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Inspiration from Some Foreign Players

In almost every country where the low cost model has been introduced, air travel has exploded. When over all worldwide air capacity failed by 8% during 2000-03, low cost capacity grew by 69%. Asia in 2000 saw 555 weekly flights by low cost carriers (990 by 2003).

• Air Asia in Malaysia (main competitor was Malaysian Air)

• Virgin Blue in Australia (growth was 25-80% as compared to overall market growth of 11%)

Inception Of Kingfisher Airlines

UB group chairman Vijay Mallya, a trained pilot himself and an avid aviation enthusiast, has announced plans for Kingfisher Airline, names after the popular liquor brand of the UB group (Taking a very different approach again). The airline has finalized plans for a 16-strong Airbus A-320 fleet to run its operations. Four have already been ordered from Airbus, with options to buy eight more, and operating another four on lease basis. Kingfisher Airline is investing around US$33 million to kick off operations, and Mallya's birds are expected to take the skies in the first half of 2005. The airline took to the air earlier this year with four A320s - the first of 14 A320s to be delivered through to the end of 2006. It has modeled itself on New York-based Jet Blue and has just lured former Jet Blue executive Alex Wilcox to be president and chief operating officer. Wilcox is upbeat about Kingfisher's and Indian aviation's potential. They believe that there is a lot of water to be drunk from Indian wells & that there are 200 million that can be flying within 10 years. They hope that Kingfisher will bring a host of firsts to Indian skies, including in-flight entertainment, real-time engine and aircraft condition reporting, self check-in kiosks and central dispatch for flight planning and crew scheduling. But he won't skimp on meals. "Service is extremely important in India" he notes.

Milestones Crossed

UB has signed a deal with Airbus to acquire 12 brand new, state of the art Airbus A-320 Aircraft with a list price of $750 million. The deliveries of four aircraft will commence in October 2005.

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* Contributed by -
Manasi Panigrahi,
Pursuing MBA, Batch of 2006,
ICFAI Business School, Hyderabad.