Flyeasy: Soon to Be the 10th Operational Private Airline in India

2015 was shaping up as the third boom in Indian civil aviation. The first came around 1995, when the aim was simply to start airlines. The second came around 2005, when low cost carriers were the fashion. The third, around 2015, looked like the birth of disruptive airlines: AirAsia India, Vistara, and a group of regionals in Air Costa, Air Pegasus, Trujet and Flyeasy.

The gap in the market

Mainline routes had saturated. The 180 seat jet had been used, and perhaps overused. Many markets were still too small for a 180 seat jet, or too far apart for a turboprop. Turboprops suit short, thin routes. Regional jets such as the Embraer E-Jets, the Mitsubishi MRJ, the Bombardier CRJ series and the CSeries suit long, thin routes. The 180 seat single aisle works best on long, dense routes.

With the 180 seat market full, the real gap in India was inter regional connectivity, mostly the long routes between Tier II and Tier III cities and Tier I cities. Air Costa moved first to tap it. With Air Costa growing more slowly than planned, and a market that was large and growing fast, Flyeasy looked set to move into the space that was still untapped.

Likely network

Judging by hiring drives on Flyeasy's Facebook page, the airline might fly from Bangalore to Tiruchy, Bagdogra, Ranchi, Varanasi, Indore and Bhubaneshwar. The network was not yet known, but given a regional operating permit and its limits, the airline would likely fly point to point between Bangalore and six stations.

Fleet

Sources said the airline would lease two Embraer E190s from Flynas (formerly NASair). NASair had six E190s. Two went to Borajet and one to AnadoluJet of Turkey. Three E190LRs appeared to be in storage, and two of them, the seven year old MSN 217 and MSN 233, were expected to join Flyeasy. Both were in Jordan undergoing C checks. Both were powered by GE CF34-10E7 engines and seated 110 passengers in a single class.

MSN 217 had left the paint shop in Flyeasy colours and was expected to fly into Bangalore in July. The aircraft would probably take VT-VVx registrations, with the first two expected as VT-VVA and VT-VVB. Maintenance was outsourced to Airworks.

The airline apparently planned to launch with three aircraft and reach five within the first six months, with talks with lessors said to be at an advanced stage. It had ambitious plans for 10 aircraft by July 2017, which looked a little optimistic.

Timeline

Flyeasy held its formal application meeting with the DGCA on 6 July 2015. Since it takes about 90 days from that meeting to receive an AOP, the permit could arrive in late September or early October 2015. Sales could then open around mid October, with commercial flights starting in late October or early November 2015.

Translating the fleet plan into dates gave five aircraft by April 2016, then one more roughly every three months until July 2017, when the fleet would reach 10. However, AirAsia India, Air Pegasus and Air Costa had all shown that fleet projections tend to be optimistic and are rarely kept. The airline planned to add aircraft through both operating and finance leases.

Funding and management

The real promoters and the source of funding were not yet known, though the money seemed to come from the Middle East. Whether it involved foreign direct investment or money from non resident Indians was uncertain.

The airline published the bios of its 15 heads of department on its website. Besides a CEO, it had a deputy CEO, Lila Singh Aulakh, who was earlier director of operations at Air Costa.

Although Air Costa and Flyeasy would fly the same aircraft type, Air Costa's network and Flyeasy's likely destinations did not overlap. Competition between them was only notional, and neither had a true competitor at that stage.

Culture

One striking thing about Flyeasy was the weight it gave to organisational culture. It called its employees a family. CEO Finn Thaulow, who spent a large part of his airline career at SAS, may have been inspired by Jan Carlzon, CEO of the SAS group from 1981 to 1994. Carlzon turned SAS from a loss making European airline into a profitable one by building a culture that motivated staff through a sense of ownership and belonging.

The business model, growth plans and efficiency would be tested by how fast the AOP was secured and how revenues and fleet grew. Customer satisfaction would be another key measure. Airlines with discipline across departments were the most likely to succeed, as market leader IndiGo had shown by rewarding all three stakeholders: the board, the employees and the passengers.