ARTICLE REVIEW: INDIAN AVIATION INDUSTRY- AN OVERVIEW

(AUTHORS: IPSEETA SATPATHY, Dr. B.CHANRA MOHAN PATNAIK, SHARAD KUMAR)

SUBJECT: STRATEGIC MANAGEMENT

SUBMITTED TO: PROF. GAURAV ASHESH
SUBMITTED BY: YASHVI BANSAL [BBA(B) 2018-21]

Introduction:
The Indian Aviation Industry is growing at a tremendous rate, and there are several factors
contributing to this, and several others which indicate its growth. The sector has seen an
increase in the number of airports, passengers, investment, both from Private and Public Sector,
which in turn has help improved on-ground infrastructure.
Earlier air travel was a privilege, only few could afford but today air travel has become much
cheaper and can be afforded by many people, especially the middle class and the increased
working class.
The Aviation industry in India encompasses a wide range of services related to air transport
such as passenger airlines, cargo airlines etc, which play an important role and hence influences
the customer’s preference of the airline to be chosen.

Concepts:
• Increase Investment due to Private-Public Partnership(PPP)- As Private and Public
sector joined hands together to improve the on-ground infrastructure, and latest
technology is used. As investment has increased significantly, it has helped have more
airports.

• Increase in number of Airplanes, Airports, Passengers- The passengers have

increased(especially domestic), airports, flights(both for commercial and cargo use).

• Rise In Disposable Income of Middle Class- Increase in the income of the of the
middle class and the working class, this has increased their affordability. This also has
increased the target market as now that has increased in magnitude.

• Geographical Spread of Air Connectivity- The increased volume of airports have

increased the connectivity, as now the accessibility and availability is enabled, as they

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 are the pre-requisites for a service/product to actually be sold. It has brought in together
more places together. This has also help increase the target market.

• Changes in Single Player Models with entry of new players in the market- The
model has changed as there are several new entrants in the market, it has changed to
low cost carrier. The low cost carrier model is dominating in the sector now.

• Effect of other sector on Aviation Sector’s Growth- As the domestic passengers have
increased, there has been comparatively lesser increase in the International Travellers
due to several factors. As people mostly travel for Business or tourism purpose
internationally, development of tourism industry will lead to increase in international
passengers.

• Current Market Players- Indigo is the currently leading, with 38% of the market
share, this is followed by Jet Airways and Jet Lite who stand together and the third
position is acquired by Spice Jet.

Mapping of the Concepts:

Concept Mapping (as per the report) Impact
Increase • The Government of India has Increase Investment and
Investment planned to invest approximately Foreign Direct
due to US$12.1 billion,…… green airport Investment(FDIs)
Private-Public to reduce the environmental
Partnership impact. (Pg 1-Introduction)
(PPP) • The increased competition….as
ground services. (Pg 1-Introduction)
• Very recently the government of
India….investors to develop the
airports. (Pg-2-third paragraph)
Increase in • The schedule airlines which was Increase in Volume
number of flown…225 and the same has gone
Airplanes, to 1657. (Pg-2-first paragraph)
Airports, • Number of departing passengers is
Passengers increased from 85.20
million….opportunities and
infrastructure requirement. (Pg-3-first
paragraph)
• Number of domestic travellers
which was 44.4 million….54.7
million during the year 2016 – 17.
(Pg-3-second paragraph)

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Rise In • The rising income level of Indian Increase in spendable
Disposable middle class is also…the growth. Income
Income of (Pg-2-fourth paragraph)
Middle Class • air travels becoming cheaper,…
customers to go for alternative
options. (Pg-3-first paragraph)
• This shows that customers…most
of the passengers spend a
substantial part in the airports as
well. (Pg-3-first paragraph)
• If we look at the vast majority of
Indian middle….the air travel
affordable for them. (Pg-3-last
paragraph)

Geographical • If we look at the vast areas More Reach as connectivity

Spread of Air of….single handedly. (Pg-2-third increased
Connectivity paragraph)
• The huge geographical spread of
the country….past decade, then this
incremental growth can be
witnessed. (Pg-3-first paragraph)

Changes in • The expansion of the Model change due to new

Single Player sector…introduction of low cost entrants
Models with carriers. (Pg-2-second paragraph)
entry of new • The single player model…low cost
players in the carrier model which is dominating
market the Indian market. (Pg-3-second
paragraph)

Effect of other • The increased competition….on air Interrelated and correlation

sector on as well as ground services.(Pg-1-first of growth in other sectors
Aviation paragraph)

Sector’s • Indian aviation sector has a

Growth long……of traffic in both the
passenger and cargo segment.(Pg-1-
second paragraph)
• In case of international travellers
the reason….much needed foreign
currency in both the segment.(Pg-3-
second paragraph)

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 Current • Indigo is leading the Indian…..new New Players and Market
Market in the market, able to get 38% of the Leaders
Players total market share.(Pg-3-lst paragraph)

Critique:
The Indian aviation industry has witnessed a tremendous growth in the recent years driven by
Macroeconomic factors such as changes in pricing models, increase in the infrastructure,
providing better services to the consumers. This has helped bringing places together, as they
are more intensively connected than before.
Demographic factors like increase in the working class and disposable income of people, this
was supported by cheapening of the tickets and make them more affordable, supported by the
increase in employment rates to FDI coming in.
Government Reforms like letting the Private sector take part in the investment, thereby assuring
good quality of the infrastructure equipped with the latest technology, thus inviting foreign
investment.
The most important change is the how such a facility which conventionally is considered to be
for the ‘rich class’, is now available to the ‘middle class’ section as well. The accessibility and
availability has contributed to the demographic and the overall connectivity.

Conclusion:
This growth in the number of airports, planes and increased connectivity geographically, has
been possible of the all the factors working together. The better the projects, more investment,
which then helps them work efficiently and provide tickets at better rates, this in turn helps in
increasing the target market. Moreover, this causes the shift of the consumers from using
conventional transport vehicles to airplanes, which also helps them save time. All of these
factors helped the industry grow at such a high rate.

Reference:
1. Indian Aviation Industry-An Overview by Ipseeta Satpathy, BCM Patnaik, Sharad Kumar,
International Journal of Academic Research and Development.
https://www.researchgate.net/publication/321875226_Indian_Aviation_Industry-_An_overview