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DEA, AHP & Kano Analysis

Group: 2
Bishnu

Deepali

Maitreyi

Rakesh

Richa

Ritika

India is the 9th largest civil aviation market in the world

India is ranked 4th in domestic passenger volumes

The Annual Passenger Traffic stood at 162.6 Million in 2012

FY12 recorded 13.4% growth in the passenger traffic


New Entrants 2014
1) TATA-SIA - Tata Sons Ltds low-cost joint venture
(JV) with Air Asia Bhd that has already started
flights and its premium JV with Singapore Airlines
Ltd (SIA)
2) Air Asia India

Entry of low fare carrier Air Asia beginning in year 2014, is


expected to add routes and connectivity for smaller airports
in tier 2 and tier 3 cities.

DOMESTIC PASSENGER
OUTLOOK

Context
Despite Yield Management techniques used by various Airlines for revenue maximization, the industry is still low on
profitability and thus the need for high performance takes an additional importance within the market challenges.

Data Source
Directorate general of civil aviation and the financial data taken from Capitaline

Performance measurement tools used:


DEA
Efficiency of each decision
making units (DMU) as the ratio
of the weighted sum of outputs
to the weighted sum of inputs

AHP
Decision making tool: decomposes complex
problem into multilevel hierarchical criteria,
compare and determine an overall ranking
of the alternatives.

KANO Model
Technique for deciding
which features you want to
include in a product or
service.

Analytical Hierarchy Process

Data Envelopment Analysis

Kano Model

Objective

Objective

Objective

To devise the most preferred


parameters among domestic airlines

To gauge efficiency for each domestic


airlines using input oriented method

To evaluate the influence of


various quality attributes
offered by airline services

Criteria
Number of Destinations
On Time Performance
% of Cancellation flights
Fleet Size
Maximum Luggage weight allowed/person

Airlines compared
Air India
Jet Ways
Indigo
Spice Jet

Input variables
Departures
Available Seat Kilometres (ASK)
Available Tonne Kilometres(ATK)

Methodology
Questionnaire : functional and
dysfunctional questions

Output variables

Quality attributes

Kilometres performed
Tonnes Kilometres performed

Attractive, one-dimensional,
must-be, indifferent and
reverse quality

Airlines Compared
Air India
Jet Airways
Go Air

Indigo
Spice Jet

Airlines Compared
Air India
Jet Airways
Go Air

Indigo
Spice Jet

Input Parameters:

Departures

Available Seat Kilometers (ASK)

2014

ASK= No. of seats available * kms those seats were flown

Available Tonne Kilometers(ATK)


ATK= Capacity in tonnes * km flown

Output Parameters:

Kilometers performed

Tonnes Kilometers performed

Data Source
DGCA (Directorate General of Civil
Aviation)
Annual Financial Results of the airlines
released

2013

1
0.9
0.8
0.7
0.6

2014

0.5

The performance of an airline


carrier in a particular year is
used to define the DMU

2013

0.4
0.3

2012

0.2

2011

0.1
0
Air India

Indigo

Jet Airways
(including Jet
Lite)

Spice Jet

Indigo, SpiceJet & GoAir have


a relative efficiency of 100%

Go Air

Jet Airways & Air India suffer


in terms of efficiency

Criteria
No of
destinatio
ns
On time
Performan
ce
% of
Cancelled
flights
Fleet Size
Maximum
luggage
weight in
lbs

No of
On time
destinati
Performance
ons

% of
Cancelled
flights

Fleet
Size

Maximum
luggage
weight in lbs

0.2

0.2

On time performance is the most preferred criterion basis the


results
% of cancelled flights falls second in preference
Maximum weight luggage is relatively least preferred criterion

0.5

Criteria

0.33

0.33

0.33

0.5

0.5

0.5

0.2

No of
destinatio
ns
On time
Performa
nce
% of
Cancelled
flights
Fleet Size
Maximum
luggage
weight in
lbs

CI

0.165

RI

1.71

CR Ratio 0.096

Consistency ratio is
less than 0.1, data
set can be assumed
as satisfactory

No of
% of
On time
destinati
Cancelled
Performance
ons
flights

Maximum
consistenc
Fleet Size luggage weight in Average
y measure
lbs

0.085

0.079

0.054

0.250

0.190

0.132

5.449

0.423

0.395

0.536

0.250

0.190

0.359

5.882

0.423

0.198

0.268

0.250

0.476

0.323

6.014

0.028

0.130

0.088

0.083

0.048

0.076

5.288

0.042

0.198

0.054

0.167

0.095

0.111

5.149

The Kano Model of Customer (Consumer) Satisfaction


classifies product attributes based on how they are
perceived by customers and their effect on customer
satisfaction.

1)
2)

Brainstorming Attributes
Kano Survey
1) Functional Vs. Dysfunctional Attributes
2) Kano Questionnaire Answers
1) I Like it
2) I expect it
3) Im neutral
4) I can tolerate
5) I dislike it

Attributes

Seat Selection
Free Food on Flight
Entertainment Program
Wide range of magazines in flight
Compensation - Flight Cancellation/
Delay
Less Waiting time
On time - Arrival/Departure
The technical services
Brief waiting time - hand baggage
check
Friendly Flight Attendants
Cost
Discounts
Stops

18
17
22
16

5
6
6
9

4
5

19
5

7
19
29
12

10
5

5
4

22
7
6
5
6

6
1
4

Grade

3
2
2
5

A
A
A
A

A
E
E
E

3
18
2

14

10

17
21

E
I
O
O
R

E- Expected
O- One Dimensional
A- Attractive
I Indifferent
R -Reverse

Key takeaways

Limitations

1. Different players existing in the industry, their current state,


performance level and position

1. Only passenger airlines chosen for study and not cargo airlines.

2. Allocating resources from inefficient unit to efficient ones


3. Identifying best practices and poor practices
4. Setting rational targets based on capturing and analyzing large
amount of data
5. Monitoring changes in efficiencies over time

2. Only services offered by domestic airlines within country covered &


not ones on international routes
3. Services offered by international players on domestic routes not
covered
4. Only five domestic players operating in purely passenger
transportation category, running DEA with such a small number of
DMUs was not practical as it would lead to misleading results
5. Performance analyzed for past four consecutive years. More data
can be collected and analyzed.
6. Only input-oriented method has been used while running DEA
7.

A larger sample size of consumers can be used for Kano Model


analysis

Operator

Efficiency

Efficiency

2014

2013
Air India
Indigo
Jet Airways (including Jet Lite)
Spice Jet
Go Air
2012
Air India
Indigo
Jet Airways (including Jet Lite)
Spice Jet
Go Air
2011
Air India
Indigo
Jet Airways (including Jet Lite)
Spice Jet
Go Air

Operator

0.96898
1
0.91816
1
1
0.87713
1
0.92227
1
1
0.78213
1
0.84941
1
1

Air India
Indigo
Jet Airways (including Jet Lite)
Spice Jet
Go Air

1
1
0.97461
1
1