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4/18/12

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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6

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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