As 2010 was drawing to a close, Kadamba Transport Corporation, Goa's state owned and perennially loss-making bus operator, saw itself in the doldrums.
Thanks to factors that infect most state-run transport corporations-decrepit buses, many unprofitable routes, low occupancy and a snowballing salary bill-it was losing anywhere from Rs 2-3 crore every month. This was on top of a cumulative financial liability of over Rs 100 crore.
Faced with very few options, Venancio Furtado, Kadamba's managing director, decided to try his luck with online ticketing for his interstate buses. In March 2011, Kadamba went live with its own Internet ticketing portal, powered by 'BOSS', a software reservation system made by Redbus, a Bangalore-based company.
What happened over the next few months was a miracle, at least for Kadamba. Travellers increased, drawn by the easy and quick online experience. Occupancy rates increased across most interstate routes from Goa; like Sholapur, Bangalore, Hampi, Shirdi and Mumbai. On those routes it started seeing a concept that was almost alien-profits as per a report in Forbes India by Rohin Dharmakumar.
Thanks to good and ever improving roads, an expanding range of modern luxury coaches, and the hassle-free booking enabled by Redbus and many of its peers like Via, TicketGoose and MakeMyTrip, demand for bus travel is growing rapidly. And as customers vote for greater comfort and speed with their wallets, operators too are upgrading-buying expensive multi-axle buses, hiring 'customer service managers' and investing in technology.
Maharashtra, one of the states that is currently implementing Redbus' reservation system, has over 19,000 daily 'schedules' or trips.
That's a single state running as many schedules as all 700 private operators currently on Redbus! Another large state, Rajasthan, is also set to adopt Redbus.
The bullishness is evident on the supply side too. "Including the 800 that it sold last year, Volvo has sold a total of 5,000 coaches in India from its inception 10 years ago. But they are ramping up manufacturing capacity to produce 5,000 coaches every year from 2015!" says Phanindra Sama, 30, CEO and co-founder of Redbus.
Buoyed by Volvo's success, a rash of international coach makers are set to launch in India this year, including Toyota, Scania, MAN and Hyundai.
Spurred by this, Redbus' business is booming. With a self-estimated market share of over 65 percent, it did over Rs 100 crore in sales during the last quarter of 2011. Despite the fact that most of the tickets it sold were worth just a few hundred rupees, it generated a cash profit of Rs 50 lakh, its first ever.
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