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TEACHING NOTE AIR DECCAN: REVOLUTIONISING THE INDIAN SKIES DVR Seshadri and Jane Henry∗ CASE FACTS Civil Aviation in India, since its inception, has been a mode of transport mainly for the elite, and it implies that it is within the means of affordability of less than 1% of the population only. The launch of Air Deccan in the last two years has changed this paradigm forever. The singular driving force behind this audacious venture is Captain Gopinath. Over the years, there have been many low-cost airlines in service in the advanced countries. Many of them have succeeded despite the general downtown in the aviation industry post 9/11. Equally tenacious entrepreneurs, who saw the potential for a low-cost and 'no frills' airline, have launched many of these ventures. In what is peculiar to India, Captain Gopinath saw the market not in terms of those who were flying, who would want a low-cost airline, but instead as the more than one billion Indians, who had no possibility of flying ever in their lives in the legacy airlines, simply because there was no way they could ever afford the price. That Air Deccan could even think of launching a regular airline, given their very modest means, and more importantly, strong political support of the existing players, is a feat by itself. Its continued growth, month after month, is a saga of fortitude and tenacity. This case study describes the story of the launch of Air Deccan and the challenges ahead of it. It can be discussed in a course / module on 'Entrepreneurship.' It can also be used in a course on 'Strategy' to illustrate how a start-up with a strong value proposition could take on the well-established players in the industry, by 'frame-breaking' innovation. In addition to the usual approaches to cost containment adopted by low-cost airlines worldwide, Air Deccan has implemented several measures that are unique in the Indian context. This has resulted in steady increase in the market share of the airline, much to the consternation of the established players, viz., Jet Airways, Air Sahara and Indian Airlines. Consequently, it has resulted in fierce competition and price wars in the Indian skies, with the net result that the passenger has benefited significantly. There are a number of challenges that Air Deccan has to contend with. It has set for itself a mission to enable every Indian to fly. Passenger fares for long haul flights such as Bangalore to Delhi, covering over 2000 km, can now be purchased for as low as Rs. 500 (about US$10), if purchased early. It perceives the market as practically unlimited, and sees itself as the largest airline in India five years hence. The case discussion in the class can focus on the challenges that the company has to face to reach this very ambitious goal. ABSTRACT (SUMMARY) This teaching note has been written by Dr. D. V. R. Seshadri, Visiting Professor and Jane Henry, Research Assistant at the Indian Institute of Management, Bangalore. The case and the teaching note were first published in the South Asian Journal of Management Vol. 12, No. 4, Oct-Dec 2005, pp. 94-126. Copyright of the case is held by AMDISA Secretariat. Reprinted by permission of the AMDISA Secretariat. ∗

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This case study describes the story of the launch of Air Deccan, India's first Low-cost Airline, and the challenges ahead of it. It can be discussed in a course/module on 'Entrepreneurship.' It can also be used in a course on 'Strategy' to illustrate how a start-up with a strong value proposition could take on the well-established players in the industry, by 'frame-breaking' innovation. In addition to the usual approaches to cost containment adopted by low-cost airlines worldwide, Air Deccan has implemented several measures that are unique in the Indian context. This has resulted in steady increase in the market share of the airline, much to the consternation of the established players. It perceives the market as practically unlimited, and sees itself as the largest...
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