Now in the throes of mega-mergers Air-India with Indian and Jet Airways with Air Sahara that ambition is likely to put them on a collision course.
Who will win? The numbers that suggest it will be a close call but the competition will be one of size versus efficiencies. The combined airlines will have a similar number of daily flights by fiscal 2008. When it comes to fleet size, both will also have identical numbers by fiscal 2009.
Both have aggressive aircraft acquisition programmes beyond 2009. Air-India has placed orders for 68 Boeing aircraft, due for delivery in 2011. Indian has ordered 43 Airbus aircraft also due delivery in 2011.
|
HOW THEY COMPARE | ||
|
|
Air-India-Indian |
Jet-Jetlite |
|
Flights (daily by 2008) |
450 |
450 |
|
Fleet (by 2009) |
120 |
120 |
|
Turnover (by 2009) |
$4billion |
$2.5 billion |
|
Employees (currently) |
33,500 |
12,000(apprx) |
|
Destinations (by 2008) |
60 |
85 |
For both government-owned airlines, most of the aircraft will replace the ageing fleet with an average age of over 10 years or leased aircraft. Over 60 per cent aircraft are leased in the present fleet.
Jet, meanwhile, is acquiring 20 wide-bodied aircraft and 10 narrow-bodied Boeings that will complete delivery by 2011. Jetlite (formerly Air Sahara) will acquire 10 more aircraft with delivery due to be completed by 2011.
In terms of turnover, the government airline will be much larger than the private one $4 billion (against $3.5 billion) to Jet-Jetlite's $2.5 billion ($2 billion at present).
Yet by next year, Jet-Jetlite will cover more destinations than A-I-Indian. This will translate into a passenger load factor of 70 per cent, compared to 65 per cent for the government-owned carriers.
But where Jet-Jetlite will score most is in terms of manpower efficiencies. It will operate the same number of aircraft on more routes with approximately 35 per cent less manpower than A-I-Indian.
Much of the battle between the two will be fought out on the Gulf routes, which has so far been a cash cow monopoly of the government airlines. From January 2008, Jet-Jetlite will be allowed to operate on Gulf routes and Goyal has applied for flying rights for Dubai, Muscat, Kuwait, Bahrain and Doha.
Jetlite, which is being positioned as a value carrier, is expected to offer extremely competitive rates in this sector to compete with Air-India Express, A-I's low-cost international carrier. Similar competition is expected on the south-east Asian routes.
However, Air-India is undeterred. "Competition is not new to Air-India," says A-I Executive Director, S Venkat.
"Air-India was always competing with international majors such as Singapore Airlines, Emirates and Thai. We have a definite plan of action. For instance, Air-India Express had increased its capacity to 157 flights a week from 28 flights a week. We will be adding four more aircraft and will link all major Gulf destinations."
But Naresh Goyal chairman of Jet Airways says: "We will take on not only domestic competition but we are ready to take on and compete with international giant carriers like British Airways, Singapore Ailrines amongst others".
He said that even Jet will have to pump in lot of money to integrate Air Sahara into it. "Moreover, A-I is considering membership of a leading international airline alliance that will give additional passengers and worldwide connectivity, Venkat added.
Other sources also pointed out that A-I has medium and long aircraft while Jet Airways is having small and medium aircraft. "This will mean that Air-India and Indian Airlines combine could offer 15 per cent more seats irrespective of the size of the fleet at any given point time," they said.