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“Reputation more important than profits”

(Mumbai: 27 April 2006) Brand image is everything in the fast growing Indian aviation market, according to Mr Jeh Wadia, Managing Director of LCC, GoAir.

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 Speaking at the Centre for Asia Pacific Aviation’s 2nd Annual Middle East and Indian Subcontinent Aviation and Tourism Investor Summit, Mr Wadia says that profits come second to reputation in the establishment period for new airlines.

“Reputation is more important than making money at first. Later it costs ridiculous amounts of money to salvage a reputation and win back customers,” he told the conference during a panel discussion featuring CEOs of Indian LCCs.
 
Mr Wadia says that GoAir reduced its aircraft utilisation rates by cutting back frequencies to maximise on-time performance and build a market position based on reliability.

GoAir also recently launched the GoChallenge, which refunds twice the cost of ticket if a customer can find a lower fare offered by another carrier. This innovative promotion follows the launch of 10,000 free ticket every month, which GoAir initiated to enhance its reputation as a low fare carrier.

India's aviation market grew by 30% in 2005 as low fares from a broad range of LCCs, including Air Deccan, SpiceJet and GoAir, stimulated passenger demand. 2006 will see further increased competition with at least four LCCs, including Premier Air and Indigo, planning to launch.
 
The panel emphasised that, in this growing but ultra-competitive environment, carriers need to work extra hard not only to grow but to maintain their market shares.

“In our February monthly survey, we found 40% of passengers were first time flyers…But we also found that 28% of passengers had flown on SpiceJet four times since our launch in May 2005,“ Ajay Singh, Director of SpiceJet, said in his presentation to CAPA’s Summit.

He says Indian aviation will continue to “explode” as low fare stimulation drives up demand but competition will intensify as new carriers enter the market to benefit from this once in a life time opportunity. In this environment, brand and reputation will be crucial.

The Centre’s 2nd Annual Middle East and Indian Subcontinent Aviation and Tourism Investor Summit, held in Mumbai, features high level participants, including the Hon Shri Praful Patel, Minister for Civil Aviation and CEOs from across the region’s airlines. The Summit, with Kingfisher Airlines as the presenting sponsor, concludes today.