In the early 1990s, Gopinath was in Singapore, where he read about a helicopter company, founded by a girl in Vietnam. The company was set up to carry tourists in the US to Vietnam after the war had destroyed infrastructure in the country. In 1995, Gopinath started Deccan Aviation Private Limited (DAPL), a private helicopter charter company, providing helicopter services for company charters, tourism, medical evacuation, offshore logistics and a host of other services. DAPL soon emerged as a pioneer in helicopter tourism in India.
While serving tourists, the company encountered demands for flights to many smaller tourist places. Gopinath claimed that government representatives from the states of Andhra Pradesh and Karnataka met him and asked whether DAPL could provide air links to smaller cities in these states More importantly, from a strategic perspective, it gives powerful evidence to how technology can be a key factor in changing industry dynamics, even in what were once considered fairly stable or conservative industry.
While Air Deccan was able to capture the imagination of the public and demand grew rapidly for its services thanks to its throwaway fares, the airline itself was plagued by operational problems as it sought to aggressively expand its network and fleet size. In the process, it developed a reputation for delays, poor service and lack of reliability. Business model. The elements of Air Deccan’s “no-frills, low-cost” air Offering low fares to stimulate demand.
The Term Paper on Ford Motor Company Customer Services Credit
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We carrier business model include: believe low fares will help Air Deccan generate new business throughout India – not only in new and under-served markets, but also in established markets that have so far failed to offer Indian middle-class consumers and cost-conscious businesses a choice of sufficiently cost-effective fares. Air Deccan targets leisure, small business and corporate customers, and seeks passengers from the Indian middle class as well as from the cost-conscious segments of more well off. COMPANY PROFILE
Air Deccan, which started operations in 2003 as India’s first low-cost carrier, is a business unit of Deccan Aviation Private Limited, India’s largest private helicopter company. It connects 55 destinations in India with 265 flights daily, making it the second largest domestic airline in India. The airline currently operates a fleet of 14 Airbus A-320 Aircraft and 21 ATR Turboprop Aircraft with about two aircrafts being added each month.
Also, the centre would support its interactive website by handling its customer inquiries, bookings and air ticket cancellations. The low cost Business Model Air Deccan’s business model was inspired by the globally successful low cost model pioneered by the US-based Southwest Airlines in the 1970s. In the fiscal year 2003-04, the LCAs commanded a global market share of 25% and their revenues had grown by 40%. LCAs were continuously offering lower flying rates by inventing innovative ways to cut operational costs. Analysts claimed that the overall costs for LCAs were 45% to 60% to that incurred by FSAs.
To keep overall costs of the company low, Air Deccan took the following measures: Food: Unlike FSAs, Air Deccan did not provide any food on board. However, it sold snacks and water bottles on its flights for a price. Serving and consumption of alcohol were not permitted. The company felt that for short distance domestic flights, most passengers did not want food.. The Target Market and Positioning Analysts felt that there was huge growth potential for LCAs in India due to the country’s huge 200 mn middle income group population. Gopinath expected that at least one fourth of this population would use LCAs in the near term.
The Business plan on Can long haul low cost airlines be successful
A key question is whether the very successful, largely short-haul LCC business model can work over long-haul sectors? This paper compares the cost and other advantages of LCCs and evaluates how far they might be applied to long-haul sectors. It is estimated that cost advantages might be much lower than the 50-60% on shorthauls. Other factors such as the adoption by network airlines of some LCC ...
He pointed out that India had 15 men rail travellers every day. Of these 1,70,000 travelled in the air conditioned class and were potential customers for Air Deccan owing to the comparable prices. Gopinath further said that the US had 40,000 commercial flights every day whereas India had only 400 flights a day. But India had four times more population than the US, so it could theoretically run 1, 60,000 flights daily! Gopinath said, “Assuming that we had tapped 1 per cent of this potential, we still need 1,600 flights a day.
Therefore, we need a quadruple jump in the number of commercial flights. Air Deccan defined its target segment as upper middle class in the short term but planned to tap the lower middle class aggressively in a couple of years. Deccan regularly evaluates its branding and position in the marketplace in order to constantly refine communications strategy to relate to its target customers. It targets both existing air travellers in its three customer market segments, focusing on the value and services it can provide to each segment, and customers who currently travel by rail or road, emphasizing that the airline’s low fares translate into “flying made possible” and a “better lifestyle through air travel”.
To help convey its desired brand message, Air Deccan has been granted the right to use Mr. R. K. Layman’s celebrated Indian mascot “the Common Man” as its brand ambassador. We believe that the use of the Common Man helps communicate to the mass of the Indian middle-class that Air Deccan is working hard to make the dream of routine air travel a reality for Indians, and helps those same people associate themselves with that dream. Air Deccan directs customized marketing initiatives at certain of its targeted customer segments.
For leisure travellers, it offers a ticket package called Value Flier, which provides multiple tickets use able over time by up to four members of the same immediate family. The airline is also in the process of developing leisure packages with bundled hotel offerings. Air Deccan advertises principally through media channels such as print, radio and billboards and also, to a lesser extent, through television. The airline seeks to use television advertising to build emotional connect and print and billboard advertising to hammer out its “low fares” message.
The Essay on Customer Service
In the ever-accelerating race for competitive advantage, many hotel operators are focusing on guest service as a way to differentiate their properties from the competition. Hilton's Customer Information System, Sol Melia's service customization and Marriott's "Wired Rooms" are all examples of this trend. A further indication of the industry's renewed focus on service comes from Barry Sternlicht, ...
