SPICE JET STRATEGY

India is one of the fastest growing tourism destinations

in the world. The World Travel & Tourism Council has
estimated that India's tourism economy will emerge as
the world’s 3rd fastest growing over 2007-16, growing
at over8% per annum in real terms. Robust economic
growth, higher disposable incomes, and growth in
tourism & business travel, are the major
demand drivers.
The advent of low-cost carriers (LCCs) has
revolutionized the Indian aviation industry. Corporate
travellers have historically formed the majority of the
domestic air travel market in India. However, the
emergence of LCCs has resulted in middle-income
people and self-employed shifting from premium class
travel in trains to air travel.
The number of domestic air passengers grew at a
healthy 38.5% with 35.3million passengers flying in
FY07 against 25.5 million in FY06. The Centre for Asia
Pacific Aviation (CAPA) has predicted that the
domestic traffic would grow at 25%-30% annually until
2010, taking the overall market to more than70 million
passengers. Aircraft manufacturer Boeing has raised its
20-yearmarket forecast for Indian commercial aircraft
purchases to $86 billion from$72 billion last year.
Domestic passenger traffic, which increased at a CAGR
of 4% over FY97-04, has moved into high growth
trajectory with a 30% CAGR during FY04-07. A 26%
CAGR in demand is expected for domestic air travel
over the next 5 years.

Aviation Turbine Fuel (ATF) forms a major part of the

overall cost for airlines in India. It accounts for 40%-
50% of total operating costs, the highest in the world.
ATF prices in India are 60% higher than international
prices. The major component of the ATF prices is
taxes , which account for 53%of the base price.
ATF prices in India are based on the "International
Import Parity Prices", and directly linked to the
benchmark of Platt's publication of FOB Arabian Gulf
ATF prices (AG); and do not relate to the actual cost of
producing ATF in India.
ATF prices for domestic operations also include freight
charges from the Gulf to India, customs duty of 10%
ad-valorem (which adds up to an effective rate of
approx 20% inclusive of the CVD and cess), domestic
transportation and other charges, excise duty of 8.24%
(including cess), sales tax (levied by state governments)
averaging across the country at 25% as add-ons to the
AG prices, besides the oil companies' marketing
margin, and throughput charges paid to the Airports
Authority.
Spice Jet is the second largest low-cost airline in India.
Spice Jet is one of India’s most dynamic low-cost
airlines, with 19 aircraft flying to 18 destinations across
the country.
Spice Jet is one of the focussed low-cost carriers (LCC)
in India. With its headquarters in Gurgaon, the company
employs 2,500 people, and focuses on delivering the
best possible value for business and private travel. The
company was originally promoted by the SK Modi
Group under the name ModiLuft. It was acquired by
Royal Holding Services (Kansagra family) in 2000 and
re-started operations in May 2005.

The airline’s new fleet of aircraft is backed by cutting-

edge technology, and infrastructure. It has maintenance
support from KLM and state-of-the-art technology from
world leaders like Star Navigation, Russel Adams and
Tech Log. Spice Jet has a partnership with Navitaire,
the world’s renowned low-cost support system for
reservations and revenue management for providing
e-booking and e-ticketing services.
Spice Jet aims to evolve from the price-centric
positioning to that of a mature brand.
Spice Jet follows the pure LCC model. This has helped
it achieve the lowest cost in the industry – its per unit
cost is 20% lower than peers in the LCC segment, and
40% lower than players in the full-service carrier
(FSC)segment.
Spice Jet needed to run on a lean operating model. So it
integrated processes and technology to save operating
cost and one of the best ways of doing that was
enabling customers to book tickets online. Today, about
70 percent of the carrier's business comes via online
credit card transactions. Spice Jet invests in cutting-
edge technology – from its fleet of Boeing 737-800
aircraft down to its operational IT systems. The
company manages its airline-specific business
processes using Star Navigation, Russell Adams, Tech
Log and Navitaire systems. We expect the company to
post profits at the net level by FY09E as an optimal
fleet size is achieved, and fixed costs are absorbed over
a higher capacity (ASKM). It has unveiled a phased
capacity expansion plan which will see the addition of
15 aircrafts by FY10E, and another 8 in FY11-12E,
taking its total fleet size to 34 aircrafts. Spice Jet flies a
single aircraft type fleet (Boeing 737), which allows for
greater efficiency in maintenance, and supports its low-
cost structure. Currently, it has a fleet of 14 Boeing
737-800aircrafts in single-class configuration with 189
seats.

The company has already secured financing

arrangement for the next phase of its expansion. In
December 2005, it raised US$ 80 million through an
FCCB (foreign currency convertible bonds) issue,
proceeds of which are being utilised for the Pre-
Delivery Payments (PDP) of first ten aircrafts. The
subscribers to the bond issue include Goldman Sach,
and Istithmar, the private equity arm of Government of
Dubai.
The company also has a sale and lease back
arrangement with Babcock &Brown Aircraft
Management and Nomura Babcock & Brown, for all 16
aircrafts to be purchased during 2007-09. The deal is
valued at over US$ 1.1 billion based on the
manufacturer’s list prices.
Further, in January 2007, the company raised US$ 67
million (Rs 297crore) through preferential equity
allotment to strategic investors like the Tata Group,
Istithmar, KBC Financial Products (UK) and BNP
Paribas.
 Spice Jet is a low cost airline in an intense
competition industry where profit margins are low. To
survive in this scenario they are using some strategies,
which are as follows-
1. They fly at a height of 38000 feet which increase
their fuel efficiency by 10%.
2. Spice jet is paying to oil companies and flight
operators before due date, so that they can avail
discount and minimize their cost.
3. It has a tie-up with KLM Royal Dutch airlines for the
maintenance support of its fleet. KLM is the oldest
airline in the world and is well-known for the
maintenance of fleets. Through this
Spice Jet is getting fuel efficiency which further allows
them to offer lowest fares.
4. Spice Jet has launched its own Cadet Pilot Program
to save itself from the shortage of Pilots.
But this strategy is not working up to expectation.
5. It has tie-up with Star Navigation, Russell Adams
and Tech Log for state of the art technology.
6. It also announces some promotional schemes to
recognize itself in customers such as it announced that
on the occasion of 60th Republic Day it will give a
100% discount to defence personnel from 26 January
2010 to 26 March 2010.
Spice Jet aims to become an efficient airline that offers
value for money. To build the brand positioning in that
manner, Spice Jet seldom does price-only promotions.
The more you cue in price, the more the tendency to
come across as a “cheap airline”.
Some of their recent promotions have read, “It’s not
lonely at the top anymore” for a buy one-get-one-free
ticket scheme. On Children’s Day, any child flies for
free. Again, parents often accompany their children.
The idea is to get people to buy the two adult tickets.
The most successful promotions are about value, not
just the price.
Spice Jet’s strategy of leasing aircraft rather than
outright purchase has helped it to keep its debt under
control. With demand growing 13-15 per cent and
supply at only five per cent, Spice Jet and Indigo (being
the most profitable) are the only two players that are
adding to their capacity.
India’s largest carriers, Kingfisher Airlines and Jet
Airways, have either reduced their aircraft strength or
are adopting the lease route to cut down costs. This
leaves the field open to the most efficient companies to
grow their market share, with Spice Jet expected to
increase its share to about 15 per cent in 2010-11 from
about 12 per cent in 2008-09.

The company plans to lease eight aircraft over the next

two years and could opt to buy two planes going ahead
to strengthen its asset base.

On the business front, the company has delivered good

results, registering its first ever annual profit of Rs
61crore in 2009-10. Revenues were up 29 per cent year-
on-year at Rs 2,181crore. In line with the robust growth
in domestic demand for the sector since December (an
average four million passengers a month), the company
has been consistently recording load factors in excess of
80 per cent.
These high loads, coupled with better control on costs,
have helped deliver higher revenues and profits. Given
the better demand prospects and limited competition,
analysts believe the company will be in a strong
position to reap the gains.
Since its launch in May 2005, SpiceJet has single-
mindedly focused on becoming a key player in the
highly-competitive low-cost airline segment. And today
SpiceJet is India's second largest low-cost carrier in
terms of market share.

To get to its current position, Spice Jet needed to run on

a lean operating model. So it integrated processes and
technology to save operating cost and one of the best
ways of doing that was enabling customers to book
tickets online. But with incidents of credit card fraud
increasing steadily, Spice Jet saw danger to its business:
the revenue loss from such fraud was making a dent in
its thin profit margins.

Alarmed by the scourge, Spice Jet began scouting

around for an automated, advanced and flexible online
risk management solution that could screen online
transactions efficiently. There was only so much the
company's manually operated fraud control unit could
cover. They were losing between Rs 50-60lakh per
month. And when operating in a fiercely competitive
low-margin segment, such a significant revenue loss
can make you bleed. This also impacted the credibility
of their website.

Real-time verification of credit card transactions was

needed.

Based on a set of rules Spice Jet defines, Decision

Manager examined each transaction and determined
whether an online order should be accepted, reviewed
or rejected. In addition, the rules can be updated at any
time using a simple interface, allowing Spice Jet to
continually adapt its strategies as scam artists change
theirs.

Spice Jet began looking for a modern, centralized ERP

solution that would improve transparency and business
agility while reducing manual workload. The company
evaluated various options, including solutions from
vendors such as Oracle, before deciding on a solution
from IBM called Airline Office, which is based on the
SAP ERP application.

IBM Global Business Services worked closely with

business and IT teams from Spice Jet to map out the
requirements for the new solution and create a blueprint
for the project that would accelerate deployment and
minimize risk. The decision was taken to implement the
solution in two phases: first, to install the SAP
applications for financial accounting, controlling,
materials management and human resources, and
second to integrate the solution with the existing airline-
specific systems such as Russell Adams.

But the Rs 10-lakh project went live in February 2008

and the implementation helped Spice Jet automatically
screen credit card transactions reducing the burden of
manual intervention.

Within two months of the project's deployment, Spice

Jet's chargeback rates plummeted from between 4 to 5
percent to 0.002 percent.

It has not only secured online transactions but also

boosted the credibility of the website.

The company’s existing back-end systems included a

number of separate applications for financial
management, procurement and inventory control. The
lack of integration between these systems created a
large quantity of manual workload for reconciliations:
staff in the finance department spent too much time
capturing information and too little analyzing it.

The user interface of the old system was complex and

inflexible. As a result it was difficult to generate reports
in different formats for internal and external audiences.
When there was a need to change or customize
something, they had to go to the software provider,
which took time and was expensive.

The new SAP ERP applications have already delivered

a number of important improvements to Spice Jet’s core
business processes. Day-to-day accounting processes
have been simplified, and a powerful search function
has been added to help staff find specific transactions,
suppliers and customers easily. Reporting has also been
improved, since the SAP applications are flexible
enough to generate customizable reports without any
need for technical intervention.

Another very important benefit is the increased ability

to analyze, plan and forecast. With a single repository
for financial and inventory data, a much greater
financial transparency is achieved. The profitability of
individual routes can be assessed and much greater
control over purchasing – which is particularly
important as oil prices continue to fluctuate.”
Spice Jet has seen considerable improvement in a
number of routine back-office processes, such as the
monthly financial close.

The monthly close used to be an almost entirely manual

process, so it took 20 to 25 days to complete. With SAP
ERP the monthly financial close can be completed
within just seven days – so a better understanding of
how the business is doing can be achieved, and they can
react more quickly to a changing business
environment.”

At Spice Jet, the customer continues to be the core of

the business and all attempts were made to ensure the
highest level of customer satisfaction. Based on
customer feedback, Spice Jet implemented the
following initiatives during FY 2009-10:
• New menu comprising of hot Indian delicacies
• Pre-ordering refreshment at the time of booking at a
discount
• Revamped in-flight magazine
•Spice Jet Privilege Pass programme wherein
passengers could use the Spice Jet boarding pass and
gain great value offerings from hotels, online retail,
insurance and wellness partners.
• Roving check-in facility at airports
•In-flight music while boarding and deplaning
composed in-house
• Gift bags for kids on board
As recognition of these service improvements, Spice Jet
has received several awards and recognitions during
this year, prominent amongst them being:

• India’s best low-fare airline in a survey conducted by

MaRS on behalf of Hindustan Times (Dec 2009)
• Smart Travel Asia’s Top 10 Best Budget Airlines in
Asia for two consecutive years (Aug 2008 & Sept 2009)
• World Travel Market Award for multi-channel
approach in distribution (Nov 2009)
• Employer Branding Institutes’ Best Employer Brand
Award for our employee best practices (Dec 2009)
• Award for Best Website at the ‘World Low Cost
Airlines Asia Pacific Conference’ at Singapore (Jan
2010)
• Outlook Traveller’s Best Low Cost Airline (Feb 2008
& Feb 2010) India
• Class of Travel and Tourism’s ‘Best Domestic Low
Cost Airline award (Mar 2010)

The airline continues to focus all efforts on ensuring

that Spice Jet maintains a healthy On-Time
Performance track record. Flight cancellations are a key
measure of on-time performance and Spice Jet has one
of the lowest cancellation rates amongst domestic
airlines.

In 2009-10, Spice Jet reported a healthy on-time

performance of 78.8% - ahead of most of its
competitors. Constant efforts are on to improve the on
time performance.

Spice Jet was conceptualized as an airline that will

always provide safe, value-for-money, comfortable and
hassle-free air travel. The brand challenge was to
connect and position Spice Jet as a brand that offers
more than others in its competitive set.

Brand stimuli employed during the year included

advertising through print, outdoor and television media
and the campaign to establish ‘Get More When You Fly
Spice Jet’ was carried out.
The campaign has been received very well and evidence
of this lies in the overall growth of ‘direct’ business on
www.spicejet.com. In pre and post campaign analysis,
the brand has fared very well on key parameters such as
top-of-mind and total recall, imagery and other key
attributes.

Passengers carried increased by 44% against the

industry growth of 16.5% reflecting greater traction for
the Spice Jet business model.

During the year FY’10, capacity deployment increased

by 21%. This is due to increase in average aircraft
availability and increase in aircraft utilization.
Spice jet’s load factor increased from 67% in FY’09 to
78% in FY’10.
Spice Jet has partnered with University of Petroleum
and Energy Studies to provide its employees full-time
MBA and BBA programme in Aviation Management,
as part of it human resource strategy to train, empower
and retain its staff.
 

This programme is a fully sponsored opportunity from

Spice Jet to its employees and also includes free
facilities like travel and stay while employees attend
classes at Gurgaon campus. This is the second major
step towards employee empowerment announced by the
airline, the first being ESOP offerings to all its
employees.
 
Programmes like these, offer opportunities to young
talents and help them groom to become Managers.
Spice Jet has selected first batch comprising of 15
students who have qualified for the MBA programme.
The objective of starting this programme is to provide
managerial education to junior and middle level
managers and enable them to develop skills and talent
required for higher managerial positions in the
organization.
 
The Aviation Management programme imparts
knowledge to the candidates on application of modern
management concepts, methods and tools to the
challenges of aviation industry. The curriculum is
oriented towards brand management, customer
satisfaction, passenger services and fleet management,
allied services and fuelling management.

Strong growth in earnings in the recent quarter that

ended in June, the low cost airline based in Delhi, Spice
Jet announced on Tuesday that it had ordered as many
as 30 Boeing 737-800 aircrafts which will take its fleet
size to 75 by the year 2018. This deal is valued at 2.7
billion dollars based on list prices and the deliveries
from Boeing are expected to begin by 2014. The
company reported a full year of profit ending on March
31st. It had also witnessed the net profit doubling to
55.2crore rupees in the first quarter of the fiscal year
ending in June. The net sales were up by 35% reaching
708crore rupees. Over the last 3 months ending in June,
the total load of passengers increased massively by 88%
which was a steep rise over the 76% year on year
percent. The airline company expects to post a revenue
growth of around 15-20% during this financial year.
In the first 3 months, the airline company had witnessed
a passenger traffic growth of 29%.
It was also in news because 37% stake in it was recently
bought by Kalanithi Maran the media baron. Starting
September, the airline company with 125 million
dollars in cash reserves is planning to start international
flights to Kathmandu, Male and Dhaka followed soon
by Colombo which will be the 4th destination.

It follows a single aircraft type, point-to-point service,

and quick turnaround time for higher asset utilisation.
It has positioned itself as a niche player focusing on
profitability rather than chasing market share.
Spice Jet operates most of its flights between profitable
metro routes to optimise its load and yield (average
revenue per passenger). It currently operates from 22
destinations with more than 700 flights a week. 56% of
these flights originate from Delhi, Mumbai, Hyderabad
and Bangalore.
Spice Jet focuses on a few destinations, and maximises
frequencies between them. This helps the company
amortise the fixed costs of setting up bases at airports
over a larger number of seats. Spice Jet follows the pure
LCC model used globally. This has helped it in
achieving the lowest cost in the industry. Its per unit
cost is 20% lower than other LCC competitors, and
40% lower than players in the FSC segment. Going
ahead, we expect the cost per unit to reduce further on
account of fleet expansion, which would absorb the
high fixed cost over a larger base.

Spice Jet’s strategy is to provide safe, reliable travel at

low cost from point-to- point by maximising the
efficiency of all resources, keeping processes simple
and without incurring expenditure on components
which do not support the basic function of travel.

The airline has a single aircraft type fleet, the Boeing

737-800, which allows for greater efficiency in
maintenance, and supports its low-cost structure. The
airline has a fleet of Boeing 737-800 aircrafts with
advanced technology and added features like blended
winglets.
The 737-800 is the most technologically advanced
airplane in the single-aisle market. With a new wing
and more powerful engines, the 737 can fly higher,
faster and farther than previous models.
The advanced-technology ‘Blended Winglets’ allows
the airline to save on fuel, extend range, carry more
pay-load and reduce engine maintenance costs.
The 737-800s can spend more hours flying, as the new
jets do not need to spend much time in maintenance.
Spice Jet’s aircraft are configured in a single economy
class having 189 seats, which is among the highest in
the industry. This is possible as the airline focuses on
maximum space utilisation for generating more revenue
per aircraft. Spice Jet accommodates 21% more seats
than a dual (business and economy) configuration. With
costs like fuel, lease, maintenance remaining same per
aircraft, its per-seat costs comes down by around 20%.

The airline sells its tickets via the Internet or call centre
route. This helps it bypass travel agents who work on
commissions.

The mechanism also helps in reducing working capital

requirements as the company receives the money in
advance prior to travel. There are no receivables, and
also controls bad debts. Overall it helps the company
cut its distribution costs by 10% of the revenues.
A carrier aiming for the lowest possible cost of
operation has to develop a schedule that would give a
high annual utilisation of each aircraft in its fleet.
Such a policy will lower cost as the fixed costs of the
aircraft ownership or lease rentals can be spread over
higher quantity of output. Spice Jet has been
consistently reporting high aircraft utilisation (around
12 hours a day), in line with international benchmarks.
This is possible because of its high on-time
performance (82% within 15 minutes) and a low
turnaround time of 20-25 minutes as compared to 40-45
minutes takes by FSC. No loading of meals or complex
cargo and faster check-in system helps in reducing
turnaround time. Overall it reduces fixed cost
absorption by 15-20%.
Ever since its launch, Spice Jet has maintained the
highest load factor in the industry.
In FY06, the company achieved a PLF (passenger load
factor) of 86%, which declined to 78% in FY07. Heavy
discounting by airlines led to this decline, even as Spice
Jet continued to sell fewer tickets at very low prices.
Addition of new fleet by the company and increase in
the overall industry capacity also laid pressure on load
factor.

The company is expected to maintain PLF in the range

of 74%-75% relatively higher than industry levels of
65%.

RISK AND CONCERNS:

Rising ATF prices

Rising global crude prices result in higher ATF prices.

This would impose a threat to the profitability of
airlines. Over the last year, ATF prices have increased
by 20%. Any significant rise in its price will impact the
company’s bottom-line significantly. Also, the high tax
structure on ATF needs to be rationalised so as to make
Indian carriers globally competitive.

Inadequate infrastructure to have a negative impact

The aviation industry is currently facing huge
infrastructure constraints. Over 40% of the passenger
traffic is concentrated in the two main airports of Delhi
and Mumbai. Both the airports have inadequate
capacities to handle aircraft and passenger movement.
This along with limited terminal capacity, increased
congestion, outdated infrastructure, inadequate ground
handling systems and poor passenger amenities have a
great impact on the operations of airlines.
Further, for a total fleet size of 310 aircrafts in the
country, there are only around 250 parking bays.

Though the government has initiated plans for

infrastructural developments, any delay in infrastructure
development would aggravate the problem.

Availability of skilled personnel

Rapid growth in the industry has led to a sustained

shortage of pilots and other trained personnel in the
industry. This is aggravated by the high gestation period
(more than 3 years) required for acquiring a commercial
pilot’s license.
The training period for a cabin crew ranges from 6
months to one year. This shortage is driving the cost of
high-skilled staff. Also, the limited availability of the
required ground & maintenance staff could adversely
affect growth plans of the company.
 OPPORTUNITY AND OUTLOOK

The Indian aviation industry is one of the fastest-

growing in the world with private airlines accounting
for more than 80 per cent of the domestic aviation
market. With a compounded annual growth rate
(CAGR) of 18 per cent over the last 5 years, upgraded
airport infrastructure at the 4 important metro cities of
Delhi, Mumbai, Hyderabad and Bangalore and more
investments underway to upgrade Chennai and Kolkata
apart from 13non-metro airports, the domestic aviation
sector is poised to continue the growth momentum.

Potential for Growth

The Indian Civil Aviation market grew at a compound
annual growth rate (CAGR) of 18 percent during the
last 5 years.
Passengers carried by domestic airlines during the
4th quarter of FY 2009-10stood at 11.85 million as
against 9.82 million in the corresponding period of
2009 –a growth of 20.6 per cent, according to the traffic
data available with the Directorate General of Civil
Aviation (DGCA). With the economy recovering from
the lows of 2008 &2009, a sustained annual growth in
the 15-16% range can be expected for the next 2-3years.
This growth hinges on the availability of adequate
airport infrastructure to support this pace of expansion.
On this front, the Airports Authority of India (AAI) is

set to spend over US$ 1.02 billion in 2010, towards

modernisation of non-metro airports. AAI is also
planning the city-side development of 24 airports,
including those at Ahmadabad and Amritsar.
Additionally, 11 new green field airports have been
identified to reduce passenger load on existing airports.
With infrastructure expansion expected to keep pace
with the traffic growth (except for Mumbai), the future
definitely does look bright.

Road Ahead

A report from the Centre for Asia Pacific

Aviation (CAPA), forecasts that by2020 Indian
domestic air traffic will reach 160-180 million
passengers per annum and international traffic will
exceed 80 million. Today less than 2% of Indians fly in
any given year.
In forecasting substantial growth over the next ten
years, the report notes that India’s domestic air travel
market is currently just 20% that of China. In order to
meet predicted growth over the next ten years airlines
will need to invest $120 billion in new aircraft and a
further $20 billon in the airport sector.
The Indian aviation sector is likely to see clearer skies
ahead in the years to come.
• The Vision 2020 statement announced by the Ministry
of Civil Aviation, envisages creating infrastructure to
handle 280 million passengers by 2020.

• Investment opportunities of US$ 110 billion envisaged

up to 2020 with US$ 80billion in new aircraft and US$
30 billion in development of airport infrastructure.
• Associated areas such as maintenance repair and
overhaul (MRO) and training offer high investment
potential.

 FUTURE OUTLOOK FOR SPICEJET

Spice Jet is the only listed airline in India to declare an

annual profit. In its five years of operations, the
company’s practices have become industry benchmarks
for best cost management, aircraft utilization, service
quality and brand image.
Besides excellent flight loads in the first quarter,
demand outlook for the traditionally low July-August-
September quarter looks encouraging. The higher brand
salience and improved brand image attributes have
resulted in Spice Jet becoming a brand of choice
carrying more passengers per departure than any other
carrier in India.
With the planned induction of 7 new aircraft in 2010-
11, the Company will continue to plug the gaps in its
current domestic network and increase frequency on
high potential routes. Spice Jet is evaluating
international destinations in the SAARC region and
looks forward to even better utilization of its aircraft
and increased revenues.
Spice Jet is confident that the airline will make a
difference to customers, excite employees to do more
with less, turn vendors into our partners and create
value for investors.
Crude oil prices and demand will continue to determine
the financial situation of the industry. Other key
challenges include the weakness of the Rupee versus
the US dollar (30%of airline costing is incurred in US
dollars), the outsourcing policies in India, airport fees
and airport/airspace congestion.

5. ROLE OF THE GOVERNMENT

The airline industry continues to look for support from

the government to ensure that the domestic industry is
structurally stable and the domestic airlines are globally
competitive.

To extend support to the industry by classifying ATF

as ‘declared goods’ which will bring about a reduction
in Sales Tax rates from the current levels of around24-
25%.

Tax exemptions from fringe benefit tax, service tax on

input/ output services, customs/excise duty on ATF/
other spares can help make Indian carriers more cost
competitive as they look to spread their wings.

Infrastructure development is critical to the growth of

the industry. However, this should lead to lowering of
costs for the airlines.

A favourable outsourcing policy is critical to ensure

cost competitiveness of the Indian carriers.

Increasing the FDI limits for the sector will allow funds
and expertise to come into India and allow the aviation
industry to mature and be more competitive.