Plain Travel

Charmaine Fernz delves into the concept of No Frills Airlines and its advantages to the business traveller…

Southwest Airlines, Easy Jet, Ryanair, Jet Blue…and now, our very own Air Deccan. Do these names ring a bell? They are all low cost carriers better known in the aviation world as No Frills Airlines. The ‘No Frills’ concept, when it took off, was a roaring success in the west. US-based South West Airlines, began operations with one aircraft in 1973, and is now a US$ six billion company. The primary objective was and remains faster connectivity at a cheaper price – to transport a passenger from point A to B in the shortest possible time at the most affordable price. Which means no in-flight services, no cabin crew to welcome you aboard or serve hot towels, no piping hot meals and no posh interiors. There will be one or two airhostesses on board since the law mandates that there should be an airhostess or a steward if the number of passengers is more than 10.

The Indian Avatar

In India, the concept in its entirety has only caught on now with the launch of Air Deccan, a company founded by G R Gopinath, a former captain of Indian Air Force. The trend appears to be here to stay.

What made Gopinath, who’s also the managing director of Air Deccan, get into this business? He explains, “We were already successfully into the business of chartered flights where we got a lot of calls from people wanting to go to destinations that were unconnected. This started the initial thought process. Our country is vast, the infrastructure is poor, air connectivity is bad; all these factors were considered. I started to think seriously about a low cost regional airline and studied the success of South West Airline of US and Ryanair in Europe. Ryanair is posing to be bigger than British Airways and it seems to have a market cap greater than British Airways. Then I realised that if anybody needed low frill aircraft, it was India. The country has a large middle-class population, which is almost the size of Europe as some people put it. Also, now the country has undergone a sea-change economically, which has generated vibrant cities like Belgaum, Vijaywada, Hubli. There is a critical mass in these regions.”

The Business Proposition

The Indian travel scene is undergoing a metamorphosis with more disposable income resulting in increased travel. However, though there has been a transformation, the Indian psyche remains unchanged - value for money rules. Bearing this in mind, how will the concept catch on in India? The answer is two-pronged.

Firstly, liberalisation has made businessmen expand bases and set up operations at cheaper localities, which are, however, poorly connected. These airlines will offer connectivity links between smaller cities and major metros which in turn will help usher in industrial development in the state.

Secondly, the main criterion for launching a low cost carrier in India was to make travel a feasible option. Says Gopinath, “The idea was to wean away the top end of the air-conditioned rail passengers since the prices will be slightly more than that for a Rajdhani ride. The target audience is the upper middle class and businessmen. Fares will be in the range of Rs 1,700 (US$ 36.9) to Rs 3,200 as the longest sector will be about an hour-and-half for the moment.”

With international airlines constantly innovating to offer its passengers incentives by the dozen, be it flat beds, multi-cuisine options or even faster technology, where do low cost carriers stand a chance? Says Ashwini Kakkar, CEO and managing director, Thomas Cook India P Ltd, “The smaller businessmen in India want to go from point A to B in the shortest possible time, which these carriers offer. To add to that, the journey is affordable. What more would they want?”

Gopinath believes the concept will catch on in the Indian market since in the one hour of travel time, passengers are not worried about what they are going to be served. “The food costs are converted to fare reduction and they are happy about it,” he says.

Also, with cost cutting being the norm of most corporate entities, ‘No Frills’ will have takers among executives too. Another market for ‘No Frills’ are those who prefer to travel internationally to South East and Middle East Asian destinations rather than travelling domestically because it is more affordable.

The customers of Air Deccan also seem a happy lot, despite the absence of frills. Says Major V Ravindran from Bangalore, “The service is good, especially because it connects those regions which are not yet connected. It is highly useful and quick. We pay almost the same amount for an air-conditioned journey by train. At the same price, we reach the destination in an hour or so. I think they should diversify into more sectors. For a short flight lasting for two hours or so, regular flights charge enormously, while there is hardly any need for add-ons.”

M Raja of Chennai, another convert to ‘No Frills’, agrees, “It is ideal for India because now more people can travel by air. The crew, the pilots, the flight were all very good. The only negatives were some communication hang-ups when it came to cancellation. Also, in in-flight food items, I feel they should include sandwiches and similar eatables. Nobody will really mind paying for them. Otherwise I was pretty satisfied with the service and I am sure in future I will prefer their service.”

Booking Process - Easy Come, Easy Go

Air Deccan has made use of information technology to make things more viable. Says Gopinath, “We were able to create technological solutions at a cost almost 1/10th of the others. While regular airlines use the Global Distribution Model for ticket booking, we have created an Internet-based model. We have a 24-hour call centre and local numbers for each region like Bangalore, Hyderabad, Chennai, Mumbai and Delhi. Therefore, when a customer makes a call, it is a local call charge for him. Thus, we have only one centre for the entire country rather than having centres all over, which saves costs.

The call centre is linked by a Virtual Private Network (VPN) on the internet to the reservation system, which in turn is linked through a VPN to the Citibank terminal for payments. A customer cannot make a reservation without paying. The customer then gets a reservation number, which he has to present at the airport to get a boarding pass. One can also get a ticket via the computer. Tickets can also be purchased from certain travel agents, to whom the customer has to pay and the travel agent in turn uses his credit card to make the payment and gives him the ticket. This is for those who do not have access to Internet. We are also in the process of having retail agents in all cities. We have started this facility in Bangalore and will be expanding to other cities as well.”

It is noticed that full-service airlines are retooling in the direction of ‘No Frills’ carriers, in an effort to cut costs. For example: American Airlines is offering bag lunches rather than hot meals on almost all domestic flights, trying to turn its planes around more quickly and cutting first-class cabins on certain US sectors and some European cities. The old amenities might then disappear from the industry. The danger for such airlines is that their products might become so diluted that they no longer differentiate themselves and satisfy anyone.

As experts say, airlines are a lot like hotels. You don't want to confuse the brand. That is why you have Marriott, and for a lower price you might have Courtyard by Marriott. Nevertheless, the brands are different. Southwest Airlines and its profitable no-frills cousins - including Ryanair, Easy Jet and others across the Atlantic - have shown that niche marketing can work with great success in the airline business. In many cases, the low-cost airlines have created a new market: people who would never have flown because of high price.

This is probably bringing in a new era into the aviation sector in the country. For the business traveller, it would be an advantage because he can easily book a ticket via Internet and save almost half of what he would have otherwise spent. Then there is the simplicity in the whole process and ease of buying a ticket. One just has to dial and buy the ticket. The flight too is easy with free seating.

Meanwhile, being the first ‘No Frills’ carrier in India, Deccan Air is planning to stay ahead. “We have been able to connect most of the unconnected destinations. We are planning to have 70 flights a day by December this year. We are also expecting a turnover of Rs 250 crore this year and by next year we plan to achieve about Rs 500 crore which would ideally mean that we are saving the public almost Rs 250 crore, when compared to regular flights. On general terms, India is where ‘low frills’ will work,” adds Gopinath. yFrills Versus No Frills