As competition gets fierce in the Indian skies, airlines are not only fighting for each passenger, they have now begun squabbling over on-time performance (OTP) too. airlines
The prevalent system of OTP calculation in India has been this: airport operators at Delhi, Mumbai, Hyderabad and Bangalore submit OTP data of each airline to the safety regulator The Directorate General of Civil Aviation (DGCA), which vets these figures and then puts out data for all airlines on a monthly basis. These data are then used by individual airlines to market their services, with market leader IndiGo positioning itself as the most punctual airline for close to a decade.
The on-time performance is a key performance metric for airlines that shows how frequently flights operate within the declared scheduled time. Therefore, it becomes an important marketing tool for attracting the passengers as well as financiers and other stakeholders, by assuring the former that the flights will reach the destination on time and the latter that the airline is using its assets optimally.
The OTP of an airline is a metric which most flyers would check before choosing who to fly with and this is more critical for frequent flyers.
Across the world, there are established methods of calculating OTP but in India, the DGCA gets data from only four large airports operators; and some data is submitted after manual calculations instead of being computed. This warped process of OTP calculation in India has actually meant that international agencies do not study data for any Indian airline to compile their global OTP rankings.
But if it was always a flawed system, why has this issue surfaced now?
Well, for the last few months, market leader IndiGo has seen its OTP suffer at Mumbai, prompting the airline to lodge a complaint against the way OTP data were being compiled by the Mumbai airport operator. According to DGCA data for October and November 2016, IndiGo was ranked third and fourth respectively in overall OTP rankings (in both months, rival SpiceJet lead the six airlines whose OTP was put out by DGCA).
So IndiGo asked the DGCA earlier this month to check data received from Mumbai, prompting the regulator to form a committee to look into this entire OTP calculation issue.
As per DGCA data, IndiGo logged the highest OTP at four major airports in August at 83.8% (66.7% at Mumbai), again it was the best performer in September at 87.7% (74.5% at Mumbai). But it slipped to third position in October at 81.2% (66% at Mumbai) and further to the fourth position at 72.4% in November (58.5% at Mumbai).
Now, at least two airlines — Jet Airways and SpiceJet — have decided to meet DGCA officials this week and explain why IndiGo’s protests are merely timed to hide its own falling OTP.
A source close to developments told Firstpost these airlines are worried about DGCA “succumbing to IndiGo’s unjustified demands”.
The IndiGO spokesperson was unavailable for comments for this story.
The source added, “As long as IndiGo had the best OTP, the mechanism to calculate OTP by the DGCA and airports was perfect. In fact, OTP was their unique selling proposition and they ran ad campaigns like ‘on time is a wonderful thing’ citing these very data. Now, for many months when their OTP has been the poorest, they are questioning the DGCA mechanism to calculate OTP itself….these are clear double standards”.
The source quoted earlier said for the month of December too, on-time performance of IndiGo has suffered at Mumbai but this could not be confirmed independently.
A SpiceJet spokesperson did not confirm if the airline will be meeting DGCA to register it's protest, merely saying “SpiceJet has ensured that it maintains impeccable operational standards even in harsh weather conditions to continuously emerge as the best on-time performing airline with a record load factor of over 90% for 20 consecutive months in a row”.
Global aviation consultancy CAPA has said in its outlook for FY18 that IndiGo’s share of domestic air traffic has already crossed 40% and could approach 55-60% within the next two years, “a remarkable achievement in such a large and competitive market.”
As IndiGo gains market share, competitors are obviously worried and looking for ways to clip its wings.
CAPA goes on to say that as its market share grows, IndiGo is becoming more competitive with its pricing. IndiGo will take delivery of two aircraft a month through to Mar-2018 which will see its fleet size reach 160 by then (of which around 140-145 aircraft will operate on domestic routes).
“This pace of growth will create a strategic compulsion for other Indian carriers to accelerate their expansion to remain relevant. The improved economics of the Airbus A320neo fleet of aircraft will further strengthen IndiGo’s market position. The carrier remains highly profitable and the market leader on all counts,” CAPA notes.
No wonder competition is worried about IndiGo’s complaints about OTP calculation.
This piece in DNA, however, shows how going forward, OTP of all domestic airlines will suffer, thanks to rapid expansion without adequate airport infrastructure in place.
The sensible thing for DGCA to do is to not just overhaul the current system of OTP calculation at Mumbai, but also ensure timely OTP data input from other major Indian airports. It also needs to discontinue taking into account the datat that has been calculated manually and insist that all data are computerized. The best would be to take a look at the global best practices in OTP calculation and implement the same system across Indian airports
Updated Date: Jan 08, 2017 20:37 PM