• HOME
  • Aircraft
    • AIRFRAMES
      • Proud to fly a Turboprop: Q400 vs ATR72
      • Airbus A320 Experience
    • SYSTEMS
      • Pratt and Whitney PW1100G Geared Turbofan Engine
      • Winglets and Sharklets
      • Cockpit Design: EPR v/s N1 indication
      • Boeing’s MAX, Southwest’s 737
      • GPS to the rescue!
    • ACCIDENTS AND INCIDENTS
      • LOT 767 Gear Up Landing
      • Iran Air 743:Partial Gear Up Landing
  • AIRLINE
    • ANALYSIS
      • IndiGo performs well in Q3’16, but is outshone by Q1’16
      • SpiceJet: Q1’16 Operational Financials Forecast
      • Vistara – Review & Analysis
      • AirAsia India – Q2FY15 performance and outlook
      • Q2 results and Prof. Sanjiv Kapoor’s introductory class on Airline Economics
      • SpiceJet in Q(2) – Great Performance in Testing Times.
      • Could SpiceJet have been profitable in FY2013-14?
      • Interlysis – AirAsia India and Mrithyunjaya Chandilya
      • A glimpse of Tony’s AirAsia India, and his success mantra
      • Interlysis with Shyson Thomas – Air Pegasus, Unplugged.
    • EVENTS
      • AirAsia India-and the competition-gets real
      • Spicejet’s inaugural Bangalore-Bangkok Run
      • Spicejet unveils the Q400s
    • HUMAN FACTORS
      • Dissatisfied Flightcrew
      • Love is in “the air”
      • Captain Dad and kid First Officer
      • Cathay’s Young Cabin Crew!
  • AVIATION
    • The Indian Aviation 2015 growth story deciphered
    • National Civil Aviation Policy 2015
      • Safety
      • Regional Connectivity Scheme (RCS)
      • The 5/20 Rule
      • Route Dispersal Guidelines
      • Scheduled Commuter Airlines (SCAs)
      • Aviation Education & Skill Development
    • 2014: A year flown by
    • 2013: A year flown by
    • Training
      • Familiarization Flights for ATCOs
      • A320 FFS LOFT Session
      • HINDUSTAN GROUP OF INSTITUTIONS: AN AVIATION UNIVERSITY
        • Hindustan Institute of Engineering and Technology (HIET)
        • Hindustan Institute of Technology & Science (HITS): Hindustan University
        • Orient Flight School (OFS)
      • IGRUA
      • NFTI: Rising to the Top, and how
      • Aerospace Engineering in India: the Gaps
      • Chief Flying Instructors
    • PEOPLE
      • Radka Máchová
      • Rodrigo David: The man behind some of the best A320 flightdeck videos
    • TECHNOLOGY
      • GAGAN: India’s first step to a Future Air Navigation System (FANS)
  • PROJECTS
    • AIRBUS TECH
      • About PAT
      • AIRCON/PRESSURIZATION/VENTILATION
      • AUTOFLIGHT
      • COMMUNICATION SYSTEMS
      • ELECTRICAL SYSTEMS
      • FIRE PROTECTION SYSTEMS
      • FLIGHT CONTROLS
      • FUEL SYSTEMS
      • HYDRAULIC SYSTEMS
      • ICE AND RAIN PROTECTION
      • LANDING GEAR
      • LIGHTS
      • OXYGEN
      • PNEUMATICS
      • APU
      • DOORS
      • POWER PLANT (IAE)
    • ATR9X
      • About ATR 9X
      • Logbook
      • Introduction
      • Fuselage
    • General Aviation Flight Simulator
    • Dual Cyliner Rotax Electronic Engine-Kill Switch
    • Making a Lynx Micro Headset Charger on the Go!
  • ABOUT
    • About The Flying Engineer
    • Advertising
    • Merchandise

The Flying Engineer

~ Technically and Operationally Commercial Aviation

The Flying Engineer

Tag Archives: fares

Thank you, @SKapoorSpiceJet

29 Thursday Oct 2015

Posted by theflyingengineer in SpiceJet

≈ 1 Comment

Tags

Airline, COO, fares, head, Kaneswaran, Kapoor, Sanjiv, Spicejet, turnaround

By qualification, profession(s) and practice, I am an engineer. My love for airplanes made me study everything technical about aviation, and hence the name, The Flying Engineer. I did get to practice a lot of it, and filed two US patents with a North American aerospace major before starting off on my own.

I never really liked studying airlines. Running an airline was something totally different from airplanes and technology. An airline with one aircraft could be profitable, and another airline with the same aircraft could be loss making. Unlike aircraft, an airline isn’t exact science. It’s a mix of forecasting science, luck, lots of funding, experimentation, government regulations, competition, glamour, God, and what not. It’s not exact, and can never be. I was, and largely still am allergic to things I cannot mathematically or logically explain.

Then came a transformation at SpiceJet. Suddenly, an ailing airline with tonnes of data had a new head. On November 1st, Sanjiv Kapoor boarded SpiceJet as COO. He pushed SpiceJet into an operation theatre and brought in surgeons like Kaneswaran Avili. It gave an opportunity to study an airline turnaround.

Sanjiv and his team spewed data. Now data is interesting, and more dependable than “we will do it”, “we can do it”, and “we did it”. Sanjiv talked of the “how” of things. That was a turning point in my interests.

He released a good amount of data on the airline’s performance. The airline even released fairly detailed reports (with lots of graphs). His western thinking gave food for thought and ‘growth’ to all those who sat, saw, heard, and reflected. His addiction on Twitter had nothing to do with selfies, or what he did. It was never about him. It was all about the airline : what the airline did, and how the airline did. He even took customer issues into his hands and resolved matters through his team. He is a man of “we”, not “I”.

For once, there was an Indian airline head who was active on social media, and spoke numbers. Now numbers for some of us give us kicks. His maturity, experience, and his emphasis on data was sufficient for me to believe that there are some who don’t hip shoot in the industry. Yet, not always was I in agreement with everything that was done, nor everything that was tweeted.

Following the developments at SpiceJet was my education about the industry. I am far from perfect, but I was lucky to have been guided, by circumstances and people. And thankful to SpiceJet for having conducted classes on airline economics for many of us. Lectured by Prof. Sanjiv, ofcourse.

I have consulted, briefly, for a few airlines, and had a chance to interview many airline heads. You’ll be surprised how very few heads are data and research driven, and even fewer process driven. IndiGo is largely data and process driven. They made sure it was in their blood from day one. Sanjiv, to the best of my very limited knowledge, attempted such a culture at SpiceJet.

He also opened up channels of communication at the airline, bringing in more transparency and clarity. His largely full service airline experience made him focus significantly on customer service. Under him, SpiceJet transformed into an airline that was neither machine-cold nor ‘hot and spicy’ – SpiceJet became perhaps the warmest airline in the country.

Towards mid 2014, one of the airplanes was stickered with the faces of six of the airline’s crew, becoming the first airline in India to fly the faces of its employees. The aircraft had SpiceJet’s tagline, “With all our heart”. In the last week of August 2015, the aircraft was stripped off its livery. Spicejet, many months earlier, had been re-branded as ‘Hot and Spicy’.

During his period, scientifically planned flash sales driven by Kaneswaran and Fares Kilpady helped sell seats that would have otherwise flown empty. It is a concept yet to be understood by many. Today, such sales have become an Indian industry norm. I was definitely not the only one who learnt from SpiceJet. The sales served two purposes – driving up unit revenues, and boosting cash flows. SpiceJet survived longer than it otherwise would have, had it not been for those sales. Salaries never stopped.

Not everyone though could appreciate what Sanjiv and his team did. At the end of the day, performance is real, and evaluation subjective.

From April 26th, 2015, Sanjiv’s Twitter handle ceased being “@SKapoorSpiceJet”. That one Twitter handle was revolutionary, educative and proactive. Exactly six months later, today, news broke of him stepping down. Thank you Sanjiv, and thank you, SpiceJet, for the turnaround and the education. It fuelled my hunger for math, numbers, equations, and logical reasoning. Your troubles educated us.

Indian aviation will miss you and your team.

With all my heart,

The Flying Engineer.

A quick take on Tony’s talk

26 Friday Sep 2014

Posted by theflyingengineer in AirAsia India, SpiceJet

≈ Leave a comment

Tags

AirAsia India, fares, Kaneswaran, Mittu, Sanjiv, Spicejet, Tony, Vijay

TonyOne interview – just one – of Tony (Economic Times, ‘So IndiGo, FIA want to fight? We fight!: Tony Fernandes, AirAsia chief’- Anirban Chowdhury) set Twitter on fire, with Sanjiv Kapoor (COO, SpiceJet) reacting, and Vijay Gopalan (CFO, AirAsia India) counter-reacting.

This is not about the gossip, but to make sense of the nonsense.

Tony Speaks

First, for Tony to say that he doesn’t understand ‘SpiceJet’s logic or strategy’, and that ‘the fares are unsustainable’ is a surprise. The man behind these low fares is Kaneswaran Avili, who was with AirAsia since its inception, and has also been involved with the group’s Tune Hotels and Tune Money. Kanesh drove the discounts and promo ‘sales’ at SpiceJet, and his logic is no different from AirAsia’s, but perhaps, tailored to suit to the needs of the Indian environment – and particularly SpiceJet.

Despite repeated attempts by SpiceJet to make the industry understand the too-easy-to-not-understand logic of their low fare strategy, people seem to not comprehend it. Even more surprising is the fact that AirAsia India, which claimed to sustain with the all inclusive INR 990 fares (AirAsia India CEO Mittu told TFE on June 12th: ” 990 fare for us is something that we think is sustainable”), finds SpiceJet’s ‘sale’ airfares, which are priced on average around INR 2,000, ridiculous. Or that’s what Tony thinks. Below is a snapshot of AirAsia’s low fares – far lower than SpiceJet’s. SpiceJet’s fares are almost always higher than AirAsia’s, for the same sector.

AA_faresThe Spicy logic

SpiceJet’s strategy is simple : determine those seats that will fly empty, and sell those seats at fares that more than cover the costs associated with transporting that discounted passenger. The result? The average yields for SpiceJet may have diluted, but the airline now records a higher – much high revenue per available seat kilometer (RASK). Which only means that on average, the airline realizes a larger revenue per flight, than it used to without these promotions and sales. Had these promos not been in place, SpiceJet would have bled further – in the face of increasing symptoms of overcapacity, with no guarantee of sold inventory or high yields.

What Tony must remember is that SpiceJet did not have the luxury of being run entirely by industry professionals throughout its existence. AirAsia has had that, and has carried no dirty laundry. SpiceJet’s performance today is awesome-for those who really know the figures-but appear terrible only because of the losses, penalties, interests, and other unwanted baggage from the past.

All that Kaneswaran has done is to implement an AirAsia strategy in SpiceJet, tweaked to ensure its optimisation for SpiceJet specifically. This has resulted in industry-wide highest loads for the year, high RASK, and working capital even in the face of a cash crunch and a meager investment of INR 300 Cr by Maran. Team SpiceJet is keeping the ship afloat.

The last word

It was perhaps poor research, poor understanding of SpiceJet’s strategy, or just a joke badly presented that drove Tony to be taken so seriously. Tony’s loose tongue lands everyone – including his airline – in trouble. For Tony to not understand SpiceJet is to not understand his own – Fares Kilpady (Vice President, Revenue Management at SpiceJet, and formerly at AirAsia X) and Kaneswaran, which is unfortunate.

What Tony doesn’t realize is that every time he or his team make a statement that counters a previous statement by Mittu, it only puts the young CEO in bad light.

Sanjiv came back with knee jerk reactions – unfortunately, even if his arguments were valid – which shows him being sucked into an unwanted word game he’s not cut out for. It’s proof that Sanjiv – a non resident Indian, with his family at London- is getting topicalised. The ‘foreigner’ jabs were uncalled for – Sanjiv is as much a foreigner in India, atleast as far as his career history shows. Mittu and Tony are a different breed, with a different mindset; but Sanjiv’s appeal as a classy COO may be waning.

Unlike Tony and Mittu who seem to have sufficient non-airline related time, Sanjiv has a big set of tasks: to walk the talk, turnaround an airline, and secure an investor (perhaps a ‘foreign(er)’?)

Meanwhile, the media & India will soon get used to Tony, and possibly not bother or read too much into each and every comment that he makes – which puts Mittu in bad light and leaves a bad after taste with the competition.

Referred by:

Referred by:

Project:

Project:

In Depth Articles:

In Depth Articles:

In Depth Articles:

RSS Feed

RSS Feed RSS - Posts

RSS Feed RSS - Comments

The Flying Engineer’s tweets

  • Couldn't have asked for a more glorious end. https://t.co/f9NYJgxYCL 2 weeks ago
  • Some hold the emergency door open. Regardless. twitter.com/mhdksafa/statu… 2 weeks ago
  • Embraer twitter.com/BrothaManBlack… 2 weeks ago
  • RT @jamiebsmith: Legroom is on point. Absolutely love the Embraer jets. https://t.co/wNpTJXm7uQ 2 weeks ago
  • @unraveaero @aditishahsays @AirLeaseCorp @Reuters @Airbus @Boeing Exactly what was on my mind but refrained from co… twitter.com/i/web/status/1… 2 weeks ago
Follow @TheFlyingEnggnr

Visit our Facebook Page

Visit our Facebook Page

Blog archives of The Flying Engineer

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 17,608 other subscribers

Site Statistics

  • 2,451,377 views

Top Posts & Pages

  • Pratt and Whitney PW1100G Geared Turbofan Engine
    Pratt and Whitney PW1100G Geared Turbofan Engine
  • Cockpit Design: EPR v/s N1 indication
    Cockpit Design: EPR v/s N1 indication
  • Winglets and Sharklets
    Winglets and Sharklets
  • Proud to fly a Turboprop: Q400 vs ATR72
    Proud to fly a Turboprop: Q400 vs ATR72
  • On the A320 Neo, if you're unlucky, you've got the last row
    On the A320 Neo, if you're unlucky, you've got the last row
  • Airbus A320NEO (A320-271N) receives Type Certification, IndiGo to soon receive first aircraft
    Airbus A320NEO (A320-271N) receives Type Certification, IndiGo to soon receive first aircraft
  • FUEL SYSTEMS
    FUEL SYSTEMS
  • MIN and MAX Acceleration Height
    MIN and MAX Acceleration Height
  • AIRCON/PRESSURIZATION/VENTILATION
    AIRCON/PRESSURIZATION/VENTILATION
  • AUTOFLIGHT
    AUTOFLIGHT

Recent Posts!

  • IndiGo receives its first Airbus A320neo at Toulouse
  • On the A320 Neo, if you’re unlucky, you’ve got the last row
  • Why the FIA’s case against the removal of the 5/20 rule is unjustified
  • Why the 90 seat Q400 had to be announced at the Singapore Air Show
  • Analysing IndiGo’s performance in Q3’16
  • Deciphering the 2015 Indian Aviation growth story
  • Air Costa receives its third Embraer E190 at Jordan
  • Why Jet Airways meant much for Brussels
  • Same aircraft family, different hands: Boeing 737NG flown by the Air Force and an airline
  • IndiGo to fly India’s longest daily domestic flight effective 7th January 2016

Blog at WordPress.com.

  • Follow Following
    • The Flying Engineer
    • Join 393 other followers
    • Already have a WordPress.com account? Log in now.
    • The Flying Engineer
    • Customize
    • Follow Following
    • Sign up
    • Log in
    • Report this content
    • View site in Reader
    • Manage subscriptions
    • Collapse this bar
 

Loading Comments...