Airline Industry 2011

Assignment Report
A Report on Aviation Industry, India
2011
Aviation Industry, India
Index
1. Overview of Indian Aviation Industry ............................................. 3
2. History.................................................................................................. 6
3. Indian Aviation Market ...................................................................... 7
4. Major Players .................................................................................... 13
5. Quantitative Analysis of 5 major players ……………………….. 23
6. Recommendations ………………………………………………… 26
7. References .......................................................................................... 28
Page
2
1. Overview of Indian Aviation Industry

The Indian aviation industry has witnessed an impressive growth during the past few years, with
major contribution from the civil aviation segment. Indian aviation industry market has been
strongly supported by the government and the private sector. Availability of skilled manpower
along with favourable business environment will position India as one of the most attractive
investment destinations in the coming years. It is currently the 9th largest aviation market in the
world. On the basis of strong market fundamentals, it is anticipated that the civil aviation market
will register more than 16 per cent CAGR during 2010-2013.
Mr Praful Patel, Union Civil Aviation Minister has stated that the airline industry in India has
grown by 400 per cent in a short span of about six-and-a-half years. He said in 10 years Indian
market will be the third largest aviation market after the US and China .
Passengers carried by domestic airlines from January – June 2010 were 46.8 million as against
39.4 million in the corresponding period of year 2009 thereby registering a growth of 18.9 per
cent - according to data released by the Directorate General of Civil Aviation (DGCA).
Presently, Delhi's Indira Gandhi International Airport is the busiest airport in the country at
present, handling an average of about 843 flights per day. On November 29, 2010, it handled its
highest ever traffic with 865 operations.
It is projected that some US$ 100 billion in aircraft orders will be up for grabs over the next 20
years. Boeing's current market outlook (2009-2028) predicts that the country will require 1,000
aircraft worth US$ 100 billion over the next two decades, according to Dinesh Keskar, President
of Boeing and FICCI Aviation Committee chairman.
Leading aircraft manufacturers Airbus and Boeing have expressed optimism over the growth of
the civil aviation industry in India. As per Airbus, the country would need 1,032 new aircrafts
worth around US$ 138 billion by 2028. Boeing has also predicted that the sector would require
1,150 commercial jets worth US$ 135 billion in the next 20 years.
Page
3
Timothy J Roemer, the US Ambassador to India has said that the US will work with the Indian
government and the domestic private sector to make the country an aviation hub. The AAI (Airport
Authority of India) is set to spend over US$ 1.02 billion in 2010, towards modernisation of non-
metro airports. AAI is planning the city-side development of 24 airports, including those at
Ahmedabad and Amritsar. Additionally, 11 new greenfield airports have been identified to reduce
passenger load on existing airports, according to Praveen Seth, member-operations, AAI.
Airport Retail
With the growth in the industry, airport retailing has also gained pace in the recent times. The
highest margin earners in this segment are food and beverages, beauty product, electronic items,
apparel etc. Development of new terminals and airports such as the recently inaugurated T3 in
New Delhi has provided have shown the intense effect that airport retail shall have in Aviation
sector. It has been predicted that airports would provide around 300,000-400,000 square feet retail
space by 2015. Many companies are also planning to leverage on this growing segment by
launching specific products for air travelers. For instance, French premium skincare brand
L'Occitane is planning to develop a special range to cater to the airport retailing segment. Some
airlines like Indigo, Jetlite, Go Air perform the sales of their items during travel calling it as
shopping at 30,000 feet. eg. Indigo airlines has launched Hello6e magazine which is actually a
brochure for so said as shopping at 30,000 feet. It charges its passengers even for simple magazines
which are free in airlines like Kingfisher Airines. The margin in retail may be estimated by the fact
that sales prices of items during air travel is more than 4 times the actual cost.
Investment Policy
According to the FDI policy released on March 31, 2010, for the civil aviation sector (Airports),
• FDI up to 100 per cent is allowed under the automatic route for greenfield projects.
• For existing projects, FDI up to 100 per cent is allowed; while investment up to 74 percent
under the automatic route and beyond 74 per cent under the government route.
Government Initiatives
To create world class airports, the government has recognised the need for the involvement of
private players in the development of airport infrastructure. Development of airports at Delhi and
Mumbai has been taken up under Public Private Partnership (PPP) mode. The capital expenditure
is funded through private equity, borrowings, and internal resources of joint venture companies.
Page
4
The AAI has taken up the development of 35 non metro airports. As per the Economic Survey of
2009-10, out of 35 airports, 9 have been completed and put in operation. The other projects are in
progress and likely to be completed by 2010-11. The adoption of Open Sky Policy has resulted in
the entry of several new privately owned airlines and increased frequency of flights for
international airlines.
Road ahead
Investment opportunities of US$ 110 billion are being envisaged up to 2020 with US$ 80 billion
towards new aircraft and US$ 30 billion towards the development of airport infrastructure,
according to the Investment Commission of India. Lufthansa Cargo and GMR group have signed
an agreement to develop Rajiv Gandhi International Airport as a South Asian cargo hub, with
focus on pharmaceutical exports. Kingfisher Airlines and American Airlines, both members of
the Oneworld alliance, will begin their codeshare and frequent flyer arrangement in 2011, the
two airlines have announced.
Page
5
2. History
The Indian civil aviation industry originated in 1912, when the first air flight between Karachi and
Delhi was started by the Indian State Air Services in collaboration with the UK based Imperial
Airways. It was an extension of London-Karachi flight of the Imperial Airways. In 1932, JRD Tata
founded Tata Airline, the first Indian airline. At the time of independence, nine air transport
companies were carrying both air cargo and passengers. These were Tata Airlines, Indian National
Airways, Air service of India, Deccan Airways, Ambica Airways, Bharat Airways, Orient Airways
and Mistry Airways. After partition Orient Airways shifted to Pakistan.
In early 1948, Government of India established a joint sector company, Air India International Ltd
in collaboration with Air India (earlier Tata Airline) with a capital of Rs 2 crore and a fleet of three
Lockheed constellation aircraft. The inaugural flight of Air India International Ltd took off on June
8, 1948 on the Mumbai-London air route. The Government nationalized nine airline companies
vide the Air Corporations Act, 1953.
Accordingly it established the Indian Airlines Corporation (IAC) to cater to domestic air travel
passengers and Air India International (AI) for international air travel passengers. The assets of
the existing airline companies were transferred to these two corporations. This Act ensured that
IAC and AI had a monopoly over the Indian skies. A third government-owned airline, Vayudoot,
which provided feeder services between smaller cities, was merged with IAC in 1994. These
government-owned airlines dominated Indian aviation industry till the mid-1990s.
In April 1990, the Government adopted open-sky policy and allowed air taxi- operators to operate
flights from any airport, both on a charter and a non charter basis and to decide their own flight
schedules, cargo and passenger fares. In 1994, the Indian Government, as part of its open sky
policy, ended the monopoly of IA and AI in the air transport services by repealing the Air
Page
6
Corporations Act of 1953 and replacing it with the Air Corporations (Transfer of Undertaking and
Repeal) Act, 1994. Private operators were allowed to provide air transport services. Foreign direct
investment (FDI) of up to 49 percent equity stake and NRI (Non Resident Indian) investment of
up to 100 percent equity stake were permitted through the automatic FDI route in the domestic air
transport services sector. However, no foreign airline could directly or indirectly hold equity in a
domestic airline company.
3. Indian Aviation Market

In terms of market share, private carrier Jet Airways was the market leader with 19.2 per cent
share, closely followed by Kingfisher Airlines with 19.1 per cent, Indigo with 17.3 per cent,
National Aviation Company Limited (NACIL) with 17.1 per cent, SpiceJet with 13.3 per cent,
JetLite with 7.0 per cent and GoAir with 6.9 per cent during the month of November 2010.
Market Share
6.90% Jet Airways

7.00% 19.20%
Kingfisher Airlines
13.30%
Indigo
19.10%
National Aviation Company Limited
17.10%
Spice Jet
17.30%
JetLite
Go Air
S.W.O.T. Analysis
Page
7
STRENGTHS WEAKNESS
• Lower air fares

• Tourism in India • Poor infrastructure at airports.
• Growing outbound travel in India • Acute shortage of trained pilots and
• Growth potential Liberalization of sector technicians.
• Stiff rules and regulations for operation.
• Modernization of non metro airports
• High operational cost for airlines.
• Rising share of low cost carriers • High security threats in the subcontinent.
• Fleet expansion by state owned carriers • Training infrastructure incompatible both in
terms of quality and quantity.
• The opening up of new international routes
• Shortage of qualified instructors due
by Indian government migration to schedule operation.
• Establishment of new airports and • Pressure on quality standard of inducted
pilots.
restructuring of old airports
• Infrastructural constraints
Page
8
OPPORTUNITIES THREATS
• The number of air travelers is about 0.8 per • Government Regulations; Though the govt.
cent of the population is making changes in the regulations, it needs
• India's civil aviation passenger growth, at 20 to move at a much faster pace on this.
per cent, is among the highest in the world. • Aviation in India is over regulated and needs
• India's civil aviation ministry expects 100 to free itself from govt. shackles.
million passengers by 2020. • Inadequate infrastructure.
• India anticipates doubling of passenger • Acute shortage of Pilots and maintenance
traffic over the next decade. engineers.
• Economic Growth • Security and safety.
• Vibrant middle class: Increasing • Low profit margins and high operating costs.
Consumerism and Affordability ”common • Other faster means of transportation
man”
• Under-penetrated markets
• Growth in Tourism
• Currently domestic passenger market is
growing at 50%
Strategic Groups
The companies in the Indian aviation industry may be divided into following strategic
groups:
Full range carriers with medium price: Wide coverage of services is provided and these
airlines have greatest potential to capture and lead the market. These have less number of
International destinations and the new comers can come up with low fares eg. Jet, Indian
Airlines, King Fisher Airlines.
Page
9
Low cost carriers with low price: Great facilities and technology but no service for economic
class. All the services in economy class are provided by levying extra charges eg. Spice Jet,
Go Air, Indigo and other Low cost carriers.
Very high service with high price: Better service due to high fare and Attractive for the
growing middle class. But these have less coverage within country. eg. Taj airways, Club one
airways.
Good service with medium price: Low fare as compared to higher service provider. Better
services than LCC. These airlines target the middle class customers eg. Kingfisher, Jet
airways.
Key Demand Drivers
1. Tourism flow boosts traffic

India's share in global and South Asia's total demand for travel and tourism has been growing.
Tourist arrival in India has grown at a CAGR of 18% for the last three years to 4.5 million.
Tremendous business opportunities in one of the world's fastest growing economies would be the
key driver for this growth.
Page
10
2. Cargo movement imperative
Low cost domestic carriers have been offering attractive prices to companies transporting a variety
of goods. The lack of refrigerated trucks and refrigerated warehouses have forced exporters of
perishable goods to use aircrafts. Cargo business is also much more revenue generating than
passenger traffic. Statistics indicate that airlines spend more than 75% on transporting
passengers, while only 25% is spent on cargo. Most Indian airlines earn about 10% of their revenue
from cargo income.
Page
11
Fig. - Booming air freight business
Source: AAI, PL Research
3. Lifestyle changes herald air travel

Explosive growth in wages has led to significantly higher disposable income, bringing about a
distinct change in the lifestyle of the middle and upper class population, which essentially is the
target market of the aviation sector.
4. Infrastructure travails will reduce
The ministry of civil aviation has decided to modernise and upgrade 35 non-metro airports across
India. Leading airport developers are readying to participate in bids to win the right to construct
and operate commercial property at these airports. Apart from this, the government is also planning
to build greenfield airports at Navi Mumbai (Maharashtra), Kannur (Kerala), Hassan and Gulbarga
(Karnataka), Ludhiana (Punjab), Greater Noida (NCR), Paykong (Sikkim), Cheithu (Nagaland)
and Chakan (near Pune, Maharashtra). This would lead to reduction in operational cost of carriers
(due to lesser fuel consumption) as well as on-time performance by players.
Concerns
Page
12
1. Route dispersal guidelines constrain profitability: As per a Directorate General of Civil
Aviation (DGCA) order on route disbursal guidelines, it has been stated that a scheduled air
transport service provider operating Category I routes is required to deploy at least 10% of ASKM
on Category II routes and at least 50% of ASKM on Category III routes. Subject to approval from
the DGCA, concerned operator could meet this obligation by providing services either by aircraft
available in its fleet or with aircraft in any other operators' fleet on mutually agreed terms and
conditions.
2. Infrastructure constricting growth: The tremendous growth anticipated in the aviation
industry is possible only if the country's infrastructure is in place. The industry is already facing
problems of congestion during peak hours at major airports. The current airport infrastructure in
the country is inadequate to support the tremendous expansion in fleet announced by major players.
3. Further competition cannot be ruled out: While there are well intentioned government
policies and controls like FDI norms, license control, landing slots and flight schedule allocations
that allow ample opportunity for airlines to remain profitable, but the sheer growth in airline
capacity can induce competition.
4. Airline functions need re-engineering: With the IT industry providing a commendable

backbone, airlines can now emerge from the inefficiency they have been restrained with.
Innovative strategies and new technologies may well offer cost savings, but at the same time they
can be hard to implement given the cost. S
Some of the areas that need re-engineering are:
• Customer oriented improvements - Self-service kiosks, remote passenger checkin,
fast bag drop-off and biometrics are the need of the hour.
• Improved crew management - Planning and pairing through online rostering.
Training module and packs. IT enabled crew control, crew communication and
crew records.
• Improvements in aircraft operation - Clear IT tools that allow uploading of weather
and flight plans and downloading of engine performance data help in pre-flight and
post-flight plans.
5. Carbon offsetting practices may add to cost: Globally, the aviation industry is under the
scanner because it is the fastest growing cause for global warming; and EU aircraft emissions alone
have risen by 87% since 1990. However, the aviation industry only contributes about 2% of all
Page
13
global carbon emission. Also, according to International Air Transport Association (IATA),
airlines have been addressing the problem of carbon emission since the early 1970s – well before
other industries did anything constructive. Aircraft fuel efficiency has improved 20% in the past
decade and almost 5% in the last two years alone.
4. Major Players
Jet Airways
Jet Airways operating domestic and international services operates 330 daily
flights to 50 destinations across the country and 6 overseas, its market share is greater than any
other Indian domestic operator’s. Jet Airways airline offers relatively low costs by international
standards and often provides economical and discounted fares, especially on booking through the
internet. It has been able to lower its costs by ‘sweating its assets’ i.e. getting maximum utilization
out of its fleet by minimizing turnaround time between flights. With frequent flights, at all possible
timings to each sector of India, this airline provides convenience and services within a league of
its own.
Founded 1 April, 1992
Commenced 5 May, 1993

Operations
Hubs Chhatrapati Shivaji International Airport (Mumbai)
Page
14
Secondary Hubs • Brussels Airport
• Chennai International Airport
• Indira Gandhi International Airport (Delhi)
Focus Cities • Bengaluru International Airport (Bangalore)

• Cochin International Airport (Kochi)
• Rajiv Gandhi International Airport (Hyderabad)
• Sardar Vallabhbhai Patel International Airport
(Ahmedabad)
Frequent Flyer Program JetPrivilege
Airport Lounge Jet Lounge
Subsidiaries JetLite
Fleet Size 99
Destination 71
Company Slogan “The Joy of Flying”
Parent Company TailWinds Ltd.
HQ Mumbai, India
Key People Naresh Goyal (Founder and Chairman)
Website www.jetairways.com
Source: www.wikipedia.org
Strategies
Jet Airways maintain market leadership in the domestic market. They have developed two equally
strong pillars: domestic and international operations. They have consistently been providing a
superior product to our passengers. Jet Airways exhibit seamless connectivity spanning domestic
Page
15
and international routes. They are continuously improving their cargo revenue potential - domestic
and international. The focus of Jet Airways for reduction in unit cost of operations is on following
points:
• On reducing operating costs (specifically fuel)
• Reduction in selling and distribution cost (on-line bookings)
• Re-negotiation of agreements with various service providers
They are bent upon providing best customer service serving both business and economic class.
Jet Airways have phenomenally acquired Sahara Airlines thus getting stronger hold in market.
They have come up with several schemes to acquire and retain customers. Regular customers
enjoy discounted fare as marketing strategy.
JetLite
Jet Lite flies to various destinations in India, which include important cities like
Delhi, Bangalore, Mumbai, Kolkata, Lucknow, Hyderabad, Pune, Chennai along with regional
destinations like Ahmedabad, Gorakhpur, Allahabad, Bhubaneshwar, Ranchi and others. The
airline has recently added international destinations like Singapore, Colombo, Kathmandu and
Chicago (Code-share with American Airline) to its network and would be further enhancing it by
adding United Kingdom (London) and Malaysia (Kuala Lumpur) shortly. For cheap airfares and
great deals on international and domestic air tickets, including popular travel sectors like New
Delhi to Bangalore, Mumbai to Bangalore, New Delhi to Mumbai, Bangalore to New Delhi,
Mumbai to Goa, Delhi to Goa, Bangalore to Hyderabad and more, book your travel on JetLite.
Kingfisher Airlines
Kingfisher Airlines is a famous and fast growing airlines. It can be easily identified
with the logo of a Kingfisher (bird) in flight with spectacular colours of red, blue and green.
Kingfisher Airlines is a major Indian luxury airline operating an extensive network to over 30
destinations. It promises to suit the needs of air passengers and deliver with reasonable airfares.
Kingfisher’s main luxury component is it’s inflight entertainment system. This highly popular
airline is very promising with brightly dressed staff, courteous services and cheap flight fares. The
interiors provide a world of luxury and you can avail cheap discounted fares year round by booking
Page
16
for flight tickets over the internet. Flight schedules and status are easily available on the World
Wide Web for Kingfisher Airlines. Currently operating only on domestic routes, it has plans to
start flights to the United States of America, so travelers can expect many desirable services to be
added to the already blossoming airline.
Founded 2003
Commenced Operations 9 May, 2005
Hubs Bengaluru International Airport
Secondary Hubs • Chhatrapati Shivaji International Airport (Mumbai)

• Netaji Subhash Chandra Bose International Airport
(Kolkata)
Focus Cities • Chennai International Airport

• Pune International Airport
• Sardar Vallabhbhai Patel International Airport
(Ahmedabad)
Frequent Flyer Program King Club
Airport Lounge Kingfisher Lounge
Alliance OneWorld
Subsidiaries Kingfisher Express
Fleet Size 66 (+130) orders
Destination 77
Page
17
Company Slogan Fly the Good Times
Parent Company United Breweries Group
HQ Kingfisher House, Mumbai, Maharastra
Key People • Vijay Mallya (CMD)

• Sanjay Aggarwal (CEO)
Website flykingfisher.com
Some of its marketing strategies are as follows:

• Aims at future fleet expansion to increase market share
• Offering free tickets
• Corporate deal offers
• Concessional fares for students
Kingfisher Red
It was formerly known as Air Deccan, the airline was previously operated by
Deccan Aviation. It was started by Captain G. R. Gopinath and its first flight
took off on 23 August 2003 from Hyderabad to Vijaywada. It was known popularly as the common
man's airline, with is logo showing two palms joined together to signify a bird flying. The tagline
of the airline was "Simpli-fly," signifying that it was now possible for the common man to fly.
The dream of Captain Gopinath was to enable "every Indian to fly at least once in his/her
lifetime." Air Deccan was the first airline in India to fly to second tier cities like Hubballi,
Mangalore, Madurai and Visakhapatnam from metropolitan areas like Bangalore and Chennai.
After the merger, Air Deccan is known as Kingfisher Red run by Kingfisher Airlines. Air Deccan
had positioned itself as a “Low Cost Carrier”. Its target markets are: Upper middle class in short
term and lower middle class aggressively in long term.
Page
18
Its marketing strategies are:
• Advertisement through print, radio and billboards
• In flight magazine for revenue generating
• In flight shopping scheme called “Brand for less” –AVA Merchandising
• Tie-up with Café Coffee Day
• ICICI-Travel agent purchase card
• Tie-ups with HPCL and Reliance Web World
• Single class aircraft configuration
• Internet booking and cheap fares
• Offering non-trunk short-haul routes and attracting high-end railway traffic through
comparable fares
National Aviation Company of India Limited (NACIL)

The National Aviation Company of India Limited (NACIL) was a company formed by the
government of India to oversee the merger of Air India and Indian. NACIL lasted 3 years and was
renamed Air India Limited on October 26, 2010. It was incorporated under the Companies Act
1956 on 30 March 2007 and was owned by the Government of India based at the Air India Building
in Nariman Point, Mumbai. The Company was created to facilitate the merger of the two main
state-owned airlines in India: Air India, with its subsidiary Air-India Express and Indian, together
with its subsidiary Alliance Air (now called Air India Regional).
Air India
In an earnest attempt to pave way for emergence of a single entity as India's

national flag carrier, Indian Airlines and Air India, India’s premier airlines
were merged to form Air India and provide an integrated international and domestic footprint, for
the advantage of travellers. This merger has brought seamless integration of domestic and
international flights, allowing passengers to check in for their international flight from any
domestic point in India.
Page
19
The new Air India has an improved frequent flier programs with new offerings to various global
destinations. The consumer is a clear winner in the merger, having a much-improved product and
superior service quality.
Founded 30 March 2007

Headquarters Air India Building, Nariman Point, Mumbai, India
Key People Arvind Jadhav, Chairman & Managing Director
• Sardar Vallabhbhai Patel International Airport (Ahmedabad
Revenue Rs 15257.47 Crores
Net income Rs 1619.12 Crores
Employees 32,000 (2009)
Subsidiaries Air India Regional
Subsidiaries • Hotel Corporation of India Limited
• Air India Air Transport Services Limited
• Air India Engineering Services Limited
• Air India Charters Limited
• IAL Airport Services Limited
• Airline Allied Services Limited
Website www.airindia.com
Indigo
IndiGo Air or IndiGo Airlines, as expected sports the deep colour of IndiGo as
its signature colour. It is a private domestic low cost airline. This airline is amongst the best,
offering professional services, economical prices with great deals and discounted fares. It operates
Page
20
to all the major areas of India. Tickets can be booked online and the services provided are user
friendly while at the same time, extremely comprehensive.
Founded 2005
Commenced Operations 4 August, 2006
Hubs • Chhatrapati Shivaji International Airport (Mumbai)

• Netaji Subhash Chandra Bose International Airport (Kolkata)
Secondary Hubs • Bengaluru International Airport (Bangalore)
• Chennai International Airport
• Sardar Vallabhbhai Patel International Airport (Ahmedabad)
Fleet Size 39 (+241 orders)
Destination 24
Company Slogan Go Indigo
Parent Company InterGlobe Enterprises
HQ Gurgaon, Haryana
Key People • Rahul Bhatia MD

• Aditya Ghosh President
Website www.goindigo.com
Spice Jet
Spicejet is a low cost airline based in New Delhi and is one of India’s newest
start - up private airlines. Spicejet was earlier known as Royal Airways and now sets its standards
Page
21
high as it competes with the Indian Railway passengers traveling in AC coaches; this speaks
tremendously for their cheap and discounted airfares. They marked their entry in the service with
Rupees 99 fares for the first 99 days and then followed with a Rupees 999 promotional fare for
select sectors. With all these marketing strategies and booming business, this airline leaves no
loose ends. Spicejet offers every day spicy fares to budget conscious travelers. This business also
thrives on online air ticket bookings with a detailed list of flight status and schedules. A low cost
airline that offers budget travel at discounted rates with the best of services.
Founded 2004
Commenced Operations 23 May, 2005
Hubs Indira Gandhi International Airport (Delhi)
Secondary Hubs • Chennai International Airport

• Chhatrapati Shivaji International Airport (Mumbai)
• Netaji Subhash Chandra Bose International Airport (Kolkata)

Fleet Size 25
Destination 22
Company Slogan “Get more when you fly”
HQ Gurgaon
Key Peoples Neil Mills, CEO
Website SpiceJet.com
Page
22
Go Air
Go Air is a low cost airline and operates domestic passenger services to 13

cities with 385 weekly flights. This relatively new, no frills airline offers great fares and deals year
round, within all major sectors of India. Go Air aims to be the lowest - cost airline in India and
provides passengers with a comfortable and affordable option to popular holiday and business
destinations within the country. Tickets can be booked online and travelers will be provided with
options that guarantee discounted fares and great deals on domestic tickets.
Founded 2005
Commenced Operations Nov, 2005
Hubs Chhatrapati Shivaji International Airport (Mumbai)
Secondary Hubs Indira Gandhi International Airport (Delhi)

Fleet Size 10
Destination 18
Parent Company Wadia Group
HQ Andheri, Mumbai
Key People Jahagir Wadia (MD)
Website www.goair.in
Page
23
Quantitative Analysis of 5 major players

Revenues of major players in India
Page
24
Revenue (in crores)

12000
10000
8000
6000
Revenue (in crores)
4000
2000
0
Kingfisher SpiceJet Jet Airways Indigo
Airlines
Source: Wikipedia
Seat factors of scheduled domestic airlines
100
91
87.5
90 87.1 86.7 84.4 85.4 86.1
80.7 82
80 76.9 76.3 77 77.4
70.8
70
Seat Factor %
60
50 Oct, 2010
Nov, 2010
40
30
20
10
0
NACIL Jet Airways JetLite Kingfisher Spicejet Go Air Indigo
Report: DGCA (Directorate General of Civil Aviation)
Page
25
Passenger carried (%)
jet airways jet lite kingfisher spicejet goair paramount indigo
2% 15%
28%
6%
14%
9%
26%
Scheduled revenue aircraft departures in numbers
140000
120000
100000
80000
2005-06
60000
2006-07
40000 2007-08
2008-09
20000
2009-2010
0
Page
26
Cargo Carried in 2009-10
140000
120000
100000
80000
Cargo Carried for scheduled dometic
services (in Tons)
60000
Cargo Carried for scheduled
International services (in Tons)2
40000
20000
0
Jet JetLite Kingfisher Go Air Spice Jet Indigo
Airways
Page
27
Recommendations
• The Airlines industry is cyclical in nature due to uncertainties which are beyond its control.
Due to this the brands have to be built in such a manner that they survive the lean periods
on their strength of being able to differentiate themselves with others. This must be done
by being clear as to what one’s brand represents and sticking to its core values and not by
raging a price war all the time.
• Price discounts need to be carefully done to attract customers and simultaneously ensure
that it does not affect the brand image or result in considerable reduction in revenue.
• In-flight advertising is an effective promotion medium as the audience is hundred percent
captive. They can help airlines promote the brand image, promote new schemes, improve
the brand recall and generate extra revenue if done without the passengers perceiving it as
a forceful.
• Pricing is the most sensitive issue in airline industry and is done depending on the demand
of the market. Switching is more frequent in case of low fare airlines whereas business
segments are more brands loyal.
• While deciding among low cost airlines fare acts as the deciding factor while in case of
choosing among full service providers the determine factors are flight schedule, reliability,
quality and connections with not much emphasis on fare.
• Concentrate Domestic Market. Indian domestic market is continuously increasing with
increased disposable income. This market need to be concentrated by designing suitable
and lucrative schemes.
• Concentrate highly developing air cargo sector. India is a highly developing economy now
acting as a global industrial hub. As such, it is indispensable for any aviation player to
increase its reach in its sector to stay tuned with market leaders.
• Try to gain the loyalty of existing customers (frequent fliers, etc.). Jet airways and
kingfisher have gained a good share of market by suitably designing frequent miles
schemes to customers using their services frequently. Other players can also cash upon this
strategy.
Page
28
• Improve quality, both pre flight and on board. Kingfisher airlines have secured the second
spot only due to its superb quality both pre flight and on board, thus making flying a superb
experience for its passengers. Other players should also provide quality service to gain
customer loyalty.
• Expanding international market & tourism sector. With globalization, international
market, which is mainly covered by international players can also prove to be a golden
opportunity for Indian players.
• Increase fleet size. This is very important as both domestic and international markets are
heading towards high growth. Both passenger and cargo planes need to be incorporated in
the fleet. New planes in the fleet will reduce operating and maintenance cost, employees
per flight and also chances of any mishappening.
Page
29
References
1) Annual Report: DGCA (Directorate General of Civil Aviation)
2) www.wikipedia.org
3) http://www.ibef.org
4) http://www.iloveindia.com/economy-of-india
5) http://money.sulekha.com
6) http://www.goindigo.in
7) http://www.jetairways.com
8) http://flykingfisher.com
9) http://www.airindia.com
10) http://spicejet.com
11) http://goair.in
12) http://www.authorstream.com
13) http://www.moneycontrol.com
Page
30

Airline Industry 2011

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Airline Industry 2011

Uploaded by

Copyright:

Available Formats

Assignment Report

A Report on Aviation Industry, India

3. Indian Aviation Market ...................................................................... 7

4. Major Players .................................................................................... 13

5. Quantitative Analysis of 5 major players ……………………….. 23

1. Overview of Indian Aviation Industry

3. Indian Aviation Market

6.90% Jet Airways

• Lower air fares

Key Demand Drivers

1. Tourism flow boosts traffic

Fig. - Booming air freight business

Source: AAI, PL Research

3. Lifestyle changes herald air travel

4. Airline functions need re-engineering: With the IT industry providing a commendable

Commenced 5 May, 1993

Hubs Chhatrapati Shivaji International Airport (Mumbai)

Focus Cities • Bengaluru International Airport (Bangalore)

Frequent Flyer Program JetPrivilege

Airport Lounge Jet Lounge

Company Slogan “The Joy of Flying”

Parent Company TailWinds Ltd.

Key People Naresh Goyal (Founder and Chairman)

Commenced Operations 9 May, 2005

Hubs Bengaluru International Airport

Secondary Hubs • Chhatrapati Shivaji International Airport (Mumbai)

Focus Cities • Chennai International Airport

Frequent Flyer Program King Club

Airport Lounge Kingfisher Lounge

Subsidiaries Kingfisher Express

Fleet Size 66 (+130) orders

Parent Company United Breweries Group

HQ Kingfisher House, Mumbai, Maharastra

Key People • Vijay Mallya (CMD)

Some of its marketing strategies are as follows:

National Aviation Company of India Limited (NACIL)

In an earnest attempt to pave way for emergence of a single entity as India's

Founded 30 March 2007

Commenced Operations 4 August, 2006

Hubs • Chhatrapati Shivaji International Airport (Mumbai)

Company Slogan Go Indigo

Parent Company InterGlobe Enterprises

Key People • Rahul Bhatia MD

Commenced Operations 23 May, 2005

Hubs Indira Gandhi International Airport (Delhi)

Secondary Hubs • Chennai International Airport

Focus Cities • Bengaluru International Airport (Bangalore)

Company Slogan “Get more when you fly”

Key Peoples Neil Mills, CEO

Go Air is a low cost airline and operates domestic passenger services to 13

Commenced Operations Nov, 2005

Hubs Chhatrapati Shivaji International Airport (Mumbai)

Secondary Hubs Indira Gandhi International Airport (Delhi)

Focus Cities • Bengaluru International Airport (Bangalore)

Parent Company Wadia Group

Key People Jahagir Wadia (MD)

Quantitative Analysis of 5 major players

Revenue (in crores)

Seat factors of scheduled domestic airlines

Report: DGCA (Directorate General of Civil Aviation)

Passenger carried (%)

jet airways jet lite kingfisher spicejet goair paramount indigo

Report: DGCA (Directorate General of Civil Aviation)