Dec 19, 2008

Business - GoAir;Groping in the dark

Anjuli Bhargava

I don’t know if any one of you have been following these developments but Mumbai-based low-cost airline GoAir has suddenly taken a U-turn. From being a low-fare, low frills airline, it has out of the blue announced the launch of something called “GoComfort”.

GoComfort — by the airline’s own definition — is a fully flexible premium service providing all the key benefits that an Indian business passenger would need. “It is India’s only low-cost premium service offering business travelers a premium choice over any other low-fare airline”, whatever that means.

The airline says it is adding value by offering telecheck in and return check in, a wider selection of food and seat selection. GoComfort takers have been promised a seat (with increased pitch) in the first four rows of the aircraft (the times of squeezing in to a middle seat are over, according to the company’s official release). It goes on to promise that the middle seat will always be free (an easy enough promise to keep with load factors at an all-time low!).

In addition to the announcement of GoComfort, the airline has launched another series of schemes — GoYouth (targeted at persons below 21), GoSolution (targeted at corporate clients) and a buy 5, get one free offer. It has further announced that it will be increasing the total number of flights on offer to 9 destinations in this winter season from the 832 in October to 900. By March 2009, GoAir says, it is planning to add 18 aircraft to its fleet size (it has six A320s at present) and by March 2011 it has plans to increase its fleet size to 34.

All this appears to be part of its constant strategy — which can best be described as groping in the dark — to reinvent itself. GoAir’s endless announcements don’t convince me enough and I would advise flyers to take their promises with a largish dose of salt.

GoAir — when it was established in June 2004 — was envisaged as a low-fare airline that would commoditise air travel. On 9 June 2005, GoAir announced that it intended to launch operations in October 2005 with a fleet of 20 leased A320 aircraft. Initial flights would be in the southern and western areas of India with the first nine A320s, the remaining 11 aircraft being added in the second year. At that time the airline was in talks with both Airbus and Boeing on the purchase of between 20 and 40 new aircraft, with a contract to be in place by the end of 2005 and with deliveries to start by 2007. None of this ever happened. It did however launch in November 2005.

Then in July 2006, the airline again announced an order for 10 aircraft from the Airbus 320 family (with options for 10 more). This was followed by an announcement in mid-January 2007 that it plans to sell a large minority ownership position to assist it with funds for continued expansion. That investment never happened either.

In the few months that it had flown — and when the industry situation was reasonably rosy compared to what it is today — GoAir failed to establish itself as a credible low-cost option, unlike some of its competitors. IndiGo, for instance, launched later and managed to trounce most other low-cost carriers and established a pretty good reputation for itself, whereas SpiceJet managed to remain a serious contender. GoAir, in fact, was often compared with Air Deccan (which had by then bagged the reputation of being the worst in its category) and was considered just a tad behind Deccan in this regard.

In its defence, those who managed to fly the airline didn’t really have much to complain about (the aircraft was clean, the flight hassle-free, the brand identity chic and staff decent). The maximum noise came from those who had booked with the airline and would, more often than not, find the flight cancelled for some reason or the other, leaving them stranded. Although the airline claimed that its model was based on ‘punctuality, affordability and convenience’, this never translated into customer experience. The ease with which flights were simply cancelled made many believe that it appeared geared more to the convenience of the airline rather than the passengers. As one senior ministry official told me back then: “It may be a smart choice to fly GoAir but it’s a smarter one not to fly GoAir (the airline’s tag line is Fly Smart)”.

However as the industry situation worsened (since mid-2006, things have been grim for the Indian aviation industry), GoAir became more unreliable by the day. This was also partly due to its “flexible fleet management policy”, which its promoter Jeh Wadia said was its way of moderating capacity based on demand. To flyers, it just meant you never know which flight may get cancelled when.

Even today, I find GoAir’s various claims and schemes hard to swallow. To cite one example, the buy 5, get 1 free offer for this winter season is available — for some inexplicable reason — only to those registered on its website (attempts by me to register just to find out the price for this through the website failed as it asks for a PNR number which is hard to provide before one has booked). On further enquiries — from its newly-hired public relations agency — it turned out that the offer gives you one free ticket after you have flown with the carrier five times! Since I am yet to meet or hear of a GoAir frequent flyer, it makes one wonder how many people will be in a position to avail of this one.

In June 2005, when Wadia met me in his Lower Parel office in Mumbai just prior to the launch of his airline — and told me how his airline would change the way Indians travel (it has a 2.3 per cent market share today) — he said: “Every Indian should fly. We are one billion people and only 0.05 per cent of the country flies. Is that a joke or is that a joke?” It is a joke but not — as he may now have realised — a particularly funny one.

No comments: