EXECUTIVE SUMMARY Indian Airlines is the oldest carrier in the domestic aviation industry.
It has been the main stay for domestic air travel in India for more than 45 years. With the arrival of other private airlines, its interests have been hurt, but it is continuing it’s quest to be the leader in this industry. During the research, the main objectives of the study have been:
a) To understand the perception of travellers towards Indian Airlines. b) Also to apprehend the perceptions of travel agents towards Indian Airlines. c) To know how Indian Airlines can improve its overall performance d) The specific objectives are to improve service quality of Indian Airlines e) To have a better marketing strategy f) Market image of Indian Airlines as compared to its counterparts
To find out the required information primary data was collected through self-administered questionnaire for the passengers and travel agents and secondary data from library and the internet. A sample size of 200 was taken including 150 passengers and 50 travel agents.
The passengers and travel agents felt that private airlines were better in certain service factors. They also could identify a change in Indian Airlines, after the arrival of private airlines and believed that it was overcoming it’s ‘I care less’ syndrome.
For analysis of the data, statistical tools, based on the data collected were used and comparative analysis was done.
Indian Airlines is a financially strong company and if it carefully plans it’s strategies, with more focus on passengers, it will remain the market leader. 1.1 PURPOSE OF THE STUDY The purpose of the study was to understand the perception of travelers towards Indian Airlines, to apprehend the perceptions of travel agents towards Indian Airlines, to know how Indian
Airlines can improve its overall performance in terms of its marketing as well as its quality of services provided and total customer satisfaction and hence with the help of the above to assess the image of Indian Airlines in the market as compared to its counterparts viz. Jet air and Sahara Airlines.
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REASERCH OBJECTIVES OF THE STUDY
a) To understand the perception of travelers towards Indian Airlines. b) Also to apprehend the perceptions of travel agents towards Indian Airlines. c) To know how Indian Airlines can improve its overall performance d) The specific objectives are to improve service quality of Indian Airlines e) To have a better marketing strategy f) Market image of Indian Airlines as compared to its counterparts
1.3 RESEARCH METHODOLOGY OF THE STUDY
Research Design: There are three kinds of research designs namely; • • • Exploratory Descriptive Causative
In my project, a Descriptive Research was initiated because it was generally a study which was carried out to describe the market characteristics of various airlines, and of Indian Airlines in particular, as well as the buying behaviour of travellers.
Situation Analysis: - Conducting a situational analysis means analysing the company, its market, its competition and the industry in general. The situation analysis is a background investigation. It involves obtaining information about the company and its business environment by means of library, research.
Data collection- primary and secondary data: Data would be collected through both primary and secondary data for carrying out the research project.
Primary Data: - Primary data relates to data which has been collected first hand and which has been collected for the purpose of analysis. It is undertaken, when data needed by the researcher does not exist, or are dated inaccurate, incomplete or unreliable, the researcher has to collect primary data. The primary data was collected through questionnaires.
Sources of Primary Data: Primary data was collected through
Corporate travellers. Professional’s Students.
Secondary Data Secondary research invariably precedes primary research. Secondary data are data that were collected for another purpose and already exists somewhere.
Sources of Secondary Data • • • • • Travel Magazine. Business Travel Journals. Brochures, Libraries Annual Report.
Doing research via sampling was important because of impossibility of finding all of a population, as well as other restrictive parameters like cost, time etc. Our sampling decision should be in-coordination with the research and data objectives. The method opted for taking samples was `Non-probability sampling’. It was a `Purposive Non-probability sampling/ Judgement Sampling’ was used. The key assumption underlined this type of sampling is that, with sound judgement or expertise, and an appropriate strategy, one can carefully and consciously choose the elements to be included in the sample, so that samples can be developed that are suitable for one’s needs. My objective for using `Judgement Sampling’ was that since airline travel is not experienced by everybody, so `Judgement Sampling’ was a must to get the closest and the correct response.
Sample Size: • • 150 passengers/ respondents 50 travel agents.
Method of Data Collection:Survey/ Personal Contact Method:- In a survey, the researcher carries out opinion polls involving customers, sales persons, dealers, traders and experts. In the survey, the main method of interviewing was by Personal Interviews, as this gave me a better understanding of the needs and preferences of the passenger. Most of the data is quantitative in nature and supported by qualitative data.
Instruments for data collection: The research instruments used for this survey were structured questionnaires. The questionnaires were designed to find the satisfaction levels of Domestic Airlines, in particular, Indian Airlines.
Questionnaire: A questionnaire consists of a set of questions prepared to respondents for their answers. Because of its flexibility, the questionnaire is by far the common instrument used to collect primary data. Closed Ended as well as Open Ended questionnaire were used in my market research . Drafting of a Questionnaire: The formulation of the questionnaire, i.e., the structure and the disguise to be used in the questionnaire depends upon the kind of information that is desired. Questionnaire was prepared over a period of 5 days by intensive brainstorming. Valuable advice regarding changes was given by my ORP tutor, Mr. S.L.Gupta, has resulted in the formulation of the questionnaire through which responses were collected and analysed. A copy of the questionnaire has been attached as an annexure to the project. Since my objective was to derive out the maximum information out of the passengers without making the whole exercise boring and troublesome, I decided to keep majority of the questionnaire close-ended. In order to generate and sustain the interest of the respondents, the initial questions pertained to the gathering of simple information like the frequency of travel, the choice of airline and the purpose of travel. Since, I had to balance the twin objectives of gathering maximum information and at the same time retaining the interest of the customers, I was compelled to squeeze in a lot of questions and club them up in a single question. The question pertaining to assessing the impact of private airlines on Indian Airlines, for this the respondents ticked in the various options under different parameters. Last but not the least, the respondents were asked to pen down some personal information purely for statistical purposes, with an assurance that it would be kept confidential.
Research Plan: . Type of Research Market Segment Geographical Area Data Sources Market Survey Passengers / travellers New Delhi Secondary - Print Media - Internet -Company documentation Primary Research Instrument Sampling Plan - Survey research questionnaire Sampling Unit- Airline passengers - Travel agents Sample Size- 150 passengers 50 travel agents Sampling Procedure-Non-probability Contact Method judgemental Personal Interviews.
The study could have been more comprehensive and more representative of the universe, had the sample-size been larger, but it was not possible mainly due to lack of time and some other constraints.
The areas covered were restricted to Delhi city only and as such the results of questionnaires are valid for Delhi city only.
All this report has been an individual attempt and also it involves the human process of interpretation and analysis, so there are chances of human error.
The marketing research is done on the basis of certain assumptions as regards to the future of the industry, but due to environmental changes, research results may not be valid.
Despite repeated proof-reading, there is a possibility of spelling error of otherwise, which may have been overlooked.
ABOUT TOPIC About Aviation Industry The first Indian State air service began to function on 20th Dec. 1929. All technical and operation control was left in the hands of Imperial Airways. After that Tata Airways came into existence. This airline was dealing with the taking off passengers and cargo from one place to another. There were as many as eight private airlines till 1953. • • Air India Limited Air Services of India Limited.
• • • • •
Air Airways (India) Limited. The Bharat Airways Limited. The Deccan Airways Limited. The Himalayan Aviation Limited. The Indian National Airways Limited. The Kalinga Airlines.
They were all having their own individual scheduled services in and around India. However, the private sector of Indian aviation industry was brought to an end in June 1953 by the introduction of an act of parliament known as Air Corporation Act 1953. This brought in the nationalization of air-transport. Consequently, all the existing eight private airlines were amalgamated to form one nationalized airline called Indian Airlines. Indian Airlines came into existence in June 1953. Today it is well-established brand name with sound infrastructure and an overwhelming size.
Progress of India’s Domestic Airlines. Item Hours flown (‘000’s) Kilometers Flown ( million) Passengers carried (000’s) Freight Tonnes (km) 1971 90 33.4 2056 14.1 1981 93 44.4 5650 59.8 1990-91 89 49.7 7484 88.0 1991-92 107 57.6 8316 84.5
OPEN SKY POLICY The process of liberalisation of the Indian air transport industry commenced with Government’s declaration of open sky policy in 1990.In fact, the first step in this direction was taken when Air Taxi Scheme was introduced as non scheduled operations in 1987. The scheme did not take off because of severely restrictive conditions. It was modified in 1990 to remove restrictions on capacity, schedules, route selection and airfares. The import duty on aircraft was also reduced to 3% to make airlines operations cheaper. This initiative further received impetus with the liberalisationof the economy, trade and industry from 1991. The entry of private scheduled airlines in Indian domestic skies was signaled in October 1992.As a result of these measures a number of parties started air taxi operations on trunk and high density routes. As Indian Airlines began losing market share and technical staff, the government took a number of steps to bolster Indian Airlines.
Air Cooperation Act, 1953, repealed on March 1st, 1994, ending the state’s monopoly of the skies.
Air Taxi Operation allowed in 1994 to seek scheduled airline status if they have at least 3 aircrafts.
Vayudoot, the third public sector airline, is merged with Indian Airlines and its infrastructure offered to private airlines.
No restrictions imposed by the government, of pricing by the private airlines and air cargo operators.
Most restrictions on types and imports of aircraft and operating routes relaxed in 1994.
Private Airlines Currently Operating: • • JET AIRWAYS SAHARA INDIA
JET AIRWAYS : Jet Airways has emerged as a major competitor of Indian Airlines on the sector it operates. It was launched on 5,May 1993 by Mr. Naresh Goyal with approximately 100 employees and 2 aircrafts. It has an interline agreement with over 90 international airlines which facilitates ticketing and allows for convenient transfer of passengers. The crew has been trained in Malaysia Airlines and Ansett-Rankett among the leading aviation training centresin the world. Jet airways have the most latest and modern fleet of Aircraft’s operating in India. They have a total of 30 Aircraft’s, out of which
AIRPLANES – fleet
Model Boeing 737 A.T.R
No. of Planes 25 5 30
The reservation system used by them is SABRE. They have an efficient and courteous ground staff to take care of the needs of passengers. They have the quickest baggage system.
Jet Airways is not just a passenger airline – an important part of their revenue accrues from their cargo division. They have capability of upto 2.5 tons per flight and with the current fleet expansion the tonnage would be 35000 tons.
Their basic aim is to fly more people and more cargo to more destinations faster and more often than any other airline in the country.
Sahara India: It was launched in 1978 from Gorakhpur. It was started with a small capital of Rs. 2000/- and the establishment was one small room.
The business today has reached over 1600 crores. Now they have 971 offices and the biggest infrastructure in the private sector in India. They work force is over 70,000 and the growth is over 180%. The various activities they carry out are parabanking, housing, steel, aviation and mass communication.
The philosophy of Sahara India is growing emotionally and materially together like a family i.e. Collective Materialism. They operate with Boeing aircrafts. It follows the motto of “Value Added flying”. They have a central reservation system and Gabriel II programmes. They have in-flight entertainment through audio-visual facility. They have taken technical assistance from British Airways and provide ratable maintenance and material management support. They have special security expert team and state of the art explosive detection equipment.
PROBLEMS FACED BY PRIVATE AIRLINES These include: • • • Lack of training facilities. Poor maintenance facilities. Low inventory of spares due to prohibitive costs of importing spares.
No proper monitoring cell for analysing information. Lack of skilled manpower with respect to pilots and engineering staff. Necessity of keeping operation at a low cost. Poor infrastructure at airport.
• • •
The saga of Indian Airlines began by the amalgamation of 8 private airlines, with the passing of Air Corporation Act to nationalise the air transport industry. The journey began with a modest fleet as well as high aspirations and over the years, Indian Airlines innovated and upgraded its fleet to emerge as one of the largest domestic airlines in the world. Today Indian Airlines, along with its subsidiary Alliance Air, provides an extensive network which encompasses the whole of India – a geographical area equivalent to Western Europe, besides reaching out to 17 international stations. In the last four decades, Indian Airlines has progressed by leaps and bounds and has built an excellent track record of manpower and infrastructural development. It has thus emerged as a
proud symbol of modern India.
Some of the highlights of this glorious period of evolution include – •
Increase in passenger carriage from 0.5 million in 1954-55 to 8.4 million in 1997-98. Spread of network from 23,000 kms in 1953 to 1,18,000 kms in 1998-99. Growth of assets from Rs. 21 million to Rs. 30,000 million in 1998-99. A manifold increase in system seat capacity from 3070 seats per day in 1955 to 35,700 seats per day.
THE HUMAN COMPONENT Indian Airline’s success could not have been possible without its 21,990 personnel (as on 31st March 1999). Everyone from pilots, cabin crew and engineers to commercial and administrative staff. Moral building communication initiatives have helped at Indian Airlines to play their part in the turn around. Productivity linked incentives and greater transparency in recruitment, promotion and transfer policies have greatly contributed to major improvements in the efficiency of the company’s service. The diverse programmes offered by the Central Training Establishment, Hyderabad virtually a university of the air, it trains personnel in all aspects of airlines operations. Effective refresher training programmes have helped to further enhance the skills learned at Central Training Establishment. The company also continues to provide various welfare measures to employees, such as medical facilities, subsidised canteens, educational scholarships, holiday homes, sports clubs, festival advance etc.
CONTINUED FLEET EXPANSION AND MODERNISATION.
On its inception in 1953, Indian Airlines took to the sky with the fleet that included: -
• 74 DC-3 (Dakota) • 1 Twin Beach • 1 Saab Safir Aircraft
• 3 Sky Master • 1 Single Beach
• 12 Viking
• 5 Sentinel
• 1 Auro xix • 1 D.H.Dove
A phased fleet modernisation programme was started by Indian Airlines with the introduction of Viscounts in 1957, followed by Fokker Friendship Aircraft in 1961. With the arrival of the pilot friendly Caravelle turbo jet in 1963, Indian Airlines took domestic aviation in to the jet age. In the 60’s, the first Indian built aircraft HS- 748 (Avro) was induced into Indian Airlines and the year 1971 saw the induction of Boeing 737’s. In 1976, Indian Airlines, became the first domestic airline in the world to induct wide-bodied 273 seater Airbus A- 300 aircraft, thus setting new standards in passenger comfort. With the introduction of the state of the art Airbus A-320 in 1989 and its fly by wire technology, Indian Airlines acquired the latest in aviation equipment.
1. Indian Airlines has an extensive fleet of 52 aircrafts comprising
AIRPLANES – fleet
Model Airbus A300 Airbus A320 Boeing 737 Total
No. of Planes 10 30 12 52
Indian Airlines flies 25000 passengers on 210 flights to 59 cities in India and 17 international destinations. Indian Airlines has the largest domestic reach in the country with the network that stretches from Leh and Srinagar to Port Blair and Dibru Garh.
3. Indian Airlines bases are situated at the 4 metros.
No. of bases 4 – Delhi, Mumbai, Calcutta and Chennai.
CONTRIBUTION TO NATIONAL EXCHEQUER.
The company has contributed Rs. 169.88 crores to the Govt. Exchequer by way of customs duty, sales tax, excise duty etc., during the year.
Joint Venture & Hub and Spoke Operations.
Arrangements with Air India Ltd. for joint venture operations on the Indo- Gulf sector and the Hub and Spoke operations continued during the year. The hours flown during the year vis-à-vis the hours previous year were as follows: -
Joint Venture Hub and Spoke
Jet Engine Overhaul Complex.
The JEOC, functioning as a separate profit centre since May 1996, has saved the company expenditure to the tune of Rs. 6.70 crores, besides saving precious foreign exchange.
With a carefully planned marketing strategy the company was able to generate substantially high revenue of Rs 156.83 crores on carriage as compared to Rs126.73 crores in the previous year. This is due to the success of it’s new door-to-door cargo service with M/S Gati Cargo.
Capacity Production and Utilisation:-
The performance of the company in terms of Capacity Production -`Available Tonne Kilometers’ (ATKms) and Capacity Utilisation -`Revenue Tonne Kilometers’ (RTKms) improved significantly.Similarly, the number of passengers also registered a growth, despite recession in the economy and sluggish market conditions, as results below indicate.
ATKms (Millions) RTKms (Millions) Passengers Carried (Including Alliance Air)
1998-99 1296.157 827.553 8.38
1997-98 1170.767 765.209 8.17
Financial performance of Indian Airlines:-
The net profit has dropped from the previous year from 47.27 crores in the year 1997-98 to 15.6 crores in 1998-99. Although in the current financial year, i.e, 1999-2000, it is expected to rise to Rs. 70 crore.
Real Time Computer:-
The Passenger reservation system of Indian Airlines was switched on to the new IBM ES-900 computer on the 8,March 1998 replacing the UNISYS mainframe computer which was in use since March 1985.The improved central processing response time of the system has resulted in a three fold increase in the capacity to handle queries. The new system uses the IBM hardware and software designed by the subsidiary of British Airways.
Computerised Reservation System
Indian Airlines possesses an extensive computerised reservation system to provide online reservations service to its clients. The reservation system is being maintained through a powerful mainframe computer, which is accessed by more than EDP 2000 terminals across the length and breadth of India, apart from the International Stations. Access to the reservation system is also available through several hundred travel agencies operating in the country. Indian Airlines participates in the following major CRS' in the world thereby providing access to the Reservation System to travel agents around the globe-
Sabre Galileo Amadeus Abacus World Span Gemini Infiniti GETS Access
ANALYSIS OF PASSENGER SURVEY
On collection of all the completed questionnaire from passengers and travel agents, the data was aggregated and methods of its analysis applied so as to interpret the required information and meaning.
1) Purchasing decision of tickets for the passengers:-
Out of the 150 respondents surveyed, it was found most of the passengers, purchased their tickets from a travel agent. Primarily because travel agents offered discounts and provided better options.
47% of the passengers purchased their tickets from travel agents. 32% say that their company books it. 21% purchased their tickets directly from an airline counter.
2) As, air travel is more convenient and less time consuming than other modes of travelling, people with now increased purchasing power as well as due to better services in air travel are flying more often.
The results show that
42% of the passengers travel every week. 40% of the passengers travel every fortnight. 16% of the passengers travel every month. Only 2% of the passengers travel every year.
3) Which of the following domestic airline have you travelled by?
Out of the 150 passengers surveyed, all had traveled by Indian Airlines, as it is the oldest and has better connections than rest of the airlines and it still is the leader. These results indicate the following: -
100% respondents/passengers have traveled by ‘Indian Airlines’ 96% respondents/passengers have travelled by ‘Jet Airways’. Showing that it is the main competitor of Indian Airlines.
92% respondents/passengers have traveled by ‘Sahara Airlines’. Sahara is slowly and gradually increasing it’s market share through continuos advertising, discount and better flight services.
4) Most Preferred Airline
In accordance to the survey, the passengers are seeking better levels of service and quality than ever before. Out of the 150 respondents surveyed the results are indicating a growing preference for private airlines over Indian Airlines. But, passengers also feel, Indian Airlines is improving after being bitten in the knee.
Indian Airlines - 42% Jet Airways – 44% Sahara Airlines – 16%
Out of the 150 travelers, who prefer Indian Airlines for domestic travelling say that they prefer Indian Airlines because of the following reasons: -
It has better connections all over India and it has a wide coverage all over the country. For it’s flight timing and improving punctuality. Since it is a Government undertaking, all the government employees travel by this airline Oldest airline, therefore goodwill.
5) Purpose Of Travel
The purpose of this question No. 5 is to deter mine the trend of the new age traveller. Does he use the airline’s just for business/work, as was the case in 70’s and 80’s due to high tariff and low purchasing power. The results indicate that 74% of the passengers surveyed travel both for work as well as leisure/holiday. 20% of the passengers only travel by air for work purposes and remaining 6% travel by air only for leisure/holiday.
Frequent Flier Programme
Frequent flier programmes were started first by Indian Airlines, to promote travel with them, as they faced threat from various private airlines. All, the airlines now have a frequent flier programme, but as of now it has not gained much popularity as the results show.
The number of respondents who were members of a frequent flier programme out of 150 were 38. Out of these 38 people 20 were the members of ‘Jet Privilege’, the frequent flier programme of Jet Airways and the rest ‘15’ were members of Indian Airlines frequent flier programme. 2 were members of both and 1 was a member of Sahara and Indian airlines.
The travellers are mostly corporate travelers who are members of these programmes. And they get following benefits: -
• • • •
Priority reservation. Free tickets after certain mileage. Separate check in counter. Extra baggage allowance. Priority waitlist. Priority on booking of international tickets, who are in collaboration with the domestic airlines.
8) Factors considered important for relative influence on the ‘Choice of Airline’
In the buying process decision for an airline ticket, consumer usually goes through these factors viz, suitability of timings, on time performance, in – flight service, in – flight comfort, appearance and hospitality of crew, ease of reservation and cancellation, baggage handling, frequent flier benefits and airfare. In the questionnaire I have taken all these factors with a rating of 1 to 4. 1) Stands for Not Important 2) Least Important 3) Important 4) Very Important
Suitability of timings: - in accordance to the important survey conducted, the following results were achieved. (Suitability of Timings) (%)
1) 2) 3) 4)
Not Important Least Important Important Very Important
4% 2% 58% 36%
On time performance: - On time performance is an important consideration for corporate travellers but when compared on time performance standards of domestic airlines are relatively poor as compared to the west. (On time performance)
1) 2) 3) 4)
(%) 0% 28% 54% 18%
Not Important Least Important Important Very important
In flight service: - With the recent entry of private airlines, the in flight service standards have improved both for national domestic carriers and private airlines. Continuos improvements seem to be a part of the programme. ( In Flight Service) (%)
1) 2) 3) 4)
Not Important Least Important Important Very Important
0% 0% 62% 38%
Ease of reservation and cancellation: - Indian Airlines, Jet and Sahara are all in the race for providing better service, and ease of reservation and cancellation is another important factor considered by the respondents (Ease of reservations And Cancellation) (%)
1) 2) 3) 4)
Not Important Least Important Important Very Important
10% 40% 40% 10%
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