 137 fleets. This company becomes the public limited company in the 1946. The company has international and the local route and its performance is increasing day by day with the pace of the good growth as compare to the other airlines in the industries in the area and the channels in which this airline is working.
Naresh Goyal, the founder Chairman of Jet Airways, India’s premier airline, has over 4 decades of experience in the Civil Aviation industry.
...r cent y-o-y to 4.7 billion-km during the same period. With supply outpacing demand, PLFs declined by around 300 basis points y-o-y to 77 per cent in 2011-12 from 80 per cent a year ago. The fleet size of the airline increased to 13 aircrafts in 2011-12 from 10 aircrafts a year ago owing to addition of 3 new aircrafts. The airline uses the Airbus A320-200 aircrafts for regional domestic routes. Given the requirement of minimum 20 aircrafts to start international operations, GoAir currently does not qualify to fly overseas. Go Air, is expected to see its fleet size increase from 13 to around 20 aircraft over the next 2-3 years, to be followed by the first of its 72 A320neos on order from 2017. The company has not been too aggressive with respect to market share; instead, it has been focusing on reducing costs and improving operational efficiencies.