NO FRILLS DOESN'T MEAN COMPROMISING ON BRANDS

Low Cost Airlines Shouldn't Compromise On Brand Image To Trim Costs

By Nitin Kalani

Mumbai, India

Recently I read an article on what low-cost airlines are doing to trim costs. What I read was highly astonishing. Can you imagine you travelling by a low-cost airline and being charged for using the washrooms while on the flight or you being charged extra for being overweight? Doesn't that sound disgusting to you?

This is not a far reality. Hit by losses y-o-y, no frills airlines are resorting to such tactics to bring their costs down or we would rather say to expand more sources  of  revenues.

So, in other words we can say that the objective of this strategy can be two-fold. 

1. Trimming costs

2. Revenue generation

In any case the ultimate thing that will suffer would be the brand image. They should look at other cost centres where they can control the costs. For isntance, they can control their ad spends by looking at emerging media platforms in lieu of traditional ones. This will help them to save considerable costs. Any attempt to save costs at touchpoints like customer service or customer experience can be a big blow to brand image.

If that happens their entire branding exercise would be futile.

Now that was cost cutting, lets now tlak about revenue generation. Low-cost airlines balance sheets have always shown red lines due to surging fuel prices and undercapacity. They can't alone rely on ticket sales to run the show. They can tap more sources of revenues like offering on-board and offboard value added services. Media Space-selling on the flights  can be a great source of revenues.

What does global recession means for the Indian outsourcing industry?

By Nitin Kalani

Mumbai, India
The global meltdown has affected the health of many sectors and outsourcing is no exception. Tough the BPOs offering non-technical services are still hiring in large numbers, the average salary offer has gone down. The IT outsourcing is the place where the heat is being felt with companies triming discretionary IT spends.

The IT industry is forced to go slow on their hiring, infact some of them have axed their headcount. However, the IT infrasrtucture management and maintainance services have remain unaffected. That's because it is a compulsory cost centre. It can't be avoided.

Do you think these happy days will last for long? Not really. High labour attrition, global recession, poor infrastructure and lack of data protection laws could derail India's booming outsourcing industry. However, lets look at this from recession point of view.

The state of the economy in India is far better than other global economies. The US and UK are the major outsourcing countries. However, there's major unemployment in these countries. There could be a major backlash in these countries. Its very difficult to pass a law to stop outsourcing. However, the governments in these countries might resort to fiscal policies discouraging outsourcing and thereby creating an environment for companies to generate opportunities for localites. Atleast thats what has been on the agenda of the newly elected Barack Obama. So, inspite of the cost and other advantages, we might see jobs being diverted back to respective countries.

If that happens there could be major unempoyment in India as IT and ITES are the major employers after real estate and retail. The GDP may fall due to fall in purchasing power. It would be a grave situation especially if the meltdown continues. Lets hope that doesn't happen. Lets have a wait and watch approach.