Take-off, landing

Five years ago Gopinath, whose origins are in a dusty Karnataka village, set up Air Deccan which he announced would be the “Udupi stand-and-eat” of the airline industry.  Efficiency and innovation would help keep costs low and attract a high turnover of customers. His airline seats were “first-come-first-served”, much like mofussil buses. Thousands of Indians logged into the internet for the first time to buy cheap air tickets, cutting out travel agents and their commission. Tickets were available at post offices and petrol stations.  In remote towns, dusty airports were cleaned and cleared of stray animals in anticipation of the first Air Deccan flight.

At its peak, Air Deccan was flying 700,000 passengers a month, networking 67 Indian cities and spawning a whole rash of budget airlines. Suddenly, social barriers were down, and flying was no longer a class-based luxury. In the midst of a haircut, the member of a barbers’ association in Hyderabad told Gopinath thrillingly of how a dozen barbers pooled money and flew to Mumbai.

That was before shooting oil prices, excess capacity and aggressive pricing by competitors made Air Deccan add on 1.5 crore rupees daily in losses. A cash-strapped Gopinath sold Air Deccan to his Bangalore-based rival Kingfisher, describing the moment as emotional as “giving away your daughter in marriage knowing she’ll never again live with you but hoping she’ll be happy”.

A lot has since changed.  These days the price of the cheapest air ticket is over 3,000 rupees; airlines have got together to charge a minimum fare in the garb of a 2,800 rupee fuel surcharge. So, ironically, entry level fares to many cities are the same in budget as well as full-service airlines. And a passenger may be paying the same fare to fly Bangalore-Chennai as Bangalore-Delhi.  The Indian flyer is uneasy that the new Kingfisher-Jet alliance covers more than seat-sharing or ground handling as the two account for close to 60 per cent of market share and could control the market place.

At the low-cost airlines’ peak, only three percent of India’s billion-plus population was flying, whether in budget or full-service airlines. The other 97 per cent is yet to step inside an aircraft and would be more likely to fly if genuine budget airlines were still in business.

Gopinath and his friends still hold 15 per cent of the stake in the airline he founded. But despite the swirling rumours of a buyback of Air Deccan, he has obviously moved on.  A spate of start-up ventures are coming: a nationwide end-to-end logistics company with its hub in Nagpur that hopes to be the FedEx equivalent in an under-served country, a budget resort company and a helicopter charter company among others.

Personally, too, Gopinath has come a long way. As a child, he walked barefoot to the local village school along with his siblings. The man now jets across the country, pursuing his new dreams. As a testimony to the fact that Gopinath is not poorer after Air Deccan, he and Mallya will be neighbours in the plush Lavelle Road neighbourhood in Bangalore by year-end, his colonial bungalow divided from Mallya’s by a common wall.

Captain Gopi, as he is known, unleashed the idea of flying on a whole new India.  When the Mallya-Goyal alliance was being worked out in Mumbai, Gopinath was working on a business deal in the Andamans for his budget resort company. On his way back, the low-cost Kingfisher Red (formerly Air Deccan) flight was full of villagers who had so messed up the aircraft toilet that Gopinath could not wait to get off the flight to use the restrooms. But he isn’t complaining — after all, his professed business model is altruism with self-interest so that every Indian can be transformed into a consumer and large businesses can grow.

saritha.rai@expressindia.com