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Figure - SWOT Analysis of Low Cost Carriers

Air India
Strengths
 Air India has been the largest air carrier in India in terms of traffic volume and
company assets.

It owns the most updated fleet and competent repairs and maintenance expertise.

Its information systems are advanced and compatible with its operation and service.

It has a good reputation in both international and domestic markets, quality service
and the age-old Goodwill that has still kept it alive in the interests of the rescue

operators.
Has financial backing of the Government

Weaknesses
 Air India is operating across broad international and domestic markets competing
with world leading giant airlines as well as local small operators. This lack of
clarity on the strategic direction largely dilutes its capabilities and confuses its

brand within markets.
Low profitability and utilization of capacity.

Growing Competitor base and entry of Low-Cost Carriers (LCC’s)

The airline’s high-cost structure and the compulsions of being a public sector unit
are the reasons and it had been making a loss and shall continue to make losses for

some more quarters.
Opportunities
 India airline industry is growing faster and will continue to grow as the GDP

increases, and the trend is predicted to continue once the slowdown recedes.
Worldwide deregulations make the skies more accessible; the route agreement is
easier to be achieved. The number of foreign visitors and investors to India is

increasing rapidly.
Complementary industry like tourism will increase demand for airline service. The
Civil Aviation Ministry’s strong regulation and protection provides opportunities

for consolidation and optimization.
Customers are getting wealthier, tend to be less price-conscious and prefer to
choose quality service over cost.

Threats

[12] SpiceJet Strengths  Entered with Rs. attracting passengers away from air service. 99 fares for first 99 days  “ Offering low everyday spicey fares”  Aim: Compete with Indian Railways AC sgment  Fleet of 6 Boeing 737-800 with 189 seats Weaknesses  Small fleet structure  Concentrating at only North-West-South Indian Sectors  Small Load Efficiency compared to Air Deccan Opportunities  Future Fleet expansion will increase its Market Share  Attractive fares and up to date quality service will generate a huge customer base comprising Frequent Flyers Threats  High Attrition rate  The Threat of New Entrants into (LCC) segment especially GoAir. with prices almost at par with the low cost carriers.  The Indian Railway Ministry has dramatically improved speed and services in their medium/long distant routes. Indigo and  Jagson Airlines High Risk Perception GoAir Strengths Promoted by Wadia Group GoAir free fares Weaknesses Small network : Only in Southern and Western India Small fleet structure Small Load Efficiency compared to Air Deccan & Spice Jet Opportunities Future Fleet expansion will increase its Market Share Flight network extension Attractive fares and up to date quality service will generate a huge customer base comprising Frequent Flyers Threats High Attrition rate . Air India faces imminent aggressive competition from world leading airlines and price wars triggered by domestic players.

 LCC which has entered international markets has boosted its brand value  Good advertising and marketing strategies have increased its brand recall Weaknesses  Not on too many routes as compared to competitors  Still has to establish itself on international destinations Opportunities  Opening up of International routes  Largest Marketshare among LCCs in Indian Market  Middle Class taking to the skies Threats  Plenty of new LCCs to compete with .The Threat of New Entrants into (LCC) segment especially GoAir. Indigo and Jagson Airlines High Risk Perception Indigo Strenghts  Strong backing Promoters and is one of the largest low cost carriers in India Only LCC to make consistent profits  It has one of the major airlines in India in terms of market share.

[13] . Rising Labour costs and changing government policies  Rising Fuel Costs.