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Air Deccan to return with Re 1 tickets: Why Captain Gopinath’s second coming is exciting
New Delhi: The screaming headlines are back and Captain G R Gopinath must surely be smiling. The pioneer of India’s LCCs, the airlines which worked out a model to keep costs low so that airfares remain within reach of the common man, is back again with his famous fares of just Re 1. Gopinath had created a huge movement with Re 1 fares when he initiated Indians into affordable flying in 2003 through budget airline, Air Deccan. The way he stimulated the market not only encouraged other LCCs to take birth in India, it prompted them to subsequently also come up with ridiculously low fares. This, of course, eventually led to an industry mired in red ink and Deccan itself flew into history. Gopinath’s airline accumulated debt and was eventually bought by Vijay Mallya. Mallya merged Deccan with his own Kingfisher in 2008, but then we all know what eventually happened to this merged airline.
It is interesting to note how Gopinath and Mallya struck a deal for the merger of Air Deccan with Kingfisher. In the book, The Vijay Mallya Story, the author refers to Gopinath’s conversation with a reporter. “Gopinath told a reporter later that what impressed him about Mallya was how badly he wanted the airline (Deccan) and how swiftly he had moved to bag the deal. When some reporter asked him whether that meant the deal had been made without any due diligence or checking the balance sheet, Captain Gopinath replied that it was true that during the negotiations, neither Mallya nor his officials ever asked to examine the books. They took Captain Gopinath’s assurances at face value because they were eager to go through with the deal.
Of course, Gopinath continued to be in the airline business, though with venture like Deccan Charters, etc, in the intervening years, after selling off Air Deccan to Mallya. Whether analysts found his first innings successful or not for flyers, Gopinath was close to God then and remains something of a reverential figure even now. Social media has been abuzz with excited prospective flyers seeking details of the Re 1 fares, routes and frequencies of Deccan flights in the airline’s second innings. The excitement is similar to that seen in 2003, when the airline first said it will offer a chance to fly, virtually for free. This time, Deccan starts its first flight on 23 December, 2017 from Mumbai to Nashik.
In this second innings, Deccan is expected to fly 20-seater planes on regional routes under the UDAN scheme of the government, where some seats on each aircraft are covered under a subsidy and fares anyway capped at Rs 2,500 per hour of flying. There would likely be no airport taxes, jet fuel would be cheaper for such flights and there would be some other incentives as well to make the flights viable for operators. The government’s endeavor under UDAN is to provide connectivity to remote areas by offering sops to operators who can keep costs low by flying smaller aircraft while availing a range of concessions.
This piece quotes Gopinath as saying, “Some of the initial lucky people will be able to get Rs 1 fare also,” even though most tickets will start at about Rs 1,400 for a 40-minute Nashik-Mumbai flight, a distance that would take four hours to cover by road. Air Deccan will also operate daily return flights between Nashik and Pune and Mumbai and Jalgaon. By January, the airline plans to station a second aircraft in Delhi to connect the city with Agra, Shimla, Ludhiana, Pantnagar, Dehradun and Kullu.
So should Air Deccan take fares at Re 1 level again, even if for a few seats? Gopinath was unavailable for comments but some twitter reactions showed people’s concern at the well being of an airline which is obviously offering at least some seats virtually for free. Mohandas Pai, former director, Infosys said, “No, No, No not again. Captain Gopinath pl do not let us down by such harebrained schemes, you need to be viable and survive!”
A Twitter user, Sanjeev_Pomani suggested that the airline should focus on sectors which require more than an overnight journey by train and that there should be daily flights between these city pairs. This user even suggested some viable routes to the Captain: Mumbai to Belgaum/Mysore, Bangalore to Udaipur/Jodhpur, Bangalore Shirdi/Tirupati, Bangalore Belgaum, Mumbai Udaipur/Jodhpur.
Meanwhile, the flying public may remember Gopinath for Re 1 fares but he has been a pioneer in more ways than one. Gopinath started the era of online ticketing, introduced the Indian airline market to a low cost model which then prompted others to jump in the fray. SpiceJet, IndiGo and GoAir all followed the pioneer in launching operations in a market which, before Gopinath’s daring, was almost entirely overtaken by full service airlines Air India and Jet Airways. Will his second innings bring about changes in the way airlines do business on regional routes, changes as momentous as in the first innings?
The regional connectivity scheme UDAN was launched by the government earlier this year and Air Deccan was among the first batch of airlines to get routes under the scheme. UDAN has not only made it possible for some of India’s over 400 ghost airports to come back to life, it has also spawned some new airline operators with a fleet of smaller aircraft who see viability in these tier II and tier III routes with government support on taxes, etc. The revival of Air Deccan’s flights is very much a part of this subsidy-driven scheme. Now, Gopinath should ensure that Deccan remains viable to continue with the commendable task of offering connectivity to India’s hinterland. Deccan got permission to fly on 34 routes under UDAN phase I.
