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Kingfisher-Deccan take measures to meet saving targets
Size matters! The Kingfisher -Deccan alliance proves it. The two airlines are determined to meet their savings target of Rs 300 to 330 crore in the first year of operations. They have already started renegotiating deals with vendors, deals that are at least 25% cheaper.
But the big savings will come from shared infrastructure. Kingfisher and Deccan will share hangars in Bangalore and Hyderabad, saving a few crore rupees. The combine might consider combining office space in some cities where both have small offices. And substantial savings will come from rationalising human resources.
"We'll save about 30% in cost by sharing engineers and about 50% from sharing security personnel," Capt Gopinath added.
Deccan and Kingfisher are also working on cutting overlapping routes. About 25% of their routes are common. By the end of the year it will fall to15%. 70 of Deccan's 350 flights a day, touch metro cities. Over the next few months the services might be skewed towards non-metro routes.
The combined airlines are expected to save Rs 300 crore in the first year. But will that reflect in the numbers? Analysts say it will depend on when they start international operations which will entail heavy initial expenses.
