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Aviation - Comprehensive Pack PDF
Aviation - Comprehensive Pack PDF
Comprehensive
Pack
Table of Contents
Glossary
:3
Domestic Traffic
:8
International Traffic
: 18
Competitive Analysis
: 30
Future Outlook
Domestic Traffic
: 48
International Traffic
: 59
Glossary
Glossary
Available Seat Kilometers (ASKM): Passenger seats in aircraft x
Distance flown in kilometers.
Revenue Passenger Kilometers (RPKM): Number of fare-paying
passengers x Distance flown in kilometers.
Passenger Load Factor (PLF): RPKM / ASKM, expressed in per cent.
Operating expenses per ASKM: Average operating expenses
Glossary
Air Operator's Certificate (AOC): Approval granted from the
National Airworthiness Authority (NAA) to an aircraft operator to
Glossary
Hub and spoke system: A system that enables an airline carrier to increase
service options at all airports covered by its system.
It entails the use of a strategically located airport (the hub) as a passenger
exchange point for flights to and from outlying towns and cities (the
spokes).
Non-scheduled services: Revenue flights not operated as a scheduled
signing countries.
Glossary
Stage length: Distance travelled by an aircraft from takeoff to
landing.
Average stage length is computed as the ratio of aircraft kilometers
to aircraft departures.
Wide-body aircraft: Aircraft with more than one aisle in the
passenger cabin.
Examples of wide-body aircraft include the Airbus A330, A340,
A350 and A380; the Boeing B-747, B-777, B-787.
Yield: Average revenue earned per RPKM.
Domestic Traffic
10
12
Note: AirAsia and Vistara commenced flying operations in 2014-15, while Air Costa
commenced in 2013-14
13
21 billion-km in 2013-14.
Improvement in demand resulted in PLFs increasing to 79 per cent
in 2014-15 from 73 per cent a year ago.
14
15
16
Player-wise ASKM
International Traffic
18
19
20
21
22
23
24
25
26
Share of international passengers carried by private and stateowned carriers (based on pax kms)
27
ago.
28
29
Competitive Analysis
30
Low fuel price, strong demand and new entrants trigger fare war
The aviation industry in India has turned into a fierce battlefield.
Players are vying with each other on fares, quality of service and
connectivity, especially between smaller cities.
Low fuel prices, strong demand and entry of new airlines have
enabled both low fare/cost carriers (LFCs or LCCs) and full service
carriers (FSC) to offer attractive discounts.
GoAir joined the bandwagon and rolled out low ticket prices at Rs
1,299, to preserve its market share.
AirAsia India to continue strong discounts during its initial years to
31
Low fuel price, strong demand and new entrants trigger fare war
This would strain domestic LFCs, especially SpiceJet, as both
airlines are primarily focused on servicing the southern region.
Airlines typically slash ticket prices during lean seasons (second
and fourth quarters) to attract demand.
However, discounts have been doled out, even for peak holiday
seasons, which reflects intense competition.
32
RPKMs at 40%.
Indigo also scores well on reliability in terms of on-time
performance and cancellations (as given below).
33
Note: We measured reliable airline service based on two key factors - average on-time
performance and cancellation rate from January-June 2015
34
35
Note: New entrants include Air Asia India, Vistara, Air Costa and Air Pegasus
36
37
38
However, the airline will not be able to trim its operating costs over
the longer run on account of limited levers (airport charges and fuel
cost being similar across airlines) available at the airline's disposal
39
40
41
TruJet to compete with regional carriers Air Costa and Air Pegasus
for a pie of air traffic from tier II and III cities in South India.
Both Air Pegasus and TruJet operate 70-90-seater aircraft.
42
India operations.
Any development on this would remain a key monitorable as it can
further heighten competition.
43
44
45
46
47
48
Crude oil prices, which rose 27% between 2008-09 and 2013-14, declined
21% in 2014-15.
Over the long term, crude oil prices to remain low at $55-60 per barrel
over the long term due to continued rise in global supplies, subdued
growth in demand and no production cuts by OPEC.
Though the rupee depreciated marginally versus the US dollar in H1FY16,
over the long term the rupee may not mirror trends seen between 2008-09
and 2013-14 when the local currency weakened by 32% versus the US
dollar.
49
among airlines.
However, to ease pressure on the existing facilities, even large
greenfield airport projects, including Navi Mumbai, Goa and
50
52
PLF of new entrants to match that of existing players in the long run
53
55
56
2018.
57
58
59
60
predominantly
includes
business
travellers
and
Indian
61
62
63
64
65
66
traffic growth.
The alliance is estimated to add passenger traffic between India and Gulf
countries.
67
provide further access to new markets and destinations, via a codesharing agreement with other member airlines.
Star Alliance has about 28 member airlines, covering 195 countries
68
On the flip side, Tiger Air terminated its interline agreement with
SpiceJet for flights to Singapore in January 2015.
Singapore Airlines, a 49% stakeholder in Vistara, is also the largest
69
70
71
75
International capacity and PLF to record sharp rise over next five
years
Note: Our projections factor the current applicable 5/20 rule, which implies that new
entrants cannot currently fly on international routes.
76
78