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Hatmary Lengen Neha Tyagi Varun Taneja Manoj Kumar
Overview of the aviation sector Legal & Regulatory environment Industry Growth trends SWOT analysis Comparison Challenges faced by the Aviation sector Bailout Packages Road Ahead
4. 5. 6. India has one of the fastest growing aviation markets in the world. The growth rate being 18% per annum. A reason for higher demand for air transport in India is due to: The growing middle class and their purchasing power, Low airfares offered by low cost carriers like Air Deccan,Kingfisher The growth of the tourism industry in India, increasing outbound travel from India, etc.
Classification of The Aviation Sector
The Indian aviation sector can be broadly divided into the following main categories: 1: Scheduled air transport service: It is an air transport service undertaken between two or more places & operated according to a published timetable. It includes: Domestic & International Airlines. Air Deccan, Spice Jet, Kingfisher Airline & Indigo
2: Non-scheduled air transport service: It is an air transport service other than the scheduled one & may be on charter basis. The operator is not permitted to publish time schedule & issue tickets to passengers. 3. Air cargo services: It is an air transportation of cargo & mail. It may be on scheduled or non-scheduled basis. These operations are to destinations within India. For operation outside India, the operator has to take specific permission of Directorate General of Civil Aviation demonstrating his capacity for conducting such an operation.
Apart from this, the players in aviation industry can be categorized in three groups: Public players : Air India, Indian Airlines Private players : Jet Airways, Air Sahara, Kingfisher Airlines, Spice Jet, Air Deccan Start up players : Omega Air, Magic Air, Premier Star Air & MDLR Airlines.
Federation of Indian Airlines Directorate General of Civil Aviation (DGCA) Ministry of Civil Aviation Airport Authority of India Civil Aviation Policy Open Skies Agreement
Federation of Indian Airlines is a body formed by the schedules carriers in India. FIA, as the voice of India's airline industry, works to identify & take up issues on behalf of the industry, with various regulatory authorities, government departments & other key stake-holders. The functioning of the FIA is guided by an Executive Council, comprising chiefs of each of the member airlines.
Directorate General of Civil Aviation (DGCA)
The Directorate General of Civil Aviation (DGCA) is a principal regulatory body for the aviation industry in India. DGCA is headquartered in Delhi & has various directorates
Ministry of Civil Aviation
The Ministry of Civil Aviation in India is located at New Delhi. The ministry formulates national policies & programs for development & regulation of civil aviation & also prepares schemes for the growth & expansion of Civil Aviation in India. The ministry also monitors airport facilities, air traffic services & the carriage of passengers & goods by air.
Under its purview are the following organizations:
Attached/Autonomous Organizations Directorate General of Civil Aviation Bureau of Civil Aviation Security Indira Gandhi Rashtriya Uran Akademi
Air Carriers Air India Ltd. Indian Airlines Ltd. Pawan Hans Helicopters Ltd. Airport Authority of India
CIVIL AVIATION POLICY
MISSION: To maintain a competitive civil aviation environment which ensures safety and security in accordance with international standards, promotes efficient, cost-effective and orderly growth of air transport and contributes to social and economic development of the country.
Trade, tourism & overall economic activity & growth is encouraged. Safe, efficient , reliable & widespread quality air transport services are provided at reasonable prices. Effective systems are put in place for timely crisis & disaster management, including investigation of incidents/accidents.
OPEN SKIES AGREEMENT
India & the United States signed a landmark agreement, permitting any number of airlines to operate any number of flights to any point in each other's territory. The agreement will enhance passenger & cargo services between the countries, decrease airfares & accompany innovations & new partnerships in the aviation industry.
Industry Growth Trends
May 2006 private carriers accounted for around 75% share of the domestic aviation market. During April-September 2006, the total aircraft movements witnessed an increase of 29.6% year on year to 494.92 thousand aircraft movements, as compared to 318.89 thousand during AprilSeptember 2005. The total air passenger traffic in September 2006 has shown an increase of 31.1%, as compared to 2005.
In 2005-06, the passenger traffic rose by 25-30% and is expected to grow by 25% year-on-year over the next five years.
Passengers Carried (Lakhs)
Projections from 2006 to 2014
The Centre for Asia Pacific Aviation (CAPA) has forecast that domestic traffic will increase by 25 % to 30 % till 2010 & international traffic growth by 15 %, taking the total market to more than 100 million passengers by 2010.
Domestic Passengers carried Year
In Lakhs Annual Growth (%) in Lakhs
International Passengers carried
Annual Growth (%)
2006 2007 2008 2009 2010 2011 2012 2012 2013 2014
267.7 321.2 369.4 424.8 488.6 523.7 561.5 601.9 393.0 691.7
-19.99 15.01 15.00 15.02 7.18 7.22 7.20 57.19 7.21
207.94 232.07 258.99 277.63 297.62 319.05 342.02 366.65 393.05 421.35
-11.60 11.60 7.20 7.20 7.20 7.20 7.20 7.20 7.20
India's civil aviation passenger growth, presently at 20 per cent, is one of the highest in the world. By 2020, 400 million Indian passengers are likely to be airborne. By 2020, Indian airports are expected to handle more than 100 million passengers including 60 million domestic passengers and around 3.4 million tonnes of cargo per annum.
SWOT analysis & Comparison
3. 4. 5. 6. 7. STRENGHTHS: Liberal Environment Modern Fleet High Quality Economic Growth Growing Tourism WEAKNESSESS: Airport Infrastructure Airways Infrastructure National Carrier Deep Pockets High Cost Structure Skilled Resources
OPPORTUNITIES 3. Market Growth 4. Geographic Location 5. Lower Costs and Higher Quality
THREATS Middle East Aviation Terrorism
Top Private Players
Main Players: Jet Airways Kingfisher Indian Spice Jet Air India
Jet + Air Sahara 29.4% Kingfisher & Decaan 28.9% Indian Airlines + Air India 19.8%
Kingfisher at a Glance
Dr. Vijay Mallya is the Chairman and CEO of Kingfisher Airlines. Kingfisher launched its airline services in May 2005.
3. Strong Brand value & Reputation in the minds of customers. 4. Quality of the service. 5. First airline to have new fleet of airbuses.
3. High Ticket prices.
3. The expanding tourism Industry. 4. Untapped Air cargo market 5. Under penetrated Domestic Market
3. Competitors. 4. Fuel Price Hike. 5. Economic Slowdown/Recessions.
Jet Airways at a Glance
Naresh Goyal is the founder & chairman Started Indian commercial airline operations in May 1993. In April 2007, they acquired Air Sahara.
Kingfisher vs. Jet Airways
Kingfisher is the latest Airline in India.
Jet airways is a experienced Airline in India. Jet airways had a slight profit in the 1st quarter of 2009. Jet acquired Air Sahara.
Overall loss in Dec 2008 of $218 ml.
Kingfisher acquired 46% in Air Deccan
Challenges for the aviation sector
Employee shortage Regional connectivity Rising fuel prices Gaps in infrastructure High input costs
The emergency stabilization Act 2008. Which is when the firm or an organization face an emergency requiring urgent & decisive action. The govt. helps to over come from the financial crises.
National Carrier: Air India
Facing financial crunch. Incurred a loss of Rs.4,000 crore last fiscal year. Delayed payment of employees. Seek Bailout package of Rs.14000 crore from Govt. Delay the salaries of its over 31,000 employees for 15 days Rs.3,000 crore annually.
Kingfisher Airlines is the first carrier in the country to offer live in-flight entertainment. Kingfisher Airlines Ltd & Dish TV have joined hands to provide live in-flight entertainment on Kingfisher aircraft . The service would enable airline’s customers to book air travel ticket after securing ‘ngpay’ application on their GPRS-enabled mobile handsets.
On the promotional front, Kingfisher has signed up the latest diva of Bollywood Ms. Deepika Padukone as the brand ambassador
JETAIRWAYS- Marketing strategies
Jet Airways has partnered with UTV to launch the online contest 'Cannes Calling', wherein winners will get a chance to attend the Cannes Film Festival 2009 along with a companion. Jet is trying to highlight its product superiority.
The boom in the aviation sector is likely to generate nearly 2.5 lakh jobs by the year 2010. The study says that the civil aviation sector is also set to become a Rs 35,000-crore industry by the same time. The industry would create 2,00,000 jobs by 2017. The industry is expected to add 130 airliners to its current fleet of 270 airliners, which would, in turn, increase manpower demand
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