Chocks- on....India’s Gift to the World – Air Passengers

From times immemorial India has contributed immensely to the world economy and knowledge base. This continues even today, where its biggest contribution has been, from and by, its huge Indian population settled overseas.

It is this ‘Global Indian’, who has become the cynosure of each and every multinational in the world who want to market and sell their product and services to him. A recent case in point is Etihad Airlines of Abu Dhabi that wants to woo this Indian on its flights and global routes. They have entered into an agreement with Jet Airways to access the lucrative Indian market. International airlines have always pursued the Indian passenger, through attractive pricing, product and connectivity to optimise their international operations and airplane capacities.

As these international airlines grew, acquiring high capacity high speed jets, expanding their global networks, they zeroed in on India and Indians to fill up seats on their airplanes. In airline parlance this is called, 6^th Freedom traffic, i.e. carrying passengers from a foreign country to another foreign country, over their home country. Airlines from Europe and South East Asian countries have long been active in the carriage of this 6^th freedom traffic to and from India. Air India in this respect was blessed, and all this this traffic came to it on a platter, without any effort or strategic marketing. This contentment ‘ of business coming in ‘ , bred complacency and a laid back attitude in Air India.

But good times do not last forever. The dark clouds of competition were already gathering in the horizon, waiting to sweep Air India and everything related to civil aviation in this country with a demonic vengeance. What was hitherto carried by European and South East Asian airlines was being threatened by the emerging might of the airlines from the Middle East and the Gulf countries of Dubai, Abu Dhabi, Qatar et al. These oil rich economies, flushed with petro dollars were the new predators in the fast growing and fiercely competitive Indian passenger market. They were all out to establish their hegemony and footprint across the globe- in every continent, country and city. They were no longer content with the tag of “National Flag Carrier “, they wanted to become “ Global Flag Carriers “- and anything and everything was justified in pursuit of this objective.

India figured prominently on their radar, as the most fertile and lucrative market, in their new scheme of 6^th freedom business model. They invested heavily in this 6^th freedom business model, honing it and improvising it with meticulous precision and connectivity through a -‘hub-and-spoke’- product, unparalled in scale, scope and size, to anything seen or heard before. This model became the mainstay of their business strategy.

One needs to marvel at their foresight and vision, their single minded determination, to develop and aggressively market their product. The results are there today for all to see. The resounding success of Emirates business model has earned it the sobriquet of ‘….the flag carrier of India…’! The growth and success of Emirates, was being keenly watched by the other countries in the Middle East , particularly Abu Dhabi and Qatar. Not to lose out on the burgeoning opportunity that India offered, Etihad, the flag carrier of Abu Dhabi hit the iron while it was hot, by striking a deal with India’s second largest airline and full service carrier, Jet Airways.

The success of Emirates shook the heckles of not only the long established European and South East Asian carriers, but also sent jitters in the Aviation circles of India – be it the airports, the National Carrier Air India, the Ministry and the Government machinery.

The controversy and the debate unleashed on the Etihad Jet Airways deal in aviation circles in India refuse to die down. Many have already started writing the epitaph of the National carrier, Air India, which is already on ventilator, and survives on government support to keep its planes flying. New generation airports of Mumbai and Delhi are panicked, because of the eventual shift of transit traffic to Abu Dhabi. Home grown airlines, predominantly the Low Cost Carriers ( LCC) foresee a shrinking of volumes on their flights due to massive diversion of traffic to Jet Airways.

Whilst these fears and anxieties cannot be brushed aside, however, it is pertinent to mention that the one segment that is indeed happy and welcomed this development is the- Indian passenger. Harassed and fed up with years of apathy and neglect, he is desperate for a choice, desperate to get value for his money, and this deal offers him precisely this. To the passengers, the world is now just one-stop ( Abu Dhabi ) away. Needless to mention that Etihad and Emirates, who have won laurels in various International forums for their robust product and services, will not find it difficult to get what they want.

But stepping aside for a while from these apprehensions and consequences, if we pry deeper, it is evident, that this is fundamentally a battle between the Gulf countries and their respective carriers, to gain mastery and control over the booming Indian passenger and cargo market. Their obsession for becoming world leaders with a global footprint in every airport, country and continent, is pushing them to grab market share, anywhere and everywhere, come what may. They want to become ‘ Global Flag Carriers ‘, period.

It is the Indian market that can deliver the numbers that are so badly needed by them for their success. Today it is a battle between Emirates and Etihad and soon, it will be joined in by Qatar Airways. This war will become more and more intense and fierce with time translating into major market shifts in product profiles, pricing and service features. Emirates, Singapore Airlines and Lufthansa have already submitted their demand list to the government of India. To combat this competition they are demanding access for their A-380’s to operate to India, besides more frequency. New areas of synergy and amalgamation will determine the eventual winner, in this ruthless game. The question one needs to ask is could this have been avoided ? Why did this happen to India ? and finally can the situation be salvaged for the sake of Indian carriers.

Regarding question one, under the present open economic and open skies policy, it cannot be avoided. One cannot remain insulated from market forces. Regarding question two, this happened to India, primarily because of the geographical proximity to India, the huge and ever growing base of originating traffic, the fledgling state of Indian aviation and airlines industry in general, and lastly the enormous proactive support and backing of their governments to promote Civil Aviation as a priority industry. The slow decision making, laid back attitude to passenger complaints and grievances, inertia to innovate, and failure to perceive and respond to the changing market demands and preferences, acted as a catalyst.

Last question – can the situation be salvaged ? Yes, Air India can still regain its mastery of the Indian skies. It still has many aces up its sleeve, which need to be harnessed with an aggressive vengeance. Its strong Brand value enjoys a high recall, not only in India, but all across the globe. This needs to be promoted through focussed and targeted advertising and promotion in all the leading media, printed and audio visual. It can start with highlighting the strong history and heritage of Air India, which is lacking in the competitors as they are all new age and new born.

Expenditure on this, like many others, should not be perceived as a Cost, but as a long term investment. While cost cutting is essential for the turnaround of an airline, but only till it does not become counter productive. Cutting costs in areas of product specifics is counter productive. Our First Class and Executive Class are brands, built assiduously over the years, and are renowned for the warm Indian hospitality. Cutting costs on meal services or reducing and replacing Executive Class seats with Economy Class is counter productive. Hence a change of mind set, particularly in product areas is an urgent imperative.

Liberal grant of non-monetary incentives like frequent flier mileages. First time patrons of Air India or those diverted from other airlines must be given a bonanza of ‘ Welcome’ miles.

Air India must commence direct operations from gateways of Mumbai, Kolkatta, Chennai and Bangalore direct to overseas destinations, rather than hubbing over Delhi. Indians, travelling overseas want their first take-off to reach foreign shores. But if we give them Bharat Darshan and take them to Delhi, they are not interested, as they do not get the feel and thrill of a foreign travel. That is why they prefer the Emirates, Lufthansa, Singapore Airlines etc.

Air India must hasten membership of Star Alliance to get the network and penetration across the globe. However it needs to be said here that global alliances are not preferred by passengers, particularly at a change over point and a change over carrier at a foreign station. Indians are conservative and timid travellers, and prefer continuity and homogeneity in their journey rather than a change.

Air India should expand its network. As the CMD of Air India had recently stated, AI will embark upon expansion of new routes and destinations by the end of this year. This is a most welcome development, and it is time Air India harnessed it’s this capability to the maximum.

Lastly as the CMD, Mr Rohit Nandan had very aptly articulated, that Jet Airways- Etihad deal is no comparison for Air India, as we operate direct nonstop flights from India to the world. This is our USP. There are many in India, who will continue to patronise this product, without changing loyalties, come Emirates or Etihad. So Air India should stop discounting, and should offer more realistic fares to increase its much needed revenues.