aviation final - copy
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AVIATION
INDUSTRYSubmitted By:Karisma Rawat -24Smrittee Priya -58Sneha Bhadra -59Sonam arwat -60Vineet Singh -69
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HISTORY OF AVIATIONINDUSTRY
The Aviation industry in India began with the birthof Tata Airlines, through the business relationshipbetween Mr. Nevill Vintcent, a Royal Air Force pilotand Mr. JRD Tata, the first Indian to get an A-license
Tata Airlines became Air India in August 1946
In 1953, the Air Corporation Act nationalized all
existing airline assets and established the IndianAirline Corporation and Air India International fordomestic and international air servicesrespectively
A number of private players including Jet Airways,
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Macro EnvironmentAnalysis
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Political Environment
In April 1990 GOI allowed air taxi operators tooperate flights from any airport both on a charterand a non charter basis to decide their own flightschedules, cargo and passenger fares.
The operators were, however, required to useaircraft with a minimum of 15 seats and conformto the prescribed rules.
Deregulations in different spheres
Low entry barriers
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Economic Environment
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Socio-cultural Environment
Growing middle class :
1993-1999 : 39.5 m to 56.7 m households
2005 : 300 m
2010 : 400 m (Estimated)
Increase in leisure travel by tourists by 15 % in
2007
Foreign tourists in 2006 : 3.2 mn
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Technological Environment
Modernization & Privatization of Airports
Modern Technology for efficient handling ofaircraft, passenger and cargo.
Instrument Landing Systems (ILS), CAT-3
Developing Greenfield Airports with Private Sector
Bangalore Airport
Mumbai Airport
Hyderabad Airport
Delhi Airport
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Demographic and Natural
Changing pattern of consumers
Highest percentage people of age group 20-25
Educational environment
Shift towards family concept
High energy cost
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EntryOf
PrivatePlayers
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SCENARIO POST 1991 1991, was the year when the Indian Government
came up with the Open Skies Policy
In 1994, following the repeal of the Air CorporationAct, private players were permitted to operatescheduled services
Ultimately the carriers with more efficient operationsand strategies survived and by 1997, only Jet Airwaysand Air Sahara made the cut from the original group.
Simplify Deccan an airline started by CaptainGopinath gave birth to the idea of Low Cost Carriers(LCC) or budget airlines
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ar e are a orPlayers
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CONTD..
In December 2004, Indian scheduled carriers witha minimum of 5 years of continuous operationsand a minimum fleet size of 20 aircraft, werepermitted to operate scheduled services to
internationals destinations
On January 11, 2005 the government designatedfour scheduled Indian carriers (Air India, Indian
Airlines, Jet Airways and Air Sahara) to operateinternational services to and form Singapore,Malaysia, Thailand, Hong Kong, the UK and theUSA
A total of 127 air orts in the countr which
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Kingfisher Vs Jet Airways Kingfisher is one of
the latest Airlinesin INDIA.
Overall growth inyear 2006-07 is37%.
Kingfisher acquired46% share in AirDeccan.
Domestic airlinespoised to go
Jet Airways is theexperiencedairline in INDIA.
Overall growth inyear 2006-07 is16%.
Jet airwaysacquired AirSahara in 2006.
Jet Airwaysalready has
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Kingfisher Vs Jet Airways In a short span of
2 years its marketshare has become28% including Air
Deccan. Personal in-flight
entertainment in
every seat. It was awarded
the Best NewAirline Of the
Year award.
Jet Airways has
its market share31% including AirSahara.
Averageentertainmentservices.
Jet Airways wonDouble Honour
Travel TradeGazette Travelaward.
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SUPPLIER POWERHIGH
strong labor unionsconcentrated aircraft makers
THREAT OF ENTRYHIGH
entrants have costadvantageslow capital requirementslittle productdifferentiationderegulation of
governmental barriers
INDUSTRYCOMPETITIVENESSHIGH
many companieslittle productdifferentiationexcess capacityhigh fixed/variablecostscyclical fluctuations of
demand
THREAT OF
SUBSTITUTESMEDIUM
autos for short distancetravel
BUYERPOWERMEDIUM/HIGH
Buyers extremely pricesensitiveGood access to information Low switching costs
AirlineIndustr
y
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What do customers look for?
comfortable journey
online purchasing
low cost airlines convenient schedule
in-flight entertainment and
services
Customer perception -higher pricemeans better quality
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Changing trend in themarket
PAST:
air travel was seen as a high qualityform of travel
symbolizing luxury and the status ofthe consumer
less negotiable pricing of airfares
Low cost airlines business travellers, especially the frequentflyers, feel that the major airlines areexploiting them.to book last minute deals, which is much
cheaperair hostesses are ood lookin and are
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Seat Factor
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Flight Cancellations
Passenger
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PassengerComplaints
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the rise of low costairline
The emergence of active consumers- those who are better connected,informed and have access to an
increasing array of choices,represents a challenge for manyindustries, especially in travel sector.
(Schwartz & O'Neill 2003) With the help of the internet and the
e-business, consumers are able to get
the hold of information and a better
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OPEN SKIES POLICY
Meaning:
Unrestricted access by any carrierinto the sovereign territory of acountry without any writtenagreement specifying capacity, portsof call or schedule of services.
No restriction
Adopted only by a handful ofcountries
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NEED FOR OPEN SKIESPOLICY
Promote Travel & Tourism
The current policy restricts theaccess of foreign airlines
Potential tourists are not offered achoice of airlines or seats
Exacerbated during the holidayseason
Hence allowing for unlimited service,
capacity and points of call.
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Civil Aviation Policy
Autonomous regulatory authorityfacilitator for the sector, prescribeand enforce minimum standards for
all agencies, settle disputes withregard to abuse of monopoly andensure level playing field for all
agencies.
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OBJECTIVES
Ensure aviation safety, security
Effective regulation of air transport
Reasonable pricing Flexibility to adopt to changes
To provide all players a level-playing
field
Encourage Private participation
Encourage Trade, tourism and
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MAJOR CHALLENGES FACEDBY AVIATION INDUSTRY
1. Shortage of trained Employee
2. Regional connectivity
3. Rising fuel prices4. Declining yields
5. Gaps in infrastructure
6. High input costs
7. Trunk routes
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Major players in IndianAviation industry
Airline Call Sign CommencedOperations
Headquarters
Air India AIRINDIA October 1932 Mumbai
Air IndiaExpress
EXPRESS INDIA April 2005 Kochi
Air IndiaRegional ALLIED
1996(as Alliance Air) Mumbai
Blue DartAviation
BLUE DART 1995 Chennai
Club One Air August 2005 Delhi
Deccan 360 DECCAN CARGO 2009 Bangalore
DeccanAviation
DECCAN 1997 Bangalore
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AirlineHeadquarters
CommencedOperations
sHeadquarters
GoAir GOAIR June 2004 Mumbai
IndiGo IFLY August 2006 Gurgaon
Jagson Airlines JAGSON November 1991 Delhi
Jet Airways JET AIRWAYS May 1993 Mumbai
Jet Konnect JET AIRWAYS May 2009 Mumbai
JetLite LITE JET1991(as Air Sahara)
Mumbai
Kingfisher Airlines KINGFISHER May 2005 Mumbai
Kingfisher Red KINGFISHER August 2003 Mumbai
SpiceJet SPICEJET May 2005 Gurgaon
TajAir Mumbai
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AIR INDIA
Air India was founded in 1932.
With its fully owned subsidiaryAlliance Air, it is one of the largestregional airline systems in Asia.
Air India is presently fully owned bythe Government of India and hastotal staff strength of around 31000employees.
Alliance Air, Air India carries a totalof over 7.5 million assen ers
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Jet Airways
Jet Airways was incorporated as an airtaxi operator on 1 April 1992. It startedIndian commercial airline operations on
5 May 1993. It is India's largest airline. It operates
over 400 flights daily to 67
destinations worldwide. On 12 April 2007 Jet Airways agreed to
buy out Air Sahara for INR14.5 billion
(US$340 million). Air Sahara was
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INDIGO AIRLINES
IndiGo is a private, low-costairline basedin Gurgaon, Haryana, India. It
commenced its operations in August2006.
IndiGo was founded by Rakesh
Gangwal and Rahul Bhatia. The parentcompany of the airline is Gurgaon-based InterGlobe Enterprises.
IndiGo operates to 26 destinations in
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Growth of Indian AviationIndustry
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SWOT ANALYSIS
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