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Anyone wan’t to fund an airline? January 22, 2007

Posted by Vijay in Airlines, Business, India, Plans, Trends.
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Please enlighten me with the logic here.

Ok so the Indian skies have opened up to private players. As is with any new business in India everyone made a beeline for it. While Jet and Sahara were comparitively older, there was a slew of new players who donned the “low cost” disguise. You have Deccan, Kingfisher, Spicejet, GoAir to name a few. In fact last year Indian companies placed the largest number of orders at the Paris Air Show.

So India is a great market, but can it handle so many players? Can these players really sustain or are we going to have a repeat of what happened in the USA where airlines started going into bankruptcy and had to cut back on everything?

Several Airline CEO’s have estimated this years losses to be between Rs. 2500-3000 Crores (courtesy Businessworld). Duh??? So when are they going to be making the money?

Talking about businesses and business plans, heres a cool cartoon strip. Courtesy of Wulffmorgenthaler. Its about how one would pitch the idea of a circus to the VCs.

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Comments»

1. Hiren - January 22, 2007

It depends where the company is placed in the Industry’s life cycle. Trying to build castles in the air can only make you crash badly. Competition beyond a point leads to diminishing returns.

2. SomeBody - January 22, 2007

Think the govt has to instead focus on cheap,quick and efficient transport system for the masses. Definetly there will be fall outs, mergers but one bright spot in this whole affair is the attitude of INDIAN – Yes our own indain airlines or AIR india is marginally better off now a days than when these guys were operating

3. Murali Partha - January 22, 2007

Airlines going into bankruptcy is nothing new in India either. Remember Damania, ModiLuft, EastWest … to name a few. It might be worth taking odds as to who amongst the current ones will go bust first!

4. Veena Shivanna - January 23, 2007

One thing is sure, Institutions who train the Aircraft-crew is been mushrooming. Its another industry now to shape one’s career.
Somehow, still that job has not gained its dignity in the middle class families, atleast my people at home says so 🙂
I still remember that year just after our marriage, we had to come back urgent from Manali. We had to almost spend 19.5K for Jet Airways flight from delhi..! Another few more thousands would have got us to singapore …, now people plan to Singapore, Malaysia, Mauritius & such places for their honeymoon…May be this is the reason 🙂

5. M O H A N - January 23, 2007

Veena,
I used to do up and down singapore in 12,800 INR in 1998!!!

Obviously you are right!

6. praneshachar - January 27, 2007

here also the same old story will repeat survival of the fittest.
big fish like KF etc., may continue other small fishes may be in problem
Any how we must thank gopinath of deccan who threw this cheap air fare to market which enabled so many people to travel by air which was otherwise a dream foreven higher middle class families.

business risks do exist everywhere and one with vision and proper plan and execution will survive others who enter without any clear vision and plans are bound to perish


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