Air India is likely to appoint a foreigner as chief operating officer (COO) in a bold attempt to turn around the beleaguered national carrier. A sub-committee of the board headed by civil aviation secretary M Madhavan Nambiar on Saturday interviewed three candidates, all expatriates.
According to Air India sources, the three are Gustav Baldauf, currently executive vice-president, flight operations, Austrian Airlines; Brock Friesen, COO, Air Malta, and George Reeleder, managing director, Rapidair, which is Air Canada’s domestic airline. The new COO, sources said, would have the task of salvaging Air India’s fortunes in three years. The three were chosen from 140 applicants for the post.
Air India’s chairman and managing director, Arvind Jadhav, and recently-appointed corporate bigwigs on Air India’s board such as Anand Mahindra, vice-chairman and managing director, M&M, Sajjan Jindal of JSW Steel and Uday Kotak of Kotak Mahindra Bank were part of the team interviewing the prospective COOs.
Of the three, Mr Baldauf has had an India stint in 2005 when he was with Jet Airways as its vice-president for flight operations. Austrian Airlines is also a member of a group of airlines called Star Alliance, which Air India is to formally join soon.
Air India brass feels that Mr Baldauf will be helpful in this because the airline is facing trouble becoming a member of the alliance over quality issues. A final decision will be taken after necessary government approvals are in place, the sources said. Some aviation experts, however, feel the entire exercise is pointless.
“For Air India to hire a COO without a business plan in place does not make much sense. In any case, high calibre people do not apply through advertisements for jobs like these. Air India is not very sure what kind of organisational and management structure it is going to be in the next three to five years’ time,” said Kapil Kaul, CEO (India and Middle East), Centre for Asia Pacific Aviation. Air India does not have a COO. Last month a panel was appointed to fast-track the process.
Air India is in the process of changing its routes as well as its organisational structure. It has incurred heavy losses projected to be over Rs 5,000 crore for the financial year ending March.
The airline has also cut excess capacity and is currently carrying out an exercise to pare loss-making routes. It recently received the government’s sanction for an equity infusion of Rs 800 crore with a provision of an additional Rs 1,200 crore in the next fiscal.
The airline has also raised over Rs 700 crore from bonds for aircraft acquisition and is slated to announce cost-saving and manpower rationalising measures soon.
Source: Economic Times
Monday, March 29, 2010
Tuesday, March 23, 2010
We have one of the lowest cost structure in aviation sector: Sanjay Agarwal, CEO, Spicejet
Sanjay Agarwal , CEO, Spicejet, spoke to ET Now on a trend in shifting of the load factor in aviation stocks, expansion plans and more. Excerpts:
We have of course seen a very strong load factor in the month of February as well as a business traffic especially the industry business traffic having gone up 15% but now we have seen a slight market share decline for carriers like yourselves and Indigo while Kingfisher and Jet have again so once again its sees discount carriers that have seen a little bit of market share lost do you see this trend continuing over the next few months now?
I wouldn't say there is a trend in shifting of the load factor. I think its only due to the fact that for example I can speak for Spicejet we have not taken delivery of an airplane in over 14 months now and next week we are taking delivery of one airplane on top of it we have had one airplane that is undergoing the maintenance checks; so there was a slight reduction in capacity and hence difference in load factor but for most part I don't see a major shift in the market share. However, if you look at the overall industry load factor for the month of February was almost 77% which is very healthy for this time of the year.
Then in terms of the yield, how is the situation playing out for you, is there a pressure on yields as the crude price and ATA prices have been inching up or putting it a little differently what is the average cost of crude that you would need to ensure that yields are stable, would $80 a barrel be good enough for you to maintain margins?
I think the yields have been stable for the last almost six months now and this is the longest I have seen the yields to remain stable in my almost a year and a half in Indian aviation. Now coming back to your question about is $80 a barrel what is priced into the airlines pricing the yields I think $80 a barrel is a sustainable fuel price and the yield should remain stable provided there isn't a significant spike in crude from here on. So $80 a barrel is an acceptable price level for crude.
All eyes especially in the aviation space have always been on the bottom line because that's always been the big drag for them of course when scooting around that Spicejet is likely to breakeven by March can you confirm this for us?
See I have to refrain from making forward looking statement but all I can say is that it is a possibility because our quarter is running better than what we did in the same quarter last year and from here on the rest would be kind of arithmetic if the quarter does turn out to be better than last quarter to say that it is a good possibility that Spicejet might breakeven.
Can you tell us that on the conversion of the FCCBs by Goldman Sachs, Wilbur Ross, Istithmar as well, how much would their equities take be and would they have majority control of the company?
Just a little correction Goldman Sachs investment is not through FCCBs rather it is through warrants whereas Istithmar, WL Ross & Co. or through the bonds, however with all of them converted it would still be less than 50%..
Stake would be around 45%-46% wouldn't...
They will not have majority ownership..
Sure but I was just asking that only the stake would be 45%-46% wouldn't it?
That is about right, I think its about 45%-46% or might be a percent higher so somewhere in that neighbourhood.
The other bit and about international operations you launching them in June with flights to the nearby areas of course its Kathmandu, Colombo, Dhaka but how bigger plan eventually do envisage your international operations for Spicejet as a company because we have seen that Jet Airways for example shutdown a few of its international unviable routes and you were just starting off, how big would this be for Spicejet as a company?
We have very modest international expansion plans, we are not taking incremental aircraft deliveries to deploy them internationally all we are looking for is how do we better your lives our existing fleet and do these foreign destinations offer us an opportunity to better utilise our aircraft. So our international expansion plans are not driven by a desire to become a global airline but rather how do we become even more efficient than where we are right now, we have one of the lowest cost structure in the industry and how do we better it. So that's kind of the driving factor but we are not close to launching the operations because we have applied for permissions to DGCA and the Ministry and once we get the approvals then we will forum up our plans.
Well its clear that Spicejet actually has done well in the current market environment and in terms of capacity while we have seen most other airlines actually slash capacity some current capacity by even as much as 20% to 25% we have seen Spicejet on the other hand raising capacity so is there something that Spicejet is seeing that's different in terms of growth of the industry or are you being able to garner a larger share of the current plan?
See couple of things one the aviation demand is improving that's the trend we have seen for the last almost nine months now and that's what we expect to see for the next 12 months. For the next 12 months we expect the industry demand to improve by another 15% or so year over year and I think what Spicejet is seeing I think everyone has seen that the demand will be healthier going forward. However, Spicejet as I mentioned earlier has one of the lowest cost structures in the industry and it helps us to compete even more effectively and provide affordable travel options to our customers. The overall industry capacity even with Spicejet's addition of five new airplanes that we are planning on adding in the next 12 months the industry capacity will go only up by 7% or so versus a 15% increase in demand which means the overall health of the aviation industry not only Spicejet but for the whole industry should continue to look better.
Source: Economic Times
We have of course seen a very strong load factor in the month of February as well as a business traffic especially the industry business traffic having gone up 15% but now we have seen a slight market share decline for carriers like yourselves and Indigo while Kingfisher and Jet have again so once again its sees discount carriers that have seen a little bit of market share lost do you see this trend continuing over the next few months now?
I wouldn't say there is a trend in shifting of the load factor. I think its only due to the fact that for example I can speak for Spicejet we have not taken delivery of an airplane in over 14 months now and next week we are taking delivery of one airplane on top of it we have had one airplane that is undergoing the maintenance checks; so there was a slight reduction in capacity and hence difference in load factor but for most part I don't see a major shift in the market share. However, if you look at the overall industry load factor for the month of February was almost 77% which is very healthy for this time of the year.
Then in terms of the yield, how is the situation playing out for you, is there a pressure on yields as the crude price and ATA prices have been inching up or putting it a little differently what is the average cost of crude that you would need to ensure that yields are stable, would $80 a barrel be good enough for you to maintain margins?
I think the yields have been stable for the last almost six months now and this is the longest I have seen the yields to remain stable in my almost a year and a half in Indian aviation. Now coming back to your question about is $80 a barrel what is priced into the airlines pricing the yields I think $80 a barrel is a sustainable fuel price and the yield should remain stable provided there isn't a significant spike in crude from here on. So $80 a barrel is an acceptable price level for crude.
All eyes especially in the aviation space have always been on the bottom line because that's always been the big drag for them of course when scooting around that Spicejet is likely to breakeven by March can you confirm this for us?
See I have to refrain from making forward looking statement but all I can say is that it is a possibility because our quarter is running better than what we did in the same quarter last year and from here on the rest would be kind of arithmetic if the quarter does turn out to be better than last quarter to say that it is a good possibility that Spicejet might breakeven.
Can you tell us that on the conversion of the FCCBs by Goldman Sachs, Wilbur Ross, Istithmar as well, how much would their equities take be and would they have majority control of the company?
Just a little correction Goldman Sachs investment is not through FCCBs rather it is through warrants whereas Istithmar, WL Ross & Co. or through the bonds, however with all of them converted it would still be less than 50%..
Stake would be around 45%-46% wouldn't...
They will not have majority ownership..
Sure but I was just asking that only the stake would be 45%-46% wouldn't it?
That is about right, I think its about 45%-46% or might be a percent higher so somewhere in that neighbourhood.
The other bit and about international operations you launching them in June with flights to the nearby areas of course its Kathmandu, Colombo, Dhaka but how bigger plan eventually do envisage your international operations for Spicejet as a company because we have seen that Jet Airways for example shutdown a few of its international unviable routes and you were just starting off, how big would this be for Spicejet as a company?
We have very modest international expansion plans, we are not taking incremental aircraft deliveries to deploy them internationally all we are looking for is how do we better your lives our existing fleet and do these foreign destinations offer us an opportunity to better utilise our aircraft. So our international expansion plans are not driven by a desire to become a global airline but rather how do we become even more efficient than where we are right now, we have one of the lowest cost structure in the industry and how do we better it. So that's kind of the driving factor but we are not close to launching the operations because we have applied for permissions to DGCA and the Ministry and once we get the approvals then we will forum up our plans.
Well its clear that Spicejet actually has done well in the current market environment and in terms of capacity while we have seen most other airlines actually slash capacity some current capacity by even as much as 20% to 25% we have seen Spicejet on the other hand raising capacity so is there something that Spicejet is seeing that's different in terms of growth of the industry or are you being able to garner a larger share of the current plan?
See couple of things one the aviation demand is improving that's the trend we have seen for the last almost nine months now and that's what we expect to see for the next 12 months. For the next 12 months we expect the industry demand to improve by another 15% or so year over year and I think what Spicejet is seeing I think everyone has seen that the demand will be healthier going forward. However, Spicejet as I mentioned earlier has one of the lowest cost structures in the industry and it helps us to compete even more effectively and provide affordable travel options to our customers. The overall industry capacity even with Spicejet's addition of five new airplanes that we are planning on adding in the next 12 months the industry capacity will go only up by 7% or so versus a 15% increase in demand which means the overall health of the aviation industry not only Spicejet but for the whole industry should continue to look better.
Source: Economic Times
Tuesday, March 16, 2010
A year on, Jet, Kingfisher fail to fly in formation
In 2008, when full-service carriers Jet Airways and Kingfisher Airlines announced an operational alliance to improve efficiency and profits, it was supposed to change the dynamics of India’s aviation sector.
More than a year after their much-publicised partnership, industry insiders say the two have not been able to move beyond tactical alliance.
What this means is, while they have joined forces in the areas of sharing ground handling services, parts and airport equipments, they have failed to tie up for sharing of routes and customers.
So, what went wrong?
A senior executive with a rival airline, who did not want to be named, said one of the primary reasons is that the two carriers are competitors and their services are not complementary.
“In such a scenario, there is always the question of who gives up what and in which areas. Such alliances, where you need to enter into code-share and interline agreements, to drive cost efficiency can be tricky if you are competitors,” he said.
Some industry experts even blame the absence of “clear-cut policy” for code-sharing between domestic carriers as the reason for the delay in the deal.
“The DGCA (Directorate General of Civil Aviation) has a broad guideline for it (code-sharing policy). So, any approval for code-sharing is arbitrary. When Jet and Kingfisher asked for clearance, the DGCA did not even look into it,” said an airline executive in the know.
He said Jet-Kingfisher alliance also faced opposition from other carriers, who viewed it as an attempt to kill competition in an industry with only a handful of players. “It was seen as a move that would lead to monopolistic practices in the now competitive market.”
The two leading carriers by number passengers carried had said they would cooperate in eight areas that involved code-sharing pacts, interline agreements, jet fuel management, sharing of ground-handling, cross-selling of flight inventories, network rationalisation, cross-utilisation of crew and merging of loyalty schemes.
Guru Malladi, partner - advisory services, infrastructure, real estate and government, Ernst and Young, says India’s aviation sector had not yet reached the maturity for a strategic tie-up of the kind that jet and Kingfisher had envisioned.
“We (India) do have many players to pressurise airlines into alliance. These alliances can bring in immediate benefits to airlines but, it appears, Jet and Kingfisher have only gone for tactical alliance and not entered into any strategic relationship,” he said.
Malladi says the argument that there was no proper policy for code-sharing is weak. “A framework for it (policy) exists. Some operators may see it as inadequate but if they (airlines) want to connect on it they can do it,” he said.
Samyukt Sridharan, chief commercial officer (CCO) of SpiceJet, said, today most airlines were cooperating for spares, airport equipments and had informal arrangement to transfer passenger to each other in case of cancellation of flights.
“We do this to avoid any inconvenience to our passenger but we have never thought of anything beyond that,” he said.
Ernst & Young’s Malladi says, once domestic carriers become part of global alliances such as Star Alliance, OneWorld and Sky Team, they would gain from strategic relationship with not just overseas carriers but even the local airlines.
State-owned National Aviation Company of India Ltd (Nacil) has been invited to Star Alliance while Jet has evinced interest in being a member of the Sky Team. Kingfisher is also vying to be part of the OneWorld.
“It (global alliances) has helped airlines around the world to turnaround as it pushed up their revenues with widening reach,” said Malladi.
Source: DNAIndia
More than a year after their much-publicised partnership, industry insiders say the two have not been able to move beyond tactical alliance.
What this means is, while they have joined forces in the areas of sharing ground handling services, parts and airport equipments, they have failed to tie up for sharing of routes and customers.
So, what went wrong?
A senior executive with a rival airline, who did not want to be named, said one of the primary reasons is that the two carriers are competitors and their services are not complementary.
“In such a scenario, there is always the question of who gives up what and in which areas. Such alliances, where you need to enter into code-share and interline agreements, to drive cost efficiency can be tricky if you are competitors,” he said.
Some industry experts even blame the absence of “clear-cut policy” for code-sharing between domestic carriers as the reason for the delay in the deal.
“The DGCA (Directorate General of Civil Aviation) has a broad guideline for it (code-sharing policy). So, any approval for code-sharing is arbitrary. When Jet and Kingfisher asked for clearance, the DGCA did not even look into it,” said an airline executive in the know.
He said Jet-Kingfisher alliance also faced opposition from other carriers, who viewed it as an attempt to kill competition in an industry with only a handful of players. “It was seen as a move that would lead to monopolistic practices in the now competitive market.”
The two leading carriers by number passengers carried had said they would cooperate in eight areas that involved code-sharing pacts, interline agreements, jet fuel management, sharing of ground-handling, cross-selling of flight inventories, network rationalisation, cross-utilisation of crew and merging of loyalty schemes.
Guru Malladi, partner - advisory services, infrastructure, real estate and government, Ernst and Young, says India’s aviation sector had not yet reached the maturity for a strategic tie-up of the kind that jet and Kingfisher had envisioned.
“We (India) do have many players to pressurise airlines into alliance. These alliances can bring in immediate benefits to airlines but, it appears, Jet and Kingfisher have only gone for tactical alliance and not entered into any strategic relationship,” he said.
Malladi says the argument that there was no proper policy for code-sharing is weak. “A framework for it (policy) exists. Some operators may see it as inadequate but if they (airlines) want to connect on it they can do it,” he said.
Samyukt Sridharan, chief commercial officer (CCO) of SpiceJet, said, today most airlines were cooperating for spares, airport equipments and had informal arrangement to transfer passenger to each other in case of cancellation of flights.
“We do this to avoid any inconvenience to our passenger but we have never thought of anything beyond that,” he said.
Ernst & Young’s Malladi says, once domestic carriers become part of global alliances such as Star Alliance, OneWorld and Sky Team, they would gain from strategic relationship with not just overseas carriers but even the local airlines.
State-owned National Aviation Company of India Ltd (Nacil) has been invited to Star Alliance while Jet has evinced interest in being a member of the Sky Team. Kingfisher is also vying to be part of the OneWorld.
“It (global alliances) has helped airlines around the world to turnaround as it pushed up their revenues with widening reach,” said Malladi.
Source: DNAIndia
Friday, March 12, 2010
Kingfisher, Jet look to expand foreign routes
Debt-laden Kingfisher Airlines Ltd and Jet Airways (India) Ltd are growing their international presence after stalling expansion plans for a year due to the recession.
The civil aviation ministry has cleared Kingfisher’s proposal to join oneworld, an international grouping of airlines, while Jet has decided to increase its network in West Asia and Sri Lanka, two ministry officials said on condition of anonymity.
Joining an airline alliance has benefits such as code-sharing, use of lounges of member carriers and consolidation of frequent flyer miles. Code-sharing is a ticket-selling deal that allows travellers to connect seamlessly to destinations on flights of more than one airline.
Kingfisher Airlines' proposal was cleared this week, one of the officials said.
“Oneworld will do an audit soon as the next step for joining the alliance,” said a Kingfisher official, who also declined to be named because he is not authorized to speak to the media.
The carrier’s chief executive Vijay Mallya had said last month that the process of joining oneworld will take 12-18 months.
Kingfisher’s second proposal to have a code-sharing agreement with British Airways Plc.—for select domestic routes where it flies and on points beyond which British Airways flies—is yet to be cleared.
Jet Airways has sought permissions to fly to Saudi Arabian destinations such as Riyadh, Dammam and Jeddah using Boeing 737 aircraft from New Delhi, besides starting new flights to Colombo from Delhi, Mumbai and Chennai. It currently flies to Riyadh and Jeddah from Mumbai.
The airline has said it does not plan to expand using wide-body aircraft such as Boeing 777 or Airbus A330, and will only look at regional routes for international expansion this year.
“We will only look at adding short-haul routes, which will be operated on a (Boeing) 737, which is a smaller aircraft,” K.G. Vishwanath, vice-president, commercial strategy and investor relations, Jet Airways, had said in January.
Kingfisher is saddled with more than Rs6,000 crore in debt, while Jet was Rs14,000 crore in the red as of 31 December.
Source: Mint
The civil aviation ministry has cleared Kingfisher’s proposal to join oneworld, an international grouping of airlines, while Jet has decided to increase its network in West Asia and Sri Lanka, two ministry officials said on condition of anonymity.
Joining an airline alliance has benefits such as code-sharing, use of lounges of member carriers and consolidation of frequent flyer miles. Code-sharing is a ticket-selling deal that allows travellers to connect seamlessly to destinations on flights of more than one airline.
Kingfisher Airlines' proposal was cleared this week, one of the officials said.
“Oneworld will do an audit soon as the next step for joining the alliance,” said a Kingfisher official, who also declined to be named because he is not authorized to speak to the media.
The carrier’s chief executive Vijay Mallya had said last month that the process of joining oneworld will take 12-18 months.
Kingfisher’s second proposal to have a code-sharing agreement with British Airways Plc.—for select domestic routes where it flies and on points beyond which British Airways flies—is yet to be cleared.
Jet Airways has sought permissions to fly to Saudi Arabian destinations such as Riyadh, Dammam and Jeddah using Boeing 737 aircraft from New Delhi, besides starting new flights to Colombo from Delhi, Mumbai and Chennai. It currently flies to Riyadh and Jeddah from Mumbai.
The airline has said it does not plan to expand using wide-body aircraft such as Boeing 777 or Airbus A330, and will only look at regional routes for international expansion this year.
“We will only look at adding short-haul routes, which will be operated on a (Boeing) 737, which is a smaller aircraft,” K.G. Vishwanath, vice-president, commercial strategy and investor relations, Jet Airways, had said in January.
Kingfisher is saddled with more than Rs6,000 crore in debt, while Jet was Rs14,000 crore in the red as of 31 December.
Source: Mint
Friday, March 5, 2010
Airbus delivers A320 aircraft to Air India, IndiGo
French aircraft manufacturer Airbus on Wednesday delivered one A320 aircraft each to flag carrier, Air India, and low-cost private carrier, IndiGo, in Hyderabad during the ongoing India Aviation 2010 airshow.
This delivery makes it a total of 74 out of a total of 111 aircraft ordered by Air India from Airbus and Boeing for its domestic and international operations. A merged Air India has on order 43 Airbus aircraft, of which 20 are A321, 19 A319 and four A320's. With the latest delivery the carrier now has received 19 A321, 19 A319 and one A320 Airbus aircraft.
"The remaining A320 and A321 aircraft are scheduled to be delivered by April," airline officials said.
The airline also has on order 68 Boeing aircraft of which 35 -- eight B777-200LR, nine B777-300ER and 18 B737-200 have been delivered. The 737-200's are meant for low cost operative Air India Express.
Currently, Air India flies to 51 international destinations across US, Europe, Canada, East Asia, Southeast Asia and the Gulf. It has 62 destinations on its domestic network.
The A320 delivered to IndiGo makes it that carrier's 25th aircraft. It has a total of 100 aircraft on order.
Source: Domain-B
This delivery makes it a total of 74 out of a total of 111 aircraft ordered by Air India from Airbus and Boeing for its domestic and international operations. A merged Air India has on order 43 Airbus aircraft, of which 20 are A321, 19 A319 and four A320's. With the latest delivery the carrier now has received 19 A321, 19 A319 and one A320 Airbus aircraft.
"The remaining A320 and A321 aircraft are scheduled to be delivered by April," airline officials said.
The airline also has on order 68 Boeing aircraft of which 35 -- eight B777-200LR, nine B777-300ER and 18 B737-200 have been delivered. The 737-200's are meant for low cost operative Air India Express.
Currently, Air India flies to 51 international destinations across US, Europe, Canada, East Asia, Southeast Asia and the Gulf. It has 62 destinations on its domestic network.
The A320 delivered to IndiGo makes it that carrier's 25th aircraft. It has a total of 100 aircraft on order.
Source: Domain-B
Tuesday, March 2, 2010
Food & beverage sales at Airports Zoom as Low Cost Airlines expand capacity
One industry doing well even in the current difficult times is the food and beverage franchise at all domestic airports. With the cost-cutting prevalent today, more travelers are opting for the LCCs (Low Cost Carriers) rather than the full service airlines.
Since food is not part of the ticket price at these airlines, passengers are opting to eat their fill at airports before boarding flights. In the last couple of years, the proportion of flights flown by LCCs has increased from 45:55 to 60:40 at present, and is expected to go up to 70:30 by the end of the year. Especially since all the LCCs including Spicejet, Indigo and Go Air are adding capacity. In these flights, food is available but the options are fairly limited with exorbitant rates sometimes charged.
As a result, the volume of business done by the retail chains and food outlets that have licensed or leased space has increased by over 30%. Cafe chain Barista that has outlets across metro airports in the country says it has seen a significant growth in F&B sales, with their outlets at the Bangalore and Mumbai airports registering 30% growth over the last year. This has also become a source of innovation. For example, BIA’s F&B partner, HMS Host, created a food offering called ‘Grab n fly’. This included a variety of light and easy packaged food products, at prices starting from Rs 50 that a passenger could carry onto the aircraft.
The business offers interesting options in terms of how airports as well as F&B outlets might shape the airport location as a retail destination in future. Pizza Corner for example has a concept called Pizza Corner Express which it offers at malls and has extended the same to its airport franchises as well.
Possibly a combination of retail lounge as well as coffee hangout might be possible in future, or a combination of coffee shop and bookstore as well as wi-fi center as is found in some of the Crossword outlets today. The possibilities are endless and only need initiative.
With airports working on the PPP model now, airport managements will be looking at alternative revenue sources to ensure adequate returns. This might be one of the ways they could add a lot of revenue while providing additional services and value to customers.
Source: TestFunda
Since food is not part of the ticket price at these airlines, passengers are opting to eat their fill at airports before boarding flights. In the last couple of years, the proportion of flights flown by LCCs has increased from 45:55 to 60:40 at present, and is expected to go up to 70:30 by the end of the year. Especially since all the LCCs including Spicejet, Indigo and Go Air are adding capacity. In these flights, food is available but the options are fairly limited with exorbitant rates sometimes charged.
As a result, the volume of business done by the retail chains and food outlets that have licensed or leased space has increased by over 30%. Cafe chain Barista that has outlets across metro airports in the country says it has seen a significant growth in F&B sales, with their outlets at the Bangalore and Mumbai airports registering 30% growth over the last year. This has also become a source of innovation. For example, BIA’s F&B partner, HMS Host, created a food offering called ‘Grab n fly’. This included a variety of light and easy packaged food products, at prices starting from Rs 50 that a passenger could carry onto the aircraft.
The business offers interesting options in terms of how airports as well as F&B outlets might shape the airport location as a retail destination in future. Pizza Corner for example has a concept called Pizza Corner Express which it offers at malls and has extended the same to its airport franchises as well.
Possibly a combination of retail lounge as well as coffee hangout might be possible in future, or a combination of coffee shop and bookstore as well as wi-fi center as is found in some of the Crossword outlets today. The possibilities are endless and only need initiative.
With airports working on the PPP model now, airport managements will be looking at alternative revenue sources to ensure adequate returns. This might be one of the ways they could add a lot of revenue while providing additional services and value to customers.
Source: TestFunda
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