A TYBMS Project Report

Airlines – A Prominent Service Sector

Submitted To Prof. Jalpa Parekh of BMS Department
Group Members:

Danish Choudhari (40) Jaffer Choudhari (41) Khatija Daudi (06) Mayuri Joshi (08)

We are greatly honoured and privileged to thank and acknowledge those people who have contributed directly or indirectly in making this project successfully. Firstly with gratitude, we would thank Our Principal Sir, Prof. A.E. Lakdawala for giving us the opportunity for making this project and extracting good knowledge from this project. We also thank Our Joint-Principal, Prof. Kamala A.; Vice-Principal Prof. Mallika and Our BMS Coordinator, Prof. Arshi in this context. With immense gratitude, we would like to thank Our Subject Co-ordinator, Prof. Jalpa Parekh, for guiding us throughout the project. We would also thank all the sources from whom we have collected the data and lastly our

No. 4. Contents Executive Summary Introduction Origin of Aviation Sector in India Past Performance Present Performance Future Plans Contribution to the Indian economy Key Players Pg. No. 4 5 6 7 7 9 10 12 3 . 8. 1. 5.group members who have been supportive and cooperative throughout. 2. 6. Sr. 7. 3.

The everexpanding Indian economy and increased demand for trade has pushed the need for air cargo services to a new high. 12. 13.9. 2006-07 posted annual passenger traffic of about 96 million. ground handling.private jets and helicopters. inadequate infrastructure being the most crucial. 10. Market segmentation Marketing Mix New innovations Conclusion Bibliography 14 16 23 25 26 EXECUTIVE SUMMARY The Aviation industry in India encompasses a wide range of services related to air transport such as passenger and cargo airlines. unscheduled service operators --. boosting opportunities for training service providers. Repairs and Overhaul (MRO). along with its tertiary services. The industry has already bumped into several challenges. and training. has wreaked a major talent crunch. airport management. Increasing number of entrants in the sector has forced airports to expand their cargo handling capacities. especially from those of the low fare ones. ground handling. The Aviation sector has reaped massive benefit from the entry of private carriers. and support services like Maintenance. The growth of the airlines sector has caused a sharp upturn in demand for allied services including MRO. 11. and catering services. The aviation sector is still a small part of the travel and transportation services sector in India. as compared to nearly 6 billion passengers carried by the railways. in-flight catering. The airlines suffered losses of 4 . The booming aviation industry.

establishment of new airports and renovation and restructuring of the existing airports have added to the growth of the industry. a need for further investments in capacity is felt more than ever. are expected to pour in. fleet expansion by airlines. the Indian aviation industry is now dominated by privately owned full service airlines and low cost carriers. aviation industry in India has undergone a rapid transformation. From being primarily a government-owned industry. INTRODUCTION The Indian aviation industry is one of the fastest-growing aviation industries in the world. however. supported by government initiatives. and unsustainably low fares have contributed to these losses. The decelerating profit margin does not entail a slump in revenue generation. development of the maintenance. Private airlines account for around 75% share of the domestic aviation market. In addition to these factors. has come to some relief. intense competition. With the liberalization of the Indian aviation sector. the emphasis on modernization of non-metro airports. Improved affordability and connectivity add to the expected improvement in both passengers and cargo traffic. opening up of new international routes by the Indian government. repair and overhaul (MRO) industry in India. It is the increasing costs that have thrown the aviation industry into the present plight. 5 . A recent spate of mergers. Large public and private investments in air travel infrastructure. The high cost of operations. but today air travel has become much cheaper and can be afforded by a large number of people. Earlier air travel was a privilege only a few could afford. service expansion by state owned carriers. India’s aviation sector stands up to the crisis and races against its fastest growing global competitors. While initiatives have been taken to remove bottlenecks to growth.around USD 500 million in 2006-07.

Aviation by its very nature constitutes the elitist part of our country's infrastructure. 6 . Praful Patel has stated that the aviation sector will witness revival by 2011. nine air transport companies were carrying both air cargo and passengers. Mr. Origin of aviation sector in India The origin of Indian civil aviation industry can be traced back to 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 therefore acts as a stimulus for country's growth and economic prosperity. This sector has substantial contribution towards the development of country's trade and tourism. Union Civil Aviation Minister. a part of the Ministry of Civil Aviation and Tourism of Government of India. of which 16 are designated as international airports. It was an extension of London-Karachi flight of the Imperial Airways. providing easier access to the areas full of natural beauty. JRD Tata founded Tata Airline. In 1932. With a compound annual growth rate (CAGR) of 18 per cent and 454 airports and airstrips in place in the country.Air transportation in India now comes under the direct control of the Department of Civil Aviation. At the time of independence. the first Indian airline.

In July 2009. was merged with IAC in 1994. The carrier sold three Airbus A300 and one Boeing 747-300M in March 2009 for $18. Orient Airways and Mistry Airways. took off on June 8. Bharat Airways. In early 1948. 1953. Government of India established a joint sector company. Ambica Airways. 7 .200 crores (Rs 72 billion) by March 2009. Air service of India. this went up to Rs 7. 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. Indian National Airways. A third government-owned airline.7 billion). 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. 1948 on the Mumbai-London air route. SBI Capital Markets Ltd was appointed to prepare a road map for the recovery of the airline.75 million to survive the financial crunch. This was followed by restructuring plans which are still in progress. the airlines began showing signs of financial distress. After the merger of the airlines.These were Tata Airlines. The combined losses for Air India and Indian Airlines in 2006-07 were Rs 770 crores (Rs 7. Deccan Airways. which provided feeder services between smaller cities. The Government nationalized nine airline companies vide the Air Corporations Act. Vayudoot. Past performance Around 2006-2007. The inaugural flight of Air India International Ltd.

led primarily by the conversion of train/bus passengers to air travel. offering unbelievable tariffs to the customers. 22 billion in 2006-07. Present performance Revolutionized by privatization along with active participation of the foreign investors.168 flights operating till June 2005. In terms of the number of flights Jet Airways secures the top position with 8. rising labor costs and shortage of skilled labor. the first budget airline in India.3 percent growth in passenger traffic in the domestic airports while the aircraft movement recorded a growth by 14. The problem was also compounded by new players entering the industry even before the existing players could stabilize their operations.Analysts opined that a combination of factors such as high aviation turbine fuel (ATF) prices. In the financial year 2005-06 there has been a significant 22. It is a phase of rapid growth in the industry due to huge build-up of capacity in the LCC (low cost carriers) space. and intense price competition among the players were responsible for the losses in this sector. It was estimated that the industry as a whole could face losses of over Rs. rapid fleet expansion. This has been the result of increased competition in the Indian aviation industry due to the presence of a wide variety of private and public airlines with their low price tags.2 percent. It was further helped by the entry of Air Deccan. The government also was keen to restrict the losses in this sector by closer scrutiny of the business plans of new entrants. The growth in supply is overshadowed by the extremely strong demand growth. with capacity growing at approximately 45% annually. conducting quarterly financial audits. as well as by the fact that low fares have allowed passengers to fly more frequently. Indian Airlines is in second position with 7.562 8 . Some experts expect the industry to consolidate in the near future. the Indian aviation industry has experienced phenomenal transformation over the last couple of years. etc. From being a service catering to the needs of the privileged group only it is now well within the reach of middle class population.

6% in March to 18. with an estimated value of US$80bn 9 .The total aircraft fleet is likely to reach 1000 by 2020.889 flights). as per the latest estimates released by the Ministry of Civil Aviation. the scheduled Indian airlines flew a total of 41. official figures showed. Passengers carried by domestic airlines from January-February 2010 stood at 8. Sahara (3.6% in April against 12% in March and GoAir 5. domestic airlines carried around 1. With an increase in traffic movement during December 2009 and increase in revenues by almost US$ 21.2 per cent.46 lakh while all-business airline Paramount Airways carried just 13.62 crore passengers as against the 1.33 crore during the same period last year.5 lakh jobs by the year 2010. Barring Kingfisher and Paramount Airways.761.225 flights).9%. while Paramount's share dipped from 1.flights. according to a report released by the Ministry of Civil Aviation. This is being primarily attributed to increase in the share of revenue from Delhi International Airport Limited (DIAL) and Mumbai International Airport Limited (MIAL). SpiceJet cornered a share of 12. Kingfisher witnessed the biggest fall in its market share from 22. This came against the backdrop of continued downward trends witnessed in the global aviation sector since it was hit by recession and experienced negative growth since 2008.62 lakh passengers.2% in April. Of these. while Air India (domestic) remained at the third spot with 7. all other airlines witnessed a growth in their market share in April in comparison to their shares in the month of March. In contrast. the Airports Authority of India seems set to accrue better margins in 2009-10. Air Deccan (2.84 lakh. between January and April.7%.000 passengers during April. Market share of Jet Airways and JetLite combine remained almost same. Its share was 25.4 million. figures showed.000crore industry by the same time. Jet Airways and JetLite combined carried 10. FUTURE PLANS  The boom in the aviation sector is likely to generate nearly 2.3%. The study says that the civil aviation sector is also set to become Rs 35.8% in March which increased to 25.98 lakh. 2010.88 lakh domestic passengers in April against 39. Among the gainers.  Scheduled Aircraft . According to the reports of PTI on Thursday.58 lakh passenger preferred to fly with IndiGo.000 in the corresponding period of 2009—a growth of 19.03 lakhs in March this year. while that of IndiGo went up from 15% to 15.056.000 as against 6. May 13. market share of troubled national carrier Air India (domestic) went up from 17. Similarly.6% in March to 21. SpiceJet carried 5.27 lakh and GoAir 2. including replacement of the current fleet of 312 aircraft.6% to a mere 0.9% against 5. Among the low cost carriers.4%. Kingfisher 8.4% in April. Spice Jet (483 flights) and Kingfisher Airlines (267 flights) come thereafter in the list of domestic and national carrier operators. 6.

• Coverage of the Indian land mass through Satellite Communication.  to US$120 Air Traffic . the Aviation Industry in India went through a complete transformation in the recent period. • Establishment of Differential Global Positioning System (DGPS). The Aviation Industry in India is the most rapidly growing aviation sector of the world. General Aviation . Navigation and Surveillance (CNS) with Satellite based CNS system. The growth of India’s aviation sector has the potential to absorb up billion of investment by 2020. 10 .  Airports – US$ 30 billion plus investment requirement by 2020(Included 9 billion already committed). Estimated Investment of US$ 4 billion. • Automation in the Air Traffic Control Services. With the rise in the economy of the country and followed by the liberalization in the aviation sector. with international traffic in excess of 50 million. VHF Data Links and Monopulse Secondary Surveillance Radar with Mode 'S' Capability. Some of the major plans for implementation of ICAO CNS/ATM programme are: • Replacement of ground based Communication. Hindustan Aeronautics Limited (HAL) was ranked 40th in Flight International's list of the top 100 aerospace companies last year. CONTRIBUTION OF AVIATION SECTOR TO THE INDIAN ECONOMY The Role of Aviation Industry in India GDP in the past few years has been phenomenal in all respects.Market for 500 + aircraft in the Non-Scheduled Category by 2020 and 300 aircraft in the private category use. • Establishment of Automatic Dependent Surveillance (ADS).  The AAI has drawn ambitious long term plans to meet challenges posed by ever increasing air traffic and advancement in aircraft technology.CAPA research projects that domestic passenger traffic will reach 150180 million by 2020.  Indian aerospace companies are growing too.

11 . In the present scenario around 12 domestic airlines and above 60 international airlines are operating in India. Air traffic has grown enormously and expected to have a growth which would be above 25% in the travel segment. Aviation Industry in India holds around 69% of the total share of the airlines traffic in the region of South Asia Future challenges:   Initializing privatization in the airport activities Modernization of the airlines fleet to handle the pressure of competition in the aviation industry Rapid expansion plans for the major airports for the increased flow of air traffic Immense development for the growing Regional Airports       FDI Policy: The Reserve Bank of India (RBI) announced that foreign institutional investors might have shareholdings more than the limited 49% in the domestic sector. With the growth in the economy and stability of the country India has become one of the preferred locations for the trade and commerce activities. The growth in the Indian economy has increased the Gross Domestic Product above 8% and this high growth rate will be sustained for a good number of years. In Airports:  Foreign equity up to 100% is allowed by the means of automatic approvals pertaining to establishment of Greenfield airports. Aviation Industry in India has placed the biggest order for aircrafts globally.

Tata in July 1932 as Tata Airlines. R. Vijay Mallya is the chairman and the CEO of Kingfisher airlines. Its corporate office is located at the Air India Building at Nariman Point in South Mumbai. Key PLAYERS 1) Kingfisher launched its services in May 2005. Air India has 44 worldwide 12 . It is the 16th largest airline in Asia.  Foreign equity up to 100% is allowed by the means of special permission from Foreign Investment Promotion Board. a division of Tata Sons Ltd. Foreign equity up to 74% is allowed by the means of automatic approvals pertaining to the existing airports. pertaining to the existing airports In Air Transport Services:  Up to 49% of foreign equity is allowed by the means of automatic approvals pertaining to the domestic air transport services. D. Dr.  Up to 100% of NRI investment is allowed by the means of automatic approvals pertaining to the domestic air transport services. Ministry of Finance. It is India's oldest and largest airline. 2) Air India was founded by J.Air India is facing financial crunch.

It currently controls about 32% of India's aviation market. Indigo Airlines is a new and private domestic airline.97 million. Jet Airways operates over 300 flights to 43 destinations. 1991 and began its operations on December 1993 with two Boeing 737-200 aircraft as Sahara Airlines. Air India has made a net profit of Rs. Naresh Goyal is the founder & chairman. 2006. Jet Airways. The airline was established on 20th September. earned a revenue of Rs. It ordered 100 Airbus A320 6) aircraft during the 2005 Paris Air Show.480 million representing a growth of almost 15 per cent over the previous year. Air Sahara is a privately owned airline operating scheduled services connecting 3) all metropolitan centers in India. The new low-fare carrier has started operations from August 4. 2006. In the financial year ending March 31. In April 2007. along with Air Sahara. Name of the players Market share Kingfisher Airlines and Kingfisher Red (previously Air Deccan) Jet Airways and Jet Lite (previously Air 28% 25% 13 . is the 4) only airline which survived the dismal period of 1990s when many private airlines in India were forced to close down. Their marketing theme "offering low 'everyday 5) spicey fares' and great guest services to price conscious travelers". Jet Airways started Indian commercial airline operations in May 1993.destinations. SpiceJet is a low-cost airline.87. Sahara Airlines was rebranded as Air Sahara on 2 October 2000. they acquired Air Sahara. Their aim is to compete with the Indian Railways passengers travelling in AC coaches.

004% MARKET SEGMENTATION 14 .Sahara) Air India and Indian (previously Indian Airlines) Indigo SpiceJet GoAir Paramount airways MDLR airways 16% 14% 12% 3% 2% 0.

all commodities are produced in bulk and they are assumed to meet similar consumer needs. Psychographic segmentation: 15 . namely Jet Lite and Jet Airways Konnect. sex. for e. ethnicity. This works in case of commodities. all the customers are treated as same and no particular efforts are made by the firm to satisfy particular groups. income levels. etc. This is one of the most common marketing segments. one cannot ignore the fact that it disregards one of the most important rules in marketing. Jet airways has two economy class subsidiaries. For e. Jet Airways have segmented East and west India on the basis of their food preferences like west prefer vegetarian whereas east prefer nonvegetarian. Under this. that consumer needs and preferences rarely collude.To segment a market is to identify the fact that certain parts of the market are different from others. In general there are three approaches to market segmentation: In undifferentiated strategy. products or services are tailored for the needs of different clientele. Mostly. products are segmented on the basis of age. one firm chooses to focus on one of the several segments that exist leaving others to the competitors. This approach is quite different from the mass marketing concept because in mass marketing. While this approach has its advantages. In case of concentrated strategy.g. location.g. Market segmentation is a notion associated with target marketing because in target marketing. But many airlines go in for differentiated strategy wherein they offer high prices tickets to those who are inflexible in that they cannot tell in advance when they need to fly. Deccan airlines focuses on price sensitive customers. And the remaining seats are given to price sensitive consumers ordering tickets in advance. this category is for business travelers filling up the plane partially. There are three types of segmentation variables: Demographic segmentation: Demographic segments depend on a series of attributes.

Psychographic segmentation refers to the use of consumer lifestyles as a basis for classifying ones' customers. consumers are classified according to consumer reception of company products. Since different people have different interests and activities. MARKETING MIX 16 . companies may classify their consumer on the basis of their values. Behavioural segmentation: In this category. while others may be first timers. In other instances. Jet airways provide Golden Jet Escapes and Jetkids which is a special program for children aged 2 to 12. Jet airways offer Jet Privilege for frequent flyers and Jet Mobile and Air India is still preferred airline for the government staff and old clientele. In this approach. Jet mall in partnership with ELVY-premier and domestic. other consumers may be occasional purchasers. then such an approach would be plausible in marketing. Some consumers may use products frequently.

The marketing mix refers to the blend of ideas. fuel prices. In our case it is the service of traveling or transportation of goods. except perhaps for repair and maintenance). are the major concerns of an airline industry which should be avoided in order to provide better products. etc. The on-the-ground services include a convenient airport with car parking facilities. The low cost airlines like Indigo. ambience and comfort. Each target segment will have a separate marketing mix. The low cost model of airlines labels these addition services as ‘frills’ and tries either to eliminate or charge separately for these. efficient service at reservation counter. transport to the airplane. Formal/Actual/Expected Product: This includes a set of services and products that the consumer normally expects to receive along with the core benefit. comfortable seats. Core benefit is the benefit which the customer is actually buying. concepts & features which marketing management put together to best appeal to their target market segments. its price. attendant services etc. public relations and personal selling). in-flight entertainment etc. The services provided inside the flight include the core service of travel. business travel continues to increase. weather conditions. crew.). This is highly variable across competitors as per brand and different classes of travel. duty free' shopping quick and efficient checking of baggage. As we further became a global economy and communication between international companies intensifies. Levels of Product: 1. 17 . The traditional marketing mix is said to consist of the following elements of the total offering to consumers: the product (the basic service or good. A. Product Mix The airline industry is a service that satisfies customer needs for travelling. GoAir and SpiceJet offer the product at this level and compete on the basis of price. Core Product: At this level the core benefit is converted into a basic service package. waiting lounges. In the airline the customer can be divided into two segments: Business and Leisure. For example: In flight snacks. Some of the problems like punctuality. tailored to meet the specific needs of consumer in the individual segment. and promotion (marketing communication: advertising.not generally a real issue for most services. regional problem. the place where the product is made available (or distribution channels . Service marketing managers have found that the traditional four P's of marketing are inadequate to describe the key aspects of the service marketer's job. etc. on time departure and arrival etc. 2. political instability. The basic or the core product includes from buying the ticket to reaching the destination. including packaging.

Potential/Future product: As mentioned above. Air India IC compete in this segment. As the level moves from the core benefit to the potential product. provision of in flight entertainment etc. Augmented Product: An augmented product exceeds customer’s expectations. etc. Thai Airways offers a limousine service at the airport and Virgin Atlantic offers an onboard massage. the customer’s needs keep on changing. fat free. etc. Where Emirates airline offers onboard shower spas for the first class customers. Sahara airlines offer six types of cuisines like vegetarian. supersonic speed. Kingfisher Class. At this level all possible augmentations are offered and the companies try to encompass new and innovative ways to satisfy customers. diabetic. senior citizens. etc: The airline takes the responsibility of escorting the children safely to the arrival terminal and after 18 . 4. The customers might look for inexpensive traveling like air taxis. The roving agents come to the customer and assist them. • Special care for unaccompanied minors. serving hot food. Jet Airways. the future is unknown. warm and friendly crew. Kingfisher airlines’ success can be related to the differentiated features provided by it like: • Roving agents: A roving agent is a check-in counter on the move. For example.3. the competition moves from price to service and experience of the customer. Passengers with hand baggage are required to stand in queues at the check-in counters. • Different check-in options: The airlines allow its customers to do a web check-in from its website apart from the airport check-in.

Disabled passengers are assigned a wheel chair. etc. & to persuade. full description of service offering. It will always be necessary to inform prospective consumers about new products & services. the more he is rewarded. King Club is a airline’s loyalty program. Similarly consumers may need to get reminded about all these types of issues. image building. etc. • In-flight treatment: Every seat is treated to an individual T. ICICI bank.verifying the credentials of the assigned person. The more a customer flies with Kingfisher. information to build consumer confidence & to reduce fears. new uses. It has also issued a co-branded credit card in association with ICICI Bank. Microsoft. Deepika Padukone as the Brand Ambassador. to remind.V with Live T. print.V. Promotional Mix The aims of promotion fall into three main categories: to inform. Inox. especially in the off-peak season. Kingfisher has adopted a well rounded approach to reach out its customers. outdoor. The card owner earns 100 point on every spend which can be converted into King Miles. but other issue may also need this type of communication to consumers. Price Mix 19 . radio. customers enjoy a wide range of exclusive discounts and privileges. Kingfisher Airlines has signed up the latest diva of Bollywood Ms. They have tied up with various brands like Tata Tetley. C. clubs and their in-flight magazine. Kingfisher has 360 degree promotion strategy.. price changes. the child is released. As a member of the club. malls multiplexes. On the promotional front. Pepsi. B. They promote through all possible media like T.V as well as pre-recorded entertainment channels and radio.

We have different authorities to manage and control domestic as well as international air transport business. Premium pricing succeeds if the company enjoys a strong reputation that the brand image alone is sufficient or the product features are not shared by its competitors. The Ministry of Civil Aviation. the Indian Airline Corporation. the overall profits are achieved. The concept of fair price is very important. This enables the airline to achieve the good level of profit. the National Airport Authority. the prices are set above the market price either to reflect the image of quality or the unique status of the product. • Value for money pricing: In this method. the International Airport Authority of India and the Air India Corporation are the bodies directly or indirectly influencing the process of pricing decision. 20 . In order to meet the competition and consolidate their position in the market. It is important to include pricing tactics which exploit price sensitivities fully. when every airline gives price discounts & competition is tough. Pricing can be classified in 3 ways: • Cheap value pricing: This method of pricing is used to undercut the competition and trigger immediate purchase. as in business class air travel. An airline is always faced by high levels of fixed costs. average price is charged for the product and it is emphasized that it represents excellent value for money at this price. Air India and Indian Airlines have their price. particularly because of seasonality. since there are price variations due to variations in the level of demand. leading to variants of cost-plus pricing or ROI as key determinants of pricing levels.Pricing in airlines is a fairly complex issue. Though the unit profits are low. It differentiates service levels & offer higher price ‘value added services’. • Premium pricing: In this method.

Kingfisher includes following: • Connectivity: Kingfisher flies to 38 destinations across India which covers a wide geography and connects all metros and major cities. The place should be safe. tour operators. The interior decoration furnishing. D. Another dimension of place is related to the location and management of offices of airways.Kingfisher Airlines has been termed as the “first full frills – true value carrier”. The frequency between the four metros and other major cities accounts for maximum number of take-offs every day. This section is modern and trendy looking for high flying experience even though they have to shell out more. travel through airlines can be greatly affected by the way of serving. where all the required infrastructure facilities are available. The water and sanitation facilities for the users and comfortable seating arrangements must be made available. 21 . It also has connectivity among the two tier cities of the country. It is also confirmed that the users booking their luggage do not face any inconveniences. Place Mix The air transport organisation has to make sure that the prospects don’t face any difficulty while buying the tickets and make necessary arrangements for the confirmation of the booking. plantation needs aesthetic sense so that the user forms a positive opinion regarding the airway services. • Booking of tickets: The customers have the option to book ticket at the airport or through travel agent or by logging on the website. travel agent. • Frequency of flights: Kingfisher operates 218 flights everyday across its 38 destinations. Gourmet cuisine and in-flight entertainment is offered on board.People Mix Many services require personal interactions between customers and the firm's employees and these interactions strongly influence the customer's perception of service quality. Easy accessibility should be the main criteria in selecting the place. Lighting and ventilation facilities should also be taken care of. well connected with all weather proof roads. For example. E. In airlines. In Place Mix. transport operators etc. The airline has a well defined target audience which is the Sec A and Sec B+ of the Indian economy which falls under the age group of 25 – 45 years with high disposable income. they utilize more than one method of distribution: they sell tickets through travel agents and sell seats to tour operators.

After all.both crew members as well as ground staff. Management leadership. airhostess and so on. helpfulness of the staff . The term "internal marketing" has been coined to characterize the sets of activities a firm must undertake to win over the hearts and minds of its employees to achieve service excellence. Gallery Management and Announcement Delivery. Physical surroundings and other 22 . crew members. F.knowledge ability. Physical Evidence Mix This element of the expanded marketing mix addresses the "tangible" components of the service experience and firm's image referred earlier. The crew undergoes rigorous training programmes. One's impression about the airline and willingness to return are determined to a large extent by the brief encounters with the front-desk staffs. It has also instituted Kingfisher Training Academy to cater to the growing demand of trained service oriented professionals. Cabin Familiarization. provide good service to customers. This institute provides intensive training on Airlines Orientation covering Airline Rules and Regulations. Management policies are considered to be of particular strategic importance for delivering high-quality services. Establishing a customer-oriented culture throughout the firm and empowering employees to provide quality service cannot be established merely by putting up inspiring posters. these employees must believe in what they are doing and enjoy their work before they can. helpers. The real winning factor for Kingfisher is the quality of the staff service and it is of course critical that the airline is able to sustain quality levels as they experience continued and rapid expansion. job redesign and systems to reward and recognize outstanding achievement are among the issues that a successful service manager must address. in turn.

Kingfisher airline’s physical evidence includes: • Fleet: Kingfisher airline has a brand new fleet of aircraft comprising of 18 ATR 72. The "services cope" . Kingfisher has following processes: • Easy booking of tickets . web booking and travel agents. the travel but the entire experience of arriving at the restaurant . etc.e.can greatly affect a customer's satisfaction with a service experience. But the customer at the airport is not merely interested in the end result i. 4 A 319s. Cleanliness: all aircrafts are well maintained for cleanliness and a pleasant experience. all physical evidence must be designed to be consistent with the "personality" that the firm wishes to project in the marketplace.of being seated. comfort of seating and the physical layout of a service facility . the flow and progress of the production process is more important for services than it is for goods. enjoying the ambience. check in.visible clues can have a profound effect on the impressions customers form about the quality of the service they receive. being seated in the airplane . the ambience.g. processes for handling customer complaints.that is. identifying customer needs and requirements. A customer who buys a television set is not particularly concerned about the manufacturing process that made it. Process Mix Because customers are often involved in the production of services. • There is a personalized valet service provided at all airports. the background music. security checks. 23 . The valet service staff assists the passengers’ right from the time they reach airport till the check-in and also upon the arrival at the destination where the staff guides the passengers to the right baggage belt and assists them with it.24/7 customer service. In particular. The customer service department deals with a number of processes involved in making marketing effective in an organisation.is important. what influences customers is the bold red colour. • The airline tries to ensure that the passengers can retrieve their baggage after they disembark from the aircraft within the shortest possible time. etc. Interiors: All aircrafts have design interiors. • • G. for e.

Nirbhay Kumar/Indian Express Wednesday. Modernisation of non-metro airports The Airports Authority of India (AAI) is undertaking the development and modernization of all 35 non-metro airports in the country simultaneously and work is due to be completed by March 2010.1 private airline Jet Airways has opposed the move to allow foreign airlines to invest in domestic carriers. According to the AAI. 2010 2. Wholly owned subsidiaries of AAI are being created for the development and operation of these airports. apron. Civil aviation minister Praful Patel had earlier this year said that government was considering divestment in Air India as one of the options to help the national carrier tide over the financial crisis. control tower and isolation bay. have pitched for an even higher stake of 49%. it has already awarded work orders for terminal buildings at 13 airports. official sources told FE. but foreign airlines are barred from investing on the grounds of national pride and security. Two Greenfield airports at Bangalore and Hyderabad are being developed. and for airside development. Kolkata -. The PMO initiative also coincides with the improved liquidity position of many foreign airlines which went through a bad patch during the economic downturn of the last two years.may soon be on the modernization path. FDI up to 49% is allowed in domestic aviation. taxiway. June 23. and at least a few more non-metro airports are being positioned strategically as regional hub airports or 24 .New innovations 1. at 19 airports. including runway. Currently. others like Vijay Mallya-controlled Kingfisher Airlines have lobbied hard for such equity infusion. the nodal agency for FDI policy. PMO pushes for higher FDI in airlines The Prime Minister’s Office (PMO) has pushed for allowing foreign airlines to pick up stakes in Indian carriers along with a significant say in their management. The proposal is to allow at least 26% FDI by foreign airlines. The other two metro airports Chennai. The PMO has specifically told the ministry in a recent letter to promptly include the proposal on the agenda of the group of ministers (GoM) on aviation. While India’s No. which would entail their presence on the airlines’ boards. At least 10 non-metro airports are being developed as strategic airports serving the region or respective states. It has asked the civil aviation ministry to support Indian airline companies’ plans for rapid fleet and route expansion with such a policy action. fire station. besides opening new funding vistas at a time when air traffic growth has peaked. Sections of the government including the department of industrial policy and promotion. The move is expected to lead domestic airlines to adopt global best practices.

With these developments in aviation infrastructure. logistics. SEZs and real estate projects being developed adjacent to airports.nodes providing better connectivity to overall airport network and feeding international network through hub/metro airports. CONCLUSION 25 . but also by means of cargo. we may also see some airports making money not purely on passenger traffic.

6% year-on-year to 494. They should lure the customers with all the privileges and thereby. 26 .92 thousand aircraft movements. industrial performance. Thus. Customer service is the major component in any service sector.89 thousand during AprilSeptember 2007. market. achieve customer acquisition as well as customer retention. In the period AprilSeptember 2009. customer service. corporate profitability/expansion. with an intense competition prevailing in the aviation segment. the highest in the world. This sector has a vast scope in employment. On average. it is immensely important that an airline industry makes itself competitive enough to stand the market.5% of market share every month to low cost carriers.The Indian aviation industry has shown continued growth in recent years with key drivers being positive economic factors (including high GDP growth). airline travel can be afforded easily. The Indian domestic market grew at almost 50% in the first half of 2007. the total aircraft movements witnessed an increase of 29. The current growth rate in domestic and international travel exceeds 25%. higher disposable incomes and growth in consumer spending as well as wider availability of low fares. Since services are judged on the basis of credential and experience qualities. etc. airline players are trying their level best in attaining competitive edge. With the increasing LCCs. full service carriers are shedding a remarkable 1. as compared to 318. They use all possible tools to make an impact on the minds of their customers.

htm www.html www.Reference Books: Services Marketing: S.org/industry/aviation.dai www.html Articles: 27 .mapsofindia.Jha -.com/doc/1G1-173876196.learnmarketing.encyclopedia.com/indiagdp/industries/aviation.M.decisionanalyst.ibef.Himalya Publishing House Websites: http://www.com/publ_art/marketsegmen tation.net/servicemarketingmix.aspx http://business.

Sign up to vote on this title
UsefulNot useful