Go Air is repositioning. Is it a good idea?
Go Air is changing its positioning from a no frills (low cost) airline to something in between a no frills and full service airline. I think even Jet Light is also taking this positioning. Now is this a good idea? The term that is being used by both is “value” carriers.
I had earlier written a post stating that Low cost carriers cannot go out of business as in practically every industry you a Maruti 800 / Nano and a Rolls Royce. The problem arises when a nano wants to become a Rolls Royce or a Rolls Royce wants to become a Nano. Every time market conditions change, one can’t reposition it products and services just to get more volumes. Now the price of oil is down. Does this mean that the low cost model will again become popular. Also, you can’t keep telling your customer base that one day you are low cost, the next day you are a value airline.
I believe running and building an airline is a long term game. I don’t think any airline can survive if it keeps changing its business model with each change in the market conditions. Airlines is a risky business and availability of funds is very critical. I remember when I was in the US from 1984-94, I used to see airlines fail and also quitr a few going into Chapter 11 (bankruptcy).
avinash narula
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