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Created by : James Masih, Product/Brand Manager, FedEx  | 10 31 2008 17:20:40 +0000
Industry : Transportation/AviationFunctional Area : Logistics & Supply Chain(Operations)
Activity:  295 views;  last activity : 07 06 2010 20:18:09 +0000
The Air Industry is facing many problems whom do you think are responsible for this is it airlines like Jet airways and Kingfisher?
 
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Dear Jaygopal,

Yes, almost all airlines all over the world are scrambling for next cheapest producers of raw materials & spare parts except for a few stable european firms and the persion gulf airlines who gets unlimited financial support from their parent countries.  And these do place a big role in the air travel ticket price & services.

And yes there are airlines out there almost as cheap as of road travel as the majority of the costs of offset by their freighter & bulk item transportation price tags.  Now since we have quite a few private airlines entreprenuers in our land venturing out into this new frontier of air travel industry, it will take some time for them to move into other services. Marketing &  guaranteed services are the key in this sector.

The story of US air carriers attaching prices to check-in baggages are slightly over-exaggerated as it pertains to increase in prices of excessive luggage & reducing the weight of both check-ins & carry-on luggages.  Unfortunately, this was supported by local legislators since reports of fuel efficency was the hot topic between the public and governing bodies. 

All of us can agree that quality assurance of returns & compensations of lost  luggages are very poor.  This particular topic is not well discussed in our common communites as people do not understand this environment.  Have you ever seen the automated luggage carrier system under the Heathrow Terminals..its a different world... no wonder luggages gets lost. 

 But how about our manual luggage handlers?  Are all of them intelligent  & educated enough to understand the Airline Codes( prefixes) on the Tags?  I don't think so, as airlines & airport authorities will push towards the cheapest employee they could buy to do the job...this is in our culture and we support and promote it to the  next generation.  I have personnally witness handlers stubling and confused over international codes on my baggages in our various international hubs.

Bad service resulting into bad harrasment cases at the counter check-ins are always going to be there. Again this comes down to proper training and the person's logic of understanding the way our everchanging world works. There are hundreds of ways to convey a message over counter... and it takes only a few seconds of mis-prnouncements, misreading the fine lines or hand gestures to lead to bad customer/attendent service.  Again, here I have been involved, witnessed and know of quite a lot of my acquitances getting involved in such endless arguments with the counter check-ins.  And All of the time, the customer lose as time is of the essence. 

There is no such thing as a perfect price & service even if the pocket has an endless seam and infinte supply of service providers.  But in the end, in most, not all, cases, airlines have been accountable at the end of the tax year or thru a random revenue audit.  Thanks to the practice of "freedom of information" in most countries, average person & news media are keeping an eye out for excessive and abuse in pricing wars.  Recently( last year)British Airways was fined by US regulators ( over 100 mil) for a certain group of BA executives and other minor players were involved in over-price -fixing.  Dig into deeper, there are evidences of reports of other airlines almost every year being fined for such bad business practices.  These are due to a long list of consistent complaints with documented proofs from travelers of airlines abuse of customer confidence.

Back to our Kingfisher, Jert Airways, & other private enterprise of our Indian subcontinent; I will have to disagree that the fault lies with them completely BUT all other supporting manufacturing sectors, Us travelers,  those elected governing bodies and our culture's attitude towards greed being as an accepted trait in our lifestyle, does play a big part in providing such busineses opportunities in controling prices & services to their advantage.


By Sujith Kanjirappallil, ASQ- CQT, Certified Quality Technician/ Inspector( Final Assembly)  04 05 2009 01:33:05 +0000
 
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A difficult one to answer only because it is both. Airline industries are to be blamed because they are greedy and hence raised airfares to unrealistic levels when it was boom time. When the economy got bad and fuel prices rose, they were hit. But having said that, they also have to bear high taxes and fuel charges.

The airport usage tax for the runway are amongst the highest in the world in indian airports. The only way out is to increase airports in the country and build good infrastructure. Also the easiest to tax is the aviation turbine fuel because air travel is considered a luxury compared to rail and road options. But one forgets the time wasted for a business man while traveling by road or rail.

Hence governments have to stop this habit of taxing aviation fuel and charging fancy airport charges. Instead they can cut down on the useless manpower which is always excess in any airport. On the other hand airlines should not be too greedy. Agreed that investing in an airline business is not going to give returns overnight but still that is not an excuse to be greedy and charge fancy rates.

I am yet to come across an airline both national and international where in cases of budget airlines food on board is reasonable. The airline industry doesnt beleive in profits from bulk. They want to squeeze the one passenger who comes to the maximum thereby creating a vacuum till the next one comes along.

Airlines and government have to work together to ensure the industry survives and is competitive. No one needs the halycon days of Air india and Indian Airlines which were treated like personal fiefdoms of the Babu's. Probably one should hand over the Civil Aviation ministry to Laloo Prasad to script another of his success stories.


By Jaygopal Raghavan, Marketing Manager, Landmark Group  03 12 2009 14:14:55 +0000
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I agree with Ms. Isha. Airways industry should have taken some other step and would have generated profit rather than taking this step....


By Sulagna Brahma, Sr Reporter, Leading Indian English Daily  | 09 03 2009 14:20:20 +0000
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Mr.Sujith i do agree with you that airlines are not responsible for every problem that they are facing today.But i would also say that they are the only ones who could have avoided these problems and could have gained more profits out of their business by adopting some reliable strategies.

what do you say?


By Isha Verma, Sales/BD Manager, Larsen & Toubro  | 04 08 2009 12:06:08 +0000
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Before all or most of us go around blaming/pointing fingers at Airlines for the the cost increases, one should look back at the manufacturing sectors which support the airline industries.  This downhill turn of events started over 3-5 years ago in the Hi-tech precision manufacturing sector across the globe.  The decreasing amount of aluminium & titanium forging supplies to the aviation industries is to be looked at for one and then the increasing expenses that goes into composite material R & D as we are still haven't found the right material mix to get cheaper.  These three are one of the most critical items that faces the aviation industry.  Now here comes the "icing-on the cake", the bad practice of business accounting by projecting exurberant future profits to get the max investments from stake holders and management's inability to manage industry portfolio adds to this mess that all of us are in. 

Airline managements also do play a part in this chain of misguided & mismanaged practices in the same manner but one realise that they are the end-product's(airplane) owners & operators and thus in the business world, as there no limits for owners set the prices and being greedy except for the courts of law who precides over regulations & procedures.  Airlines will increase expenses in food or even in elimination of it and as well in aviation fuel as long as it is acceptable by the majority who are willing to support them.  Did you know that it take a a lot longer & more expensive process to produce the "special" aviation jet fuel for the right engine? Keep in mind, outside of the Indian  subcontinent, foreign airlines still depends upon large coorporations and even their parent countries's administrations to support them thru incentives & consessions so as to keep those businesses afloat. 

Lets hope someone comes up with a better aviation fuel and a better/faster option for travelling before the end this current generation.

 


By Sujith Kanjirappallil, ASQ- CQT, Certified Quality Technician/ Inspector( Final Assembly)  | 03 29 2009 16:05:39 +0000
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Yes I think the airlines should be blamed. First of all I don't find anything correct in their balance sheets. If those are the balance sheets which are the original ones then do you think that there would be a need to cut so many jobs.

By James Masih, Product/Brand Manager, FedEx  | 10 31 2008 17:20:40 +0000
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I think it is not only Kingfisher & Jet that are responsible. In general all the players are ot be blamed. When the market boomed in 2002 - 2006 they went for price wars & under cut their margins. Also expecting doule digit growth & opening of many sectors to open up  for many years to come .. they ordered numerous large jets which are now are high on running costs & are running at 30- 40 % capacities. THe airlines also paid huge salaries to acquire pilots & onboard staff for their expanding fleets which now they are trying to cut down. The deferred delivery orders by many airlines has attracted penal costs by manufaturers.


By santosh kumar, Marketing Manager, AUTOMOBILE  | 09 03 2009 10:10:15 +0000
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Dear Sujith

If your argument about high raw material costs were to be true then airlines should be facing the same problems world over. In fact in some eurpoean countries air travel is almost equal to the cost of road travel but faster. Even though they use the same aircrafts.

In india the whole scenario changed only with the advent of Air Deccan and the same can hold true abroad with Virgin Atlantic. Till then airline companies were raking in the moolah almost greedily because air travel was a relatively new concept and people didnt have the knowledge to question much.

When you consider the fact that in most of the developed as well as developing countries in the world, airline companies dont buy aircraft outright, they take it on wet or dry lease for long periods. Airlines like British Airways and Singapore airlines are some of the examples i can think of - where outright purchase is made. Recently i read reports about a low cost carrier in the US who was thinking of charging for check-in baggage. Do you know how much money airlines make on excess baggage receipts ? But there is no accountability. Has any airline compensated a passenger adequately for late departure/arrivals, lost baggage, harrasment at check-in counters etc? the list really goes on.

No sir! the airline companies have to do a lot of inward thinking and become more transparent and quality conscious if they need to survive ahead. I would place my bets on other modes of transport like high speed cruise boats that can ship passengers across countries faster.


By Jaygopal Raghavan, Marketing Manager, Landmark Group  | 03 30 2009 11:07:44 +0000
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The airlines need not be blamed at least for this. If we start looking at the Tax which these airlines have to give for turbine then that tax is much higher which is why they have to cut jobs.

By Rajat Mittal, Product/Brand Manager, Jet Airways  | 10 31 2008 17:23:33 +0000
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