Airline Industry

Javeed budhwani

Airline Industry in
India

454 airports and airstrips

(includes Operational, Non Operational, Abandoned and Disused
Airports)
127 are owned & operated by AAI
16 - international, 7 custom airports, 28 civil enclaves
Scheduled domestic air services - available from 82 airports
May 2007- May 2008
25.5 million domestic & 22.4 million international passengers
20% growth highest in the world
Growth Rate Projections (for next 5 yrs)
15% p.a (Passenger Traffic)
11.4% p.a (Cargo Traffic)

History

1911
1932
1938
1946

first commercial flight airmails from allahabad to nani (10 km)

the aviation department of tata sons ltd . Established
tata airlines (successor to aviation sivision of tata son )
Tata Air Lines converted into a public Company and
renamed Air India Limited
1948 Air India International incorporated
1953 Nationalization of Aircraft Industry
Air India (serving the international sectors)
Indian Airlines (serving domestic sectors)
Deccan Airways, Airways India, Bharat Airways,
Himalayan Aviation, Kalinga Airlines, Indian National
Airways and Air Services of India

History
1986 Private Sector Players permitted as Air taxi operators
Players including Jet, Air Sahara, NEPC, East West,
Modiluft, etc started service
1990 Open sky policy
1994 Private Carriers permitted to operate scheduled services
2003 Entry of low-cost carriers
2007 Merger of Indian Airlines into Air India
Acquisition of Air Sahara by Jet Airways
2008
Kingfisher acquired 49% stake in Deccan Aviation

Regulatory
Ministry of Civil Aviation
Authorities
Responsible for the formulation of policy, development and regulation

of Civil Aviation. Its functions also extend to overseeing airport facilities,

air traffic services and carriage of passengers and goods by air
Other Attached/Autonomous Organizations:
Directorate General of Civil Aviation (DGCA)
Promote safe and efficient Air Transportation through regulation and
proactive safety oversight system
Bureau of Civil Aviation Security (BCAS)
Regulatory authority for civil aviation security in India
Airport Authority of India (AAI)
Accelerate the integrated development, expansion and modernization
of the operational, terminal and cargo facilities at the airports

Policies
Open Sky Policy
FDI
Airports
100% for green field operations
74% for existing airports - 100% with special permissions
100% tax exemptions for 10 yrs.
Airlines
49% in domestic airlines - 100% for NRIs
74% in cargo & non-scheduled airlines

Service

Competitive Pressure

Low cost Carriers

changing the game

Indigo

Price

MARKET SHARE

The Kingfisher
AIRLINES
The king of good times

Kingfisher airlines
Dr Vijay Mallya is the Chairman and CEO of Kingfisher
Airlines
Kingfisher Airlines Limited launched scheduled airline
services on May 9, 2005 with 4 daily flights between
BOM & BLR and one A-320 aircraft.
There are tools for mood lighting such as web chat, inseat
plugins for music, liveTV with 16 channels on each seat
100 percent E ticket airline

VISION
The Kingfisher Airlines family will
consistently deliver a safe, valuebased and enjoyable travel
experience to all our guests

STP
Segmentation

SWOT Analysis

Strengths
First airline with full new fleet of aircraft
Quality hospitality provided to customers
Route rationalization
Already have training academy
Weaknesses
Service delivery to metros and other big cities
Yet not in profit
High ticket pricing
High attrition in top brass

Opportunities
Under penetrated domestic market
International market
Untapped air cargo market

PESTEL ANALYSIS
POLITICAL FACTORS
1) Open sky policy
2) FDI limits: 100% for Greenfield airports
74% for the existing airports
100% through special permission
49% for airlines.
ECONOMICAL FACTORS
1) Contribution to the Indian economy.
2) Rising cost of fuel.
3) Investment in the sector of aviation.
4) The growth of the middle income group family affects the aviation
sector.

SOCIAL FACTORS
1) Development of cities leads to better services and airports.
2)Employment opportunities.
3)Safety regulations.
4) The status symbol attached to a plane travel
TECHNOLOGICAL FACTORS
1) The growth of e-commerce and e-ticketing.
2) Satellite based navigation system.
3) Modernisation and privatisation of the airports.
4) Developing green field airports with private sector for example in
Bangalore the airport corporation limited.

ENVIRONMENTAL FACTORS
1)The increase in the global warming.
2)The sudden and unexpected behavior of the atmosphere and the
dependency on whether.
3)Shortage of the infrastructural capacity
4)Tourism saturation.
LEGAL FACTORS
1) FDI limits
2) Bilateral treaties
3) Airlines acquisitions and the leasing cost.

7 Ps
Product

Price

PORTERS FIVE FORCE

MODLE

KINGFISHER AIRLINES
Performance
KingfisherAirlineshas posted a net loss
of Rs 577 crore in the financial year
ended March 2007, the balance sheet of
UB Holdings,which owns the airline,
shows.

Jet Airways
Founded in 1993, Chairman - Mr.Naresh Goyal
HQ in Mumbai
Countrys second largest international airline
Largest domestic airline - 31%
Primary base - Mumbai's Chaatrapathi ShivajiAirport
Secondary hubs - Bangalore, Brussels, Chennai, Delhi,
Hyderabad, Kolkata and Pune.
April,2007 - Acquired Air Sahara - JetLite
Now JetLite integrated into Jet Airways

Mission Statement
Jet Airways will be the most preferred domestic airline in India. It
will be the automatic first choice carrier for the travelling public and
set standards, which other competing airlines will seek to match.
Jet Airways will achieve this pre-eminent position by offering a high
quality of service and reliable, comfortable and efficient operations.
Jet Airways will be an airline which is going to upgrade the concept
of domestic airline travel - be a world class domestic airline.
Jet Airways will achieve these objectives whilst simultaneously
ensuring consistent profitability, achieving healthy, long-term returns
for the investors and providing its employees with an environment
for excellence and growth

STP
Primary Segments (Geographic) - Domestic & International
Customer Segments
First class, Premiere(Business) class & Economy class
Target Segments
Premiere(Business) class
Business travelers, contribute 48% of passengers & 66% of revenues,
ready to pay higher prices, last time booking, dont like transit
Economy class
Leisure travelers, prefer low cost airlines, ready for transit if there is cost
advantage, large % of passengers
Seat Allocation Yield Management Technique
Positioning High value for High price
Unique Selling Price Customer relationship and Punctuality

SWOT Analysis

Strengths
Market driver
Experience exceeding 14 year
Only private airline with international operation
Market leader
Largest fleet size
Weaknesses
Loosing domestic market share
Old fleet with average age around 4.79 years
Scope for improvement in in-flight service
Weak brand promotion

Opportunities
Untapped air cargo market
Scope in international service and tourism
Threats
Strong competitors
Fuel price hike
Overseas market competition

PEST Analysis
Political Issue
License issue for international
operation
Infrastructural constraint
ATF price policy
Economic Effects
Rising income level
Reduced fare but yet not enough

Social Effects
Sound Pollution
Plane hijacking
9/11 Incident
Technology Effects
Modernization of aircrafts
Modern technology like CAT3
and ILS

7Ps
Price
Economy & Club Premiere Fare
Discounted fare for senior citizens & defense personnel
Advance Passenger Excursion/ APEX Fares
One Fare
Night Saver Fares
Check Fares
US Dollar Fares & Visit India Fares
Place
Place of Service - Aircraft
Various Destinations

Promotion
Offers
Companion Free Offer, One Fare, Concessional fares, JetPrivilege
Offers,
Jet Airways Citibank Credit Cards, Corporate Deal Offers, International
Specials, Camp Rock contest, Festival specials, Student specials,
Surprises etc.
Advertising and Branding
Hoardings
Brand Ambassadors
Sponsorships
Event Organization

Process
People Processing
People physically enter the service system to receive the service.
Aircraft is the
service factory where service is delivered.
Possession Processing
Cargo
Luggage & Courier
Physical Evidence
Servicescape
Servicescape usage - Interpersonal
Complexity of Servicescape - Elaborate
Flight
Offices - Org. & Ticket Booking Agents
Virtual Servicescape

Jet Airways - Performance

Annual Revenues - Rs.9481.5 crores (200708)
Rs.7401 crores (200607)
Profit(Loss) After Tax - Rs.253 crores loss
(2007-08)
Rs.27 crores profit
(2006-07)
- All Other Domestic Players showed
loss(2006-07)

Kingfisher

Kingfisher

THANK YOU