COMPETETIVE MARKETING

STRATEGIES OF AIRLINES OF
THE PVT. SECTOR

Group Members:
Hatmary Lengen
Neha Tyagi
Varun Taneja
Manoj Kumar
 Synopsis

 Overview of the aviation sector

 Legal & Regulatory environment
 Industry Growth trends
 SWOT analysis
 Comparison
 Challenges faced by the Aviation sector
 Bailout Packages
 Road Ahead
 OVERVIEW

 India has one of the fastest growing aviation markets in the

world.
 The growth rate being 18% per annum.
 A reason for higher demand for air transport in India is due
to:
1. The growing middle class and their purchasing power,
2. Low airfares offered by low cost carriers like Air
Deccan,Kingfisher
3. The growth of the tourism industry in India, increasing
outbound travel from India, etc.
 Classification of The Aviation Sector

 The Indian aviation sector can be broadly divided into the

following main categories:

1: Scheduled air transport service: It is an air transport service

undertaken between two or more places & operated according to a
published timetable. It includes: Domestic & International
Airlines.
 Air Deccan,
 Spice Jet,
 Kingfisher Airline &
 Indigo
2: Non-scheduled air transport service: It is an air transport
service other than the scheduled one & may be on charter basis.
The operator is not permitted to publish time schedule & issue
tickets to passengers.

3. Air cargo services: It is an air transportation of cargo & mail. It

may be on scheduled or non-scheduled basis. These operations
are to destinations within India. For operation outside India, the
operator has to take specific permission of Directorate General
of Civil Aviation demonstrating his capacity for conducting
such an operation.
 Further Classification

Apart from this, the players in aviation industry can be

categorized in three groups:

 Public players : Air India, Indian Airlines

 Private players : Jet Airways, Air Sahara, Kingfisher
Airlines, Spice Jet, Air Deccan
 Start up players : Omega Air, Magic Air, Premier Star Air &
MDLR Airlines.
 Regulatory Environment

 Federation of Indian Airlines

 Directorate General of Civil Aviation (DGCA)

 Ministry of Civil Aviation

 Airport Authority of India

 Civil Aviation Policy

 Open Skies Agreement

 FIA

 Federation of Indian Airlines is a body formed by the

schedules carriers in India.

 FIA, as the voice of India's airline industry, works to

identify & take up issues on behalf of the industry, with
various regulatory authorities, government departments &
other key stake-holders.

 The functioning of the FIA is guided by an Executive

Council, comprising chiefs of each of the member airlines.
 Directorate General of Civil
Aviation (DGCA)

 The Directorate General of Civil Aviation (DGCA)

is a principal regulatory body for the aviation industry
in India. DGCA is headquartered in Delhi & has
various directorates
 Ministry of Civil Aviation

 The Ministry of Civil Aviation in India is located at

New Delhi. The ministry formulates national
policies & programs for development & regulation
of civil aviation & also prepares schemes for the
growth & expansion of Civil Aviation in India.

 The ministry also monitors airport facilities, air

traffic services & the carriage of passengers & goods
by air.
 Under its purview are the
following organizations:
 Attached/Autonomous Organizations

 Directorate General of Civil Aviation

 Bureau of Civil Aviation Security
 Indira Gandhi Rashtriya Uran Akademi

 Air Carriers
 Air India Ltd.
 Indian Airlines Ltd.
 Pawan Hans Helicopters Ltd.

 Airport Authority of India

 CIVIL AVIATION POLICY

 MISSION:
To maintain a competitive civil aviation
environment which ensures safety and security
in accordance with international standards, promotes
efficient, cost-effective and orderly growth of air
transport and contributes to social and economic
development of the country.
 STRATEGIC OBJECTIVES

 Trade, tourism & overall economic activity & growth

is encouraged.

 Safe, efficient , reliable & widespread  quality air

transport services are provided  at reasonable prices.

 Effective systems are put in place for timely crisis &

disaster management, including investigation of
incidents/accidents.  
 OPEN SKIES AGREEMENT

 India & the United States signed a landmark

agreement, permitting any number of airlines to
operate any number of flights to any point in each
other's territory.
 The agreement will enhance passenger & cargo
services between the countries, decrease airfares &
accompany innovations & new partnerships in the
aviation industry.
 Industry Growth Trends

 May 2006 private carriers accounted for around

75% share of the domestic aviation market.
 During April-September 2006, the total aircraft
movements witnessed an increase of 29.6% year on
year to 494.92 thousand aircraft movements, as
compared to 318.89 thousand during April-
September 2005.
 The total air passenger traffic in September 2006
has shown an increase of 31.1%, as compared to
2005.
 Passenger Traffic

 In 2005-06, the passenger traffic rose by 25-30% and is

expected to grow by 25% year-on-year over the next five
years.
Year Domestic Domestic International International

  Passengers Growth (%) Passengers Carried (Lakhs) Growth (%)

Carried(Lakhs)

1996 119.07   99.60  

1997 116.43 -2.22 106.04 6.47

1998 118.60 1.86 108.39 2.22

1999 122.30 3.12 113.60 4.81

2000 133.21 8.92 119.99 5.63

2001 128.10 -3.84 120.20 0.18

2003 145.42 9.20 140.37 9.93

2004 181.73 24.97 166.72 18.77

2005 223.07 22.75 189.63 13.74

 Projections from 2006 to 2014

 The Centre for Asia Pacific Aviation (CAPA) has

forecast that domestic traffic will increase by 25 %
to 30 % till 2010 & international traffic growth by
15 %, taking the total market to more than 100
million passengers by 2010.
 Domestic
International Passengers carried
Passengers carried
Year
In Lakhs Annual Growth (%) in Lakhs Annual Growth (%)

2006 267.7 -- 207.94 --

2007 321.2 19.99 232.07 11.60

2008 369.4 15.01 258.99 11.60

2009 424.8 15.00 277.63 7.20

2010 488.6 15.02 297.62 7.20

2011 523.7 7.18 319.05 7.20

2012 561.5 7.22 342.02 7.20

2012 601.9 7.20 366.65 7.20

2013 393.0 57.19 393.05 7.20

2014 691.7 7.21 421.35 7.20

 Contd.

 India's civil aviation passenger growth, presently at

20 per cent, is one of the highest in the world. By
2020, 400 million Indian passengers are likely to be
airborne.

 By 2020, Indian airports are expected to handle

more than 100 million passengers including 60
million domestic passengers and around 3.4 million
tonnes of cargo per annum.
 SWOT analysis & Comparison

 STRENGHTHS:  WEAKNESSESS:

1. Liberal Environment 1. Airport Infrastructure

2. Modern Fleet 2. Airways Infrastructure
3. High Quality 3. National Carrier
4. Economic Growth 4. Deep Pockets
5. Growing Tourism 5. High Cost Structure
6. Skilled Resources
 OPPORTUNITIES  THREATS

1. Market Growth 1. Middle East Aviation

2. Geographic Location 2. Terrorism
3. Lower Costs and
Higher Quality
 Top Private Players

 Main Players:
 Jet Airways
 Kingfisher
 Indian
 Spice Jet
 Air India
 MARKET SHARE

 Jet + Air Sahara  29.4%

 Kingfisher & Decaan 28.9%

 Indian Airlines + Air India  19.8%

 Kingfisher at a Glance

 Dr. Vijay Mallya is the Chairman and CEO of Kingfisher

Airlines.
 Kingfisher launched its airline services in May 2005.
 SWOT ANALYSIS

 STRENGHTS:

1. Strong Brand value & Reputation in the minds of

customers.
2. Quality of the service.
3. First airline to have new fleet of airbuses.
 WEAKNESSESS:

1. High Ticket prices.

 OPPORTUNITIES:

1. The expanding tourism Industry.

2. Untapped Air cargo market
3. Under penetrated Domestic Market
 THREATS:

1. Competitors.
2. Fuel Price Hike.
3. Economic Slowdown/Recessions.
 Jet Airways at a Glance

 Naresh Goyal is the founder & chairman

 Started Indian commercial airline operations in
May 1993.
 In April 2007, they acquired Air Sahara.
Kingfisher vs. Jet Airways
 Kingfisher is the latest  Jet airways is a
Airline in India. experienced Airline in India.

 Jet airways had a slight

 Overall loss in Dec
profit in the 1st quarter of
2008 of $218 ml.
2009.

 Kingfisher acquired 46%  Jet acquired Air Sahara.

in Air Deccan
 Challenges for the aviation
sector
 Employee shortage
 Regional connectivity
 Rising fuel prices
 Gaps in infrastructure
 High input costs
 Bailout Package

 The emergency stabilization Act 2008.

 Which is when the firm or an organization face an

emergency requiring urgent & decisive action. The
govt. helps to over come from the financial crises.
 National Carrier: Air India
 Facing financial crunch.

 Incurred a loss of Rs.4,000 crore last fiscal year.

 Delayed payment of employees.

 Seek Bailout package of Rs.14000 crore from Govt.

 Delay the salaries of its over 31,000 employees for

15 days Rs.3,000 crore annually.
 MARKETING STRATEGIES

 Kingfisher Airlines is the first carrier in the country to offer

live in-flight entertainment.

 Kingfisher Airlines Ltd & Dish TV have joined hands to

provide live in-flight entertainment on Kingfisher aircraft .

 The service would enable airline’s customers to book air

travel ticket after securing ‘ngpay’ application on their
GPRS-enabled mobile handsets.
 On the promotional front, Kingfisher has
signed up the latest diva of Bollywood Ms.
Deepika Padukone as the brand ambassador
 JETAIRWAYS- Marketing
strategies
 Jet Airways has partnered with
UTV to launch the online contest
'Cannes Calling', wherein
winners will get a chance to attend
the Cannes Film Festival 2009
along with a companion.

 Jet is trying to highlight its

product superiority.
 ROAD AHEAD…
 The boom in the aviation sector is likely to generate nearly
2.5 lakh jobs by the year 2010.

 The study says that the civil aviation sector is also set to
become a Rs 35,000-crore industry by the same time.

 The industry would create 2,00,000 jobs by 2017.

 The industry is expected to add 130 airliners to its current

fleet of 270 airliners, which would, in turn, increase
manpower demand
THANK YOU!!