Member Companies

No: Name Roll No Analysed

1 Ambar Gupta PGP/23/253 IndiGo
Air India
Strategic Vistara
AirAsia

Assessment:
GoAir
SpiceJet
2 Saket Rana PGP/23/291 Jet Airways

Aviation Industry
 Porter’s 5 forces
Suppliers power – Moderate

• The suppliers of aircraft are varied hence the power is low.

The suppliers of operational materials are numerous and
again the power is low. On the other hand, the number of
big airports in the country is less, and hence the power of
Threat of new entrants - airports to lay costs are high.
Low Buyers power - High

• The industry is capital Intensity of rivalry - High • The customers are faced with
intensive and requires a lot of • The aviation industry is • Air India makes this
highly competitive with industry a little lop sided numerous airlines for both
approvals before a certificate
earnings margins ranging since other’s do not have domestic and international
of flying can be issued.
from 1%-6%. The the option of the same. travel. The regional routes
Further, given the grim
government funding for are served by UDAN airlines.
situation currently when
Indian customers are further
airlines are going bust, it is
highly price conscious
unlikely that new ones come
up.

Threat of substitutes - Moderate

• The customers have the option of rail, road & air. The rail is
an extremely competitive mode of transport though time
consuming is cheap. COVID 19 negated the threat by some
means through interstate transport closure.
 S W O T

S W O T
STRENGTHS WEAKNESS OPPORTUNITIES THREATS
• Demand is poised to rise
barring the current • Government regulations • With the growing number • With the opening up of the
scenario due to COVID have been erratic and of airports in India, industry, the increased
• ATF has been largely haven’t favoured the home multiple flight routes are slots to foreign player is a
stable over the past 5 grown carriers available great threat since they can
years hence a major cost • Industry operates on wafer • Bilateral agreements with better service at cheaper
can be forecasted thin margins countries can lead to rates
• Development of training • Duopoly in the medium greater slots at their • Changing govt norms
schools in India has and large sized aircraft locations • Oil is largely controlled by
allowed for home-grown segment • Indian Harbours to be Middle East and can be
cheaper talent used for connecting artificially made expensive
International Flights
 Strategic Group Formation
1

3rd IMPORTANT
Low Cost Full Service IDENTIFYING OUTCOME
Carriers Airlines 2 KEY VARIABLES 3 VARIABLE

Comparable Direct Business Business

Firm in Direct Competition but Management Financial
Competition not directly
Comparable

GoAir Air India • Diversity of markets • Interest Coverage

SpiceJet Jet Airways – If it makes • Management of input Ratio
Vistara a return in 2020 price volatility • Debt Service
AirAsia • Multi-locational Coverage Ratio
Advantages (Times)
• Fleet Optimization • Debt to Equity Ratio
• Turnaround Time Trend
• Sale and Leaseback • Capacity Utilization
Model • On-Time Performance
• Parent/ Government
 Low Cost Airlines Full Service Airlines
Strategic Group • Parent/Government
Support
•
•
Cost Structure
Supplier Risk
• Business Model
Formation • Operation Efficiency
•
•
Management Risk
Existing Financial
• Current Market Share Position
• Fleet Age • Portfolio mix
Graphical Representation • Capacity Utilization optimization
of Aviation Industry • Debt Service Coverage • Inputs/labour count and
Ratio (Times) structure

Dimensions of Competition
Competitor Moves in Aviation Industry
• Entry of Vistara as a low cost carrier company in Indian
aviation which is a capital intensive industry
• Optimization of operational efficiency on the part of
IndiGo’s Competitors such as SpiceJet
• Indian aviation to lose Rs 21,000 crore this fiscal; needs
Rs 35000-37,000 crore funding till FY23
• FDI rules change for Aviation Industry Airline
• Automatic upto 49% and Government route beyond 49%
 Competitor Analysis
Companies Future goals Current Strategy Assumptions Capabilities

Indigo • International • Expansion plans halted sue • Betting on Tier 2 • Low cost
expansion plans to COVID, expected to and growing middle • Tier 2 presence
• Tie Up with resume by 2023 class for domestic • Turnaround time
IGRUA for pilots ops. • Fleet mgmt.

Vistara • Expansion plans • Full cost airline with 3 • Tata’s past • Premium
backed by Tata segments with fine dining experience and experience
and SIA • Targeting High revenue brand equity of SIA • Mix of domestic
business class travellers and international

SpiceJet • Low cost with • Leader in cargo operation • High brand recall • Cargo as well as
highest value • Low cost target and stickiness passenger
• Expansion plans • Poor on time performance • Big bet on cargo • High brand loyalty
hinted in 2019

Air India • Privatization plans • Geographic presence • Govt influence in • Star alliance
• Undifferentiated targeting all decision making member
segments, mostly middle- & due to bureaucratic • Cargo and
high-income segments mgmt. passengers
Thank You