Deccan 360 The Indian avtar of Fed-Ex

Capt. G.R. Gopinath may first seem to be a man who takes heavy gambles in a volatile industry. But his past records speak volume about what he has in him. When Deccan first flew out of Bangalore only 1% of India's population was flying. Later when he sold it to Mallya it was 5%. Now his new brain child 'Deccan 360' dares to change supply chain and logistics scene in the country.

Within an year he plans to have a fleet of 9 planes and over 400 trucks criss crossing the country and abroad. A corporate logistics solution provider, end to end supply chain management and a swift and low cost courier and parcel service, all combined into one. This is what he has envisioned. Think of a parcel being sent from Jalandhar to Tuticorin within a day. This is what Gopinath is planning to achieve. With a hub at the geographically and therefore the govt favoured Nagpur MIHAN, that will serve as the hub for domestic network and a feeder point for international cargo, one can expect a reformed and competitive service from the logistics sector in the near future.

Jet Airways Konnect - following a once successful model

On May 7th 2009, the Indian aviation industry, which has witnessed everything from boom to crashes in the past, saw the emergence of another successful business model that is still followed in the U.S and Europe. The feeder and hub model. Under this model low density routes from major cities are served by a subsidiary which acts as a feeder for the mother airline. The mother airline operates on the high density routes. These subsidiaries act as a feeder service for the high density routes. For eg, if a passenger wants to travel from Coimbatore to Kolkata, he will take a Jet Konnect to Chennai from where a Kolkata bound Jet Airways flight would leave in twenty or thirty min. At the same time similar flights from other tier 2 cities like Trichy and Madurai will also arrive to connect with the Kolkata flight. Since only ATRs or other regional jets would be operated on these routes, the load factor would be high as well as the load factor on the mother Chennai - Kolkata flight would be high.

Similar model is already being followed by Paramount keeping Chennai as a hub, with the only difference being it operates all business class flights in all its routes. Though the time of introduction of such a service by Jet Airways is debatable, considering the position of Jet lite and the current economic scenario, this age old model has been highly successful in boom times. Seems like Naresh Goyal wants to consolidate his position further in the domestic sector, considering the current international scenario.

Chennai Airport expansion project

Work on the Rs. 2000 crore Chennai Airport expansion project has finally got off with the handover 130acres of land to the AAI. The land will be used for extending the secondary runway beyond the Adyar river. The project involves construction of a new Domestic Terminal, expansion of the International terminal, sprucing up the Cargo terminal and extension of the secondary runway. The new domestic terminal has been designed by a consortium of 4 firms including Hargreaves Associates, Frederic Schwartz firm and The Creative Group. The terminal has been designed to handle a capacity of 10 million passengers per annum. Hope the project will be finished in time to witness growth after the current economic slowdown that has led to a decrease in air travellers. Full news about the project can be read from the following link.

A google sketchup model of the new terminal created by me is pasted here. Type Chennai terminal and you will get it. It can also be viewed in Google Earth by zooming to the place.

Political pressure or Corporate Ethics

After more than half a decade of extravagant growth, the aviation sector is yielding to the World Economic Crisis. Suddenly the word 'pink slips' has become common. It was a matter of over capacity. The sky-rocketing oil prices added fuel to the fire. The American aviation sector saw huge amount of capacity cutting including retirement of some old workhorses from their fleet which weren't efficient. Older pilots got their retirement early.

In the Indian sector those carriers which were operating daily services to tier-2 and tier-3 cities started cutting their capacity even on the inter metro sectors. The two Private giants Kingfisher and Jet Airways who were on an international expansion mode put on hold, their plans as well as new contracts. But the term 'pink slips' never entered the Indian aviation sector. Except for a handful of old international pilots who were sacked(that was also following a DGCA notification on air safety) and the unsuccessful layoff drama by Jet, Indian aviation didn't see much.

Jet's layoff and the immediate backtracking by its chairman brings up to the table a long pending question that hasn't been answered yet. In case of a crisis situation, how will the Indian Corporate sector react? This is the first time that the private sector is facing such a deep crisis in our country. Before 1991, government policies insulated the bottom half of the employee pyramid from any such problems. But now, the private players, they have to decide upon the future of the company and its employees. Jet Airways followed the west's method but came under severe pressure from local political parties for it, and the concept of employees union entered the arena. Kingfisher and Air India were cautious enough to not take such drastic steps.

The corporate culture and ethics in India is quite different from the rest of the world. The Tatas and the Birlas stand as living example of what it is. The Indian players will be up against those who are ready to take desperate measures to see that their stocks remain in the green throughout the year. Back home the playing field is different. Other things like social responsibility, Employees welfare etc assume larger significance.

India is fast emerging as a super power in the region. Now its decisions will not only affect the Domestic industrial sector, but also to some extent, the region as a whole. Every move made by it will be watched from outside. With the private sector having a larger role to play, they must realize their responsibility. The next few years will be a testing time for it. How it deals with the crisis is going to determine its role and value, in India as well as in the global arena.

Infrastructure bottlenecks

While the Indian aviation sector continues to boom, the state of infrastructure of airports across the country is appalling. Long queues in check-in counters, customs, immigration and poor parking and access facilities present a dismal picture. On the air-side lack of adequate parking bays, inefficient ground handling facilities and long time for landing and take-off of aeroplanes are costing the companies dear. The pictures show the situation at various airports.

The first picture shows the situation on the taxiway of Mumbai Int'l airport. The modernisation drive being carried out at the airport is expected to decongest the airport and also be able to enhance its handling capacity. Modernisation of other metro's airports are under various stages of implementation. As for Bengaluru(Banglore) and Hyderabad they are getting new greenfield airports by next year. The state of the present airport is in the first picture.

Airbus A-380 is not the largest!!!

It would fascinate the reader to know that the Airbus A- 380 is not the largest of aircrafts presently. Very few people know about the Airbus Beluga and the Boeing Dreamcarrier which are actually more than 1.3 times the size of an A-380. It is mainly a transporter(used only for cargo puposes). The second picture is of a Beluga unloading a fuselage.

For example, Airbus is a consortium formed by a group of European nations. So the manufacture and the profits thus gained are shared among the countries. Hence, different parts of an aircraft are made in different countries and is finally moved to its Toulouse assembly plant, where the parts are assembled. In such cases these carriers are used to transport the fuselage and wings, which are bigger. It is for these purposes that a transporter is used.

If an Airbus Beluga could carry the fuselage(the central tube like part of an aircraft) of an Airbus A-380 consider its size. There are totally a five of them under operation eith Airbus and an equal number with Boeing. These days they also leased to other companies to transport combat aircrafts, helicopters, space station components and large machinery. If converted to a passenger aircraft(which has not yet been done) it can accomodate between 1800 to 2000 passengers over four floors(a nice substitute for trains).

Consolidation all the way

Industry sources state that the public can expect another merger. There are indications that Paramount Airways (which mainly caters to the southern region) is looking at Go Air (for picking up stake) to extend its presence in the western and northern region.

I'll keep the viewer updated on the Indian aviation sector from time to time and make a move from the economic sector to the technical sector.