JAGSON AIRLINES- NEWEST PLAYER for INDIA REGIONAL AIRLINE DEVELOPEMENT
By definition Regional Airline or more specifically Regional Schedule Airline, which has been incorporated in Indian CAR ( Civil Aviation Requirement) wef 27th August 2007 has been the recent addition to the expanding Civil aviation in the country.
By sheer definition as per CAR Section 3, Part C, Series VII, DGCA enumerates that “The need to promote air connectivity between specific regions and to enable more efficient air travel within the region, as well as linking such regions and expand air travel services for Tier II and Tier III cities within the country’s aviation network, the scheduled regional air transport services has been introduced”.It clariefies more as Air Transport service which operates primarily in a designated region and which on grounds of operational and commercial exigencies may be allowed to operate from its designated region to airports in other regions, except the metro airports of other regions.
Note 1: The regional airlines shall not be permitted to operate on Category I routes as given in Annexure-VII of the CAR. But it also inserts the following -
Note 2: The regional airlines of the southern region which has 3 metros would be allowed to operate between the metros within the southern region namely Bangalore, Chennai and Hyderabad.
Well, this very definition becomes itself a non-starter for upcoming enterprenuers. Which in other words means categorically that you could start a scheduled Regional Air services, with an aircraft lesser in MTOW than 40T, operate from a Specified metro to either smaller cities of Tier-II & Tier III and at times defunct airport and compete fiercely with Larger airlines which has Pan-Indian operations.
Lets run some interesting statistics before we proceed to get into the core issue of the Regional Airlines in India. Today looking at India aviation Domestic and Regional Market there has been a year on year growth of 39.5%, that is 28% growth of the previous Fiscal year and 20% on previous year. There has been whilst 123% growth year to year from Tier II & Tier III cities , which itself shows the market trends. Global data has clearly shown that the right mix of Business to leisure Travel has been 30 : 70 , wherein Global aviation has been 60% on leisure , VFR and other Traffic. Surprisingly in this region India is the only unique Market. Indian and Asian Travel scenario and fair understanding of the Flyers need, which in last few years most of the Airlines has forgotten to drive a new segment of Market, who may have that propensity to spend and yet deprived of the right connectivity. In the process of the LCC era’s emergence in India, true Air Travellers in India has been left high and dry . Studies conducted by Management Firms and Research bodies of International repute has produced some interesting figures :-
Out of the above 70% of the Total Market , which is primarily Corporate Travellers, 73.5% of Travel by Full Service Carriers in India , ie by Jet Airways, Indian Airlines & Kingfisher Airlines, out of which 72% of the 73.5% is being concentrated between In-Metro Travel. Interestingly Corporate Travellers in these carriers comprises of appx 59% of the total Economy Class Travellers in these full service Airlines. Which in pure laymans term means out of the total seats offered within the country daily which is 55000, between all the Carriers 4800 seats are offered primarily for regional Routes which is mere 8.7% and there could be growth propensity upto 11820 seats per day between the State Capital and State Financial Hubs for Travel within and to metro’s, which has to be handled by any Regional airline with the same finesse of a National Airline. Still restricting any Airline just to be confined to particular zone , might be the biggest Bottle neck for Growth.
One has been able to explain and convey the message that this a very vital sector which is good for the growth of the economy and tourism,. With multiple SEZ’s opening all across, all of us Aviation personnel has been able to convince the government that this is one Sector where growth means a win-win situation. But at the same time for things remain far from perfect in the rapidly changing Indian Market, however three is still plenty of work needs to be completed before we could even get into a detailed Regional Policy as discussed . Delays due to bottlenecks in the air Traffic control system are rampant and travel growth is being slowed due to the lack of airspace capacity. In addition most airlines are losing money, personnel shortages are an issue and service levels remains extremely poor at Airports making air travel an often unpleasant experience.
Lets look here at some major bottle necks which has not allowed even a single True Regional Airline to take its wings, barring Paramount Airways which has still date an ethos of True Regional Airline,may be due to their Unique Business Proposition, or by choice, it has been able to maintain its own niche. Thats extremely surprising for a airline which has a National Permit and with National permit these days becoming a rare commodity. In International scenario also we see the emergence of Medium sized players , who are strong in the market.
The Concept
JAGSON Airlines – Regional Jet Project – India’s Premium Dual Class Regional Airline with a built-in concept was conceptualized in OCTOBER 2009 and has already being formalized with a detailed Business Plan being build up over the months. The Project and the implementation stage of Jagson Airlines has evolved from its initial planning stage to a detailed Research and Development phases, which has yielded a more concrete and Factual Planning.
The concept of Low Cost Airlines till 2002 was an unique concept in Asia, with Air Asia breaking the silence and making itself heard , yet became a profitable venture only in 36 months and through enormous changes in their planning and strategies. In India Sep 2004 marked the emergence of Deccan Air into pure LCC service which also took more than 24 months to establish itself and the Mantra for the success in these 24 months has been intense and fast paced expansion with addition of Aircrafts every months and now flying to more than 56 stations and more than 312 flights / day.
Jagson Airlines on the other hand has gone through its tested philosophy of R & D, which has churned Millions of numbers, Seat Mile costs, Yields, immaculate planning, Route dispersals , Route planning, Ramp-up and all other fine tuning, which is needed for a Professionally run airline in the market. The other factors which has attributed to a Sound Planning of the Jagson Airlines to minimize the lag time for set-up are :-
Detailed study and day to day comparisons of the Indian Aviation Markets…Competition activities and competition figures, which get daily accumulated and analyzed ( for last 4 months ) to understand and strategize the LCC and Corporate flying dynamics
A rock-solid Management Team chosen from best of Indian and International carriers who are either the pioneers in start-up of these airlines or have had Introduced
Airline concepts in the Country. Most of them are updated and has fresh experience of handling airlines as a part of the airline or as a Competition.
The entire process of start-up of the airline , its pains , pangs and woes…the loop holes and the Governmental Red-tapism, which delays the process has all been tested and tried ( unlike any other start-up airlines ), which makes the Proposed team of Jagson Airlines, more apt and ready to solve these impending issues without much cliches. Expected that with application process in place by 17th Nov 2009 and with expected Security Clearance, AOC, NOC and all licenses in place with 45 days the Airline , with its financial backing from the Investor/ Investors/Syndicate should be flying with atleast One aircrafts latest by 15th Jan 2009.
The realm of Uniqueness in Concept- A sheer differentiator in Aviation of Today :-
Jagson Airlines ’s concept has been derived from years of experience of the Management Team, who has studied the Indian and Asian Travel scenario and has fair understanding of the Flyers need, which in last few years most of the Airlines has forgotten to drive a new segment of Market, who may not have that propensity tospend. In the process of the LCC era’s emergence in India, true Air Travellers in India has been left high and dry .
Studies conducted by Management Firms and Research bodies of International repute has produced some interesting figures :-
Unlike any other Nation ( Japan excluded ), India’s base of Corporate Travel forms more than 80% of the entire Market, while 20% Travellers travel for leisure, VFR and other purposes. Out of the above 80% of the Total Market , which is primarily Corporate Travellers, 73.5% of Travel by Full Service Carriers in India , ie by Jet Airways, Indian Airlines or Kingfisher Airlines.Interestingly Corporate Travellers in these carriers comprises of appx 59% of the total Economy Class Travellers in these full service Airlines.
Jagson Airlines , is a low cost-low Fare, two class Regional Airline in India, which is primarily targeting Frequent Fliers, Corporate Travellers, SME- corporate Travellers of India/ international, would comfortably Break even and succeed with a mere conversion of 3.59% of the above 59% ( of Full Service Airlines- Economy Class Travelers ) through their two Class models and exclusively through the Economy model in Tier II & Tier III cities in northern India
Jagson Airlines lines thus proposes in the following Business plan :-
A Two Class- Regional low cost-Low Fare Airline – Northern regional network Airline focused at Leisure,Corporate, Frequent travellers for Tier II & Tier III cities. Conceptualize an Unique concept- a differentiator in Service Levels through Concept-fare and service route
• Immense expansion and reach within 12 Months to 9 stations with 2 aircrafts, virtually mapping Northern India
• Maintaining the Low fare and Strong Leisure-Corporate Airlines Image over the competition Low Cost carriers in the region.
• With these strong notes and carefully planned and tested (through service Mapping and survey process), Jagson Airlines proposes detailed Insight and a strong business case with an in –depth analysis.
Key to Success : The keys to success for starting the Airline are as follows:-
• Obtaining the required governmental approvals in time.
• Securing funds.
• Experienced management.
• Marketing; either dealing with channel problems and barriers to entry; or solving problems with major advertising and promotion budgets. Targeted market share must be achieved even amidst expected competition.
• Product quality. Always with safety foremost.
• Services delivered on time, costs controlled, marketing budgets managed. There is a temptation to fix on growth at the expense of profits. Also, rapid growth will be curtailed in order to keep maintenance standards both strict and measurable, however we will certainly grow keeping the pace of the market growth.
• Cost control.
• The overall cost per ASK (Available Seat Kilometer) is pegged at 6.5 cents or less .This ASK factor places Jagson Airlines in a grouping of one of the lowest in the airline industry within the long haul and short haul market globally. (Full Service Airline, the dominant carrier in the Domestic Market, averages between 10.5 to 12 cents per ASK by comparison). The only one airline with lower operating cost is operating older, less reliable equipment with turboprop operation at present, and even then the lowest cost in the airline industry is currently of Indigo at 8.50 cents per ASM. Thus, we need to launch and grow faster than this airline to capture the market in low cost segment.
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