AirAsia India reports Q4 FY’15 net loss of INR 19 Cr, trending towards a break even.


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AA320_ATFAirAsia India’s journey so far has been interesting. What was a pleasant surprise was the airline reporting its lowest ever net loss in an operating quarter – of INR 19 Cr. This, despite Q4 being a season of low travel demand, and in the same quarter having had numerous delays and cancellations. It was also the first full quarter of three aircraft operations.

AirAsia India claims to have an attractive cost structure. In this piece, we analyse their figures for Q4 FY’15.

Operating Figures

Operating Numbers Air Asia IndiaIn the months of January, February and March 2015, AirAsia India flew 222,502 passengers. No show passengers were 15,055. These two total to 237,557 seats that were sold. No show accounted for 6% of all sold seats. Total seats flown were 300,240, and flown passenger load factor was 74% for the quarter, while seats sold load factor was 79%.

The airline carried a total of 1,620 tonnes of cargo on 1,668 flights, which averaged to 971 kg of cargo per flight – a very good number.

A total of 2,260 hours were flown in the quarter. With three aircraft, this averaged to a daily average aircraft utilisation of 8:22 hrs per aircraft per day. This low average utilisation reflects the cancellations and delays in the quarter due to crew shortage. While the airline was originally scheduled to fly 22 flights a day, the average flights per day in the three months were lower due to the same reason.

12,155 of the airline’s passengers were affected by cancellations and delays of more than two hours in the quarter.

Market share stood at a constant 1% throughout the quarter.

Operating Expenses

Air Asia India Cost StructureAirAsia India realised an operating expense of INR 95.3Cr in the quarter.

37% of AirAsia India’s costs are due to fuel. The next biggest is staff salaries which make up 25%. Lease comes next at 19%. These three together make up 80% of the airline’s costs. In this period, the airline had three aircraft: VT-ATF/ATB/RED. All three are new enough to have no maintenance issues or checks, and hence maintenance is only 3%.

Average lease cost per aircraft is INR 2 Cr per month.


AirAsia India realised an operating revenue of INR 74.4Cr in the quarter. Of this, 92% was due to passenger ticket sales, while 8% was due to ancillary revenue.

Unit Figures

The average fare per passenger (excluding taxes and fees) for the quarter was at INR 2,884. Revenue per available seat kilometre (RASK) was at INR 2.75/seat-km, while Cost per available seat kilometre (CASK) was at INR 3.53/seat-km.

At the same load factor, average fares could have been increased by INR 878 per passenger to operationally break even.

At the same average fares, operational breakeven load factor stood at 103%.

Both figures above assume constant ancillary revenue. Ancillary revenue per flight was INR 35,320.

Average operating cost per block hour was INR 421,311 (US$ 6,600).

Average cost per kilometer flown was INR 635/km.

Positive Trend

AirAsia’s losses are on a steady decrease. With five aircraft operating in Q1’16, better routes, and the strong travel demand, the airline may spring a surprise with its Q1 performance.

A sixth aircraft is expected to join the fleet in June. Q2’16 – a lean season- will be an interesting quarter to watch, with a mild possibility of a break even. The airline may either break even or post profits in Q3’16.

The airline added Imphal to its booking engine on 28th May 2015.

AirAsia India: The Million Passenger Question


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Cumulative Passengers Carried in the first year of ops

AirAsia India is a wonderful airline, and has got a few things right. Their on board service is one of those.

As an airline, especially a start-up airline, making mistakes is inevitable. Falling short of projected growth plans and heavy flight cancellations and delays in certain months of the first year of operations are acceptable. Both these have happened to AirAsia India, and the industry understands. Of course, there are better examples, such as IndiGo, which has managed to play the game like no other.

The unacceptable part? Factually incorrect statements that can lower the overall credibility of the industry.

Here is an excerpt from the May 20 interview of the AirAsia India CEO, by Ashwini Phadnis, as published in The Hindu Business Line:

How many of the things planned initially have happened and how many have not?

We have done certain things we did not expect. We have flown close to a million passengers. By the time we complete our first year we would have flown more than a million passengers[1]. No other airline in India has done that before in their first year of operations[2]. We have done that with a skeleton fleet, meaning, we have utilised aircraft significantly.

We contest both claims [1] & [2], in the interest of factual correctness.

The graph on top (click to enlarge) shows the total number of passengers flown against the first twelve months of operations. All data is from the DGCA.

IndiGo, Kingfisher Airlines, SpiceJet, and Go Air started operations in the 2005-2006 timeframe. Within the first one year of operations, all airlines in consideration, with the exception of Go Air, carried in excess of 1 million passengers. IndiGo crossed the 2 million mark in the first year!

As of 31st March 2015, AirAsia India had carried 550,000 passengers. This means that the airline will need to carry 450,000 passengers to touch the 1 million mark by the end of June (AirAsia India started operations on 12th June, 2014). This means that the airline will need to carry on average 150,000 passengers in the months of April, May and June. Is this achievable?

Data for the month of April and May were not available at the time of writing this piece. Since April had no new flights, but had infact cut 4 – Bangalore- Chennai & back, the airline flew around 97,200 seats in April. With an assumed 82% load factor – their highest so far, the airline could have flown no more than 80,000 passengers in April.

66% of May was flown with 18 flights a day, which totals to approximately 65,000 seats. Effective 21st May, the airline will operate 8 new flights. For 33% of the month this totals to around 47,000 seats. IN total, May can fly only 112,000 seats. At a generous 90% load factor, this is 100,000 passengers.

In June, the airline will fly 28 flights a day, flying approximately 140000 seats a month. At 80% load factor, this will result in around 120,000 passengers being flown.

This means that AirAsia India will close its first year of operations with a maximum of 850,000 passengers, neither meeting nor crossing the 1 million mark.

We wish the airline all the very best for its northern hub operations.

SpiceJet: Leading the Unbundling Movement towards absolute no-frills


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Sg seats

SpiceJet goes loud on some developments, and silent on the rest. What SpiceJet has done in the last few weeks is to unbundle as much of its services as possible, to find multiple ways in which the airline can make money.

Tony Fernandes (Group CEO, AirAsia) and Mittu Chandilya (CEO, AirAsia India), have been fighting for unbundling of services for long. In fact, when AirAsia launched a year ago, it charged passengers for check in baggage. DGCA interference, reportedly driven by pressure from other airlines, ensured that the airline provided a minimum free check in baggage service: 15kgs per passenger. Tony Fernandes regarded this move undemocratic. He had a point: The 15kgs of baggage did not come free, but was included in the airfare, unknown to the passenger. This only meant that every passenger was forced to pay for a baggage service that he or she may not opt for. Business travellers usually have no check-in baggage.

Air Transport Circular 1 of 2015, dated 24th March, 2015, seems to be an outcome of the constant requests AirAsia India has made to the ministry. The DGCA now allows airlines to charge for all seats that are pre-booked. Previously, this was limited to just 25% of the seats and excluded the middle row seats. The new circular also talks about “Check-in baggage charges” being unbundled. Although this was present in the previous circular, upon which AirAsia India acted, DGCA had the final say. Things seem to have now changed.

SpiceJet is the first airline to have stealthily implemented the circular to the fullest. All the seats on SpiceJet’s aircraft – Bombardier Q400 & Boeing 737, are chargeable when pre-booked, which wasn’t the case earlier.

Every Seat Pays

SpiceJet_737_Q400_Seat_RatesOn the Boeing 737-800s (The airline flies 16 B737-800s and 1 737-900, besides three wet-leased Boeing 737-800s which have no SpiceMax extra legroom rows), the middle seats on rows 6 to 13 are charges at INR 100. The window and aisle seats are charges INR 300. Seats on the first five rows are charged INR 1,000. Emergency exit rows are charged INR 600. From rows 16 to 31, middle seats are charges INR 50, while the aisle and window seats are charged INR 100.

This allows SpiceJet to potentially generate an additional INR 56,400 per Boeing flight. Assuming a flight with 80% load factor has 25% of its passengers pre-booking their seats, this is INR 11,300 per flight. With this assumption, and a maximum of 129 Boeing flights in a day, SpiceJet may realise around INR 14,50,000 revenue per day from selling seats on Boeings alone.

On the Q400s, (The airline flies 12 -13), there are no middle seats. Row 1 (two seats) and Row 2 (right two seats) are SpiceMax seats, charged at INR 500. All other seats upto and including row 6 are charged INR 200. The rest of the seats in the cabin are charged INR 100.

This allows SpiceJet to potentially generate an additional INR 11,200 per Q400 flight. Assuming a flight with 90% load factor has 25% of its passengers pre-booking their seats, this is INR 2,520 per flight. With this assumption, and a maximum of 162 Q400 flights in a day, SpiceJet may realise around INR 4,10,000 revenue per day from selling seats on Q400s alone.

Together, the airline may, on average, generate 18,66,000 per day from selling seats. Over a month, this will be sufficient to pay almost two Boeing 737s’ dry lease.

No free check-in baggage

With SpiceJet’s “#Travel Light, Save More” offer, announced on April 27th, SpiceJet offered 1,50,000 seats on sale. The tickets for these seats were on the condition that a passenger did not travel with a check-in baggage. The offer was extended, adding an additional 100,000 seats. In total, SpiceJet offered 250,000 seats for sale with high confidence that these passengers would not have check in baggage.

With 15Kg per passenger not occupying the cargo hold, the airline has saved 3,750 tonnes of cargo hold weight. At an assumed average cargo rate of INR 20,000 per tonne (we’ve earlier determined this average to be slightly higher), this allows the airline to ‘sell’ INR 7.5 Crore worth cargo space/weight to its cargo handler, Sovika.

If however any passenger chooses to check in their baggage on these tickets, the airline’s T&C requires a flat fee of INR 750 to be paid for upto 15kg. This is the first example in India where a passenger is not granted complimentary 15kg check in service, but has to pay for “any” check in baggage.

This may be SpiceJet’s move in evaluating demand for such tickets. Perhaps, if proved successful, the airline may implement a policy of paying for every check-in baggage.

Other unbundled services

SpiceJet also charges for priority check in, Meal (hot meals – 737s and cold sandwiches – Q400s), excess baggage slabs, a ‘Meet and Assist’ service, and “SpiceAssurance”.

SandwichesPriority Check-in charges a passenger INR 200. Hot Meals on Boeings are charged at INR 315 when pre-booked and INR 350 when bought on board. On Q400s, pre-booked Sandwiches are available for INR 200, and INR 220 when bought on board (the illustration for the Q400 meal is misleading as it shows steam coming from the plate that has the sandwich, which is not true. The sandwiches are cold). The SpiceAssist service comes at INR 500 per passenger (assistance from the SpiceJet staff at the airport).

All these services are ‘opt-in’ services, as mandated in the DGCA circular (a passenger needs to check the box associated with the service. By default, there must be no service pre-selected). However one service, the SpiceAssurance which charges INR 35 per passenger is pre-checked, which may not be the right thing to do. By paying INR 35, SpiceJet offers passengers a voucher of INR 500 is the flight is delayed by 1 to 2 hours, and INR 1000 if beyond 2 hours. This also offers limited baggage loss reimbursement.

This, in our personal opinion, is a poor move. Firstly, this is an opt out service. Secondly, a passenger has to pay for his own compensation for a delayed or cancelled flight. Previously, the airline offered this compensation for free, more. Third, the compensation is in the form of a voucher, which forces the passenger to book on SpiceJet to avail the compensation as a deductible from the next travel fare. Fourth – the voucher is valid for 90 days only.

Passengers who miss this INR 35 on the SpiceJet website (not offered through OTAs) will together contribute INR 19,30,000 to the airline, per month (assuming 10% bookings are through the website, and all these passengers miss or choose to ignore the INR 35 charge).

SpiceJet_double_chargeFor a limited period, opting for a SpiceMax seats entitles a passenger to a complimentary meal. However, the airline allows for a meal to be chosen as well. This means that a passenger pays for a meal that he is entitled to. This seems to be a glitch in the system.

These small little things add up to big money! SpiceJet, we hope, corrects the ‘hot sandwich’ and SpiceAssurance.


Moving towards absolute no-frills

SpiceJet is the first to act like a ‘true LCC’ in India. IndiGo, Go Air, and surprisingly – AirAsia India, are yet to follow with seat selection and no-free check in baggage. On one hand, these moves pitch SpiceJet as a LCC (we now don’t believe in the term, we prefer no frills carrier), and on the other hand, the SpiceMax seats with good legroom and complimentary meals lend it a different image: of good premium economy luxury. Same brand, two images. Does it lead to brand confusion? We think so.

AirAsia India makes Delhi a hub, 5th aircraft arrives from Malaysia


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AirAsia India announced today Delhi as its second hub, after Bangalore. Delhi will also serve as a base for the airline, while Bangalore will remain the home base.

Assuming that the airline will start flying between Bangalore and Delhi, the airline will for the first time begin flying on a Category I (Cat I) route, as defined by the prevalent route dispersal guidelines (RDG). Flying on a Cat I route will now oblige the airline to deploy a minimum percentage of the Cat I route capacity on Category II, IIA and III routes. Capacity is measured on an available seat kilometer (ASKM) basis. Every 180 seat flight between Bangalore and Delhi adds approximately 3,42,000 ASKM.

This makes the choice of Delhi as a base very important.

The importance of Delhi

Category II (Cat II) routes are routes which were traditionally looked upon as ‘loss making’ routes. These are routes that connect the mainland to the ‘neglected’ north-east, far north, and the islands that make up Lakshadweep and the Andaman and Nicobar Islands. (Please note that ‘neglected’ is a harsh word, but that’s how the ministry looks upon these regions as far as air connectivity is concerned). 10% of the Cat I capacity must be deployed on Cat II routes (To be soon revised to 20%). Had AirAsia India flown to Port Blair from Chennai or Bangalore, this requirement could have easily been met. AirAsia’s Airbus A320s cannot operate into and out of Agatti’s short strip.

Category IIA (Cat IIA) routes are routes which connect airports within a ‘neglected’ region. Examples are Jammu-Srinagar, and Guwahati-Bagdogra. Unfortunately, the southern portion of India – where AirAsia India is based- has no such Cat IIA routes. 1% of the Cat I capacity must be deployed on Cat II routes (to be soon revised to 1.5%)

To cater to a Cat I route and Cat II & IIA routes, the northern part of India is a wiser hub.

All the routes AirAsia India flies today are Cat III routes, as per prevalent RDGs.

Establish the route

By having a hub at Delhi, AirAsia India can fly early morning flights from Delhi to Bangalore, which can be mirrored by early morning Bangalore – Delhi flights. Similar flights from either destinations may be flown in the evening. This requires one A320 to be based at Delhi, to start with.

If such a strategy is followed, each aircraft will fly a minimum of 2 flights on the Bangalore – Delhi/vv route. Each flight is planned for 2:45 hrs, which will total upto 5:30 hours of utilisation per aircraft on this city-pair, leaving a maximum of around 7hrs of utilisation for other stations.

We feel that the airline may fly a 3x Bangalore-Delhi one way, per day, of which at least 2 shall be direct flights.

Flights to Delhi are not expected before May 2015, and perhaps not before mid-May 2015.

Deploy Cat II & IIA capacity.

Flights between Delhi-Jammu-Srinagar or Delhi-Guwahati-Bagdogra or Delhi-Guwahati-Agartala may be flown for Cat II and Cat IIA capacity. Delhi-Jammu-Srinagar seems to be the most likely set of cities to be flown first.

If the airline is innovative enough, it may make the most of its patterns to fly underserved routes. I am obliged to not exercise my creativity in suggesting routes.

Open Vishakhapatnam as a destination


AirAsia India presently flies three aircraft, and one of the three patterns flown everyday has a poor utilisation of just 7:50 hrs (see above). It is in this pattern – the third pattern, that two flights to Vishakhapatnam may easily fit in (as published in the DGCA’s Summer Schedule), with perhaps slight schedule changes.

The necessity – 5th aircraft

9MAHU_AirAsia_India_5th_AircraftOpening the Delhi-Bangalore route will require two additional aircraft: one based at Bangalore, and the other at Delhi.

Further, as per CAR Sec 3 AT series C Part II, operators “will be given one year’s time from the date of securing operator’s permit, to have the fleet size of five aircraft”. AirAsia India secured its AOP on May 7th, 2015, and a 5th aircraft is necessary to meet regulatory requirements.

Today, at around 11:00hrs IST, AirAsia India’s 5th aircraft flew into Hyderabad from Kuala Lumpur. The aircraft is a used Malaysia AirAsia A320-216 (9M-AHU) without winglets, and is around 5.5 years old. The aircraft is AirAsia India’s second, non-winglet A320, after the 7 year old A320 which was unveiled to the public on 21st March in the JRD Tata livery (see image on top). Both aircraft are yet to start flying commercially for the airline.

The first three aircraft have winglets. If the airline is prudent with its fuel burn, only the winglet equipped aircraft (VT-RED/ATF/ATB) will be deployed on the BLR-DEL vv route.

Thank you to @ATCBLR on Twitter for posting the 5th aircraft’s arrival.

Marked shift in strategy

Last year, Mittu Chandilya, CEO AirAsia India had announced Goa as the second hub, with the induction of the 4th aircraft. He had also mentioned that the airline will keep off Delhi and Mumbai.

The airline last operated flights on the Bangalore – Chennai route on 31st March 2015.

Air Pegasus : The Start


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Pegasus_Lauch_ShysonAir Pegasus (ICAO: PPL, IATA: OP) is the newest airline in the Indian airspace, and the second active airline to be headquartered in of Bangalore, after AirAsia India. The airline is a regional scheduled operator, and plans to fly a fleet of only ATR 72 aircraft.

The airline received its first ATR 72-500 on September 27th, 2014. The aircraft, with a serial number MSN 699, formerly flew for the now defunt Kingfisher airlines as VT-KAA. The aircraft, back in India to fly for Air Pegasus, is registered VT-APA.

Six months after receiving its first and only aircraft, Air Pegasus was granted its Air Operator’s Permit (AOP) by the DGCA. The airline officially ‘launched’ on April 1st, and today – April 4th 2015 – has opened for bookings.

The second aircraft, another ex-Kingfisher ATR 72, is expected by the end of April 2015. The airline plans a third ATR 72 this year, details of which are not available.

The airline is India’s first all-ATR72 operator.

The airline plans to start operations on 12th April, 2015, with the inaugural flight from Bangalore to Hubli and back. The next day, the Bangalore – Trivandrum – Bangalore route will be inaugurated. These two stations are expected to be followed by Kochi, Chennai, Tuticorin, Belgaum, Rajmundry, Pondicherry and Madurai. Some of these stations witness good demand. However, it must be remembered that demand is a function of pricing.

Pattern+Acft1_initial_pegasusAverage turnaround time at the airline is 25 minutes, and the total aircraft utilization with these two sectors is 5:30 hrs. We expect the utilization to touch close to 10 hours per aircraft per day.


The airline opened for sales today, 4th April, 2015. The open for sales could perhaps have been supported by the presence of newspaper advertisements, media reports, tweets on the official Twitter account, or posts on the Facebook page. These were missing perhaps missing due to the long holiday weekend. It is learnt that the airline will launch a media campaign very soon.

Online Travel Agencies (OTA) are yet to list the airline in their searches, and may soon happen.


On the Bangalore- Hubli sector, a fully loaded ATR72 will consume around 875 litres of ATF as trip fuel, assuming a cruise at FL220. This translates to around INR 38,000 as fuel cost, including the discounted sales tax of 4% applicable to aircraft with less than 80 seats flying for a regional airline. The estimated operating cost, taking into account the low aircraft utilisation and few other factors, is at around INR 1,80,000 per flight, bringing the cost per seat on this sector to around INR 2,200, and CASK to INR 5.62.

On the Bangalore- Trivandrum sector, a fully loaded ATR72 will consume around 1,125 litres of ATF as trip fuel, assuming a cruise at FL220. This translates to around INR 49,000 as fuel cost. The operating cost is estimated at around INR 2,00,000 per flight, bringing the cost per seat on this sector to around INR 3,000, and CASK to INR 5.45.

Ticket prices on both sectors fall in eight buckets. The corresponding all inclusive fares are also shown. (deleted upon request)

Depending on the way revenue management at the airline is played with, the airline may comfortably break even with load factors of 70% +/- 10%. However, a lot of this depends on the actual demand by last minute travellers, when ticket prices usually sit in the higher buckets. This high yield D0-D7 demand is also driven by the service reputation that the airline builds over time.

The airline enjoys a monopoly on the Bangalore- Hubli route, and this will do the airline good. Air Pegasus competes with IndiGo, Air India, and Jet Airways on the Bangalore – Trivandrum sector. The airline will face certain stiff competition from IndiGo which prices its fares as low as INR 1,964.

We wish the airline all the very best in its operations.

SpiceJet’s BBAM Boeing 737-800 goes to Pegasus Airlines


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SpiceJet’s Boeing 737-800 MSN 37366 earlier registered as VT-SGU had entered storage in the July of 2014. The aircraft, leased from BBAM, was recently painted in the colors of Pegasus Airlines, and will soon be flown off from Hyderabad Shamshabad to operate for the Turkish airline.

A very significant number of SpiceJet’s Boeing 737s were leased from BBAM, most of which have been returned to the lessor. BBAM, which began as Babcock & Brown Aircraft Management remains the largest lessor for SpiceJet, with five aircraft – VT SGG/SGH/SGV & SGQ – all four Boeing 737-800s, and VT-SPU – a Boeing 737-900.

Recent media reports pointed to BBAM taking SpiceJet to court for the de-registration of the five 737s. The airline issued a statement on 25th March ststing, “Discussions have been ongoing with the lessors for an amicable settlement. SpiceJet fully expects the matter will be resolved shortly and positively with the lessors, and there will be no grounding of aircraft or disruption of operations.”

All five BBAM aircraft are still operating flights for the airline.

Lessors_SpiceJetSpiceJet today flies an active fleet of 17 Boeing 737s, which includes only one 737-900 leased from BBAM. The other lessors are Air Lease Corporation (ALC), Ansett Worldwide Aviation Services (AWAS), Bank of China Aviation (BOC), Industrial and Commercial Bank of China (ICBC), and Mitsubishi Corporation Aviation Partners (MCAP).

SpiceJet owns all its fifteen Bombardier Q400s.

GE Capital Aviation Services (GECAS), another prominent lessor, had towards the end 2014 pulled out its five Boeing 737s, four of which are parked at Seletar Airport, Singapore- VT-SZE/F/G/H, all of which have been de-registered.

As per the airline’s statement on the 20th of March, 2015, “SpiceJet is also in the process of adding more aircraft to the fleet and expects to add 8-9 Boeings starting in April to take the active Boeing fleet to 25-26 aircraft in the summer, in addition to the 15 Bombardier Q400 aircraft that are owned by SpiceJet. SpiceJet will continue to add more aircraft in the second half of the year to take the Boeing fleet up to 34-35 aircraft by the end of the year.”

It is believed that some of the 737s to come will be wet leased.

Vistara – a review with a view (Analysis)


Vistara is the newest airline to have taken wings.It’s a little over two months since the airline started operations. In this period, the airline’s fleet has grown to five, and will soon grow to six for a large part of the Summer schedule. The cities it services have also grown to eight. The fleet size and the number of airplanes have made another pan-India airline that started operations earlier- Air Asia India – now the smallest airline in terms of fleet size and destinations.

What is Vistara? How is it? Where is it going? What should it perhaps do? This and more in our fairly deep analysis, which you can read more about by clicking here.

Celebrating Women’s day – the airline way


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There are few airlines in India which talk about their employees on social media. IndiGo has been featuring some of its staff and crew in its in-flight magazine, but these are more individual stories – either of struggle or achievement than a general feature. AirAsia India hasn’t officially talked of its staff – most photos of staff in a joyful mood are clicked and posted by its poster CEO Mittu. Air India only recently got active on social media. Go Air remains silent and Jet Airways uses certain employee photos to focus on matters other than the employees.

SpiceJet stands out. It became the only airline in India to sticker photos of its crew on the sides of its poster aircraft – VT-SZK. It did away with models, and featured employees for all promotional advertisements and banners. SpiceJet uses its employees as faces of the airline. Women’s day had to be special

Costa_femmeOf all airlines in India, SpiceJet and Air Costa were the only ones to issue press releases with photos of their all women crew. While SpiceJet talked of 16 all women flights operated on Women’s day, Air Costa operated four flights with an all women crew. Air India operated four such flights, but spoke nothing of it on its social media sites. Air Costa issued a press release, but it was only the chief financial officer (CFO) Vivek who posted photos of the all women crew. The only airline that well coordinated the effort was SpiceJet.

Crew_InteractionSanjiv Kapoor, the COO, was active on Twitter, and posted a photo of him posing with the all women crew who flew him from Goa to Delhi. The airline allowed all its fans and followers on Twitter to ask four of its women crew – a captain, a first officer, a cabin crew in charge, and a cabin crew, questions about pretty much anything. It also posted photos of the all women crew that operate the first Q400 and Boeing 737 flights today. SpiceJet pulled all plugs to engage with its audience, and the crew interaction was perhaps the most meaningful activity hitherto undertaken by any airline in India, on Women’s day. The message was clear – don’t just admire, ask and learn. SpiceJet may have been successful in not just inspiring, but guiding men and women seeking a career in the airline industry. Efforts of the management head and the airline social media team seem to have been energetic, and well co-ordinated. Sunday wasn’t an excuse.

While SpiceJet conducted a great, out-of-the-box and meaningful exercise on social media , one aspect where it perhaps fumbled was in blindly (though unofficially) promoting a poorly researched story about a SpiceJet woman pilot from a particular religious community that was carried in the mainstream media – Hindustan Times.

Social media take away – Do what SpiceJet did (not necessarily follow, but get inspired!). It was brilliant and out of the box. Also make social media mental checklists a habit, so that certain stories, when promoted, don’t damage the image of an individual or an airline.

Kudos to SpiceJet, for what it did. We’ll next have to convince them to form an ‘Aviation Day’ that we can observe and celebrate.


AirAsia India posts a loss of INR 21 Crores for Quarter ending December 2014


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AirAsiaIndia ATB

In the quarter ending December 2014 (Q3FY’15 – India), AirAsia India, an associate of AirAsia due to the latter’s share of 49% in the India venture, posted a net loss of INR 21.7 Crores.

In the same quarter, spanning the months of October, November, and December 2014, the airline faced a significant challenge. The airline was faced with a shortage of senior cabin crew, effects of which were largely seen in November and December – very significant delays of many flights (up to 5 hours and more) and the cancellation of some. The airline was forced to play around with its schedules to match the flight duty time limitations (FDTL) of its senior crew, which resulted in the delays and cancellations.

Cancellations at AirAsia India rose from 0% in October to 2.65% in November, and dipped to 1.92% in December. In the quarter, a total of 4,019 passengers were affected by delays more than two hours (2% of the passengers carried in the quarter), and 513 passengers were affected by cancellations (0.2% of the passengers carried in the quarter), as per DGCA data.

In the quarter, the airline flew a total of 201,000 passengers, out of 253,852 seats, resulting in a load factor of 79.2% for the quarter. In the month of November, passengers carried dropped to 61,000, down 5,000 passengers compared to October, while load factors increased to 79.8%, up from 76.2% in October, perhaps indicating that the loads in November were driven by servicing affected passengers.

December is a month of high domestic travel demand. December 2014 was AirAsia India’s first month of operations in a high demand season, which resulted in domestic load factors rising to 81.5% – its highest since start of operations. Considering that the target customers for AirAsia India are leisure travellers, AirAisa India was expected to have recorded higher load factors. This figure was the lowest among all airlines in India for the month, either due to the airline’s limited network or an image that was impacted by the high number of cancellations and delays that continued into December.

AirAsia India ended the quarter with a fleet of 3 Airbus A320 aircraft, of which two are used (from AirAsia Malaysia), and one is new (directly received from Toulouse). The third aircraft entered commercial operations on 18th December 2014.

In the quarter, the airline added only one destination to its network – Pune, on the 17th of December 2014, while doubling the frequency on the Bangalore-Jaipur sector, and halving the Bangalore-Chennai frequency. The airline presently services Chennai, Cochin, Goa, Chandigarh, Jaipur, and Pune from Bangalore, and Jaipur from Pune.


As per AirAsia, AirAsia India will receive just three additional aircraft in the year 2015, raising its total fleet to just six (6) aircraft by the close of calendar year 2015. All three aircraft will be used (older) airplanes from AirAsia Malaysia. In the same year, the group will receive only five new airplanes from Airbus, of which one will be for Malaysia AirAsia, two for Phillipines AirAsia, and two for Japan AirAsia which presently has no aircraft.

AirAsia India is forecasted to have a load factor of 81% in Q4 FY’15 (Q1 CY 2015). This may seem difficult considering the airline is entering another lean season, and its past performance in both lean and peak seasons hasn’t been encouraging enough to support this forecast.

However, one tactic that the group may resort to is to feed traffic from Malaysia AirAsia and Thai AirAsia into Bangalore, which can then be picked up by AirAsia India to offer more connections in India, such as Jaipur, Chandigarh and Goa to passengers of the other two AirAsia associate airlines.

Says Tony Fernandes, AirAsia Group CEO, “For a new airline, the AirAsia brand is strong in India and the load factor of 80% recorded in 4Q14 speaks for itself. Looking at the growth potential there, an additional aircraft was added in India during the reported quarter hence it ended the year with a total of 3 aircraft. Though the associate, due to the local regulations, is only allowed to operate domestic routes in its first five years of operations, AAI has the advantage of getting traffic feed from MAA and TAA which also flies in to AAI’s hub in Bangalore. This differentiates AAI from its competitors.”

AirAsia’s A320NEOs will be delivered only at the end of calendar year 2016. Further, in 2015 and the next few years, the group will not be taking in large number of aircraft every year like before, in an attempt to preserve cash.

For the quarter, Thai AirAsia was the only associate to record a net profit. Indonesia AirAsia, Malaysia AirAsia, Philippines AirAsia, AirAsia Japan and AirAsia India recorded net losses. Indonesia AirAsia and Malaysia AirAsia however recorded operating profits.


The Blackbox store – merchandise sample review.


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We received our Blackbox store merchandise samples – a mug and a crew tag. These have been put to use over the last two weeks, when we’ve been travelling and testing the tag, and sipping away from the mug.

The Blackbox store sent across a personalised ‘Crew’ tag. The tag is made of plastic, and is secured to a handle via a transparent rubbery-plastic strap. This ensures that the strap dies not distract from the tag.

Crew_Tag_Both_viewThe tag sample we received has ‘Aviate Navigate Communicate’ on one side and ‘CREW’ on the other side, both set against a black background. Under the ‘CREW’ is my name, which I really enjoyed as the tag was personalised. The tag is attached to my travelling pull-along suitcase, and has survived any harshness with which the baggage may have been handled. It has helped with the quick identification of baggage on the belt. The tag seems to have sustained a bit of damage, but the impressive part is that the white surface underneath the black surface has not yet been exposed. Says something about the durability of the tag.

The mug I’ve been drinking off (beverages only) is made of white ceramic, and the exterior paint seems durable – it’s lived through washes. The best part is what’s on the mug – IATA airport codes of airfields in India. It is a nice feeling to be able to drink off a mug that has 20 airport codes on it.

The Blackbox store has even more eye catching designs – crew tags, mugs, tee-shirts, and pillow covers, but our luck stretched only so far in getting samples. If you really like my work, sponsor me a tee from their store! Each one of the designs profusely bleeds aviation.

The banner below will link you to their store.


Aero India 2015 – The ‘Show’


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ai15_03Aero India 2015 is lower in energy than ever. There are no big deals to announce, no big customers to woo. And that reflects in the energy at the show.

On the show front, there is a larger presence of civilian aerobatic teams. The Flying Bulls aerobatic team, the Scandinavian Airshow and the Breitling Wingwalkers, and the Yakovlevs Airshow Aerobatic team. The only other aerobatic team is the Indian Airforce’s Sarang helicopter team.

DSC_0993The Flying Bulls pulled out of the show after two of their aircraft collided mid-air, leading to prop damage to one and wing damage to the other. Incidentally, this was to have been the Flying Bulls’ last airshow on the Zlin 50XL aircraft, as these birds have reached the end of their airframe life.

Civil aircraft on static display includes a Dassault Falcon 7X, Falcon 2000, Pilatus PC-12, Dornier 228NG, Sukhoi Superjet 100, Let L-410 Turbolet, and an Embraer Pheonom 300.

Indoor presence is limited and low key. Original Equipment Manufacturers like UTC Aerospace have a modest stall, while a major airframer like Embraer have neither a stall nor a chalet. Dassault has a large stall, and that is only because of their optimistic outlook of the civilian and military Indian market.


SpiceJet’s ‘With All Our Heart’ VT-SZK Skymark 1:100 model review


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The timing couldn’t have been more perfect. It’s the day of hearts, and the evening prior, FirstFlight delivered am almost 2 foot long box that had a photo of a SpiceJet aircraft on the side. The wait was over – VT-SZK ‘With all our heart’ was finally home, from SpiceShop, manufactured by Skymarks to a 1:100 scale.

SMR_01SMR_02Inside the box were layers of black foam that carefully housed in all eight parts – The 15 inch long fuselage with the nose gear pre-fitted, both wings with the engines and min gears pre-fitted, the two horizontal stabilizer pieces, the vertical tail, a wooden base stand, and a securing screw. It couldn’t get simpler. All pieces were were packed in plastic save the rudder and the horizontal stabs, which had made their way to the bottom of the box, where it may be prone to damage.

Assembly took just a minute, as all parts are snap fit and firmly stay in place.

From the stand, up!

SMR_04The stand for the model is made of two parts – a wooden base with a polished metallic plaque bearing the SpiceJet logo, the aircraft name ‘Red Chilli’, the aircraft model, registration, and the month and year it was delivered to SpiceJet. A matt finished aluminum support is secured to the wooden base via to screws, which were loose. You’d need a star (‘+’) screwdriver to tighten the screws, to prevent your model from wobbling with fake turbulence on the table. The support is keyed to align the hole on the support with the threaded hole at the bottom of the model’s fuselage. Slight alignment is necessary before the securing screw can be inserted.


VT-SZK was delivered to SpiceJet in May 2014, is leased from BOC Aviation, and is the airline’s prized airplane for many reasons. It finds a special place in the heart of perhaps all its employees for the singluar reason that it is the only airplane in the fleet to have an off-beat livery. The forward fuselage features three crew on either side. On the left is a lady captain flanked by two lady cabin crew, and on the right is a male captain flanked by two other lady cabin crew. The featured crew are: Capt. K. Rangarajan, Captain and Examiner, Boeing 737. Capt. Anushree Varma, Captain, Boeing 737, CCIC Roshika Chettri, CCIC Rashmani Singh, CCIC Prexa Kaushik, CC Lavi Choudhary.

The aft fuselage of the real aircraft is stickered ‘SpiceJet’ on the left, and ‘With All Our Heart’ on the right. Perfect for valentine’s?

1:100 – How scale is the model?

SMR_05The measuring tape determined the length of the fuselage to be approximately 15 inches. We say approximately because a collector would never get a hard surface to contact the fuselage, for fear fo damage to the decals. The real 737-800 has an overall length (nose to the trailing tip of the horizontal stabilizers) of 1,554 inches. 1,544 / 100 (scale) = 15.44 inches. Yup, the model passes the scale test. Since the wings, engines, and tails appeared proportional, we took the scale on all axes for granted.

SMR_07The most important aspect of any model airplane is the nose. Just as a human is identified by the face, and not the body, an airplane is only a scale model is its nose appears exactly like the real aircraft. Skymarks has got it right here. The model passes the major tests.

Testing Tougher

We shall progress from the nose to the tail, and examine every aspect.

SMR_08The nose is simply great – it couldn’t have been more ‘737’ like. The nose bay doors’ lower edge are curved, which is unlike the real aircraft (straight). The wheels are proportional, but do not move easily.

SMR_09The faces on the fuselage are a little bigger than what they should have been. This can be identified by the location of the face of the first cabin crew relative to the static port (the oval under the third passenger window). The ‘missing windows’ on the 737-8000 are reproduced here – two missing on the left, one on the right (to accommodate air conditioning ducts).

SMR_10The fuselage very clearly shows the line where the ‘double bubbles’ meet (the 737’s fuselage cross section is comprised of two intersecting circles)- see the image on the left with the red arrow, pointing to a visible dent line. Although nowhere this pronounced on the real 737, it allows one to appreciate the 737’s fuselage design.

SMR_11As we progress to the engines, we hit a pocket of disappointment. The engines that Skymarks has used are the Boeing 737- classic (300/400/500) engines, which have the ‘hamster pouch’ look – flattened bottom with a non-circular nacelle. The Boeing 737NGs have an almost circular nacelle. The engine fails the scale test big time. Further, the exhaust nozzle is also long. VT-SZK uses CFM 56-7BE engines, which have a shorter nozzle.

The detailing on the wing is good, complete with the walk zones, flap track fairings, and emergency exit markings. The double slotted flaps, spoilers, and ailerons with aileron tabs are marked on the upper surface. The fuel tank access panels are also marked on the lower surface.

SMR_12The red ‘paint’ on the outer portion of the winglet should have run further under the surface of the winglet.

SMR_13The main landing gears are simple, but the tyres are good. The model would have been more of a scale had they the white wheel caps as found on SZK. The wheel wells could have been painted black for higher level of detailing.

SMR_14The stabilizer and the vertical tail plane are both well detailed, complete with the trim markings (trim markings are not symmetric and so it should have been on the model). The APU inlet door, and APU exhaust are marked.


SpiceJet is the only airline in India to sell 1:100 models of its aircraft (though not on board their flights, but through their website), which is a big plus. The finish of the Skymarks 737-800 is overall good, but could be better with more detailing, such as fine print text near the statics. It is definitely a model for the collector, but does disappoint a bit when it comes to certain details. Hogan’s eye for detail is much better (Example: IndiGo’s A320 ‘Premium model’ sold on board), but then, they do not offer this large a scale.

On the pricing front, the Boeing 737 1:100 is available for INR 9,499 + 13.125% tax + INR 500 shipping = INR 11,246. On airlinemuseum, Skymarks 737-800s are available or US$95, which translates to INR 5,900. Add customs and freight, and the model’s price comes close to SpiceJet’s price, perhaps cheaper by a thousand or two (or three?). But SpiceJet’s price is justified by the limited edition of its infamous aircraft.

In short – a lovely airplane model, largely faithful to the 1:100 scale, and with a finish and color accuracy that is bound to catch eyes and make you stare speechlessly – with all (y)our heart! Must have for a serious model collector.



The Black Box Store – Aviation Themed merchandise


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TBB_Banner_bMerchandise for aviation enthusiasts is usually the same offering, in different variations: Airplane models, Remove-Before-Flight key chains, and some apparel. Creativity is very limited, just to conform with the narrow range of acceptable designs that qualify one as ‘serious aviation enthusiast’.

This dogmatic approach to aviation enthusiasts has been challenged by The Blackbox store. And how? It has been founded by someone who is both in aviation and not in aviation. Specifically speaking, the founder, who is also a designer, is not really in aviation but supports aviation activities. The result? Numerous friends in operational aviation – pilots, cabin crew, engineers, ground support staff, and more. With many friends come many birthdays, and the want for differentiation drove the designer to unleash the creativity within to gift something that was both unique, yet evidently aviation.

What started with gifting friends has today evolved into a full time business. The Flying Engineer got in touch with the designer, and without unnecessarily overdoing it – fell in love with the range of merchandise targeted at the aviation enthusiast. It’s not another buy and resell store – it’s a store that sells in-house designs, all proprietary of the chief designer, who wants customers more than sales, satisfaction more than profits, because of the personal belief in ,”We’re here for the long run”. No diversions!

The best part of the designs are that they are simple and generic enough to be used / worn anywhere, and yet serve as a soft, classy voice that speaks on your behalf. To someone alien to aviation, most designs appeal as a good design. To someone right in aviation, the designs appeal as classy and fresh, strongly beckoning the avgeek inside. It’s not one of those merchandise and apparel that will want you to shy in a general party – it’s what you’d perhaps want to wear to not stand out as the odd one but mingle with the crowd and yet speak of where you come from.

I’ll be honest about this – the Blackbox store designs have appealed to us, and we’re getting a couple of samples for review – shipping takes a week! We’ll probably even buy the company out – that’s how much we’ve been impressed by what’s on show at the site (and hence we’ve decided to advertise them here). We just hope that what we get is close to or better than what’s been shown on the site. We’ll soon be in a position to decide, and we’ll let you decide for yourself, at


SpiceJet’s revival: Singh is King


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SpiceQ400_BIALYesterday, SpiceJet announced 5,00,000 seats for sale, bringing back the airline’s ‘Sale’ after a gap of three months. This does send across a message that the airline has set its focus on staying afloat. We discuss SpiceJet under its re-crowned king: Ajay Singh.

Ajay Singh is believed to return to SpiceJet because of two reasons: Him being approached by Maran to revive SpiceJet, who was mulling over closing the airline; and the lower oil prices, and an economy that’s poised to grow. Being a BJP man, he was also approached by the government to salvage the airline, as an airline that bites the dust will imperil the investment climate in the country, posing strategic imperatives for many including the government. And the people, for whom airfares will increase.

The 2015 summer schedule, which comes into effective March 28th onwards, has been planned for 280 daily flights, to be operated with a fleet of 26 Boeing 737s and 15 Q400s – a 41 aircraft fleet, of which 39 will be active at any given time, up from today’s 16 Boeing 737s and 14 Q400s. The commercial team swung back into action, opening bookings till October 2015, and offering 5,00,000 seats for sale, boosting cash flows at the airline. Ajay’s idea is to bounce to a 35 aircraft Boeing fleet as soon as possible- which would be a challenge given that the airline today doesn’t have enough Boeing pilots to fly a fleet of that size. Reportedly, the airline by end of March will have enough pilots to fly only 15 Boeing 737s, as a significant number are serving their notice period. Ajay has appealed to these pilots to reconsider their decision to leave.

Ajay’s priority, as far as the Q400s are concerned, is to pressurize and renegotiate with the manufacturer – Bombardier, to make the turboprop fleet a profitable one, allowing the Q400s to stay for a longer period, and perhaps growing the fleet. Ajay was never in support of the Q400, but as in previous analysis on this site, the turboprops are good money makers, and are needed by SpiceJet to differentiate itself from a big player like IndiGo, by offering routes that are both commercially and technically unfeasible for narrow bodies to operate on. The only problems that SpiceJet may be facing are maintenance and support issues. Ajay looks to making the Q400 fleet ‘a profitable fleet’. SpiceJet has received immense support from Boeing, but has been disappointed with Bombardier who has apparently not behaved as fairly with the airline as they should have.

With money flowing in, Ajay aims to renegotiate all those bad contracts that have been signed.

Ajay wishes to treat the pilots who’ve recently left as furloughed, and looks to getting them back on board on priority. However, this would be a challenge from a technical, emotional and legal perspective, especially for those who have already started flying on another type.

Ajay Singh is looking to introduce a cultural change, or rather, bringing back a culture of transparency between the employees and the higher management. Ajay will look towards better employee and customer engagement, with his aim of achieving perfection in human interaction.

For example, although the present COO Sanjiv had made it clear to all employees that he was accessible anytime via email, there were others lower in the chain of command who had broken this link of direct communications. The Flying Engineer, who had interacted with certain operational staff, had vented out their frustration in not being able to reach the COO directly. Ajay Singh has been made aware of unwanted forces in the airline, and has initiated a task to indentify the negative, and the passionate, and separate these forces for the benefit of the airline, to bring back a cleaner culture they started with, in 2005.

Uplifting hot meals for the crew was recently resumed.

To bring in a greater sense of belonging and loyalty, Ajay Singh is looking to introduce an employee stock ownership plan (ESOP). He reportedly told a section of employees, “I want to see all of you owning a piece of SpiceJet”.

To help reset the airline to a comfortable position, Ajay Singh will put money into the airline, in three installments – February, March, and April. He’s already pumped in some money into the airline, but that may have been an emergency infusion to help with aircraft that lessors look to repossessing.

Ajay seems to know what he’s getting into. Sources quote him as saying, “Plenty of sh*t I get on my plate with this acquisition. It needs cleaning up, and it will take time to clean up. I’m still discovering the problems at SpiceJet.

Who sh*t on the plate?

Perhaps there is nothing quite as frustrating as working for someone who doesn’t grasp the basics of the business. Kaneswaran Avili, CCO at SpiceJet had tweeted on 14th November 2014, the day of a board meeting, “Aaaaiiyoo why no one understand RASK……”, very obviously referring to the board.

SpiceJet today is riddled with multiple problems, most of which are related to the airline being cash strapped for a fair period of time. Ajay being a director with SpiceJet since he sold his stake to the Marans in 2010, has kept a watch on the airline, and reportedly believes that the cash strapped situation arose because of some strategic decisions that went wrong in the early years of transfer to the Marans, and also because of certain commercial decisions which were taken primarily in the year 2013, which led to a significant cash burn for the airline, which the airline couldn’t recover from.

Having said that, Ajay reportedly doesn’t seem to throw the entire blame on Maran, as the latter’s background didn’t prepare him to take on airline – a business which is extremely competitive, and consumer centric, contrasting the other businesses he runs. Maran’s lack of involvement in the airline cost him.

Ajay feels he can make a difference, as his involvement in the airline he founded gives him a better understanding of the space. Ajay seems to be passionate about SpiceJet as a brand, and works hard to defend, just like Sanjiv Kapoor, that the present situation at SpiceJet is far different from that at Kingfisher in 2012.

While Ajay believes that the airline has a lot of positives to re-build on, including a strong team led by performers: Sanjiv and Kanesh, the external environment is fast changing – competition is stiffening. SpiceJet will have to play to its strength, to hopefully find itself in a healthier and comfortable state by May 2015 – a month when domestic travel demand is very high, and also the month the airline started operations in its present form, 10 years ago.

SpiceJet’s Q400s are here to stay


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In the light of Ajay Singh taking over SpiceJet, media reports and general speculation had pointed that the revival plan of Ajay’s ‘include culling the 15 Bombardier Q400 regional aircraft from the airline’s fleet’. On the contrary, The Flying Engineer has learnt that SpiceJet’s Q400s are here to stay.

While the industry in general is led to believe that a single fleet strategy is best suited for a low cost carrier, based on the success of Southwest, Ryanair, AirAsia, and IndiGo, The Flying Engineer has firmly believed in a dual fleet strategy to effectively penetrate the Indian market. This is based on the Indian market which falls into three broad categories:

  1. Thick, long and short routes – markets which are mature and overcrowded, such as Bangalore- Delhi (long), and Bangalore -Goa (short).
  2. Thin, long and short routes – markets which are evolving (underserved, and unserved), such as Bangalore – Chandigarh, Bangalore- Vishakapatnam.
  3. Thinner, short routes – markets which will not mature easily – such as Vijayawada- Hyderabad, Bangalore-Belgaum.

The reason for the last market to not mature easily is the fairly good rail and road connectivity that is present between such city pairs. Yet, there is a segment (albeit small) of travellers who will pay for the time and convenience of air travel, which reduces an overnight journey to around an hour or so. Further, at many such destinations, the runways haven’t been upgraded to allow bigger jets to land, making them fit almost exclusively for turboprop operations with ATR72 (typ. 72 seats) and Q400 (typ. 78 seats). Since most travellers on this segment are those who value time and convenience, and because there is insufficient competition, an airline like SpiceJet enjoys good pricing power.

To support this, SpiceJet, in Q2 FY’15, realised a passenger-only RASK (excludes ancillary revenues) of INR 2.74/ASK, while the Q400s delivered INR 4.99/ASK. This passenger only RASK of the Q400 was higher than the average RASK (including ancillary revenues) of INR 3.26/ASK.

In Q2, the Q400 flew only 8.13% of the airline’s total deployed capacity, yet contributed to nearly 14% of the airline’s total passenger revenue. Interestingly however, the Q400 made up 30% of the airline’s fleet in Q2, but had only 14% of the airline’s total aircraft seats.

What worked the most against the Q400 was the maintenance costs, which The Flying Engineer has been led to believe is a problem of the past, when maintenance facilities were not available in the sub-continent. Perhaps the selection of the aircraft wasn’t right, but the dual fleet concept wasn’t wrong.

Should SpiceJet bounce back with the infusion of funds, the airline may have to redo the Q400 network a bit and play the aircraft to its strength, better feeding into the mainline network with traffic from Tier III routes. This is one of the ways a smaller player in the market can hope to survive through differentiation, and monopoly / duopoly, especially when established routes are crowded with very low margins.

The days of a dual fleet jet – a mainline narrow body complimented by a regional jet, are not far off, either.

Vistara: Aggressive growth beyond its unbaked proposed route pattern


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When the DGCA notified the public that TATA-SIA airlines, now operating under the brand name Vistara, had applied for an Air Operator Permit, the DGCA had made public the joint venture’s proposed route pattern, detailed below.


In the light of the temporary relaxation in meeting route dispersal guidelines handed to Vistara, The Flying Engineer analyses the proposed route pattern for year 1.

The proposed route pattern, as handed over to the DGCA during the application phase during April 2014, had listed Mumbai, Goa, Bangalore, Hyderabad, Ahmedabad, Srinagar, Jammu, Patna and Chandigarh as destinations – either non-stop or with one stop, from Delhi. Based on the weekly frequencies, we’ve computed the average daily frequency, and computed the capacity (in available seat kilometers – ASK) as per ICAO’s Air Transport Bureau (ATB) guidelines.

The proposed route pattern for one year generates enough capacity on CAT IIA, but generates a CAT II capacity that just meets or falls slightly short (0.18%) of meeting the capacity as stipulated by the existing (at the time of writing this piece)  Route Dispersal Guidelines (RDG) as laid down by the Ministry of Civil Aviation (MoCA), India. However, the airline, in its original proposed route pattern, could notwhere have met the required capacity on CAT III routes, as shown in the table on top.

The airline’s present pattern, which includes DEL-BOM vv, and DEL-AMD-BOM vv, does not conform with the original proposed pattern. The frequency on DEL-BOM nonstop is already 21 a week, each way. The DEL-AMD-BOM pattern, which was to have kicked in during the second year of operations, started on the second day of the airline’s operations.

A very smart move that Vistara may have made is to push its requirement to meet the RDG three months later, which is April 2015 onwards. This benefits Vistara in two ways:

  1. It allows the airline to make money in a lean season by flying on business routes which are not much affected by seasonal variations, while ramping up fleet and mainline network strength.
  2. It will allow the airline to deploy disproportionally high capacity on CAT II/IIA and CAT III routes (to compensate for the first three months of operation, starting January 9th 2015) during the summer (Q1 FY15-16 / Q2 CY15), when demand for travel is high, due to a holiday season.

With this strategy, the airline may be able to minimise its losses in Q4 FY’15 and perhaps maximise its revenues in Q1 FY’16.

Statistically, Bangalore ranks the third among all cities in India as far as domestic passenger movements are concerned. In FY13-14, Bangalore witnessed 10.2 million passenger movements, which is after Delhi (24.2 million) and Mumbai (21.9 million). Besides Tier I cities, Ahmedabad had the highest traffic, of 3.6 million passenger movements. Going by Vistara’s priority in tapping lucrative, proven markets, Bangalore may be either the next Tier I destination or simply the next destination after Delhi, Mumbai and Ahmedabad. Goa witnesses the third highest passenger movements among non-Tier I cities, and may also become the airline’s next Tier II destination (CAT III route). It will not be surprising to see Vistara choose Pune as another Tier II destination, soon. Pune had the second highest non- Tier I traffic after Ahmedabad, at 3.5 million movements.

The original pattern would have required an average of 51:40hrs of block time to be clocked, per day (which will vary on a daily basis based on non-daily flights). The actual daily block time would have been between 50:30hrs to 53:20hrs. Assuming a conservative 10hr aircraft utilisation – per day per aircraft, the airline will require 6 aircraft to fly the original proposed pattern. The airline already has two aircraft flying, and a third in Delhi. Two others are ready at Toulouse and will be delivered by March end (2015), taking the total to five. With one aircraft per 1.5 months expected post March 2015, Vistara may be able to fly its original planned network in May 2015, should it still hold. But considering that the airline may end 2016 with 13 Airbus A320-232SL aircraft, it is likely that Vistara will far outgrow its original proposed network, even with the backlog of RDG – mandated capacity that will have to be flown.

With this in mind, it may not be surprising to see Vistara expand its network to Guwahati, Kolkata, along with few other stations. The projected growth seems both achievable yet aggressive.

Network service and on time performance are important yet just two of many factors that influence people to choose an airline. Vistara is just one of three full service carriers in India, bringing with it a strong brand formed by established and well known players – Singapore Airlines and Tata Sons. This will attract the discerning traveller. Full service carriers play the yield game, generated largely by the first class in their aircraft – the business class. The airline has 16 business class seats on each of its aircraft.

However, the only product differences between a low cost carrier and the premium economy (36 seats) and economy sections (96 seats) of Vistara are the food, the renowned oriental style emphasis on service and higher pitch comfortable seats, as the airline offers no in flight entertainment options or support. How these two cabin sections of Vistara will compete with other airlines is to be seen. For example, for travel on February 15th between Mumbai and Delhi (based on a search at the time of writing this piece), airlines including Jet Airways charge as little as INR 3,000 one way, while Vistara holds its ground at 6,520 one way. Whether brand name will prevail in a generally cost sensitive market is to be seen. However, there is also an emerging trend amongst people with disposable income who look forward to enjoying their money.

Air Costa realises an operating profit


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PATTERN-11JAN15Air Costa, the Vijayawada based regional airline, has realized an operating profit in the month of December, 2014.

ATF sales tax at Andhra Pradesh, which was reduced to 1% from 16%, has positively benefited the airline. Three out of four aircraft rotation patterns have at least one stop at Andhra Pradesh, which allows the airline to tanker fuel out of the state. The Embraer E170s, which used to pay a flat sales tax of 4%, now pay only 1% within the state and 4% outside the state.

The airline’s tie up with Sovika Group to carry a target of 500 tonnes of cargo a month in the unused belly space of the aircraft has also contributed to the airline’s revenue stream via ancillary revenues starting December. It is estimated that the airline makes around INR 1 Cr per month for 500 tonnes of cargo.

Route wise CompetitionThe airline flies 34 flights a day between 15 city pairs, connecting 9 stations with four Embraer E Jets – two 112 seat E190s and two 67 seat E 170s. Of these, the airline enjoys a monopoly on three pairs: Jaipur-Chennai, Tirupati – Vishakhapatnam, and Vijayawada-Vishakhapatnam sectors, and a duopoly on five others. On the other sectors, the airline enjoys competition from just two other airlines. Two out of 15 routes are Tier II – Tier II city pairs, while just two city pairs are Tier I – Tier I. The other 11 are Tier I – Tier II city pairs : the market that has the highest growth potential. The airline stopped flying the Bangalore- Chennai sector – a short, crowded sector that is not suited for a 100 seat regional jet in the light of stiff competition especially from economical 70-80 turboprops and higher capacity Boeing 737-800 and A320 aircraft. While the turboprop is the right sized aircraft with favorable economics, for jet aircraft, this sector is unviable. However, deploying a Boeing 737-800 or an A320 on this sector can be commercially managed through low airfares that fill up an entire aircraft to break even. The E190 cannot compete due to its very significantly higher operating costs than an turboprop and its higher cost per seat compared to a mainline jet, on such a short, already crowded sector.

The network has been restructured to eliminate unprofitable routes and unfavourable patterns.

It is also possible that the disruptions faced by SpiceJet across its network could have benefited Air Costa. The airline shares two duopoly sectors with SpiceJet and three other sectors with SpiceJet and other airlines.

Another important factor that would have contributed to Air Costa’s profit is the high demand for domestic air travel in December. Tirupati, for instance, is preferred by many in December due to the favorable weather and the coincidence with the holiday season.

Route Deletions

CITY PAIRSWhen compared to the 2014 Summer schedule, the airline has stopped flying five city pairs and added four city pairs. The most notable change has been in the drop in the number of Chennai connections. Connections to Chennai from Coimbatore, Bangalore, and Vijayawada have been snapped. Madurai as a destination was dropped soon after opening. The connection between Hyderabad and Jaipur has been snapped. The frequency of flights between Hyderabad and Chennai have dropped from 3 flights a day each way to just one.

Route Additions

Tirupati was opened towards late September. Direct Hyderabad – Coimbatore, Hyderabad – Tirupati, and Tirupati – Visakhapatnam sectors were commenced, and  the Hyderabad – Vijayawada frequency was doubled.

Route Modifications

Air Costa has stopped its three / four way routes : Bangalore – Jaipur – Hyderabad – Chennai (and the return), and Bangalore – Ahmedabad – Chennai (and the return), replacing these with direct Bangalore – Jaipur-Bangalore, Bangalore – Ahmedabad – Bangalore, Chennai – Ahmedabad – Chennai, and Chennai – Jaipur – Chennai routes.

Flights & Utilisation

Station wise acft & depFrom 40 planned flights a day in summer ’14, the airline today flies 34 flights a day, dropping routes that were unprofitable.

Compared to the Summer schedule, the aircraft utilisation has dropped, from an average of 12:53hrs to 11:42hrs per aircraft, a drop of 1:11hrs. E170s, which were planned for 11:00 -11:25hrs in summer presently are utilised to 9:45hrs-10:00hrs a day. E190s, which were planned for 14:30hrs -14:40hrs a day in summer today fly for 12:50hrs – 14:15hrs.

Chennai, from 10 departures a day as per the summer’14 schedule, has reduced to just three. Bangalore and Hyderabad have the highest departures – seven a day. It may be prudent for Air Costa to shift its E190 aircraft base from Chennai to Bangalore both in light of its importance and the benefits handed out by Bangalore Kempegowda International Airport for operators who station 50% or more of their fleet in the city and fly more than a million passengers annually through the airport.

Presently, Air Costa flies a total of about 26,000 passengers into and out of Bangalore, every month. The E190s contribute to about 17,500 passengers per aircraft per month. Should 4 additional E190s be stationed at Bangalore to fly point to point routes out of Bangalore, then the airline will cross 1 million passengers movements per annum at Bangalore.

According to earlier plans, the airline was to have received the 5th E190 (7th aircraft) in December 2014.

GoAir’s misleadingly worded ‘Winter Offer’


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When GoAir announced yesterday its intention to offer 17 lakh (1.7 Million) seats for sale for the travel period between Jan 01, 2015 and March 31st 2015, there was something misleading, yet not dishonest about the advertisement.

The advertisement, ‘Winter Offer – 17,00,000 air tickets for travel from January 1 to March 31, 2015 – Fares Rs. 1,469* onwards. Book now!‘, projected the offer as a large volume sale, perhaps on the lines of SpiceJet’s, during the latter’s better days.

The result? The ‘Winter Offer’ attracted many visitors to its website, making the website slow, unresponsive, and at times – not load at all. But the attention it gathered was based on perhaps a misleading wording of the offer.

Go Air is a small sized, Airbus A320 operator. Each aircraft flies just 176 seats, as four middle seats in the first two rows are left vacant as part of the Go Business offering. This airline flies to 22 destinations, on mostly mature routes which the airline claims are ‘profitable’ (in reality, profitable for the capacity of the aircraft). On average, the airline flies 128 flights a day – all domestic – and carries some 20,000 passengers a day. 20,000 passengers translate to 18 lakh (1.8 Million) passengers across three months.

On a lean season to lean season basis, GoAir’s capacity has grown 15%. Based on this, this year’s Q4 FY2014-15 : January, February & March – the period of travel for the ‘Winter Offer’ – may fly close to 21 lakh (2.1 Million) seats, of which 5.8lakh (0.58 Million) seats are expected to fly empty in the absence of a market stimulation.

In short, GoAir offers a sale of ‘17,00,000 air tickets ‘ when the airline can fly a maximum of only 21,00,000 seats, making the number of tickets up for grabs 81% of the expected capacity to be deployed, while only 5,80,000 seats (27% of the expected capacity to be deployed) are expected to fly empty in the Q4 lean season. It’s these empty seats that an airline usually tries to fill via an offer or discount.

The real, discount offers may be available for a maximum of around 5,80,000 seats, while the remaining seats may sell at close to the regular fares, as it still falls under the bracket of ‘Fares Rs. 1,469* onwards‘.

We expect only about 35-40% of the 17 lakh seats to sell abnormally fast in this offer period, as these may represent seats that are priced lower than regular fares. The balance 60% may not witness an abnormal purchase rate, and a large portion may remain unpicked. In the event that the 35-40% target is not met, the airline may perhaps come out with another offer to sell excess inventory in advance. In this sale, the airline has withheld ~20% of its capacity (4 lakh seats), which correspond to about 35 seats a flight, which may include both pre-sold seats as well as seats which may be bought in the last one to two weeks of travel, at high prices. Of these, 8 seats per flight are Go Business, which are priced at between 1.5 – 3 times the regular fares.

The five day sale window is abnormally close to the travel period which starts as soon as six days later – a debatable decision.

GoAir chief executive Giorgio De Roni told PTI ,”The January-March quarter is traditionally a lean quarter… The purpose of introducing these fares is to make air travel affordable during the period”. That statement has proved to be very interesting, considering that in the lean season airfares are usually lower, as capacity is higher than demand. The only time airfares rise is when carriers sell their excess inventory early, thereby not putting any pressure on the pricing as the date of travel approaches.

The best way to read the offer is by separating, “17,00,000 air tickets for travel from January 1 to March 31, 2015″ and “Fares Rs. 1,469* onwards. Book now!”.

Brand Salvaging – Automated Disruption Management at SpiceJet


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Spice_737_VIDPSpiceJet has automated the process of applying for a refund or modifying the flight booking should the flight be delayed by more than 90 minutes. Rescheduling the flight under these circumstances, as reported by the airline, comes at no charges. The steps are self explanatory and on the airline’s website.

This seems to have been a move taken by the airline in response to unbearably long queues in congested call centre lines. With heavy disruptions in the airline’s flight schedule over the past few days and weeks, prompting action from the DGCA, the airline came under flak from passengers, resulting in a brand image that was spiraling down in the light of poor service (On time performance and flight realization are very large contributors to service quality).

Reportedly, “This is the first time ever an airline has automated disruption management to enable passengers find alternatives”.

The airline has reportedly been flying additional flights to cater to affected passengers. The efforts taken by the management team over calendar year 2014 seem to have been negated by the effects of a lack of funding at the airline which led it to the crisis it is in today.

The management seems confident of a future for the airline with new investors coming on board to fly it out of difficult times. With such hopes, it is necessary to cater to the flyer of today for a loyal base for tomorrow.

About Vistara – the new Full Service Carrier in India


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VistaraThree days after securing its Air Operator Permit (AOP), Vistara opened for bookings, for flights 9th January 2015 onward. This marks the start of commercial operations in Q4 FY2014-15, a period which is traditionally the second weakest season for Indian domestic travel.

The airline places itself as a full service carrier (FSC), with a three class cabin.

Vistara Business ClassUK MealRows 1 – 4 feature a four abreast Business Class Cabin with 16 seats. The seats sport a 42-inch seat pitch, with a 7-inch recline. Business class passengers will be pampered with a meal service with fine linens and bone china tableware. Meal options – for all classes – are shown on the left.  Business class passengers will have a separate check-in counter at airports. Passengers are entitled to 30kgs check in and 7kgs carry-on baggage. Fares are in two categories – Business Flexi and Business Saver, with the expensive former waiving off a change fee while allowing the ticket to be valid for 12 months.

Rows 5 – 10 feature a six abreast Premium Economy Class Cabin with 36 seats. The seats sport a 33-inch seat pitch, with a 4.5-inch recline. This cabin section includes two emergency exits at rows 9 and 10. These rows offer a 36 inch legroom, but the recline is unavailable on row 9 and perhaps restricted on row 10 due to the cabin partition wall right behind. Passengers are entitled to food and beverage. Premier Economy class passengers will have a separate check-in counter at airports. Passengers are entitled to 20kgs check in and 7kgs carry-on baggage Fares are in two categories – Premium Flexi and Premium Saver, with the expensive former waiving off a change fee while allowing the ticket to be valid for 12 months.

Vistara_Capacity_DistributionRows 11 – 27 feature a six abreast Economy Class Cabin with 96 seats. There are only 16 rows in this section, but the row numbering skips the number ’13’, misleading one to believe there are 17 rows. The seats sport a 30-inch seat pitch, with a 3.5-inch recline. The seat thickness will determine the actual legroom available. For example. IndiGo’s 29-inch seat pitch with its ultra slim dragonfly seats are thin enough to offer the equivalent of a 31-inch seat pitch legroom with standard seats. Passengers are entitled to food and beverage. Economy class passengers will have a separate check-in counter at airports. Passengers are entitled to 15kgs check in and 7kgs carry-on baggage Fares are in two categories – Economy Flexi, Economy Saver, and Economy Super Saver, with the expensive first option waiving off a change fee while allowing the ticket to be valid for 12 months.

In addition, passengers who have web-checked in will have a separate counter to drop off check-in baggage. The airline also offers an auto check in service, in which if the passenger has not self checked-in at 4 hours prior to scheduled departure time, the airline will auto check the passenger on the flight and send the boarding pass via SMS or email.

In total, every aircraft is configured with 148 seats.

The lower number of passengers and dedicated counters may check in a smooth experience. Being a FSC, load factors may hover around the 75% range, leading to just 111 passengers per flight, on average – possibly a smooth boarding experience.


Vistara’s IATA code is ‘UK’. On the first day of Operations – Friday, the 9th, January 2015, the airline will operate only on the Mumbai-Delhi and return sectors. Vistara’s regular flight numbers are expected to start with ‘9’. However, on January 9th, the airline will operate two flights to Mumbai from Delhi and one flight to Delhi from Mumbai, all with special flight numbers – 895, 890, and 228. Flights to and from Ahmadabad will commence the next day, on the 10th of January. With this, one aircraft will be stationed at Mumbai.

The first commercial flight will be operated as UK890, which Departs Delhi at 12:30IST and arrives at Mumbai at 14:45 IST.

The airline will commence operations with two aircraft, both Airbus A320-232SL, registered VT-TTB and VT-TTC. The airline will operate the following patterns from 10th January, with the first pattern for an aircraft out of Mumbai and the second for an aircraft out of Delhi. The pattern holds good for most days, with certain changes on Sunday. Reportedly, the pattern will run till 15th February 2015.

Vistara_PatternThe airline will operate from Terminal 2 of Mumbai’s Chhatrapati Shivaji International Airport, and Terminal 3 of Delhi’s Indira Gandhi International Airport.