LAXDESI From United States of America, joined May 2005, 5086 posts, RR: 48 Posted (9 years 2 months 3 weeks 2 days 8 hours ago) and read 2324 times:
Air Deccan will go public and raise about US $250-300 million. It carried about 1.1 million passengers last year, and expects to carry 4 million passengers this year. It currently has a fleet of 18 and will increase to 29 by March 2006.
Last year Jet airways carried 7.9 million passengers, and Indian airlines carried 7.6 million passengers. Best wishes to Air Deccan. All credit must go to them for bringing the LCC revolution to India.
COUGARRIDES From , joined Dec 1969, posts, RR:
Reply 1, posted (9 years 2 months 3 weeks 2 days 6 hours ago) and read 2284 times:
I think this airline is growing too fast for its own good!
They are servicing a network of what 33 stations with a fleet of 17 planes (12 ATR's and 5 A320's). Averaging out to 2 stations serviced by each aircraft. Compare this to the full service 9W which services 42 stations with 42 aircraft (domestic fleet). This means that the network is very thinly spread out with many stations recvg less than a even one daily flight. This is a very high cost model as it costs a lot to maintain a station. it is important for a low cost carrier to maximise flights and revenues from each station and this can happen only if there are multiple daily flights to a station.
9W on the other hand is full service, but still low cost. According to myu research, over 60% of their stations on their network see atleast 3 flights daily. Some routes like BOM-BLR have upto 7 flights daily!! This helps them keep costs low.
DN on the other hand is basically resurrecting part fo the Vayudoot idea by flying to stations like Kolhapur, Jolly Grant and other small towns. This is keeping costs high. Despite these high costs, DN is under severe pressure to cut fares. They have already gone 30% below KF on the 2 routes they compete on. and atleast 6 seats on each Airbus and 3 seats on each ATR are being sold at the Re.1 fare! How are they going to make money? And with the state owned IC coming out with its own LCC, India Shuttle (a shockingly great idea and seemingly great business plan: i find it hard to believe it is coming from the Govt of India!!)
I would invest in Deccan ONLY if i see some tangible moves towards seriosuly cutting costs.
LAXDESI From United States of America, joined May 2005, 5086 posts, RR: 48
Reply 2, posted (9 years 2 months 3 weeks 2 days 6 hours ago) and read 2274 times:
You make some very interesting points. However, they seem to have close to 100% load factors on some of their A320 routes. Their overall load factor is 80% plus(compare to Jet and IA's 70% load factors), which may be helping them stay profitable. They would not go public unless their profit figures were reasonable. Lack of profits is perhaps one reason Air Sahara is not able to go public.
Kingfisher seems to be following a better model by having high frequency on routes they currently serve.