High price for Jet flight

While Naresh Goyal may be considered close to the current civil aviation minister Praful Patel, there is no doubt that the Jet Airways tycoo...

While Naresh Goyal may be considered close to the current civil aviation minister Praful Patel, there is no doubt that the Jet Airways tycoon is a businessman first and then a friend. Clearly tired and exhausted by the constant rise of aviation fuel prices, the tycoon decided that he had had enough. Proposing a hike of 10 per cent in domestic airfares is a move that has been waiting for long. Everybody in the business knows that India is already among the most expensive country for aviation fuel. Given the fact that domestic air travel continues to grow at a healthy rate, Goyal probably decided that this was a good time to move fares up a bit. Of course, given the cut-throat competition in the business at the moment, it is entirely clear why the rest have chosen to follow the Goyal example.

Once Jet had bitten the bullet, there is no doubt that the airline will have to find ways to ensure that its huge market share does not get dented. Savvy marketing should help them, given the fact that their levels of customer service are already among the industry8217;s best.

Today8217;s Indian domestic customer is getting more quality conscious and price is no longer the only determinant of deciding which airline to fly.

There are, of course, those who believe that the sudden move by the tycoon is actually designed to be a shot in the arm for Patel. Since petroleum prices are being raised at the moment, it could work to the Civil Aviation Minister8217;s advantage, to make out case that his sector deserves a tax cut, to make it more internationally competitive. If that is the plot, then that may be the reason why we are seeing every airline raise its fares. And if indeed the entire industry raises its voice that higher fares are the inevitable result of excessive taxes on aviation fuel, then Patel may well get his way, come budget time. But for more on that keep watching this space.

TVS Zooming around

This April Venu Srnivasan achieved a wonderful turnaround, by regaining his dropping market share. The cause of this was competitors like Bajaj and Hero Honda, who had hit the market with new models. Srinivasan, of course, achieved a turnaround by introducing a whole range of his newest TVS models. This was followed by good news from overseas. Srinivasan had achieved his highest ever exports 8212; 4003 units in May. That was enough to get him all geared up, and he decided that he had to take his two wheelers to undiscovered lands, read Asia. So don8217;t be surprised if you see a TVS manufacturing plant sprouting up in Indonesia. For the tycoon is just itching to set up a plant there by 2005.

Srinivasan would like us to believe it8217;s just whim to head there. But its actually a well thought over move. The Indonesian market is a 2.8 million market and once he gets there he will have easy access to Thailand. Both markets are at present undergoing a boom of sorts in two-wheeler sales, which will be of great advantage to him. Apart from that Srinivasan8217;s TVS service that includes his multi brand car repair network, his emerging roadside service and his used car business will soon break even, once profits reach Rs 220 crore. That will not be too far off as he is presently the only one step into this unorganised service sector which is dominated by showrooms and garages. Here the tycoon again has an advantage above both of them. Unlike showrooms, his centres are not sparsely located, and unlike garages they have well trained personnel to service the vehicles. Clearly a piece of cake for one who will take his TVS services to Tamil Nadu and Kerala, followed by Karnataka and Andhra Pradesh.

So while Srinivasan begins his riding trip to southern India, Asia will be his next stop. Wonder what drives him, a never-say die attitude, or some really good servicing.

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Dilip Cherian runs a public affairs firm Perfect Relations. He is an economy watcher and tycoon tracker . None of the people he writes about are his clients. Your insider tales are welcome at dilipcheriannow-india.net.in