Headless Hunch : If we have low cost airlines why not low cost airports?

The moment we say word ‘airport’, we imagine of a gigantic halls with automatic doors & escalators, well maintained facilities & somewhat courteous staff.  Leading road to the airports is mostly well maintained with beautiful landscapes & huge bill-boards.  But this also pops up to the question, are some of those things necessary?  Isn’t they just add the burden to the overall infrastructure cost with no or little value additions to end consumer.

This prompts me to the question, that if as consumer we are happy with low cost airline, not serving snacks or charging extra for a higher leg space seats, then why can’t be we happy with concept of ‘no frill’ airports?  Or is it our mindset on airport that’s not driving this change? Well I have no easy answers on this but this is definitely a proposition to think about.

International Air Transport Association

International Air Transport Association

The International Air Transport Association (IATA) in its report mentions that through infrastructure changes & bringing transparency, they were able to save whooping $475 million only on airport charges in year 2012 (Source link).  IATA 2011 data sheet for year 2011 estimates outflow of at least $92.3 billion for the use of airport and air navigation infrastructure, equivalent to 14.4% of the cost of transport. (Source link). Imagine the value being unlocked if we think towards low cost airport models.

Having put my points for the low cost airport let me pen down my thoughts on this model.  Unlike LCA where they charge you for anything & everything, these airports would be developed in such a way that they shunt unnecessary luxury (or perceived luxury) associated with airline industry.

– These airport needed be gigantic buildings with one or two terminals but could be buildings good enough to address the security concerns of flight travel (just to ensure that proper check-in counter can be placed & security check areas are segregated).

– Airport is not place to hangout, the leaner the security procedures, the shorter the time person needs to be at airports and better the utilization. If check-in counters are closed 20 minutes prior to departure instead of current 45 minutes to 1.30 hours, not only people time will be saved, but avg. traveler count on airport will also reduce ensuring benefits of reverse economies of scale.

– Is it mandatory to only one airport in city & instead have multiple airports in large cities?

– Why is terminal only at one side of the runway? Better management of planes, I don’t think it helps? Having a one big terminal instead of four small terminals, does help flyers with single point of contact, but the associated infrastructure cost increases like bigger air-conditioning requirement, longer check-in & security queue etc.  Instead why not to have smaller but multiple terminals?

Airport, walk to plane

Nanded Airport

– Why to have buses ferrying people to different plane bays? Instead design airport in such a way that people can walk from gate to airplanes. Best example, Nanded Airport, Bhuj Airport, Rajkot Airport & at times Pune Airport in India. Apart from individual with specific needs no one will mind walking few hundred meters if they are going to save on total travel cost.

– Last but the important one, is it required to have only government controlled or privately licensed airports?  Why not open up the sector for entrepreneurs to develop green-field airports & bring innovations. (Remember it was only Deccan Airlines brought concept of LCA, which now is lifeline of all major airlines in India).

These are some of the example, I can tip-off based on my flying experiences & if this topic is debated, I am sure industry experts can open up avenues to reduce cost in airport infrastructure, leading to heavy cost reductions & ensuring air travel affordability. This is something that needs to be thought of to assist heavy burdened airline industry & provide individual cost-effective means of travel.

Happy Anniversary – 3 Years & Counting @ WordPress.com

Happy Anniversary - 3 Years & Counting @ WordPress.com

3 Yrs & Counting

 

How time flies… got a notification from WordPress.com reminding me of reality that its been three years I have been ‘flying’ with WordPress.com.  Feeling wonderful to hear & will continue with a promise to enlighten much more as ‘another common man’.

Brainless Bomb : IRCTC Shop – Is IRCTC really into retail e-commerce?

Like others, this is one of the questions that came to my mind when I first heard plan of introducing IRCTC Shopping website. The next question was why IRCTC would invest into a venture which is already overcrowded with private players, probably more lean & strong to challenge a semi-government organization like IRCTC?  Why IRCTC would jump to band wagon of competitive private e-commerce and not focus on its monopoly business of train ticket booking?

IRCTC Shop, Yebhi.com

IRCTC Shop – Yebhi.com Webpage Screen print

The fact that IRCTC has monopoly on train ticket booking creates a large online customer base for any e-commerce player to leverage it for additional monetary benefits.  But what surprised me was the selection of ‘Yebhi.com’, not so successful venture in e-commerce space. I am no expert in e-commerce domain, but on personal experience, IRCTC did not do the best vendor selection.  However important point for Yebhi.com (vendor who is providing entire catalog, shop product, shopping platform and back-end services to IRCTC) would be maximum marketing of its brand in this IRCTC venture. Yebhi.com might get a jump-start (considering on its own it is not as famous as its peers) from joining hands with IRCTC but would not build its brand value in this one or three years of contract & ultimately going to lose, unless they sustain this relationship over long period with IRCTC (which looks difficult if this venture succeeds.)

On other hand IRCTC, instead of venturing into different domains like air tickets, shop & holidays, should have focused to its core strength of train ticket booking & should have used its monopoly to create better customer service in that area so that monopoly is not challenged in future. Alias, I am not their strategy consultant, but I believe, moving out of your core advantageous positions to known downward market is not at all a good path to walk on.  Yes, obviously IRCTC is going to have short-term monetary benefits, but would be definitely at cost of its brand value & customer satisfaction (which is already low considering its ticketing platform is under tremendous burden of public dissatisfaction), but I guess in monopoly business these factors are like pawn in game of chess.

Going ahead, it would be interesting to track this half-cooked venture of IRCTC & Yebhi.com.

DISCLAIMER: The views expressed are personal views and is not intended to cause any derogatory remarks/ statements to any institution/company or individual.