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Old May 10th, 2019, 03:09 PM   #16841
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The regulations discourage connection between metro cities. It really doesn't sound logical why all airlines would compete to make losses when regulations are already constraining them.

I would say business class seats are more suited for routes from BOM and DEL (in that order) to the top 10-12 cities (not exactly metro routes)

SO, a BOM-CJB/IXC would still be better than a MAA/BLR-CCU. The corporate India is centered around BOM and DEL and the demand for business class seats come from these corporate headquarters, predominantly. For the same reason, SG would find it more profitable to deploy them in the regional international routes from BOM and DEL.
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Old May 11th, 2019, 04:36 AM   #16842
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Air India offers 'hefty discounts' on last-minute bookings

https://www.rediff.com/business/repo...s/20190510.htm

This airline screws the industry!!!! When will it be closed?
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Old May 11th, 2019, 05:42 AM   #16843
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This is the second time I think. An year or two back, AI announced the same. May be this offer for short period of time.
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Old May 11th, 2019, 06:28 AM   #16844
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And after all this, it will cry that the planes ordered in 2005 is the reason for its losses. The fun is that almost all those planes are sold and leased back! To add to it, it claims the dream liners are its great assets. It utlises those 77Ws and 77Ls to the fancy US destinations!
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Old May 11th, 2019, 06:38 AM   #16845
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Quote:
Originally Posted by Indiadreams View Post
And after all this, it will cry that the planes ordered in 2005 is the reason for its losses. The fun is that almost all those planes are sold and leased back! To add to it, it claims the dream liners are its great assets. It utlises those 77Ws and 77Ls to the fancy US destinations!
The problem is any govt concern like AI runs with unfit employees filled by quota or recommendation or bribe and the real talents are working at wrong places or at lower levels or in private or abroad.

So AIs problem of plenty will be never resolved. Govt will backup the airline for reasons known. And AI will continue to serve the nation.
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Old May 11th, 2019, 07:00 AM   #16846
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The regulations discourage connection between metro cities. It really doesn't sound logical why all airlines would compete to make losses when regulations are already constraining them.
Yes. The Governments Route Dispersal Guidelines place most routes between metro cities (such as BOM-DEL) in Category I. Which means that for every BOM-DEL they add, they must add stipulated capacity in the other categories. This is a problem for FSCs, because while its easy to find business class passengers on the metro routes, they're forced to fly the same planes on routes where Business class is not sustainable. Vistara faces the same issues today.

Airlines (both FSC and LCC) seem to be "competing" on trunk routes by adding more flights because, in those markets, "frequency" is a game changer. An airline that offers only twice Daily on BOM-BLR will not be able to retain a loyal passenger base. The airline 'needs' to offer multiple choices to its passenger at different times of the day in order to prevent the customer from going to a competitor. This is why, when UK was not able to get more slots at BOM, they pulled out of all other sectors and focussed on BOM-DEL, cancelling BOM-AMD/BLR/GOI to increase BOM-DEL to 10 Daily.

IndiGo is now the market leader precisely because it offers the largest number of options between any two metro cities in India (and even more).


Quote:
I would say business class seats are more suited for routes from BOM and DEL (in that order) to the top 10-12 cities (not exactly metro routes)

SO, a BOM-CJB/IXC would still be better than a MAA/BLR-CCU. The corporate India is centered around BOM and DEL and the demand for business class seats come from these corporate headquarters, predominantly. For the same reason, SG would find it more profitable to deploy them in the regional international routes from BOM and DEL.
But aircraft seats cannot be reconfigured for every flight, and airlines cannot limit themselves to only flying to the top 10-12 cities from BOM/DEL, especially when the competition flies to more, resulting in economies of scale and hence cheaper tickets.

This is what forced 9W to fly Two class configured aircraft on routes where there was literally no J revenue, leading to a piling up of losses. Even Vistara tried its three-class plane on MAA-COK and hastily withdrew. But they still fly 3 class to Port-blair and Dibrugarh because the government forces them to.

In an extremely cost conscious market, the Government is killing FSCs by forcing them to deploy capacity to routes that don't need it.

The RDGs need to Go!
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Old May 11th, 2019, 09:25 AM   #16847
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https://www.cnbctv18.com/aviation/ro...ed-2335551.htm

Though this explains RDG requirements well, it still begs the question about criteria for fulfilling requirements that it has raised - smaller aircraft (with more trips) can also meet the stated criteria with equivalent ASKM. It may thus be a good step to modify the requirements with actual seat-kms instead of same aircraft (if so stipulated in the RDG regs).

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What gets asked many times is - can’t an airline deploy the bigger planes on the metro routes and smaller planes on the non-metro or RDG routes? The answer is No. The capacity is not judged by seats but by ASKM (Available Seat Kilometers). ASKM calculates an airline's passenger carrying capacity by multiplying the seats available by distance flown.

Let’s take some routes for example. The distance between Mumbai and Delhi is 1,135kms and if an airline is flying a 150-seater aircraft between these two cities, the Available Seat Kilometers is 42,56,250. Similarly, the distance between Delhi and Guwahati is 1,457kms and that between Guwahati and Bagdogra is 331kms. For every 25 flights which an airline flies between Delhi and Mumbai, it will have to fly two flights between Delhi and Guwahati and 1 between Guwahati and Bagdogra to satisfy the RDG. Similarly, the airline will require eight flights between Delhi and Bhubaneshwar to satisfy the Category III requirements. These cities are just examples and the airlines have to also look for commercial viability. Theoretically, the longest flight under Category IIA would be from Srinagar to Port Blair – a distance of 3,074 kms, but the airlines would not want to operate such a flight for lack of viability.
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Old May 11th, 2019, 09:39 AM   #16848
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RDG is not needed anymore. Bid the Cat II and II A routes just like UDAN.

Abolish Cat III requirements. This will help the airlines to use the assets productively. Especially, FSCs would be able to breathe easily!
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Old May 11th, 2019, 10:16 AM   #16849
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Originally Posted by Indiadreams View Post
RDG is not needed anymore. Bid the Cat II and II A routes just like UDAN.

Abolish Cat III requirements. This will help the airlines to use the assets productively. Especially, FSCs would be able to breathe easily!
Absolutely. I think we're getting there. The RCS scheme although flawed in its execution, has produced good results at airports like Salem and Jaisalmer, where infrastructure was always available but a subsidy was required in order to sustain un-interrupted operations. Everyone, from the DGCA to MoCA to AAI and the airlines themselves, have learned a lot.

The MoCA has also been inviting suggestions from the public (as it did in 2016) and several analysts tell me that a lot of suggestions from the public made it to the NCAP. I believe that a viability gap funding system is necessary in places like the North-East and the Islands. But the RDG (which was created in the 90s addressing AI/IC's fears that private operators will hog the main routes and leave the non-performing routes to sarkari carriers) needs to be dismantled to help the industry come out of the red.

But, Dismantling of the RDG will also cause great upheavals in domestic route networks. GAU is, so far, the largest Beneficiary of the RDG. A lot of capacity is deployed there (and at Bagdogra) BECAUSE of RDG and not pure commercial demand. Airlines fly routes like COK-GAU and JAI-GAU simply to rack up ASKMs on CAT- II routes. If RDGs disappeared overnight, airlines would simply route this traffic via hubs like BLR and CCU.

Swapping of the RDG to an RCS-like system will be good for the industry, but will be hugely unpopular with the travelling public. And, given the populist government we have (and which is likely to continue for the next 5), this is a big hurdle.
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Old May 11th, 2019, 11:33 AM   #16850
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I don't think the air travelers are going to influence votes in a big way. It is also a mindset issue as the policymakers don't understand the reality. Else DGCA wont be interfering with the domestic capacity now! The domestic fares need to be compared with the fares elsewhere! Distorting the market claiming increase in air fares is utter stupidity! Obviously the fare will increase because it was highly unsustainable!

As far as GAU is concerned, the current volume and growth can still be maintained using the VGF model by grouping airports in each region. Airlines could be given a choice to choose the airport and VGF in a region! Be open-mined and appoint a consultant to devise methodologies; everything will fall in place. Routes like GAU-COK are better routed through hubs like BLR, CCU or MAA to increase productivity; else we are wasting the assets

GAU deserves VGF as it is truly remote!
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Old May 11th, 2019, 11:43 AM   #16851
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Quote:
Originally Posted by Indiadreams View Post
GAU deserves VGF as it is truly remote!
Who pays the VGF? It may become a burden for Assam govt. If CG pays, there will be demands from several other states & so on.
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Old May 11th, 2019, 11:48 AM   #16852
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The regular air travelers in other routes! Cat II and II A routes are relatively small and can be easily paid off by other travellers.

Infact the smaller airports are also supported with revenues predominantly from BOM, DEL and few profitable airports of AAI
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Old May 11th, 2019, 12:53 PM   #16853
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Any stats - how many Cat-III airports actually being flown to under RDG & how many not being flown to? All these airports will close down if they are removed from RDG.

I think RDG can be modified & different (smaller) aircraft should be made acceptable, as long as ASKM numbers are met, but 35% seems high. This could be because the number of such airports may be too many.
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Old May 11th, 2019, 01:05 PM   #16854
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There's no limit on the size of aircraft. But the economics of operating smaller aircraft are worse than bigger ones. The cost of deploying the same number of ASKM goes up when the seat-count on the aircraft comes down.

Towards the end of last year, 9W junked its entire North-East operations on ATR in favour of long CAT II A flights like Dehradun-Guwahati, which it flew right until the day it ceased operations.

Airlines had proposed the trading of ASKMs - a more viable solution, wherein an operator flying small aircraft on CAT-IIA routes could "sell" ASKMs to mainstream airlines who didn't want to get into operating a sub-fleet that didn't suit their business model.

The Government didn't allow it. Unsurprising.
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Old May 11th, 2019, 02:17 PM   #16855
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Quote:
Originally Posted by Cygnus-X1 View Post
Any stats - how many Cat-III airports actually being flown to under RDG & how many not being flown to? All these airports will close down if they are removed from RDG.

I think RDG can be modified & different (smaller) aircraft should be made acceptable, as long as ASKM numbers are met, but 35% seems high. This could be because the number of such airports may be too many.
The problem is not about small or big aircraft. That article is quite misleading and bit off the mark. An airline needs to rotate aircraft for various sectors. If the passenger profile between the sectors vary significantly, the airline will lose a lot. For ex: Vistara would not have any takers for business class and premium economy routes outside the few select routes, but it is forced to fly Cat III and Cat II , where it will struggle a lot to fill those seats.

As far as Cat III routes are concerned, there wont be any impact on removal of the RDG guidelines, as LCCs are already flying them. It will make FSCs more viable. Cat II routes need attention , but there are thousand other ways to implement it.

To start with, DGCA should abolish Cat III.
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Old May 12th, 2019, 07:26 PM   #16856
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High on promise, low on delivery: UDAN not flying well
New Delhi: The hype around UDAN (Ude Desh Ka Aam Nagrik) scheme and low entry-barrier prompted a rich farmer from Maharashtra to approach the Airports Authority of India (AAI) to launch air services on select routes. But his initial enthusiasm soon fizzled out.
The much-publicised UDAN or regional connectivity scheme (RCS), now in its third year, also seems to have lost steam with the latest data showing that a fourth of the routes out of 688 awarded so far getting regular flights.
While 18 routes awarded to Deccan Charters and Air Odisha have been cancelled due to prolonged grounding of flights, as many as 10 routes awarded to crisis-hit Jet Airways are under review and may soon be cancelled.
"We had relaxed the regulations to allow more entities to participate in the scheme. A farmer from Maharashtra came to discuss the launch of services but did not follow up. There are many issues such as availability of funds, cost of operations and weak demand preventing the spread of RCS," said a senior official handling the flagship scheme.
A total of 688 routes have been awarded to various air-operators in three rounds of bidding.
https://www.livemint.com/news/india/...652000672.html
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Old May 12th, 2019, 08:18 PM   #16857
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UDAN

small players crushed

Large ones are swelling

Its common in any vertical

FRANKLY AVIATION is not a place for a start up to try ( not at all in India )

No one copying INDIGO formula . SLOW AND STUDY WILL HELP THEM GROW.
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Old May 13th, 2019, 06:45 AM   #16858
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Only if they had allotted that Rs.1000 Crore to improve the basic amenities of the Tier 2 cities, the demand would have automatically come over the years!

Airline service is a tertiary sector and the demand can only come from the growth of other sectors. It is not the other way round! Unless, it is a geographically constrained area!

The great examples are BLR and PNQ!
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Old May 13th, 2019, 08:22 AM   #16859
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Whats the update new airline that was coming called Star Air ? and Does Air Deccan have plans to have ATR or Q400 ?
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Old May 13th, 2019, 01:09 PM   #16860
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In a nutshell, SpiceJet will have to make exactly the same revenue per flight that it did with 189 seats but with only 168 seats to stay profitable and the only way is to price certain seats higher.
160 economy seats and 8 business class. To make up loss of 29 seats, 8 business class seats needs to be priced at 4x the price per seat. Gourmet meals cost extra. Assuming it was flying full occupancy earlier and later.
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