Air Deccan changes course from market share to revenues

Mumabi: After clocking losses of Rs 340 crore for the 15 months ended June, 2006, budget carrier Air Deccan is changing course — from focussing on market share to revenues. As a corollary, route rationalisation and yield management become the buzzwords.
“We are planning to protect our revenues through innovative marketing campaigns, route rationalisation and a sound revenue management system,” said Air Deccan CEO Warwick Brady.
It has already kicked off the process by cutting frequency and flights on some sectors to make them commercially viable. The no-frills airline wants to improve its yields by 5-6% over the next couple of months.
Air Deccan’s current average yield is around Rs 2,700 per passenger. Today the airline was missing the break-even yield by $7-8 (Rs 322-368) in a bad month and by $4-5 (Rs 184-230) in a good month. On a fare of Rs 3,000, we need to achieve a load factor of 80% to break even,” Brady said.
And as the airline pursues higher revenues, it does not mind if it slips a little on market share. “We don’t want to jeopardise our revenue flow for 1-2% market share,” quips Brady.
01/10/06 Praveena Sharma/Daily News & Analysis

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