AVIATION AVIATION

ITM Business School Global Leadership Centre Masters In International Business Navi Mumbai

DEPARTURE-29AUGUST2006
DEPARTURE
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Pilot Crew
Mr. Ganesh Kumar (9) Mr. Gyanesh Thakur (46)

Ms. Pushpinder Kaur Bhullar(38)
Mr. Saurabh Sharma (28)

Mr. Shishir Paliwal(51)

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Air one “Empower Every Indian To Fly”
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Table of contents
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Introduction Global overview Current/future status India aviation industry Company description Strategy, Target, Positioning Product SWOT Market analysis Competitors Environment analysis Consumer behaviour organization

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AVIATION CONSISTS?
The

aviation industry can be broadly classified into military aviation and civil aviation. The term 'civil aviation' covers all aviation related activities except for those undertaken by the military and the government. The airlines segment can be broadly classified into international airlines and domestic airlines.
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Cont.
An

airline with one or both terminals in the territory of a country, other than the country in which it is registered, is classified as an International airline. Domestic airlines refers to those airlines whose flights fly only within the domestic boundaries of a particular country.
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THERE ARE 36 BILLION REASONS FOR CHANGE IN THIS INDUSTRY. AIRLINES HAVE CHANGED RADICALLY. WE ARE MAKING SOME PROGRESS WITH STAKEHOLDERS. CHANGE REMAINS CRITICAL. GREATER EFFICIENCY AND THE FREEDOM TO DO BUSINESS ON A LEVEL PLAYING FIELD ARE ESSENTIAL. Mr Giovanni Bisignani Director General & CEO IATA 7 IATA Global Press Briefing

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Current State of Industry

CURRENT STATE OF INDUSTRY

In 2005, the air transport industry marked its fourth consecutive year of financial aggregate loss, bringing total post-9/11 industry losses to over US$36 billion since 2001.

The principal cause of the loss in 2005 was the industry's US$61 billion fuel bill, US$17 billion more than in 2004.

 

And the situation is getting worse. This overwhelmed the success of considerable costGanesh Kumar cutting initiatives in other areas. 8

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OUTLOOK 2005 + 2005+ Outlook
 ASIA

Outlook 2005 +

AND CENTRAL EUROPE ~ GREATEST REVENUE POTENTIAL scheduled passenger traffic in 2005 increased 15.3% over 2004 levels, and cargo traffic rose 13.4% growth in 2004 was exceptional for two reasons: one-off rebound from the adverse affects in 2003 of the SARS epidemic and the war in Iraq on air traffic levels.
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 International

 Traffic

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Cont.
2004

~ strongest world economic growth in 3 decades.

 Economic

environment less favorable in next 2 years.  Strongest potential lies where liberalization is taking place Economic liberalization continue to boost growth in China Increasing trade integration of central European countries within the EU will lead to expansion in central Europe.
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NEED OF THE HOUR- CUT COSTS
6% annually Industry growth for 2004-2008 period. Regulatory burdens + high price of oil to contend with. Significant improvement their non-fuel unit cost performances - down 3% in 2004 and 2.5% in 2003. It is therefore more critical than ever that air transport becomes a low-cost industry.
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Deregulating India’s Civil Aviation

Prior to 1991, aviation, much like other major sectors of the Indian economy, was nationalized and heavily regulated

In 1953, the Air Corporation Act, 1953, changed the landscape of the airline industry in India.

It was in 1994 that the Air Corporation Act was repealed

and thus this allowed private operators to operate in the
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ABOUT AIR ONE

The AIR ONE airline is a low cost airline with four Boeing 737 planes at an investment of $300million. AIR ONE believes in dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit with returns to the shareholders.
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AIR ONE PRINCIPLES
 Simple product — which means no free meals,

economy seating, online reservations, no frequent flier programmes

Positioning — targeting business and priceconscious passengers

 Low operating costs.
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AIR ONE MISSION

The mission of Air one is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit with returns to the shareholders.

To Our Employees We are committed to provide our Employees a stable work environment with equal opportunity for learning and personal growth. Creativity and innovation are encouraged for improving the effectiveness of Air one. Above all, Employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share externally with every Air one Customer.
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AIR ONE GOALS
 Financial goals  To have a public stock offering by the year

2010  To obtain a return on equity at least between 15-20%  To be among the top three aviation companies in market revenue in nearly four years
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AIR ONE GOALS
Non financial goals
 Customer satisfaction to the maximum  To come up with new services from time to

time  To be among the top three domestic airline company in market share by 2011
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AIR ONE PLANE

Boeing 737. To fly only one airplane model. Thus, pilots and mechanics need to be trained on only one kind of airplane. Having a single airplane model in a fleet also lowers inventory, record keeping and maintenance costs, and it minimizes the number of technical manuals, tools and spare parts. Also, fleet management is greatly simplified.

Weigh less than the A320 and therefore require lower engine thrust, less fuel, have lower engine maintenance costs, lower navigation and landing fees.
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AIR ONE PLANE
Ease of maintenance, the airplane sits low to the ground, allowing maintenance crews to easily perform routine maintenance on the engines.

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AIR ONE PLANE

Good reliability, because the airplane can be turned around at the gate so quickly, airline can get back on schedule if it falls behind for any myriad of reasons. This allows our airline to deliver passenger satisfaction as defined by the customers themselves: getting them where they want to go, when they want to go, at a good value. Giving passengers more departure time choices and airline the opportunities for more revenue. Good flexibility, the 737 comes in four different sizes in the 100to 200-seat market. The interiors are flexible, too. Optional flex seating, capability of changing a row of seats from five-abreast business-class seating to six-abreast tourist-class seating in less than one minute. A moveable cabin divider also allows configuration changes between flights. On a typical route, 737 cash operating costs are nearly 4 percent less than its closest competitor, the A320 series, in part due to its superior structural efficiency.
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AIR ONE STRATEGIES
 A single passenger class. Targeting business

and price-conscious passengers.
 Shorthaul and point-to-point approach  No assigned seats, pay the crews best in

industry, and use of less congested airports

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AIR ONE STRATEGIES

Employees working in multiple roles, for instance flight attendants also cleaning the aircraft or working as gate agents (limiting personnel costs) Removing seat-back pockets to reduce weight and cleaning expense Charging passengers for practically every amenity they might consume. There are no free peanuts or beverages Using that traffic as a marketing tool for related services; each time a passenger books a rental car or a hotel room, our airline will earn a percentage of the sale.
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AIR ONE STRATEGIES
Promotion Strategy
 Promotion

will be through outdoor advertising, radio and print media.  Employing public relation firm for both consumer and financial purposes.  Combined amount budgeted for advertising and public relations will be held under 15% of sales.  Tie up with Creamoza Coffee.
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AIR ONE STRATEGIES
 Distribution Strategy  Developing our own website containing the

information about the company along with facilities of online reservation and payment.  Hotels and Restaurants.  Agencies giving cars on rent.  Travel insurance agencies.  Tie up with Creamoza Coffee.
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Breakdown of cost saving
Passenger services costs Aircraft related costs Commission Station costs Advertising and promotions costs Sales and reservations costs Airport and ANS charges Aircraft fuel and oil Cabin crew Flight crew Other operating costs 0 5 10 15 20 25 Full cost short haul airline Low cost airline

Turning our planes into media and entertainment Cost (Rs) plays, offering advertisers the opportunity to repaint the exteriors 29/08/2207 Ganesh Kumar of our planes, effectively turning them into giant billboards.

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SWOT ANALYSIS
Factors
Management Marketing Offering HR R&D Economic

Strenghts
Experience Operating in Metro Unique, high quality, low price Small, good workforce Continuing effort to ensure quality Consumer income is growing

Weakness
Small size No national distribution Cost covering Attrition Fund scarcity Brand image New to the industry
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Competitvenes Distinctive service and features s
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SWOT ANALYSIS

Opportunities Huge potential to capture market Growth rate of the industry is the highest FDI which will in turn can help us in growing rapidly Changing Consumer Preferences Mergers and acquisitions

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SWOT ANALYSIS

Threats Existing competitors Unstable Government Policies Changing dynamics of the industry Upcoming new airlines Further rise in oil prices in the international market International terrorist

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MARKET ANALYSIS
Market share of passenger traffic in major cities 1. Mumbai 2. Delhi 3. Chennai 4. Kolkata 5. Bangalore 26% 17% 7.5% 8% 8% ………………. 66.5%
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DIRECT COMPETITORS
Air Deccan Go air Spice jet Alliance air (add some more name)

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INDIRECT COMPETITORS
Railways Road transport Ship transport

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ENVIORNMENTAL ANALYSIS
 Government policies  Technological Environment  Economic factors  Competitive Environment  Social cultural

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CONSUMER BEHAVIOUR
 Reaction-

Will need sometime for winning the trust of the potential costumers Deliver what we have

 Expectations-

promised for

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ORGANIZATION
Board of Directors President and CEO Dire. Operator, V.C (Marketing.), Dire. Finance & admin., Director sale

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Differentiation
 Maintaining  Tie

costumer data base.

up with Creamoza Coffee.

 Boeing

specialized engineers for maintenance so that security is upgraded. plight at Non-Metro airport.
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 Direct
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“ As deregulation and privatization of the Indian Civil Aviation and Airline Industry occurs, Air One is prepared to meet the demands of the consumer and deliver their expectations while sustaining growth? ”

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THANK YOU
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