Industry Overview

India is one of the fastest growing aviation markets in the world. It is the 9th largest aviation
market in the world .With the liberalization of the Indian aviation sector, the industry had
witnessed a transformation with the entry of the privately owned full service airlines and low
cost carriers. The aviation industry in India is one of those sectors that saw a constant pace of
growth among the other industries in the world over the past many years. The open sky policy
of the government has helped a lot of overseas players entering the aviation market in India.
From then, it has only been growing in terms of players and the number of aircrafts.

At present, private airlines account for around 75% portion of the domestic aviation market. As
of May 2006, private carriers accounted for around 75% share of the domestic aviation market.
The sector has also seen a significant increase in number of domestic air travel passengers.
Some of the factors that have resulted in higher demand for air transport in India include the
growing middle class and its purchasing power, low airfares offered by low cost carriers, the
growth of the tourism industry in India, increasing outbound travel from India, and the overall
economic growth of India.

The growth in the aviation sector and capacity expansion by carriers have posed challenges to aviation industry on
several fronts. These include shortage of workers and professionals, safety concerns, declining returns and the lack of
accompanying capacity and infrastructure. Moreover, stiff competition and rising fuel costs are also negatively impacting
the industry.

1. Employee shortage: There is clearly a shortage of trained and skilled manpower in the aviation sector as a
consequence of which there is cut-throat competition for employees which, in turn, is driving wages to unsustainable
levels. Moreover, the industry is unable to retain talented employees.

2. Regional connectivity: One of the biggest challenges facing the aviation sector in India is to be able to provide
regional connectivity. What is hampering the growth of regional connectivity is the lack of airports.

3.Rising fuel prices: As fuel prices have climbed, the inverse relationship between fuel prices and airline stock prices
has been demonstrated. Moreover, the rising fuel prices have led to increase in the air fares.

4.Declining yields: LCCs and other entrants together now command a market share of around 46%. Legacy carriers
are being forced to match LCC fares, during a time of escalating costs. Increasing growth prospects have attracted & are
likely to attract more players, which will lead to more competition. All this has resulted in lower returns for all operators.

5. Gaps in infrastructure: Airport and air traffic control (ATC) infrastructure is inadequate to support growth. While a
start has been made to upgrade the infrastructure, the results will be visible only after 2 - 3 years.

6. Trunk routes: It is also a matter of concern that the trunk routes, at present, are not fully exploited. One of the
reasons for inability to realize the full potential of the trunk routes is the lack of genuine competition. The entry of new
players would ensure that air fares are brought to realistic levels, as it will lead to better cost and revenue management,
increased productivity and better services. This in turn would stimulate demand and lead to growth.

7. High input costs: Apart from the above-mentioned factors, the input costs are also high. Some of the reasons for
high input costs are:-
Withholding tax on interest repayments on foreign currency loans for aircraft acquisition. Increasing manpower costs due
to shortage of technical personnel.

Market share

Current market share of Indian carriers in the domestic aviation market is shown below:[3]

Jet Airways and Jet Lite 26.2%

Kingfisher Airlines 19.0%

NACIL 17.7%

IndiGo 16.8%

SpiceJet 13.6%

GoAir 6.6%
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Disaster in industry

Disasters can occur at any time, in any industry. A comprehensive disaster-response plan

is therefore essential for dealing with the unthinkable. Often, elaborate operations must cope

with managerial, emotional, financial, legal and public relation aspects of a tragedy.1 Survival of

an organization confronted with a crisis situation is often the product of successful

communication and intricate preparation.

Disaster management is of particular importance to the airline industry. Because of the vast

amount of media attention that surrounds aircraft disasters, most people do not realize that airplane

accidents are actually rare occurrences. Interestingly, the scarcity of major airline disasters for many

individual airlines has proven to be a disadvantage to managers in those airlines, as many have not had

the opportunity to acquire valuable knowledge and experience necessary to deal with such crises. 2

Historically, disaster-response plans have been insufficient, and consequently there is a need for

intensive crisis training in order for the airline to deal professionally, effectively, and courteously with

1
Gilbert, Gordon A, ed. “Crafting a Disaster Response Plan.”
2
http://home.coa.cranfield.ac.uk/ccoa_test/tech-atm/atm4g.htm
the passengers and crew involved. Crisis management in the airline industry specifically includes

prevention of the disaster, highly extensive contingency planning, rapid response, and prompt delivery

of information to the public. Indeed, the plan of action during a crisis falls under the responsibility of the

organization’s top-level management.

What is Disaster / crisis management

Disaster in airline industry-a list

how do/should airlines manage

factors affecting airline industry

politics in disaster management

how to plan crisis management

Effectiveness of Strategic Crisis Communication

HUMAN ERROR
NEED FOR MOTIVATION
GROUPS AND THEIR ROLES
THE ROLE OF STRESS

Conclusion

Bibliography/references