Airline Industry

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
first commercial flight airmails from allahabad to nani (10 km)
• 1932
the aviation department of tata sons ltd . Established
• 1938
tata airlines (successor to aviation sivision of tata son )
• 1946
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 NRI’s
 74% in cargo & non-scheduled airlines
 Competitive Pressure
eci vr e S

Low cost Carriers

changing the game

Indigo

Price
 MARKET SHARE
Others Airlines Market Share
Spice Jet 2%
6%
Kingfisher
8%
Jet Airwyas
Indian Airline
Jet Lite Jet Airways
Air Deccan
10% 35%
Air Sahara
Air Deccan Kingfisher
15% Spice Jet
Others
Indian Airlines
24%
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, value-
based and enjoyable travel
experience to all our guests
 
STP
SWOT Analysis
 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 P’s
PORTERS FIVE FORCE
MODLE
 KINGFISHER AIRLINES
Performance

• Kingfisher Airlines has 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
Country’s 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, don’t 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
Strengths
SWOT Analysis
 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
 7P’s
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 (2007-
08)
Rs.7401 crores (2006-
07)
Profit(Loss) After Tax - Rs.253 crores loss
(2007-08)
Rs.27 crores profit
(2006-07)
- All Other Domestic Players showed
loss(2006-07)
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