July 11, 2007

Illegal Indian Workers Get Special Airfares

This is kinda interesting:  The UAE has offered a 3-month amnesty to Indian workers who are in the country illegally.  Now, in response, airlines are tripping over each other to offer special one-way fares to these workers to they can get home.  Think about that.  Imagine American, Continental and Delta offering illegal Mexican workers advertised cheap fares back to Mexico.  Cheaper than what Americans could get.  What kind of a freak out would there be here?   There appears to be no freak out in India. 

Anyway, thought that was interesting...

July 11, 2007 | Permalink | Comments (2)

May 03, 2007

India Requires Seat Assignments

Looks like Southwest won't be flying to Mumbai...

India's government is requiring airlines to assign seats on all domestic flights.  They say it will improve safety (?) by keeping the "centre of gravity within limits" (? again) and help with "investigations" (ibid).  On the plus side, you'll get a seat before you board.

May 3, 2007 | Permalink | Comments (0)

April 17, 2007

Air Sahara to Be Re-branded Jetlite

Quick follow-up to the story yesterday about the Air Sahara - Jet Airways merger in India:  Air Sahara will be re-branded Jetlite, and offer service somewhere between a no-frills airline and a traditional airline (AirTran, maybe?).  Jet Airways will launch service to New York and San Francisco later this year.

April 17, 2007 | Permalink | Comments (0)

April 12, 2007

Jet Airways Will Buy Air Sahara...Again

Jet Airways, which has about 1/3 of India's airline market share, will purchase Air Sahara for $340 million.  If this sounds sorta familiar, it's because Jet Airways was going to buy them last year for about $500 million, but decided at the last minute to pull out because they felt their bid was overvalued.  Yes, that sounds weird that they were unhappy with their own bid.  But the move seems to have worked, as they've knocked about a third off the price.  No word on whether the airlines will actually merge, but some news outlets are reporting that Air Sahara will be re-launched as a discount airline to compete with Air Deccan, SpiceJet and GoAir.

April 12, 2007 | Permalink | Comments (0)

March 28, 2007

The State of Online Travel in India

Forgive me for veering off from the airline world for a moment here, but for the 2nd time in as many years, I'm actually going to do a bit of original work, rather than just passing on stories I read somewhere else along with a too-cute-by-half comment at the end.

With that self-deprication out of the way, I've seen a few articles recently about how quickly the online travel agencies are growing in India, and I wanted to put these pieces in a little perspective. 

ContentSutra, a website that follows the e-commerce comings and goings in India, has done a nice job passing along statistics from the online travel agencies (OTAs) in India.  From the site, we've learned that, for example, Yatra.com (1 of the top online agencies) is saying that they're averaging $5 million in gross sales per month, selling 2500 airline tickets and 150 rooms per day.  While this $60 million annualized gross sales seems impressive for a site that launched last year, remember that OTA revenues are really just the commissions they generate, not gross sales.  So, taking an educated guess (let's assume $6 per airline ticket and $10 per hotel room), they're looking at $6 million in revenue for the year. We can also estimate that since Expedia's revenues are about 12-14% of their gross sales, we're probably in the ballpark (Expedia generates more of its revenues from hotels than does Yatra or the other Indian agencies.)

Leading site MakeMyTrip.com does about $120 million a year, or, we can guess, about $12 million in revenue.  We'll assume that Travelguru and Cleartrip are probably somewhere in the that ballpark (let's say each does about $9 million a year).  Does that mean the entire online travel agency industry in India is less than $40 million? 

Journalists have gotten a bit taken in by the gross sales numbers (which are fine, don't get me wrong), but it doesn't tell any of the story of how these OTAs will survive in a market where they're barely getting paid for the sales they make.  The OTAs are betting that they'll be able to create loyal customers over time, but this has proven to be mind blowingly expensive in the US.  Add to this the growth of the low cost carriers (who typically pay less than $2 --if that much -- for a sale, plus the lack of hotel rooms from which to generate the great margins you see here), and it starts to get ugly very quickly.

Already, tens of millions of VC dollars have been poured into the online travel industry in India, and it appears the results will never get near where they'll need to be to justify the investment.  If I'm missing something in my estimate, I'd love to hear about it...

This concludes today's Obscure Market Analysis (tm) from the OTR.   Now back to reading about which celebrities are getting caught having sex on planes.

March 28, 2007 | Permalink | Comments (4)

November 14, 2006

India's Airlines to Eliminate Foreigner Pricing

India's legacy carriers have long had a policy of charging foreigners and non-resident Indians (NRIs) fares in dollars, which work out to about 50% more than Indian nationals paid for the same tickets.  India's low fare carriers did away with this policy, offering the same (unprofitable) low fares to everyone.  Now, in a huge change in policy, Jet Airways, Indian Airlines, and Air Sahara have all announced that they will drop the dual-pricing strategy.  Jet Airways has already implemented the new fares, while the other 2 carriers will do so soon.  A welcome change if you're flying within India.

(As always, for great deals on Indian travel, visit our sister site at tripmela.com)

November 14, 2006 | Permalink | Comments (0)

July 26, 2006

Kingfisher Airlines to Buy MAXjet?

The Times of India is reporting that India's Kingfisher Airlines (named after a beer, mind you) is in talks to purchase MAXjet.  Kingfisher's owner has made it clear that he would like to own an airline in the US, which he can't do since he's not a citizen.  But his kids are, so he's hoping they can buy it.  In any case, he wants a foothold in the US to give him rights to fly to India.  MAXjet is vehemently denying a sale.  I'm shocked -- shocked! -- you can't always believe what you read in the newspaper.

July 26, 2006 | Permalink | Comments (1)

June 22, 2006

Jet Airways and Air Sahara Merger Called Off

Jet Airways and Air Sahara, which were set to merge to create the largest airline in India, have called off the merger after Jet Airways tried to lower the price.  The combined carrier would have had more than 50% market share in India.

June 22, 2006 | Permalink | Comments (1)

June 21, 2006

Does Jet Airways Have Terrorist Ties?

This is an odd one:  India's former Civil Aviation Minister has told India's Prime Minister that Jet Airways, one of India's largest airlines, has close links to terrorists.  According to the former official, Jet Airways has been a "steady recipient of large dubious investments originating from Gulf sheikhs" and had intermittent contacts with "underworld dons Chhota Shakeel and Dawood Ibrahim to settle financial disputes."  Strange, right?  As you might imagine, Jet Airways had no comment.

Meanwhile, its takeover of Air Sahara, another large Indian carrier, is now in doubt (unrelated to the terrorist thing) and the largest airline merger in India's history may not take place after all.  There are conflicting reports about the reasons the merger may fall through, though it appears Jet Airways has decided it wants to pay 40% less than it had offered originally and has now gone to the courts to stop Sahara from filing suit.  It's quite a soap opera if you care about this stuff...

June 21, 2006 | Permalink | Comments (0)

March 08, 2006

Airline Food in India: Chicken and Eggs Are Back!

If you've been flying around India lately (and who hasn't?) you may have noticed that you couldn't get chicken or eggs on your flight.  Or maybe you didn't notice.  It doesn't matter.  The foods had been pulled from airline menus due to fears about transmitting bird flu.  Worry no longer.  Indian carriers are putting chicken and eggs back on their menus.  Indian Airlines was the first to return the poultry to the air on Monday, with Jet Airways following suit today.  I'm not sure why I thought you should know this.

March 8, 2006 | Permalink | Comments (4)

March 07, 2006

India's Travel Agents Sell Tickets on Fake Air Deccan Flight

As I've mentioned here before, India's airline industry is booming.  In fact, it's booming so quickly that travel agents can't keep track of which flights actually exist.  Travel agents in India have been selling tickets on low cost carrier Air Deccan's new route from Kolkata to a city called Imphal.  That normally wouldn't be an issue.  Except the flights don't exist.  Air Deccan was supposed to launch service between the two cities, but the launch didn't happen.  And due to a technical error (of some sort---it's not really explained), travel agents have been booking hundreds of tickets on these fake flights.  My advice?  Book on Air Deccan's website.

March 7, 2006 | Permalink | Comments (0)