Captain’s cost-saving tips

January 31, 2010 09:37 pm | Updated 09:37 pm IST

You know Captain Gopinath as the one who flew planes for the ‘common man’. Not as one who herded donkeys. But that is just one of the many stories you’d read in ‘Simply Fly: A Deccan odyssey’ ( >www.harpercollins.co.in ). A chance conversation with a washerman makes the author weigh the economical advantages of the donkeys, at a time when electricity was a distant dream in his village.

“Why not employ donkeys to fetch water from the stream? I was at the time hiring workers to physically fill and carry pitchers. It would save my expenses on labour which was expensive.” The flash of idea, however, proved eventually more asinine than inspiration, Captain concedes, what with the creatures proving to be of a species that challenged all his ingenuity!

There are different kinds of donkeys, he summarises. “Those who were reluctant to work were the equus truantus. The mischievous ones could be classified as equus naughticus; those not used to being team players could be called equus singularis.”

Udupi hotel

Another source of inspiration that the book records is the Udupi hotel, a place in which to eat and leave. When customers go to an Udupi hotel, they do not expect to sit around and be served, explains the author. “They expect no frills but get what they have really come looking for: good, inexpensively priced food served in a clean environment. That is what an LCC (low-cost carrier) is all about.”

An LCC is about inclusiveness, innovativeness and efficiency, Gopi adds. “It commits itself to fly the common man and prices the tickets so that a larger number of people at the lower end of the economic bracket can fly the airline. The rich and well-to-do are welcome but they must realise that they will not be pampered as they are on a legacy airline.”

Talking about efficiencies, he mentions that not serving food in flight makes cleaning easier, saves on time consumed by loading and unloading food containers, and brings down the weight and fuel consumption of the aircraft.

“When food is sold rather than served free the cost model becomes a revenue model; people are careful when they pay for food, there is less wastage, and less pilferage. What is a cost overhead for legacy airlines becomes a revenue source for LCC.” Also, his LCC model eliminated brokers and agents, ‘which straightaway brought down costs by 15 to 20 per cent.’

To get started, he was looking at only three airfields, viz. Vijayawada, Rajahmundry, and Hubli, where with minuscule investment connections would be initiated for ATR aircraft. “Just a shed where people could stand about and wait for their flight would be sufficient. My aircraft would land, pick up passengers, and fly off within twenty minutes. All I required was a good runway with a thatched shed and a toilet!”

A critical decision, right from the very first day, was to distribute tickets only over the Internet and not print any, recounts Gopi. “Passengers would pay upfront and book three months in advance. That would create a comfortable cash-flow for the airline.”

India presentation

Among the many clinchers that he goes through are the Rs 5 crore loan on stiff terms from Ladhani with which Air Deccan was born, and the forceful presentation to ATR officials in Toulouse. The latter was more about India than about the airline company, Gopi recounts. “I spoke with passion and fervour about how India was going to be the future of the world, of India’s ongoing economic reforms and progress… about why India needed a low-cost airline, emphasising that the all-round growth of the economy would definitely make it possible for more people to fill the planes.”

The vibrancy of the Indian economy contrasted with the global slump at the time, and this captured their imagination, writes Gopi. And so, without any cash flow upfront, he got a complete comprehensive package from them. “I would pay an hourly lease rental and they should maintain the aircraft end to end. They would bring in their engineers and take care of the entire logistics and inventory support. They would train our pilots and help my staff to undertake maintenance.”

An insightful cost-saving takeaway is about launches. When chief ministers inaugurated our flights the state government bore the expenses for the event, the airline was not having to spend more than Rs 40,000 to Rs 50,000, Gopi realised. “All such cost-saving schemes helped bring down the fares and also ensured a relatively smooth programme.”

A book to grab before it flies off the shelf!

**

>BookPeek.blogspot.com

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