Air Deccan – India’s first low cost airline
The entry of Air Deccan into the Indian civil aviation sector heralds a new era in air travel & points to several important changes that are likely to happen in the competitive landscape. Air Deccan’s basic strategy is to make air travel accessible to every Indian by pricing their services at 30-40 percent of regular airline services. Translating this overall strategy into operations calls for making unique choices in several operational elements. At a broader level, this resulted in unique methods adopted for procuring aircraft, maintenance, ticketing & in-flight services & flight & schedule management policies. This constitutes the operations management process.
At the most fundamental level, operations strategy at Air Deccan is characterized by four features: more flying hours per aircraft, cutting out all frills, elimination of inter-airline arrangements for baggage & a new distribution model. Targeting for such a strategy means the service delivery system, including the type of aircraft used, needs to be carefully selected. Air Deccan uses airbuses on heavy traffic routes & smaller aircraft for lower traffic routes. This choice & other unconventional approaches to maintenance have enabled Air Deccan to save on cost considerably. Other operational design choices in the service delivery system include elimination of in-flight food, business class & lounges at airport. There are no refunds, & compensation or accommodation facilities for missing a flight. These choices made in the design of the service delivery system are consistent with the operation strategy.
The ticketing service & distribution is very unique to Air Deccan & is tandem with the operations strategy. Conventionally 90 percent of ticketing is done through travel agents & the agent gets a commission of 7-10 percent. The other operational complexity include lock up of funds, multiple booking in...
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