Airlines in India have been on a roller coaster ride since domestic aviation re-started on May 25. From the outset, multiple conditions hit the airlines — the cap on capacity, lower and higher ranges in air fares, and slots at airports being scattered to ensure physical distancing. As if this was not enough, individual states came up with an additional set of rules.
This has led to a challenging time for passenger-facing staff of airlines — cockpit and cabin crew as well as those on the frontlines at airports. Frontline staff members interacting with passengers have their own set of challenges, Meanwhile, another battle is playing out in the backroom with Network Planning and Revenue Management teams, among others, on their toes processing inputs from the ground to start a route that can help fill up planes, garner additional revenue and ensure cash flow.
The result has been a change in the pecking order at airports as those away from the public glare try every trick in the book and invent new ones to ensure money keeps rolling in.
The rules of engagement
When the government allowed the restart of services, it laid down a condition that an airline can start one third of its approved summer schedule while spacing slots to ensure physical distancing within the airport.
While the initial days saw spacing of flights, airports as well as airlines bettered their processes with each passing day. The government, too, relaxed the capacity norms, allowing additional flights, and airports started accommodating more flights in the same time band.
While the initial days saw traffic move from metros to Tier II and Tier III cities, as things stabilised and the economy began reviving, the flow was in the reverse direction. A favourite pastime on twitter for many was to map passengers per flight, whereas in reality most flights were going choc-a-block one way and almost empty the other way.
Airlines plan with a longer view of a market that will mature over time, a new city they land in that will support expansion over the next decade. They look at how economic activity will help the airline increase capacity, which will help reduce fixed costs and aid profitability. Routes are planned with the help of years of data at the airlines’ disposal. The lead time from announcing the route to starting it is also considerable in normal times.
Cut to current times and the demand pattern has been changing by the minute. And demand is not the only thing changing, with the rules changing as often. States and cities, for instance, laid out rules on accepting or banning flights from certain cities. More often than not, they were one way. For example, no flights were allowed to land in Tamil Nadu from certain states but airlines could fly to those States from Tamil Nadu. Vistara, for instance, operated a Chennai-Mumbai flight at times when the return direction was not allowed.
There also wasn’t any restriction on passengers coming with one stop, so that added to the complexity in planning flights as most passengers wanted the best connections to their final destination.
Moreover, airlines have to sell 40 percent of the seats at median fare, which means to increase revenue, the airlines will have to plan for routes where they can fill over 40 percent of the seats. There were quite a few routes where airlines could even charge the highest fare.
All of this has to be done by following the due process, which involves requesting for preferred landing and take-off slots from the particular airport, along with approvals from all regulatory authorities and having a buy-in from internal stakeholders, including crew and engineering staff.
Out of the box thinking
IndiGo, India’s largest carrier by fleet and market share, has been deploying a little above 50 percent of its capacity and has 60 percent of the market share, indicating passenger preference. The airline either operated or continues to operate flights from Mumbai to Gorakhpur and Madurai; Delhi to Madurai; Ahmedabad to Raipur, Nagpur and Coimbatore; Hyderabad to Nagpur and Calicut and Chennai to Jodhpur.
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IndiGo said that these routes were in its medium to longer term plan and current constraints on other markets as well as the abnormal demand dynamics during this initial recovery phase led to the start of such routes earlier than reactivation of some other markets.
A closer look at the airline-wise schedule published on regulator DGCA’s website and flights open for sale shows that Spicejet, too, is operating routes that it did not intend to at the time of approval of the Summer Schedule. This includes the new flights to Darbhanga, which will start in November, and also sectors such as Kolkata-Hyderabad, Delhi-Jaipur, Kolkata-Jaipur, Bengaluru-Surat and Bengaluru-Dehradun.
National carrier Air India started operating triangular flights, often clubbing two flights to operate three legs to save on costs and serve more passengers. The airline operated routes such as Delhi-Pune-Ahmedabad- Delhi, Delhi-Indore- Pune- Delhi, Hyderabad- Jaipur- Ahmedabad- Hyderabad and the like.
Vistara also took to striking gold and recently started flights between Mumbai and Raipur. The airline has been operating flights between Bengaluru and Patna and for a short period also did the same on the international segment, with flights between Bengaluru and Dubai.
AirAsia India started flights to Guwahati from Mumbai — a route it did not operate earlier and that does not find a mention in its approved Summer schedule.
For the airlines, this period is serving as a learning opportunity to understand traffic flows — traffic that was being lost to other modes of transport such as the Railways for instance — and factor these into its future growth plans.
Air travel is always a mix of multiple segments, led by corporates, and followed by leisure and VFR (Visiting Friends and Relatives) traffic. Different segments have different parameters for recovery. A case in point being that of Patna, which has seen a far higher recovery percentage than most other airports in the country. A few airports, which largely see traffic driven by RCS-UDAN, have even recorded higher air traffic movement than in the same month during the previous year.
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IndiGo feels that these segments are recovering at a different pace, with corporate travel demand likely to take longer to recover than other segments, while leisure travel will be paced with unlocking of other travel and hospitality infrastructure in the value chain.
The airline also believes that some new non-stop markets may become less feasible when traditional connecting pipelines to these regions are re-established.
Being proactive and reading the market before it creates an opportunity has become the name of the game and we will soon know who is excelling at it.Ameya Joshi runs the aviation analysis website Network Thoughts.