Is India ripe for a DY, FI, or D7 business model?

WPvsMW · Wed May 24, 2017 1:40 pm

Why hasn't 9W (Jet Airways) replicated the DY, FI, or D7 (Air Asia X) business model, nonstops India/Europe? Let's assume that AI, emulating AZ, will never get its act together. 9W has the govt connections... but maybe not the money. In 2016, D7 announced nonstops KUL/BCN and KUL/IST (but no service yet). IMO, it's Mr. Money waiting for a match with Mr. Deal, with Mr. Money being Indian mega-family money and Mr. Deal being an LCC operator.

dtw2hyd · Wed May 24, 2017 1:53 pm

9W should do what DL tells them to do, no need to hurt their own neurons. 9W has good soft product and crew. Management has no route development and retention skills. All they did was to grab routes developed by AI thru political connections. Those days are gone.

Air Asia is not that smart everyone thought of.

WPvsMW · Wed May 24, 2017 2:14 pm

9W is not yet in Skyteam... but are expected to join. 9W would be a great fit, DL/KE and DL/AF/KL connecting to 9W... gives RTW.

AI hasn't done much for *A, and 6E (Indigo) is still predominately Indian domestic.

anshabhi · Wed May 24, 2017 2:42 pm

SG is all set to fly to London and Birmingham from upcoming winters.
It has confirmed that it will be taking 2 dreamliners on wet lease.
http://m.timesofindia.com/business/indi ... 781941.cms

Adipocere · Wed May 24, 2017 3:32 pm

While India has a huge population, I am not convinced there is enough disposable income to support massive airline expansion. Income needed to get into the top 1% in India is about $5800 annually. I think that leaves international leisure and travel out of reach of 99% of the population, many of whom are in desperate poverty and famine. So while many people get carried away by sheer size comparisons to China, the actual number of Indians who may have the means to fly anywhere is probably close to 10-20 million, about the size of Cambodia - which does not have any presence on the international mega- airlines or airports map. The fact that India has so many airlines willing to fly there means it is punching above its weight.

yycdel · Wed May 24, 2017 5:32 pm

Adipocere wrote:
While India has a huge population, I am not convinced there is enough disposable income to support massive airline expansion. Income needed to get into the top 1% in India is about $5800 annually. I think that leaves international leisure and travel out of reach of 99% of the population, many of whom are in desperate poverty and famine. So while many people get carried away by sheer size comparisons to China, the actual number of Indians who may have the means to fly anywhere is probably close to 10-20 million, about the size of Cambodia - which does not have any presence on the international mega- airlines or airports map. The fact that India has so many airlines willing to fly there means it is punching above its weight.

Your numbers are either extremely outdated or just plain wrong

kjeld0d · Wed May 24, 2017 6:21 pm

Is India ripe? Yes, yes it is.

WPvsMW · Wed May 24, 2017 7:03 pm

The target demographic would be pax now flying one-stop on the ME3. Those pax (or their employers) currently pay ME3 fares. The premise is non-stop and lower fares in Y and J would shift patronage from ME3 one-stops to nonstops.

PatrickZ80 · Wed May 24, 2017 7:25 pm

As said before, India does have LCCs but mainly short haul. Indigo, Spicejet, to name a few.

There's two problems with India. First one is that it's population is mostly too poor to afford airline tickets even on an LCC. Only a small fraction of them can afford to fly at all, so don't count on the local population to keep the airline running. Second are the foreigners visiting India. While India certainly does attract quite a few tourists it's a highly seasonal destination. India has got a dry season (winter) and a rain season (summer). Almost all tourists visiting India do so during the dry season. During the rain season there's hardly any demand and the planes would either fly empty or sit on the tarmac doing nothing. No airline can afford that.

vadodara · Wed May 24, 2017 10:15 pm

dtw2hyd wrote:
9W should do what DL tells them to do, no need to hurt their own neurons. 9W has good soft product and crew. Management has no route development and retention skills. All they did was to grab routes developed by AI thru political connections. Those days are gone.

+1

In addition, they should try 'consult' DL to define their Fly East route strategy.

vadodara · Wed May 24, 2017 10:17 pm

WPvsMW wrote:
Why hasn't 9W (Jet Airways) replicated the DY, FI, or D7 (Air Asia X) business model, nonstops India/Europe? Let's assume that AI, emulating AZ, will never get its act together. 9W has the govt connections... but maybe not the money. In 2016, D7 announced nonstops KUL/BCN and KUL/IST (but no service yet). IMO, it's Mr. Money waiting for a match with Mr. Deal, with Mr. Money being Indian mega-family money and Mr. Deal being an LCC operator.

The likely operators will be Indigo/SpiceJet. They are probably waiting for the right aircraft. Obviously, Indigo as invested heavily in the A32XNEO's. Once the bugs are shaken, flts to S/C Europe should be in range.

LAX772LR · Wed May 24, 2017 11:22 pm

yycdel wrote:
Adipocere wrote:
While India has a huge population, I am not convinced there is enough disposable income to support massive airline expansion. Income needed to get into the top 1% in India is about $5800 annually. I think that leaves international leisure and travel out of reach of 99% of the population, many of whom are in desperate poverty and famine. So while many people get carried away by sheer size comparisons to China, the actual number of Indians who may have the means to fly anywhere is probably close to 10-20 million, about the size of Cambodia - which does not have any presence on the international mega- airlines or airports map. The fact that India has so many airlines willing to fly there means it is punching above its weight.

Your numbers are either extremely outdated or just plain wrong

Can't vouch for his numbers, but his point isn't that far off.

It took India until 2014 to crack the top-100 countries for Purchasing Power Parity; and its PPP, GDP per capita, and median income are all still more akin to subsaharan African countries than to the likes of Brazil, China, and Russia.

Sure there's some considerable wealth in the likes of Mumbai and Delhi, but the fact remains that despite the country's enormous population, the overwhelming majority of it couldn't afford bus fare, let alone intercontinental air fare.

anshabhi · Thu May 25, 2017 12:36 am

Well don't get me into it again.
while it's correct 99% Indians are like me, starving, diseased and waiting to die, But some ghosts fill Indian aircraft which totals to 100 million domestic passengers- more than every country except China & US and 32 million international passengers- only less than US, China & Japan.

These ghosts are also the reason why 30% of all NEOs are based in Delhi.
Why Vistara will be soon ordering 50 B777X, why ME3 are crazy for flying rights to India and why none of you are their financial officers.

ASQ400 · Thu May 25, 2017 12:40 am

anshabhi wrote:
Well don't get me into it again.
while it's correct 99% Indians are like me, starving and diseased, waiting to die. But some ghosts fill Indian aircraft which totals to 100 million domestic passengers- more than every country except China & US and 32 million international passengers- only less than US, China & UK.

These ghosts are also the reason why 30% of all NEOs are based in Delhi.
Why Vistara will be soon ordering 50 B777X, why ME3 are crazy for flying rights to India and why none of you are there financial officers.

I don't think you realized this yet, but Vistara is a domestic airline and should probably stay one.
Granted, apparently Vistara invented the narrowbody, so there is merit to your claims.

anshabhi · Thu May 25, 2017 12:43 am

ASQ400 wrote:
anshabhi wrote:
Well don't get me into it again.
while it's correct 99% Indians are like me, starving and diseased, waiting to die. But some ghosts fill Indian aircraft which totals to 100 million domestic passengers- more than every country except China & US and 32 million international passengers- only less than US, China & UK.

These ghosts are also the reason why 30% of all NEOs are based in Delhi.
Why Vistara will be soon ordering 50 B777X, why ME3 are crazy for flying rights to India and why none of you are there financial officers.

I don't think you realized this yet, but Vistara is a domestic airline and should probably stay one.
Granted, apparently Vistara invented the narrowbody, so there is merit to your claims.

Hold your breath! Vistara is already looking for Boeing pilots.
https://www.bloomberg.com/news/articles ... for-hiring

ASQ400 · Thu May 25, 2017 12:47 am

anshabhi wrote:
ASQ400 wrote:
anshabhi wrote:
Well don't get me into it again.
while it's correct 99% Indians are like me, starving and diseased, waiting to die. But some ghosts fill Indian aircraft which totals to 100 million domestic passengers- more than every country except China & US and 32 million international passengers- only less than US, China & UK.

These ghosts are also the reason why 30% of all NEOs are based in Delhi.
Why Vistara will be soon ordering 50 B777X, why ME3 are crazy for flying rights to India and why none of you are there financial officers.

I don't think you realized this yet, but Vistara is a domestic airline and should probably stay one.
Granted, apparently Vistara invented the narrowbody, so there is merit to your claims.

Hold your breath! Vistara is already looking for Boeing pilots.
https://www.bloomberg.com/news/articles ... for-hiring

Do you know who else is looking for pilots? Metropolitan Airways, an idea so dumb it hasn't gotten off the ground and never will.
I doubt this is much more than an attempt by 49% owner SQ to strong-arm its partners in Star into giving it better codeshares or something of the sort.

anshabhi · Thu May 25, 2017 12:51 am

ASQ400 wrote:
anshabhi wrote:
ASQ400 wrote:
I don't think you realized this yet, but Vistara is a domestic airline and should probably stay one.
Granted, apparently Vistara invented the narrowbody, so there is merit to your claims.

Hold your breath! Vistara is already looking for Boeing pilots.
https://www.bloomberg.com/news/articles ... for-hiring

Do you know who else is looking for pilots? Metropolitan Airways, an idea so dumb it hasn't gotten off the ground and never will.
I doubt this is much more than an attempt by 49% owner SQ to strong-arm its partners in Star into giving it better codeshares or something of the sort.

SQ recently invested SGD 100 million more in UK. So, quite surely I can deny your claims.

http://www.straitstimes.com/singapore/t ... er-vistara

You're going off topic now. Btw.
Talking about SG would be better as its already in final stages of launching low cost long haul ops.

ASQ400 · Thu May 25, 2017 12:53 am

anshabhi wrote:
ASQ400 wrote:
anshabhi wrote:
Hold your breath! Vistara is already looking for Boeing pilots.
https://www.bloomberg.com/news/articles ... for-hiring

Do you know who else is looking for pilots? Metropolitan Airways, an idea so dumb it hasn't gotten off the ground and never will.
I doubt this is much more than an attempt by 49% owner SQ to strong-arm its partners in Star into giving it better codeshares or something of the sort.

SQ recently invested SGD 100 million more in UK. So, quite surely I can deny your claims.

http://www.straitstimes.com/singapore/t ... er-vistara

That's not enough for a single 779, much less 50.
It seems more like the kind of figure that would go to domestic expansion.

anshabhi · Thu May 25, 2017 1:00 am

ASQ400 wrote:
That's not enough for a single 779, much less 50.
It seems more like the kind of figure that would go to domestic expansion.

Yes but it's enough to ascertain that SQ takes UK seriously.
P.S.: I don't think you have to pay $400mn upfront for an aircraft.... Anyways, when the order is finally concluded, you will also see Tata sons contributing their 51%, and you never know the final selling price, loan conditions etc etc (which are also off topic here).

dtw2hyd · Thu May 25, 2017 1:01 am

^^
That is a very simplified view of India. Its terrain(mostly plateau) and vast road/railroad network makes aviation not so attractive. Any village is connected to district HQ within 2-3 hours and state capital within 5-6 hrs.

You will be amazed to see how advanced some buses are in India. I have seen news reports of buses with WiFi, Live TV among others.

Indians in metros may show off their wealth, but not everyone in villages is poor. Fertile farmlands are very expensive and there are super rich farmers, they lead a simple life, but not poor.

Susi Air(Indonesia) is a success story in remote connectivity. But most Indian villages don't need such service, they can haul perishable fresh produce within 2hrs on a bus which comes right to their village.

BawliBooch · Thu May 25, 2017 1:18 am

In the interview with the SG chief that @anshabhi keeps reposting to substantiate his claims, Ajai Singh says they are looking at taking 787's on wet-lease and starting operations to Birmingham & London by Winter. Those of us who keep track of slot allocations, asset sale/lease haven't seen anything so far. Until I see a 787 aircraft in SG colors landing in DEL, I wont buy these puff-piece interviews, especially considering the journalist who ran the story.

OTOH There could be some movement from Vistara - Unsubstantiated Rumor is that some ex-SQ 777-200's are heading their way.

How many airlines out there start induct

dtw2hyd · Thu May 25, 2017 11:02 am

BawliBooch wrote:
Unsubstantiated Rumor is that some ex-SQ 777-200's are heading their way.

So basically give $100 Million and sell two clunkers at $50 Million each. DL got those for $10 Million. Paint, Engine overhaul, interiors and on-going maintenance problems, Vistara will be digging its own hole. Owner just gave the shovel.

WPvsMW · Thu May 25, 2017 12:31 pm

WPvsMW wrote:
The target demographic would be pax now flying one-stop on the ME3. Those pax (or their employers) currently pay ME3 fares. The premise is non-stop and lower fares in Y and J would shift patronage from ME3 one-stops to nonstops.

Sorry to quote myself... but the target demographic isn't Indians who don't now fly... it's the Indians who do now fly ... on ME3 a/c. The ME3 aren't a LCC, much less an ULCC. The premise is an LCC nonstop India/EU would attract Y pax from the ME3. J and Y cabins on B787/A350 should also work. I think SQ is trying the latter model to avoid tarnishing its image, which leaves the LCC model as 9W's or UK's (Vistara) target. Hmmm... does the UK code tell us something about Vistara's ambition?

anshabhi · Thu May 25, 2017 12:45 pm

WPvsMW wrote:
WPvsMW wrote:
The target demographic would be pax now flying one-stop on the ME3. Those pax (or their employers) currently pay ME3 fares. The premise is non-stop and lower fares in Y and J would shift patronage from ME3 one-stops to nonstops.

Sorry to quote myself... but the target demographic isn't Indians who don't now fly... it's the Indians who do now fly ... on ME3 a/c. The ME3 aren't a LCC, much less an ULCC. The premise is an LCC nonstop India/EU would attract Y pax from the ME3. J and Y cabins on B787/A350 should also work. I think SQ is trying the latter model to avoid tarnishing its image, which leaves the LCC model as 9W's or UK's (Vistara) target. Hmmm... does the UK code tell us something about Vistara's ambition?

Well no. Its a premium carrier.
UK is 51% Tata Sons. You can't ignore that!

What SG is planning will be atleast 30% cheaper than what ME3 currently offer.

you will find this interesting: http://www.btvi.in/m/videos/watch/22506 ... rs-30-000-

WPvsMW · Thu May 25, 2017 11:56 pm

Thanks for the link about SG's announcement of DEL/LON introductory fares next year. Rs 30K return! The interviewee alluded to govt subsidies (or concessions) to assist SG in the new service. I think SG's announcement will be a catalyst for 9W (or UK or 6E) to act. There will be a first-mover advantage, but SG's trumpeting may prompt a competitor who actually has planes and pilots to act.

ME3 foreheads furrow with anxiety ... all those whales to feed.

devmapper · Fri May 26, 2017 5:41 am

Anybody know what happened to the GOI plan for open skies with countries beyond 5000 miles from India?

anshabhi · Fri May 26, 2017 6:02 am

devmapper wrote:
Anybody know what happened to the GOI plan for open skies with countries beyond 5000 miles from India?

This is the latest news: no more bilaterals until a long term policy is made.

http://www.financialexpress.com/industr ... es/686311/

devmapper · Fri May 26, 2017 6:09 am

anshabhi wrote:
devmapper wrote:
Anybody know what happened to the GOI plan for open skies with countries beyond 5000 miles from India?

This is the latest news: no more bilaterals until a long term policy is made.

http://www.financialexpress.com/industr ... es/686311/

Ooh, so no new bilaterals till 2020? :duck:

anshabhi · Fri May 26, 2017 6:13 am

devmapper wrote:
anshabhi wrote:
devmapper wrote:
Anybody know what happened to the GOI plan for open skies with countries beyond 5000 miles from India?

This is the latest news: no more bilaterals until a long term policy is made.

http://www.financialexpress.com/industr ... es/686311/

Ooh, so no new bilaterals till 2020?

TBH, if SG or anyone else is able to win back all long haul traffic from ME, there's no need for new bilaterals till 2020 either.
EK has 50,000 seats going to transit traffic every week.

Nimish · Fri May 26, 2017 11:51 am

There are numerous attempts at a low cost UK - India service - including one stop via the "stans" - Uzbek and so on. None have seemed to thrive quite as much as the ME3 are. A BOM/ DEL focused long haul LCC better have a good amount of domestic feed (at the similar low cost) to make the flight sustainable. I think it's more the "network" that the "Low cost" aspect that's important - starting a one off DEL-LHR flight without a good feed at at least one end is what's going to cause the problem.

Nimish · Fri May 26, 2017 11:55 am

dtw2hyd wrote:
9W should do what DL tells them to do, no need to hurt their own neurons. 9W has good soft product and crew. Management has no route development and retention skills.

Ouch

At least they seemed to have done a good job out-manoeuvring-ing EY. Taken the money, got EY the additional bilaterals (at the expense of the Indian republic), and now scooted. EY owns JetPrivilege, but has done nothing about it - ideally I would have thought they'd merge it with their FFP program - so all 9W fliers are bound to the EY family

WPvsMW · Fri May 26, 2017 12:56 pm

The GOI AvMin's comments about delays in bilateral policy development in devmapper's link

http://www.financialexpress.com/industr ... es/686311/

and the BTV interviewee's allusion to government assistance with SG's DEL/LON flight are consonant, but something doesn't fit... something big is missing. The FinExp article states the the IN/Dubai bilateral could be expanded since both sides are at 80% capacity. Both sides? AI is flying as many pax in/out of IN as EK + EY???? What am I missing?

anshabhi · Fri May 26, 2017 1:08 pm

Dubai= EK+FZ only.

And, from Indian side we have AI, 9W, 6E and SG flying to DXB.

AUH has loads of bilaterals available on both sides.

(India has 3 different bilaterals with Dubai, Abu Dhabi and Sharjah).

dtw2hyd · Fri May 26, 2017 1:19 pm

WPvsMW wrote:
The FinExp article states the the IN/Dubai bilateral could be expanded since both sides are at 80% capacity. Both sides? AI is flying as many pax in/out of IN as EK + EY???? What am I missing?

Actually Dubai is exceeding quota limits using grace quota. Indian carriers are close to 100% to Dubai. EY and 9W using most of Abu Dhabi quota along with other Indian carriers.

If you look beyond the myth of EK being India's international carrier, 9W #1, AI #2 and EK #3

WPvsMW · Fri May 26, 2017 1:33 pm

Thanks for the explanation. I didn't realize that the IN/UAE bilateral was that granular as to airports (or more accurately, emirates?) in UAE. And, not that granular as to IN airports?

As to Dubai, are DXB and DWC consolidated as one entity in the UAE, since EK is hubbed at DXB and FZ is hubbed at DWC?

In the C-suites of 9W, is there a battle brewing between the EY faction favoring status quo, and the DL faction pushing EU nonstops and joining Skyteam? 9W must be the only bright spot in EY's "equity alliance", in view of AZ and AB.

Spiderguy252 · Fri May 26, 2017 2:47 pm

Nimish wrote:
EY owns JetPrivilege, but has done nothing about it - ideally I would have thought they'd merge it with their FFP program - so all 9W fliers are bound to the EY family

EY did dilute the programme heavily though, last August. A straight slash across the board, and it isn't so rewarding for JP members anymore.

devmapper · Fri May 26, 2017 5:31 pm

Nimish wrote:
There are numerous attempts at a low cost UK - India service - including one stop via the "stans" - Uzbek and so on. None have seemed to thrive quite as much as the ME3 are. A BOM/ DEL focused long haul LCC better have a good amount of domestic feed (at the similar low cost) to make the flight sustainable. I think it's more the "network" that the "Low cost" aspect that's important - starting a one off DEL-LHR flight without a good feed at at least one end is what's going to cause the problem.

Shh... let's not talk about hubs and network feeds. That would mean no non-stop flights from AMD/BLR/HYD/MAA/CCU. People would be so outraged!! How dare India-based airlines be so callous as to ignore all of those swanky new airports?? SG should have direct non-stop flights to LHR/MAN/BHX from each city in India!! And while we are at it, why are the ticket prices so expensive?? People should be able to fly non-stop round-trip to London for Rs.500!! It's outrageous!!! Throw all airline economics out of the window, it's all a conspiracy by the "North/West" Indian people with no imagination!!!!

In case it isn't readily apparent, I am being facetious.

vadodara · Fri May 26, 2017 5:34 pm

Nimish wrote:
There are numerous attempts at a low cost UK - India service - including one stop via the "stans" - Uzbek and so on. None have seemed to thrive quite as much as the ME3 are. A BOM/ DEL focused long haul LCC better have a good amount of domestic feed (at the similar low cost) to make the flight sustainable. I think it's more the "network" that the "Low cost" aspect that's important - starting a one off DEL-LHR flight without a good feed at at least one end is what's going to cause the problem.

Left between a Rock (LHR) and a Hard Place (BOM/DEL), consumers who want to fly into cities like AMD (or BLR or MAA and so on) simply take a hop at DXB!

WPvsMW · Fri May 26, 2017 9:49 pm

And for a lower fare, pax from the new airports in India would fly non-stop to MAN, LGW, STN, BHX, etc.

IOW, is a fare premium, transit, and delays, worth the diversion to UAE/Qatar?

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