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EXECUTIVE INTERVIEW: AIR DECCANAir Deccan: 21 new ATR turboprops are on the wayDeccan still goes for growthWe’re gearing up for the ‘big bang’ and it’s coming soon, says carrier’s founderBy Tom BallantyneThe man behind India’s firstand largest low-cost carrierdoesn’t pull his punches. AirDeccan’s growth over the lastyear has been “breathtakinglystaggeringly phenomenal,” says CaptainG.R. Gopinath, founder and managingdirector. And that’s no idle boast. Whateverparameters are used, the Bangalore-basedairline has far outstripped competitors interms of expansion.“Our fleet size doubled from 20 aircraftto 42,” Gopinath told Orient Aviation. “Thenumber of passengers doubled; this year wewill be carrying eight million. Seat capacitydoubled; revenue tripled. We are now thecountry’s second largest airline with closeto a 20% market share.”Air Deccan, which currently operates 19A320s and 23 ATR 42-320s, 42-500s and72-500s, has 60 new A320s and 21 ATRson order for delivery over the next six years,although expansion will slow in the shortterm. This year it will take four more A320sand eight ATRs and in 2008 eight A320sand six ATRs, as it continues its strategyof linking previously unserved secondarytowns with major cites.All this is coming at a time when mostof the industry is losing money and thereare dire predictions some operators will goout of business because there are too manyseats on the market. But Gopinath makes noapologies. He believes over-capacity is partof the natural business cycle of a growthindustry.There are parallels with other emergingbusinesses, such as those dealing with mobilephones, automobiles, scooters, televisionsand white goods, he argued. “When youset up initial capacity for an emergingeconomy, where a large part of the middleclass which has got purchasing power hasnot yet adopted the lifestyle, then there isAir Deccan founder G.R. Gopinath:he expects a huge shift by 2008a sudden appearance of too many products,or too much capacity. The moment thereis over-capacity it creates panic. It createsan aberration in the market and there is adownward spiral on pricing.”Five years ago, mobile phone companieswere struggling to get 100,000 subscribersa month, he said. Some disappeared or weretaken over. Today, the survivors have upto six million subscribers a month and aremaking huge profits, even though rates havedropped dramatically.His point? The proportion of India’sbillion-plus population using air travelremains below 2%. But when the consumershift already seen in these other sectorsfinally occurs, there will be dramaticchanges. “It will not be gradual. Suddenly, itwill explode. It will take maybe another yearor 18 months. I am confident by 2008 therewill be a huge shift,” said Gopinath.And that means big money. “We areconfident that by 2008 Air Deccan will bea cash machine. It will be the SouthwestAirlines of India, but with a difference. Themodel is different from Southwest Airlinesbecause India is different,” he said.In the meantime, Air Deccan is strugglingto stay in the black, although it made a netprofit of US$21.9 million in its second quarterending December 31, thanks to additionalincome of $30 million from the assignmentof aircraft purchase rights to Investec Bank12 ORIENT AVIATION INDIA MARCH 2007