evolution of entrepreneurs in the indian aviation industry ...table 6.45 correlation analysis :...
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Evolution of Entrepreneurs in the Indian aviation
industry and factors affecting their sustenance :
A study of entrepreneurs in Aviation maintenance
and Air Charter business.
Dissertation Submitted to the Padmashree Dr. D. Y. Patil University’s, Department of Business Management
in partial fulfillment of requirements for the award of the Degree of
DOCTOR OF PHILOSOPHY IN
BUSINESS MANAGEMENT
Submitted by : PRAVEEN KUMAR SRIVASTAVA
(Enrollment No. DYP-PhD-066100027)
Research Guide Dr. PRADIP MANJREKAR
PROFESSOR
PADMASHREE DR. D.Y. PATIL UNIVERSITY’s, DEPARTMENT OF BUSINESS MANAGEMENT,
Sector 4, Plot No. 10, CBD Belapur, Navi Mumbai – 400 614
December 2010
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Evolution of Entrepreneurs in the
Indian aviation industry and factors affecting their sustenance :
A study of entrepreneurs in Independent
Aviation maintenance and Air Charter business.
iii
DECLARATION
I hereby declare that the dissertation entitled “Evolution of
Entrepreneurs in the Indian aviation industry and factors affecting
their sustenance : A study of entrepreneurs in Aviation
maintenance and Air Charter business.” submitted for the Award of the
Degree of Doctor of Philosophy in Business Management at the Padmashree
Dr. D.Y. Patil University Department of Business Management is my original
work and the dissertation has not formed the basis for the award of any
degree, associate ship, fellowship or any other similar titles.
Place: Navi Mumbai. Date:
(Praveen Kumar Srivastava) Signature of the Candidate
iv
CERTIFICATE This is to certify that the dissertation entitled “Evolution of Entrepreneurs
in the Indian aviation industry and factors affecting their
sustenance : A study of entrepreneurs in Aviation maintenance
and Air Charter business.” is a bona fide research research work carried
out by Mr. Praveen Kumar Srivastava, student of Doctorate in Philosophy
(Business Management), at Padmashree Dr. D. Y. Patil University’s
Department of Business Management during the year 2007-2010, in partial
fulfillment of the requirements for the award of the Degree of Doctor of
Philosophy in Business Management and that the dissertation has not
formed the basis for the award previously of any degree, diploma, associate
ship, fellowship or any other similar title of any University or Institution.
Prof. Dr. Pradip Manjrekar Prof. Dr. R. Gopal Signature of the Research guide Director Dept. of Business Mgmt. Padamshree Dr. D.Y. Patil
University
Place: Navi Mumbai Date:
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Acknowledgement
I am indebted to the Padmashree Dr. D.Y.Patil University Department of
Business Management, which has accepted me for Doctorate program and
provided me with an excellent opportunity to carry out the present research
project.
Regardless of the extent of a researcher’s effort, the accomplishment of a
dissertion of this nature is greatly dependent upon the expert guidance,
understanding and patience of the guide. My guide Dr. Pradip Manjrekar
deserves considerable credit for the academic quality of this study. I am
thankful to Dr. Pradip Manjrekar who has been my primary advisor, guide
and mentor; and has inspired and encouraged me to write this dissertation.
Special recognition must be made to Prof. Dr. R. Gopal, Director, Dean and
Head of the Department, Padmashree Dr. D.Y. Patil University, Department
of Business Management, whose expert guidance was clearly beyond
expectations and indicative of his high level of knowledge and
professionalism.
Most of all my gratitude is extended to my family, specially my wife Mrs.
Neelika P. Srivastava, without whose support, I could not have undertaken
this endeavor.
(Praveen Kumar Srivastava) Signature of the Candidate
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TABLE OF CONTENTS Page No. List of abbreviations ……………………………………………………… viii List of figures ……………………………………………………………… ix List of tables ……………………………………………………………….. x Executive Summary ………...…………………………………………….. xvi CHAPTER I : INTRODUCTION 1.1 General Introduction …………………………………………………. 2 1.2 Entrepreneurship – A journey full of challenges ....………………. 5 1.3 The common challenges faced by entrepreneurs ………………… 10 1.4 Aviation industry in India – An overview …………………………… 21 1.5 Aviation maintenance in India – Industry overview ………………. 29 1.6 Air charter business in India – Industry overview ………………… 40 CHAPTER II : LITERATURE REVIEW 2.1 Literature review ……………..…………………………………..…... 50 2.2 Entrepreneurial success and failures in aviation industry ………... 51 2.3 Charter Airlines – Have they the future …………………………….. 53 2.4 Entrepreneurial policies and strategies …………………………….. 53 2.5 First generation entrepreneurs build the Chinese market ………... 54 2.6 Entrepreneurial opportunity identification …………………………... 56 2.7 The Indian Aviation industry 2008 …………………………………... 60 2.8 Research Gap …………………………………………………………. 61 CHAPTER III : OBJECTIVES OF RESEARCH 3.1 Research problem ……………………………………………………. 64 3.2 Statement of research objectives …………………………………… 66 3.3 Hypothesis ……………………………………………………………... 67 3.4 Importance of the research …………………………………………… 70 CHAPTER IV : RESEARCH METHODOLOGY 4.1 Instrument development and measures …………………………….. 72 4.2 Pilot test ……...…………………………………………………………. 77
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4.3 Validity ………………………………………………………………….. 80 4.4 Reliability ……………………………………………………………….. 83 4.5 Sample design …………………………………………………………. 84 4.6 Sample size …………………………………………………………….. 85 4.7 Data collection and measure to reduce sample bias ………………. 86 4.8 Data processing and Analysis ………………………………………… 86 4.9 Limitations of research ………………………………………………… 89 CHAPTER V : EVOLUTION OF ENTREPRENEURS IN INDIA 5.1 Evolutionary phases ………………………………………………….. 92 5.2 Evolution of Entrepreneurs in Independent MRO …………………. 96 5.3 Evolution of Entrepreneurs in Air Charter sector ………………….. 100 CHAPTER VI : DATA ANALYSIS AND HYPOTHESIS TESTING 6.1 Description of the sample ……………………………………………. 108 6.2 Motivational factors of entrepreneurs ………………………………. 118 6.3 Entry barriers faced by entrepreneurs ……………………………… 136 6.4 Evolutionary factors …………………………………………………... 146 6.5 Challenges faced in Sustenance ……………………………………. 156 6.6 Rewards ………………………………………………………………... 176 6.7 Results of Hypothesis testing ………………………………………... 183 6.8 Summary of Hypothesis validation …………………………………… 204 6.9 Major Findings ………………………………………………………….. 207 CHAPTER VII : CONCLUSION 7.1 Conclusions …………………………………………………………… 213 7.2 Independent MRO ……………………………………………………. 221 7.3 Air Charter ……………………………………………………………... 222 7.4 Scope of future research ……………………………………………… 223 APPENDICES 1 BIBLIOGRAPHY ………………………………………………………….. 226 2 QUESTIONNAIRE ………………………………………………………. 236 3 SURVEY DATA ………………………………………………………….. 247 4 SPSS OUT PUTS ……………………………………………………….. 259
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LIST OF ABBREVIATIONS
Sr. no Abbreviation Full Form
1 MRO Maintenance repair and overhaul facility
2 OEM Original Equipment manufacturer
3 TAT Turn around time
4 w.r.t With respect to
5 Forex Foreign exchange
6 DGCA Director general of civil aviation
7 LCC Low cost carrier
8 FBO Fixed base operator
9 AME Aircraft maintenance engineer
10 CMM Component maintenance manual
11 USP Unique selling proposition
12 PMA Part manufacturers approval
13 BCAS Bureau of Civil Aviation security
14 AAI Airport Authority of India
15 ROI Return on investment
16 BAAI Business Aviation Association of India
17 CAPA Center for Asia Pacific Aviation
18 ICAO International Civil Aviation organization
19 IATA The International Air Transport Association
20 FICCI Federation of Indian chamber of commerce
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LIST OF FIGURES
Figures Page No.
Passenger traffic in India …………………….……………………….. 23
Domestic market share of Airlines …………………………………… 27
Number of Aircrafts in India ………………………………………….. 33
Maintenance contracts of Airlines ………………….………………… 36
Population of Independent MRO and Air charter entrepreneurs ..... 85
Evolution of Independent MRO sector in India ……………………… 97
Region wise share of MRO market …………………………………… 99
Location & Category of respondents ………...………………………. 109
Age & Family background of respondents ….……………………….. 110
Personal background of respondents ………………………………... 111
Initial capital and current capital of respondents …………………….. 112
Source of funding and break-even of respondents ………………….. 113
Current financial condition & Current ROI of respondents ………….. 114
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LIST OF TABLES
Table No. Name of the Tab Page No.
Table 1.1 Fleet data for year 2000 - 2010 33 Table 4.1 Research measures 74 Table 4.2 Summary of internal validation methods 83 Table 4.3 Population of MRO and Air Charter entrepreneurs 85 Table 6.1 Sample Description – Facts 108 Table 6.2 Significance of motivational factors in evolution of 118 Entrepreneurs Table 6.3 Correlation analysis : Aviation as a hobby of any 120 family member or friend * Personal back ground Table 6.4 Chi-Square test for Aviation as a hobby of any 121 family member * Personal Background Table 6.5 Correlation analysis : Own interest in 121 Aviation * Personal back ground Table 6.6 Chi-Square test for Own interest in 122 Aviation * Personal Background Table 6.7 Correlation analysis : Adventurous / Craving to take 123 risk * Personal back ground Table 6.8 Chi-Square test for Adventurous / Craving to take 124 risk * Personal Background Table 6.9 Correlation analysis : Desire to take challenges in 125 life * Personal back ground Table 6.10 Correlation analysis : Passion towards Aircrafts / 126 Flying * Family background Table 6.11 Chi-Square test for Passion towards Aircrafts / 127 Flying * Family background Table 6.12 Correlation analysis : Being your own master * Family 128 Background Table 6.13 Correlation analysis : Being your own master * Personal 129 Background
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Table 6.14 Correlation analysis : Follow your dream * Family 130 Background Table 6.15 Correlation analysis : Follow your dream * Personal 131 Background Table 6.16 Correlation analysis : Money * Family background 132 Table 6.17 Correlation analysis : Money * Personal background 133 Table 6.18 Correlation analysis : Glamour * Family background 134 Table 6.19 Correlation analysis : Glamour * Personal background 135 Table 6.20 Entry barriers in the evolution of entrepreneurs 136 Table 6.21 Correlation analysis : Difficulty in getting Permissions / 137 Approvals * Motivation Table 6.22 Correlation analysis : Difficulty in getting Permissions / 138 Approvals * Evolution Table 6.23 Correlation analysis : Infrastructural 139 constraints * Motivation Table 6.24 Correlation analysis : Infrastructural 140 constraints * Evolution Table 6.25 Correlation analysis : Capital intensive * Motivation 141 Table 6.26 Correlation analysis : Capital intensive * Evolution 141 Table 6.27 Correlation analysis : Control of OEM * Motivation 142 Table 6.28 Chi-Square tests : Control of OEM * Motivation 143 Table 6.29 Correlation analysis : Control of OEM * Evolution 144 Table 6.30 Chi-Square tests : Control of OEM * Evolution 144 Table 6.31 Correlation analysis : Unavailability of data * Evolution 145 Table 6.32 Chi-Square tests : Unavailability of data * Evolution 146 Table 6.33 Factors significant to the evolution of entrepreneurs 146 Table 6.34 Correlation analysis : Industry need based * Motivation 148 Table 6.35 Chi-Square tests : Industry need based * Motivation 149
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Table 6.36 Correlation analysis : Industry need based * Challenges 149 faced in sustenance Table 6.37 Chi-Square tests : Industry need based * Challenges 150 faced in sustenance Table 6.38 Correlation analysis : Opportunity based * Motivation 150 Table 6.39 Correlation analysis : Opportunity based * Challenges 151 faced in sustenance Table 6.40 Chi-Square tests : Opportunity based * Challenges 152 faced in sustenance Table 6.41 Correlation analysis : Idea based * Motivation 152 Table 6.42 Correlation analysis : Idea based * Challenges faced 153 in sustenance Table 6.43 Correlation analysis : Foresight / Vision * Motivation 154 Table 6.44 Chi-Square tests : Foresight / Vision * Motivation 155 Table 6.45 Correlation analysis : Foresight / Vision * Challenges 155 faced in sustenance Table 6.46 Significance of Challenges faced in sustenance 156 Table 6.47 Correlation analysis : Regulatory controls * Motivation 158 Table 6.48 Chi-Square tests : Regulatory controls * Motivation 159 Table 6.49 Correlation analysis : Regulatory controls * Rewards 159 Table 6.50 Chi-Square tests : Regulatory controls * Rewards 160 Table 6.51 Correlation analysis : High cost of operation * Motivation 161 Table 6.52 Chi-Square tests : High cost of operation * Motivation 162 Table 6.53 Correlation analysis : High cost of operation * Rewards 162 Table 6.54 Chi-Square tests : High cost of operation * Rewards 162 Table 6.55 Correlation analysis : Availability of spares * Motivation 163 Table 6.56 Chi-Square tests : Availability of spares * Motivation 164 Table 6.57 Correlation analysis : Availability of spares * Rewards 164
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Table 6.58 Chi-Square tests : Availability of spares * Rewards 165 Table 6.59 Correlation analysis : Difficulty retaining Skilled man 166 power * Motivation Table 6.60 Chi-Square tests : Difficulty retaining Skilled man 166 power * Motivation Table 6.61 Correlation analysis : Difficulty retaining Skilled man 167 power * Rewards Table 6.62 Chi-Square tests : Difficulty retaining Skilled man 168 power * Rewards Table 6.63 Correlation analysis : Control of OEM * Motivation 169 Table 6.64 Chi-Square tests : Control of OEM * Motivation 169 Table 6.65 Correlation analysis : Control of OEM * Reward 170 Table 6.66 Chi-Square tests : Control of OEM * Reward 171 Table 6.67 Correlation analysis : Effect of market 172 fluctuations * Motivation Table 6.68 Chi-Square tests : Effect of market 172 fluctuations * Motivation Table 6.69 Correlation analysis : Effect of market 173 fluctuations * Rewards Table 6.70 Chi-Square tests : Effect of market 173 fluctuations * Rewards Table 6.71 Correlation analysis : Problem managing cash 174 flow * Motivation Table 6.72 Chi-Square tests : Problem managing cash 175 flow * Motivation Table 6.73 Correlation analysis : Problem managing cash 175 flow * Rewards Table 6.74 Chi-Square tests : Problem managing cash 176 flow * Rewards Table 6.75 Significance of Rewards to the Entrepreneur 176 Table 6.76 Correlation analysis : Monetary / Financial * Motivation 178
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Table 6.77 Chi-Square tests : Monetary / Financial * Motivation 178 Table 6.78 Correlation analysis : Recognition in the 179 Industry * Motivation Table 6.79 Chi-Square tests : Recognition in the 180 Industry * Motivation Table 6.80 Correlation analysis : Satisfaction of being an 181 employer * Motivation Table 6.81 Chi-Square tests : Satisfaction of being an 181 employer * Motivation Table 6.82 Correlation analysis : Job satisfaction * Motivation 182 Table 6.83 Chi-Square tests : Job satisfaction * Motivation 182 Table 6.84 Cross tabulation : Family 183 Background * Motivation category Table 6.85 Chi-Square Tests : Family 184 Background * Motivation category Table 6.86 Cross tabulation : Current Financial 185 condition * Motivation category Table 6.87 Chi-Square Tests : Current Financial 186 condition * Motivation category Table 6.88 Cross tabulation : Evolution * Motivation 187 Table 6.89 Chi-Square Tests : Evolution * Motivation 188 Table 6.90 Cross tabulation : Source of funding * Entry barriers 189 Table 6.91 Chi-Square Tests : Source of funding * Entry barriers 190 Table 6.92 Cross tabulation : Initial Capital * Entry Barrier 191 Table 6.93 Chi-Square tests : Initial Capital * Entry Barrier 192 Table 6.94 Cross tabulation : Break-even period * Entry Barrier 192 Table 6.95 Chi-Square tests : Break-even period * Entry Barrier 192 Table 6.96 Cross tabulation : Innovative Idea based * Evolution 194 Table 6.97 Chi-Square tests : Innovative Idea based * Evolution 194
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Table 6.98 Cross tabulation : Industry need based * Evolution 195 Table 6.99 Chi-Square tests : Industry need based * Evolution 196 Table 6.100 Cross tabulation : Regulatory norms * Sustenance 197 Table 6.101 Chi-Square tests : Regulatory norms * Sustenance 198 Table 6.102 Cross tabulation : Capital Intensive * Sustenance 199 Table 6.103 Chi-Square tests : Capital Intensive * Sustenance 199 Table 6.104 Cross tabulation : Glamour * Rewards 201 Table 6.105 Chi-Square tests : Glamour * Rewards 201 Table 6.106 Cross tabulation : Rewards * Motivation 202 Table 6.107 Chi-Square tests : Rewards * Motivation 203 Table 6.108 Summary of Hypothesis Validation 204 Table 7.1 Summary Pearson correlation test 214
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EXECUTIVE SUMMARY
Since the airline deregulation took place in the year 1994, a new business
model has emerged in the Indian aviation industry. It has caused a shift in
the way people travel within India. With the launch of private airlines and
increase in number of Aircrafts, the need for aviation maintenance has
increased. Also the Low cost carrier model of commercial aviation has
opened up avenues for third party independent maintenance, repair and
overhaul facilities (MRO). The low cost carrier business model includes only
line maintenance to be done in-house and all other maintenance jobs are
outsourced to the Independent MROs. As the aircrafts get older, the need for
maintenance would increase, thus creating opportunities for entrepreneurs to
enter into Independent aviation maintenance business. The competition
amongst the airlines and charter operators, has forced these operators to
consider cost cutting measures. Maintenance being one of the major cost in
the total operation of an Aircraft, local or nearby MROs would be preferred to
save the aircraft ferrying, crew and fuel costs.
The deregulation also opened up the skies for small business jets to fly
across the length and breath of the country, which created opportunities for
Air Charter business in India. With the emergence of rich business class in
last 2 decades, air charter has seen steady demand and business travel has
shifted from flying by commercial airlines to traveling by private jets.
Traveling by Charter or Private aircraft, not only gives luxury and privacy, but
also saves time and effort. The upcoming successful businessmen prefer to
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hire a charter plane than owning one, due to the regulatory and operational
hassles involved in it. It also gives them the flexibility of hiring different types
of charter planes as per their travel needs and the airports at which they
intend to land.
In light of the growth in aviation industry, specifically in the MRO and Air
charter sectors, this study becomes important due to the fact that people are
traveling more frequently and wish to do so quicker and more efficiently. With
businesses growing faster than before, the need for Air Charter is increasing
day by day and hence a study of the evolution and challenges faced by the
entrepreneurs engaged in Air Charter would add value to the industry.
The challenges faced by MROs which is a limiting factor in the growth of this
sector, would create a problem for the Airlines in the near future. According
to the Industry sources 85% of the aviation maintenance is still outsourced to
the US and Europe or their subsidiaries out side India. Hence a study was
past due in the area of aviation MRO, to evaluate the challenges, which if
addressed at the industry level could give impetus to the development of this
sector.
The objective of this research is to study the evolution of entrepreneurs in
Aviation maintenance and Air Charter businesses to draw the pattern of
growth, basis on which references can be made for future growth in these
two sectors. This research also looks at whether or not the challenges faced
by entrepreneurs is effecting the over all growth in these two sectors. A study
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of both external as well as internal industry challenges faced by the
entrepreneurs has been made and analyzed through statistical methods.
Investment, Regulatory, Control by the manufacturers, human and technical
challenges have been investigated.
This study has sought to identify the major factors, which affected the
evolution of entrepreneurs in these two sectors. On the basis of factors which
affected the evolution of entrepreneurs, an endeavor has been made to study
the impact of these evolutionary factors on the sustenance of entrepreneurs.
The method chosen for this study was of an integrated approach based on
both the primary and secondary data. Due to the limited sample size in these
two sectors of Indian aviation industry, each entrepreneur was individually
met and interviewed to obtain first hand information. A literature survey
coupled with a comparative analysis has also been done. The data obtain
after interview was analyzed through SPSS and validation of Hypothesis
tested through statistical methods.
Dramatic change has occurred in the Indian Aviation industry in last 10
years. Competition is increasing not only between airlines but also between
Independent MROs and Air charter operators. With the competition going to
increase in the future, entrepreneurs will have to redesign their business
models to keep afloat. While the Indian aviation industry is still in its growth
stage, there are several challenges related to infrastructure, technology and
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human resources, which if not addressed immediately, would eclipse the
growth of aviation industry in India.
The study of evolution of entrepreneurs in MRO reveals that the growth in
last one decade has been slow in comparison to the overall increase in the
traffic and passenger load. Independent MRO sector is still getting organized,
when there is an immediate need for it to scale up. There are several
opportunities in this sector, however due the challenges faced by
entrepreneurs, not much investment is being made in MRO sector. The entry
barriers, long gestation period, not enough reward / return on investment and
multiple challenges faced by the entrepreneurs in sustenance is keeping
away new entrepreneurs to enter into Independent MRO business.
Reports show a growth of 18% PA in the Indian aviation industry and
passenger load of upto 100 million by end of 2010. With such high growth
Airlines will continue to lose revenue due to high cost of maintenance and
outsourcing of repair jobs out side India.
Findings of this research show that not enough is being done to attract
entrepreneurs in Independent aviation maintenance sector. The evolution in
this sector has been slow and entrepreneurs are facing constant challenges
to sustain.
In the Air charter sector findings of this research show that entrepreneurs
who entered into Air Charter business in last 5-6 years are now realizing that
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their business is not making profit and hence they have to restructure their
business model very frequently. The regular customers who fly Charter
Aircrafts for more than 200 hours in a year, prefer to buy their own private
jets, considering the total spending done by them in flying Charter Aircrafts in
a year. Air charter business is facing challenges in sustenance due to the
high cost of operation, infrastructural limitations and regulatory issues.
Air charter business has different set of challenges, because of the
regulatory restrictions at most of the airports, like no permission to land
during peak hours, unavailability of night landing facility, runway limitations,
unavailability of trained pilots locally etc. This study has made an attempt to
know the motivating factors for entrepreneurs to enter into Air charter
business inspite of several challenges being faced at the industry level.
This study reveals some interesting facts, which show that non of the Air
Charter companies in India have ever made profit and continue to operate as
a support to their parent companies which have used them for internal travel
purpose. Many entrepreneurs entered the Air charter business due to the
glamour attached with this industry, only to realize later that Air Charter is not
a profitable business. Air charter business in India can either survive as a
supporting activity to the parent company or its business model has to be
designed in a way to make private air travel affordable, only then volumes
can come from this business.
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This study through the statistical analysis arrives at conclusions that internal
motivation level of entrepreneurs in both MRO and Air charter business was
a major factor which helped them to sustain in their business, the external
factors like regulatory norms and funding did not had much effect on their
sustenance. However, infrastructural constraint is a major hindrance in the
over all growth of MRO as well as Air charter sectors of the aviation industry
in India.
It also concludes that the capability of an entrepreneur to overcome the entry
barriers had correlation with the internal motivation level of the entrepreneur.
This study establishes the fact that entrepreneurs are a different breed and
have maneuvering skills to handle their business in different situations.
Conclusions show that entrepreneurs did not evolve due to the industry
needs but they were more idea based and grabbed the opportunities through
their vision and foresight, they also maneuvered to sustain in business
despite all the inherent challenges of these two sectors.
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CHAPTER I
INTRODUCTION
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CHAPTER I
INTRODUCTION
“Evolution of Entrepreneurs in the Indian aviation industry and factors
affecting their sustenance : A study of entrepreneurs in Aviation
maintenance and Air Charter business, is the study to understand the
facts like family back ground, source of funding, effect of various factors like
motivations, entry barriers, challenges, entrepreneurial traits and
characteristics which played important role in the evolution of Entrepreneurs
in the Indian aviation industry.
During the last two decades, the commercial aviation industry in India has
seen multifold growth due to the increase in number of people traveling by air
and thus has given rise to the need of more aircraft maintenance. The
corporate or business flying has also seen phenomenal growth, as the
business houses have grown and first generation entrepreneurs have
created wealth with the growth in economy.
The overall growth in Commercial aviation (scheduled airlines) as well as
General aviation (non Scheduled - Air Charter / business flying) has brought
in opportunities for entrepreneurs. This gave birth to entrepreneurship in
different areas of aviation industry. Since the aviation industry in India is still
in its growth stage, there is not much reference available to the
entrepreneurs who engage themselves in aviation related business. In the
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growth stage, every industry keeps trying different business models and
hence the challenges faced by the entrepreneurs are varied. In the growth
stage business models and strategies need to be adjusted to the varying
external business environments. The business dynamics in the growth stage
is highest and thus the entrepreneurial skills are put to test during this phase.
Success of an entrepreneur depends on his / her adoptability to the changes
in external environment.
This research is an attempt to study the evolution of entrepreneurs in the
Independent aviation maintenance and Air charter segments of the aviation
industry in India and compile the information for future reference of
entrepreneurs who would like to establish their business in this industry.
As such the whole study is divided into 3 segments 1) Study of the general
and financial facts of entrepreneurs in Independent aviation MRO
(maintenance repair and overhaul facilities) and Air charter business, 2)
Study of the factors responsible for their evolution and 3) Challenges faced
by the entrepreneurs to sustain in their business – dynamics of aviation
related entrepreneurship.
Entrepreneurs are innovators and the saying “Need is the mother of all
innovations” applies to entrepreneurship. Most entrepreneurs are born out of
need, whether it is the individual need of the entrepreneur or industry need,
where the entrepreneur taps the opportunity and converts it into a business
enterprise. This study through the survey gathers information on how
4
entrepreneurs tapped the opportunity which came along with the growth in
Indian aviation industry and what are the factors effecting their sustenance in
the same business.
Opportunity identification has increasingly been viewed as a core attribute of
entrepreneurship (Shane & Venkataraman, 2000), without which
entrepreneurship cannot take place (Singh, 1998). This dissertation also
addresses the fundamental question of entrepreneurship from a cognitive
perspective : why some people are able to identify entrepreneurial
opportunities in the aviation sector. It suggests that social networks,
information diversity, prior knowledge and entrepreneurial alertness are
necessary but not sufficient to explain the process of identifying
entrepreneurial opportunities. Whether an opportunity can be identified
necessitates congnitive processing, which refers to the mode of thinking
through connecting previously unconnected matrices or domains of
information.
Entrepreneurs are a difference breed, who drive the society, industries and
economy of countries at large. Entrepreneurs are born with fire and their fire
within becomes a forest fire as they tap the opportunity and make it big. This
study has made an attempt to evaluate the factors which act as fire within the
entrepreneurs.
It would be difficult to imagine the economy of India less Tata, Reliance and
Infosys, these being only 3 such names of successful enterprises for
5
reference purpose. Even such an imagination would bring shiver to
economists. In a similar manner there are hundreds and thousands of
entrepreneurs contributing to the economy of India, right from the milk man
who delivers milk every day morning to our homes to the auto rickshaw driver
who takes us from our home to office. They are all entrepreneurs who are
self motivated, self driven and self managed, who contribute to the economy
in their own way. No industry can growth or evolve without entrepreneurs.
Thus it becomes important to study the various factors which encourage the
entrepreneurs to start their own business. This study with its focus on
Independent Aviation Maintenance (MRO) and Air Charter business will try to
contribute to the existing literature on this subject and reference to the
industry.
Entrepreneurship – A journey full of challenges :
"Entrepreneurship is the recognition and pursuit of opportunity without regard
to the resources you currently control, with confidence that you can succeed,
with the flexibility to change course as necessary, and with the will to
rebound from setbacks." An entrepreneur is a person who starts a business
to follow a vision, to make money, and to be the master of his/her own soul
(both financially and spiritually). Inherent in the venture is the risk of what the
future may bring. Therefore, an essential key to success is that the
entrepreneur also be an "educated" risk taker.
According to Muthu Kumar & Ayyapan (2003) – “There is no such thing as a
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good time or bad time to start companies, all times are equally challenging.
Opportunities always exist, what is important is the attitude which one takes
to entrepreneurship. Nothing in the past that one has done can prepare one
for "chucking it all up" and becoming an entrepreneur. No management
education or theory can provide answers to the Right Way to build a
company from scratch. Many of the best of management thinkers have been
found wanting, when it came to running their own company.”
The fact remains, that only 1 in 100 startups succeeds. If one were to ask
entrepreneurs about their chances of success, most would give themselves
greater than even odds, even as high as a 60-70% chance of success. The
reality though, is very different. While no one can predict success or failure, it
is important to do things right to begin with.
Successful entrepreneurs are those who have the great ability to articulate in
a passionate way what their vision is, to not just their investors, but also to
their employees and potential customers. They should understand their
limitations, wiling to be held accountable, need to be focused, tenacious and
determined to succeed. As they grow their businesses, they must learn to
enlarge their inner circles and empower their professionals for their business
to grow.
Researchers have been inconsistent in their definitions of entrepreneurship
(Brockhaus & Horwitz, 1986, Sexton & Smilor, Wortman, 1987; Gartner,
1988). Definitions have emphasized a broad range of activities including the
7
creation of organizations (Gartner, 1988), the carrying out of new
combinations (Schumpeter, 1934), the exploration of opportunities (Kirzner,
1973), the bearing of uncertainty (Knight 1921), the bringing together of
factors of production (Say, 1803), and others (See Long, 1983). The outline
below presents some authors definition of entrepreneurship and attempts to
summarize these viewpoints into a more meaningful whole.
According to Richard Cantillon (circa 1730) : Entrepreneurship is defined as
self-employment of any sort. Entrepreneurs buy at certain prices in the
present and sell at uncertain prices in the future. The entrepreneur is a
bearer of uncertainty.
As defined by Jean Baptiste Say (1816); An entrepreneur is the agent "who
unites all means of production and who finds in the value of the products, the
reestablishment of the entire capital he employs, and the value of the wages,
the interest, and rent which he pays, as well as profits belonging to himself."
According to Frank Knight (1921) he defines entrepreneurs as :
Entrepreneurs attempt to predict and act upon change within markets. Knight
emphasize the entrepreneur's role in bearing the uncertainty of market
dynamics. Entrepreneurs’ are required to perform such fundamental
managerial functions as direction and control.
Entrepreneurs are defined by Joseph Schumpeter (1934) as ; The
entrepreneur is the innovator who implements change within markets through
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the carrying out of new combinations. The carrying out of new combinations
can take several forms; 1) the introduction of a new good or quality thereof,
2) the introduction of a new method of production, 3) the opening of a new
market, 4) the conquest of a new source of supply of new materials or parts,
5) the carrying out of the new organization of any industry. Schumpeter
equated entrepreneurship with the concept of innovation applied to a
business context. As such, the entrepreneur moves the market away from
equilibrium. Schumpter's definition also emphasized the combination of
resources. Yet, the managers of already established business are not
entrepreneurs to Schumpeter.
Another definition of entrepreneurship by Penrose (1963) is ; Entrepreneurial
activity involves identifying opportunities within the economic system.
Managerial capacities are different from entrepreneurial capacities
The research scholar While Harvey Leibenstein (1968, 1979) defines it as ;
the entrepreneur fills market deficiencies through input-completing activities.
Entrepreneurship involves "activities necessary to create or carry on an
enterprise where not all markets are well established or clearly defined
and/or in which relevant parts of the production function are not completely
known.
Late in the 1970s researcher Israel Kirzner (1979) has defined entrepreneurs
as ; The entrepreneur recognizes and acts upon market opportunities. The
entrepreneur is essentially an arbitrageur. In contrast to Schumpeter's
9
viewpoint, the entrepreneur moves the market toward equilibrium.
The Entrepreneurship Center at Miami University of Ohio has an interesting
definition of entrepreneurship: "Entrepreneurship is the process of identifying,
developing, and bringing a vision to life. The vision may be an innovative
idea, an opportunity, or simply a better way to do something. The end result
of this process is the creation of a new venture, formed under conditions of
risk and considerable uncertainty."
In summary, entrepreneurship is often viewed as a function which involves
the exploitation of opportunities which exist within a market. Such exploitation
is most commonly associated with the direction and/or combination of
productive inputs. Entrepreneurs usually are considered to bear risk while
pursuing opportunities, and often are associated with creative and innovative
actions. In addition, entrepreneurs undertake a managerial role in their
activities, but routine management of an ongoing operation is not considered
to be entrepreneurship. In this sense entrepreneurial activity is fleeting. An
individual may perform an entrepreneurial function in creating an
organization, but later is relegated to the role of managing it without
performing an entrepreneurial role. In this sense, many small-business
owners would not be considered to be entrepreneurs. Finally, individuals
within organizations (i.e. non-founders) can be classified as entrepreneurs
since they pursue the exploitation of opportunities. Thus intrepreneurship is
appropriately considered to be a form of entrepreneurship.
10
The Common Challenges faced by Entrepreneurs
The internet boom has brought in vast opportunities, entrepreneurs have
become one of the most dynamic forces in the economy of India.
Entrepreneurs are now driving the technology boom, which is itself driving
much of the country's economic growth. This makes entrepreneurs very
important from a macro-economic perspective. They have become a broader
economic phenomenon that has a major impact on the economy. As the
globalism of business becomes even more widespread, this impact will be
felt even more deeply. Entrepreneurs have already become a major force in
positioning India in the worldwide economy.
The scope of what entrepreneurship involves will continue to change and
evolve as India continues to change and evolve, and yet there are some
common issues of how to start a business, how to finance the business, how
to run the business that this community can share and learn from each other.
While there are many heroes and stories, entrepreneurism is an established
field with a wide range of issues at all stages of the enterprise.
A common denominator for all entrepreneurs is the challenge of starting a
business, be it through inventing something, looking for a new idea within a
business, finding the right opportunity to break into a business or buying into
a franchise. All of these take planning and organizing all the aspects so that
the entrepreneur reaches his goals. Entrepreneurs are also faced with the
challenge of financing their entrepreneurial venture. So unless the venture
comes from self funding, getting money is a challenge that requires preparing
11
funding proposals or applications to be written and presented for loans,
venture capital, angel investors or even IPO's.
It may be felt that after over coming those challenges, it would be a smooth
sailing. Given the business has a good plan, everything should proceed with
minor glitches. However, the implementation stage seems to be the real
make-or-break point of an entrepreneurial venture. More realistic, perhaps, is
that there are such a wide variety of skills needed at the implementation
stage, that no one person can have the skills to manage all the functions
well. The real talent is for entrepreneurs to recognize what they do well and
then find employees or subcontractors who can fill the gaps.
One way to look at this implementation stage is to look at how many different
skills are involved in operating a business. Operating a business involves
employees, marketing, advertising, sales, communications, public relations,
legal needs, government regulations, equipping the office, risk management,
disaster planning, crisis management, insurance, technology, hardware,
software, the internet, and the financial aspects of the company -
bookkeeping, managing debt, taxes, and funds flow.
Most businesses are built around strong technical basis. Above and beyond
this, however, is the conceptual aspect of management: ethics, leadership,
growth philosophy, and even the exit strategy of the company. These are
much less tangible, yet set the overall theme and direction that the business
will take.
12
Ken Ryan (1967), quoted that "He that is prepared has half won the battle.".
This is true for all startup entrepreneurs and studies have shown that
entrepreneurs who prepared them selves well before starting their business
were more successful. Every entrepreneur faces several challenges in his
journey to establish the enterprise. Discussions reveal that below are 10
common Business Challenges every entrepreneur faces when building a
business from scratch:
1. Developing the Vision and Idea:
This is usually the first challenge faced by every entrepreneur. Finding the
right business opportunity or creatively developing an idea is certainly not an
easy task. "Envisioning the idea" is the first true task of an entrepreneur. As
an entrepreneur, one must develop the ability to see what others cannot see.
While others see problems, an entrepreneur must see opportunities.
But seeing opportunities is just the first task. The main challenge is his ability
to forge that opportunity into a business idea. This is a business challenge
because the process of transforming opportunities into business plans is like
trying to turn lead into gold. This could be called the process of "Creating
Value out Of Nothing." Non-entrepreneurs, might not be familiar with the
process. The process of :
- Identifying a problem - Seeing an opportunity in the problem - Coming up
with a solution - Developing your opportunity into a business idea -
Integrating your solution into the business plan.
13
Another way "developing the vision and idea" will be a business challenge in
which an entrepreneur must sometimes assume the role of a sorcerer. While
others dwell in the past and present, an entrepreneur must envision and
forecast the future. An entrepreneur must always be ahead of his time or else
he might lose his relevance. He must have the ability to bring into present
what is yet to be.
In the late 70s and early 80s, while IBM saw increase in demand for their
mainframe computers, Steve Jobs envisioned a personal computer in every
home and Bill Gates envisioned the need for easy to use software for
personal computers. While everyone saw humans flying as an impossible
task, the Wright brothers envisioned a flying machine. Back in those days
when cars were custom made and exclusively for the rich, Henry Ford
envisioned affordable cars for the masses. These few examples, clearly
indicate that developing the vision and idea is the first true task of an
entrepreneur.
2. Raising Capital:
After developing idea, the next challenge faced by an entrepreneur is the
challenge of raising capital. An entrepreneur, is the only person who knows
the idea to the core. He is the only one who knows the story of the future.
Trying to convince investors about something that doesn't exist is definitely a
challenge.
There is more to raising capital than just simply asking for money. Most
investors want to invest in already established businesses with minimal risk.
14
When building a business from scratch, raising capital is definitely a business
challenge every entrepreneur must face.
To overcome this challenge, an entrepreneur must develop the ability to sell
his idea and vision to potential investors. "Sell his ideas", means improving
communication skill and manner of presentation. In the game of raising
capital, he must have a good story backed by a strong business plan.
3. Assembling a Team:
The third challenge faced by entrepreneurs in the course of developing a
business is assembling the right team. Here team does not mean regular
employees, it means a "round table strategic business team" that will meet
regularly to brainstorm on ways to grow the business.
As an entrepreneur, one is bound to have strengths and weaknesses. That is
the more reason he needs to assemble a strong team that will cover up for
his weaknesses. A team is a necessity in the quest to build a business. Now
finding a business team is just the first hurdle, transferring the passion and
vision to the team is the real piece of cake.
An entrepreneur must strive to make sure his team sees the future as he
sees it. They must believe in his possibilities and must also be passionate
about making that possibility a reality. If they can't grasp his vision, if they
can't see their future with him, then they are not worthy being in the team.
15
The strategic business team may comprise of the banker, financial advisor,
accountant, company secretary or legal adviser and any other specialist that
will be of tremendous impact to the business.
4. Finding the Right Location:
Some time an entrepreneur might feel that finding a good location is a piece
of cake but finding a good location at the right price is definitely not easy. The
following are features one must consider before choosing a location. These
features are subject to change with respect to the industry of business:
- Suitable price - Easy access to raw materials - Good road network. -
Basic amenities and infrastructures - Adequate Power supply - Easy access
to cheap labour - State and central tax benefits - Favorable Government
financial and monetary policy - Current economic policy and political
situation.
5. Finding the Right Employees:
Those who are already entrepreneurs know how difficult it is to find a
hardworking, trustworthy employee. Most employees want to work less and
get paid more. Finding a good employee who will be passionate about
delivering his or her services is quite difficult.
Employees are the representatives to customers and the outside world. They
are a reflection of business culture and ethics of the company. If an
employee is bad or rude to customers, it is going to portray a bad image of
16
the company. So one must be careful when hiring employees. There is a
golden rule followed by successful companies; "Hire slow and fire fast."
6. Finding Good Customers:
The sixth business challenge an entrepreneur faces is the challenge of
finding good customers. When in the process of building a business from
scratch, an entrepreneur will realize that there are good customers and bad
customers.
One must really be on guard for bad customers. Good customers are really
hard to find. A good customer will be loyal to the company and will be willing
to forgive if there is any mistake and one apologizes. A good customer will try
to do the right thing that will benefit both himself and the company mutually.
A bad customer will always look for loopholes in the company's policy to
exploit and make some few gains. Bad customers will always try to exploit
the company's goodwill and look for ways to rip off the company. Bad
customers are responsible for bad debts. Good customers build the business
and bad customers will always try to liquidate the business. Just as the
employees are fired, an entrepreneur must also be prepared to fire bad
customers without hesitation.
7. Overcoming Competition:
Competition is the next challenge an entrepreneur faces. Most individuals
see competition as a plague but entrepreneurs see competition as a good
challenge. They see competition as a benchmark for creativity, the main
17
engine for innovation and quality products at great prices. Without
competition, there will be no innovation and without innovation, the world will
be stagnant.
Entrepreneurs must see competition as a welcomed challenge. Competition
keeps the entrepreneurs on their toes and drives them to constantly improve
their products and services. But one must be careful, competition can make
business lose its relevance in the eye of the customers so an entrepreneur
must always be on guard.
"If you don't have a competitive advantage, don't compete." – Jack Welch
8. Unforeseen Challenges and Expenses:
Just as a sailor prepares for unexpected storm, just as a pilot is always on
the watch for unpredictable bad weather and thunderstorms, so must an
entrepreneur be prepared for what ever comes. Unexpected challenges can
come in the form of:
- Unexpected legal battles - Inconsistent government policy - Not being able
to pay salaries - Unpaid bills and taxes - Unexpected resignation of staff
from sensitive positions - Bad debts from customers - Loss of market share
- Dwindling working capital - Inadequate stock or inventory
These challenges, if not handled properly can ruin the plan of an
entrepreneur to build a successful business from scratch. Another challenge
18
entrepreneurs must expect is an unforeseen increase in business expenses.
If not handled properly, it might result in constant negative cash flow and
eventually, the business failure.
9. Keeping Up With Industrial Changes and Trends:
Change in trends is really a business challenge an entrepreneur must be
prepared for. Trends have made and broken lot of businesses. There are
several examples of profitable businesses that have been wiped out by slight
industrial changes and trends. A typical example is the Dot com trend, where
many industrial based businesses were wiped out by new web based dot
com companies. When the Dot com era began, business owners were left
with only two options. Either they join the dot com train or they get crushed
by the dot com train.
Seasoned entrepreneurs know that trend is always a friend and are always
willing to swiftly adjust their business with the current trend. Keeping their
eyes open to spot trends is really a challenge but the big task will be an
entrepreneur’s ability to quickly use the trend to his advantage.
10. Exiting the Business:
"In the world of business and investing, an entrepreneur’s exit is more
important than his entry. A good thumb of rule is; “exit before you enter." -
Robert Kiyosaki
When building a business from scratch, entrepreneurs would face the
19
business challenge of determining their exit strategy. Just as the quote above
states, the entrepreneur has to plan his exit strategy before he even starts
the business. Most entrepreneurs run their business without any plans to exit
and even if they have an exit strategy, they find it difficult to implement it.
Before starting a business, it is most appropriate to always plan the exit.
There are benchmarks one can use to determine the exit from business.
Most smart entrepreneurs use this benchmark as a target and once the
specific target is reached, they exit the business. Examples of such
benchmarks are:
- Annual sales - Annual Turnover - Asset Base - Market Saturation -
Customer base or number of users.
When it comes to exiting the business, there are three exit strategies you can
apply. The exit strategies are:
Turning over the business to professional managers: When the business
reaches a certain stage of maturity, entrepreneurs can exit by turning it over
to professional managers. In this case, the business still belongs to him but
he is not involved with its day to day affairs. The entrepreneurs give up
administrative role to assume the role of a watchdog. When the entrepreneur
exits in this manner, he will have more free time to look into other projects or
retire.
20
Selling the business privately: In this case, the entrepreneur exits the
business by selling it to a private investor. In the business world, it is called
M&A (Mergers and Acquisitions). After the sale and transfer of assets is
complete, entrepreneur has nothing to do with the business again.
Taking the company public: The unique thing about this type of exit strategy
is that while the entrepreneur is selling his business (in form of shares) to
public investors, he still owns and control the business.
The above introduction about entrepreneurship and challenges would give an
over all view of the entrepreneurial skills and various factors and stages,
which will help understand the entrepreneurial aspects of evolution and
sustenance of entrepreneurs in Independent aviation maintenance (MRO)
and Air charter business.
21
Aviation Industry in India – An Overview The aviation industry in India is now entering a new phase of development
after two decades during which the sector has witnessed both stagnation and
unprecedented growth. The industry has experienced some of the natural
growing pains of a sunrise sector, but numerous lessons have been learned
and are being acted upon. Despite the recent growth, less than 2% of Indians
travel by air in any given year, highlighting that we have barely arrived at the
threshold of the growth potential of Indian aviation.
Recent History of Indian Aviation Industry
Pre 1993 :
Aviation was traditionally viewed as an elite activity, and one in which
socialist governments could not be seen to allocate resources. The two
government airlines Air India (long haul international) and Indian Airlines
(domestic and shorthaul international) were the only Indian carriers. Both
carriers operated with relatively old aircraft and inefficient work practices,
from airports which were functional at best. There was no focus on
developing traffic and the market grew at uninspiring single digit rates.
1993 – 1995 :
The first steps in domestic aviation deregulation were taken allowing private
airline entry, first as air taxis and then as scheduled operators. However, the
government was still focused on protecting the state owned carriers, and a
slew of under capitalised and underprepared start ups entered and then
22
mostly exited the market. Only Jet Airways and Air Sahara survived beyond
the initial couple of years.
1995 – 2003 :
After the “failure” of the deregulation experiment, the industry fell into
dormancy. No new carriers entered the market and Air India and Indian
Airlines continued to be starved of capital. Despite the fact that the broader
economy performed well during this period, aviation continued to show
limited growth. Aviation was largely untouched by the economic reform
agenda of the governments in power as there was little strategic direction
for the sector.
2003 – 2006 :
This was a period of unprecedented change. With the arrival of Ministers of
Civil Aviation on both sides of parliament that recognised the importance of
aviation for the development of business, trade and tourism, and who had a
vision for delivering a vibrant and modern sector, the industry saw dramatic
reforms across the aviation value chain. Developments included:
• Domestic open skies policy which saw market entry by several
carriers;
• The arrival of the low cost airline model in India with the launch of Air
Deccan, and subsequently SpiceJet, IndiGo and Go Air;
• Announcement of the airport modernisation plan, including the
privatisation of Delhi and Mumbai, upgradation of 35 non metros and
encouragement of Greenfield development;
23
• Placement of orders for 111 new aircraft for Air India and Indian
Airlines;
• Liberalisation of the international sector with some private carriers
permitted to operate overseas; greater access for foreign carriers and
opening up of international routes for non metro airports;
• Increased foreign direct investment caps in certain sectors of the
industry.
Traffic started to accelerate at double digit rates, both domestic and
international, levels never before seen in India, highlighting a latent demand
for travel.
India Annual Domestic & International Passenger Numbers 96/97 – 08/09 :
Source : CAPA India Review of 2009 and Outlook 2010
2006 – 07 :
During this period, traffic continued to accelerate further, to levels
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24
approaching 40% in 2007. However it was at this stage that the realities hit
home – although traffic was buoyant, yields were being slashed through
overcapacity and fragmentation of the industry, and costs were increasing
because of the poor state of airport infrastructure and a shortage of human
resources.
• The bullish fleet orders placed by Indian carriers saw capacity being
introduced at the rate of 6 to 6.5 aircraft a month, whereas the actual
growth in demand was closer to 3 aircraft equivalents;
• Aside from the mis-match between supply and demand, the rate of
growth was simply too great for the industry to handle from a
management and capital perspective.
• In a fragmented market, with multiple start ups chasing market share,
loss-leader pricing was widespread and Air Deccan in particular was
responsible for setting fares well below cost as it fought to retain its
first mover market share;
• The rapid increase in capacity at a time when the airport
modernization program was yet to deliver upgraded infrastructure,
meant that airports and airways were highly congested, increasing
airline operating costs;
• With the inadequate surface access and airport (and airways)
infrastructure, airlines were unable to secure a significant competitive
edge over other means of travel, thereby excluding huge parts of the
still untapped leisure market;
• In a period of global boom, demand for skilled personnel such as
pilots and engineers also outstripped supply leading to a sharp
25
escalation in wages, and in some cases grounding of aircraft due a
shortage of staff;
• Balance sheets were stretched as a result of the aggressive fleet
induction programs, combined with the mounting operational losses.
2008 - 09 :
The fragility of the sector - which had over extended itself by growing at rates
that it could not manage, in an environment that was not conducive to
efficient operations – was exposed during the fuel price spike of mid 2008
when oil reached close to US$150/barrel. In India, this situation was
exacerbated by the taxation structure which increases the costs of fuel by up
to 60% vis a vis international benchmarks. As costs spiralled upwards,
carriers were forced to raise fares, and with a simultaneous slowdown in the
Indian economy, there was resulting decline in traffic of around 10 - 12%
year on year.
2009 – 10 and beyond :
After the dramatic changes of the last five years, the Indian Aviation industry
is starting to see the emergence of a more favourable environment :
• India’s GDP growth slowed from over 9% in 2007/08 to 6.1% in
2008/09. However, given the contraction globally, this was a relatively
a good result. The economy appears to be recovering earlier than
expected, with GDP growth of 7.9% in the last quarter, ahead of
expectations. The World Bank projects annual growth of 8.0% per
annum from 2011 to 2014.
• Domestic traffic is also showing a return to growth. After 12
26
consecutive months of year on year declines in domestic traffic, July
2009 saw a return to positive territory, which has continued since then.
This is partly due to the impact of a lower base resulting from last
year’s decline, however discussions with the industry indicate a
discernible increase in demand as business and consumer confidence
increases, although yields continue to remain depressed.
• The operating environment is improving, with airports and airspace
gradually being upgraded, and ground access being developed, which
will not only enhance the passenger experience, but should allow
airlines to achieve faster turnarounds and higher aircraft utilisation.
The airline landscape in India has been transformed in recent years. In 2003
there were just 4 carriers – Air India, Indian Airlines, Jet Airways and Air
Sahara - all operating full service models. And private carriers in those days
were limited to operating domestic routes only. Today, there are effectively 7
airlines operating 11 different brands.
• Air India + Air India Express
• Jet Airways + Jet Konnect + Jet Lite
• Kingfisher Airlines +Kingfisher Red
• IndiGo
• SpiceJet
• Go Air
• Paramount
On the domestic front, the 3 large airline groups – Air India, Jet Airways (+Jet
Lite) and Kingfisher Airlines command a 67% market share.
27
Domestic Market Share November 2009
Source : CAPA India Review of 2009 and Outlook 2010
General Aviation :
This has been a neglected sector of the aviation industry but one which could
have significant positive economic benefits. The general aviation industry in
India is at a nascent stage, however strong GDP growth and rising wealth
are stimulating demand. Further more, the long distances and poor state of
surface infrastructure in India make this an ideal market for air travel,
particularly to smaller and more remote destinations where scheduled
services do not operate. The expansion of all economy services and gradual
removal of business class could further drive demand for private aviation
from the senior corporate segment. Non-scheduled passenger traffic has
more than doubled in just the last 4 years. Demand is largely from the
corporate sector, however there is increasing take up related to luxury travel.
Strong growth has been witnessed over the last few years, infact India has
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28
the fourth highest number of firm business jet orders in the world, and almost
double the size of the current fleet. In the next 5 years, India will have one of
the ten largest business jet fleets globally.
With the Indian economy set for strong and sustained long term growth, we
can expect to see the general aviation sector in India undergoing a dramatic
transformation in a very short period of time, however some key challenges
remain :
• Absence of dedicated general aviation terminals, heliports and fixed
based operations;
• Restricted timings at key metro airports and lower priority clearance
relative to commercial traffic;
• Lack of hangar space and parking bays;
• Limited maintenance facilities;
• High import duties and a cumbersome import approval process;
• Obtaining permission to operate at civil enclaves can be a lengthy
process;
• Severe shortage of skilled pilots and engineers.
29
Aviation maintenance sector in India – Industry Overview
According to the industry research papers published in industry journals
(Aviation week, Feb 2010), it takes almost over 5,000 people to put each
flight on air and perhaps another 5,000 to ensure that you fly without any
incidents and land safely. Over 95% of these people don’t work for airline
companies. Behind the swanky aircrafts and smiling air hostesses hides a
network of companies and operations that allows smooth flying anywhere.
Apart from the services that you are offered on your flight, it is the ancilliary
service providers, the key amongst those being MROs, who keep you and
your flight afloat, since they have a direct bearing on those services and the
entire business.
On an average, about 4 lakh passengers (domestic and international) fly
every day in India (DGCA 2010). And this number is poised to grow at an
average of 25% every year. Plus, investment to the tune of Rs.6,00,000 crore
(CAPA Sep 2010) is expected to pour into the aviation sector over the next
eight to nine years in the form of the new airports, maintenance facilities
(MRO) and other infrastructure. A similar amount will be spent by airlines to
buy a total of 1,150 aircrafts. In short, the aviation maintenance sector is
bound to grow many folds as the aviation industry in India grows.
For a decade, India has seen a substantial growth in national and
international passenger traffic. The increasing numbers translates into
increased demand for aircrafts and thus the maintenance of aircrafts. The
30
passenger traffic grew by over 200% in the last ten years, resulting in a
similar demand for MROs, since the LCC (Low cost carrier) business model
of the new airlines do not include much of aircraft maintenance in-house.
The Indian government’s plan to develop more non-metro airports as
strategic airports serving the region or the respective states also goes to
show that, in future, some airports will make money not purely on passenger
traffic, but also by means of renting their space to MROs, logistics companies
and real estate projects. Hence modernization, privatization and
development of Greenfield or Brownfield airports are going to bring more
opportunities for entrepreneurs interested in Aviation maintenance and Air
Charter business.
This research project attempts to study the evolution of entrepreneurs in the
aviation maintenance sector in India. Study done by researchers in the
aviation sector leads us to believe that there has not been exponential
growth in the aviation maintenance sector in India, although the aviation
industry as such has grown 200% in last 10 years. Since the Aviation
technology is controlled and monopolized by the OEMs (original equipment
manufacturers) from United States and Europe, not much growth is seen in
Asia, especially India.
In spite of several attempts made by government of India during the last 2
decades, there has not been much growth in the maintenance facilities of
aircraft components in India, manufacturing of aviation components still being
31
a distant dream. Independent third party large maintenance facilities are still
to evolve and those who have setup facilities are struggling to sustain.
While more than 200 aircrafts have been added into the fleets of various
airlines as well as business jet owners in India, during the last 3 years, not
much growth has been observed in the maintenance sector. Government of
India through ministry of civil aviation has made attempts to provide favorable
environment for evolution of Aviation maintenance sector in India, however
the results are not very encouraging. Fact remaining that, the dominance and
regulatory controls by the west (FAA & EASA approvals) and challenge to
meet the high quality standards of aviation industry make it difficult for
entrepreneurs to start new ventures in this sector. Those who have evolved
during the earlier decades are finding it difficult to sustain without external
support.
The research is expected to arrive at a deeper understanding about the
evolution of entrepreneurs in the aviation maintenance sector and factors
affecting their sustenance. It is an attempt to gather information on various
factors effecting the growth of independent maintenance facilities in India
both in Civil (commercial) and General (business) aviation sectors and thus
study the barriers faced by the entrepreneurs in entering this field. Apart from
aviation being a capital intensive industry, monopoly of the OEMs and slow
evolution of aviation technology in India are some of the challenges faced by
the entrepreneurs in India, thus a scope for study of these factors.
32
As such, the information contained herein should be of particular importance
to entrepreneurs who intend to venture into aviation maintenance, policy
makers and OEMs who would be interested to explore the opportunities in
the Indian aviation industry. For policymakers, it will demonstrate the on-the-
ground results of the current policies and provide evidence that will inform
future policies. In the case entrepreneurs viewing to venture into aviation
maintenance sector of the aviation industry in India, this information will
facilitate the design of appropriate business models keeping into
consideration the challenges that they will face in this sector.
In 1994, the Indian Government, as part of its open sky policy, ended the
monopoly of IA and AI in the air transport services and private operators
were allowed to provide air transport services. Foreign direct investment
(FDI) of up to 49 percent equity stake and NRI (Non Resident Indian)
investment of up to 100 percent equity stake were permitted through the
automatic FDI route in the domestic air transport services sector. However,
no foreign airline could directly or indirectly hold equity in a domestic airline
company. This could be one of the reasons which kept the foreign investors
away from investing in the MRO development in India.
By 1995, several private airlines had ventured into the aviation business and
accounted for more than 10 percent of the domestic air traffic. These
included Jet Airways Sahara, NEPC Airlines, East West Airlines, ModiLuft
Airlines, Jagsons Airlines, Continental Aviation, and Damania Airways. But
only Jet Airways and Sahara managed to survive the competition.
33
Meanwhile, Indian Airlines, which had dominated the Indian air travel
industry, began to lose market share to Jet Airways and Sahara. Today,
Indian aviation industry is dominated by private airlines and these include low
cost carriers (LCC) such as Jetlite, Kingfisher red, Indigo, GoAir, SpiceJet etc
who have made air travel affordable.
Table 1.1 : Fleet data for year 2000 – 2010 :
Source: ICAO data of 2008, IATA 2009 estimates and 2010 forecasts and Airport Authority of India traffic forecasts
The 9th largest aviation market in the world is India. Taking the help of the
statistics from ICAO, IATA and AAI it could be seen that the fleet of aircrafts
in India has more than doubled in last 10 years. The above table shows all
the aircrafts including commercial and general aviation aircrafts. More
0 100 200 300 400 500 600 700 800 900
1000
No. of Aircrafts in India for 2000 - 2010
Aircrafts
Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Aircrafts 393 459 485 508 545 559 688 702 788 840 910
34
opportunities in the aviation industry in India are likely to make way for about
69 foreign airlines from 49 countries.
Low cost carriers have thrown open the Indian skies and are fast becoming
successful business models. They have not focused on establishing in-house
maintenance facilities, as their business model demands outsourcing of
maintenance jobs to third party MROs. This can be considered as a great
opportunity for the entrepreneurs to venture into aviation MRO, viewing the
demand for maintenance as the fleets of these LCCs gets older. However,
the fact that MROs in India are still struggling to sustain makes it a vulnerable
proposition for entrepreneurs to venture into this sector of aviation industry.
This study should also provide further information to the budding
entrepreneurs who plan to get into the aviation MRO business.
While the Indian aviation industry is experiencing exponential growth, MRO
work is typically outsourced outside of the country. Less than 5% of MRO
work is carried out in India, it all goes abroad. This fledgling industry,
however, has the potential to excel in coming years.
By 2015, India will have 125 airports, up from 92 this year and 1,800 aircraft
by 2025 (ICAO projections of 2009), which creates enormous scope for
setting up MRO facilities. Opportunities exist in areas such as engine
overhaul, airframe repair and over haul, component repair and paint shops,
which are not found in India. The nearly $475 million currently spent on MRO
in India is expected to go up to around $1 billion dollars by 2020 (CAPA
35
industry news 2010). MROs in India are more imperative than an option. The
challenge is to build in cost efficiencies. The competitive advantage of low
labor cost is lost with constraints of high taxes, regulatory issues, lack of
space at metro airports, lack of training institutions and a high attrition rate of
skilled labor.
An airline loses money, while an MRO makes it. There is need for economies
of scale and a quality one-stop shop. Airlines can make all the difference if
they are willing to sign longer maintenance agreements. While the
government looks at aviation seriously, it does not consider MRO a priority,
more over it has to be an industry initiative. Given that Mumbai-Delhi is one
of the busiest city pairs with 48 daily flights carrying 106,000 passengers, the
aviation business is growing, however neighboring countries—Sri Lanka,
Bangladesh and Nepal—may get an edge over India as land is cheaper
there. With upgrades to airports such as Lucknow and Jaipur in central and
North India, opportunities to set up MROs are increasing.
While leasing is a popular mode for aircraft acquisition world-wide, in India
many new airlines have opted for acquisition through purchase – Acquisition
through purchase puts the onus of maintenance on the airlines themselves,
the airlines would therefore need to enter into comprehensive maintenance
contracts. The following chart shows the maintenance relationships
established by various airlines.
Presently, a lot of such work is being sourced from service providers based
36
in regions such as Singapore and Europe.
Line Maintenance Base Maintenance Component Repair
Air India Air India Air India Air India
Indian Indian Indian Indian
Jet Airways Jet JAECO Lufthansa
King Fisher Kingfisher Lufthansa MAS / Lufthansa
Spice Jet Spice MAS Boeing
Indigo Air Indigo Sri-Lankan Airfrance
Go Air Go Air MAS Airbus
Paramount Paramount - GE
Source : CAPA news letter Mar 2009.
A number of companies have firmed-up plans to enter the airline market in
India. This signifies an enormous growth potential for the MRO market. The
proposed airlines which plan to operate a variety of formats such as
chartered carriers, regional discounters etc will add to the market potential for
MRO.
The Independent aviation MRO market in India is largely untapped, as there
are hardly any third-party service providers with the ability to address the
needs of the existing fleet. The prohibitive costs of getting the aircraft
serviced outside the country, due to the absence of domestic service
providers, are eating into airlines' profits. In fact, airlines are charged by the
hour for aircraft maintenance, creating an urgent need for aviation MRO
37
services in India. The development of the Independent aviation MRO market
in India will not only provide cost benefits to airlines but also greater
employment in the country. Proactive infrastructure set ups, along with the
availability of manpower, will add value to the market in the long term. "Labor
costs in India are around $30 to $35 per man-hour, compared to $55 to $60
in Southeast Asia and Middle East and even higher in the United States and
Europe," (aviation week publication journal Sep 2010). "Therefore, India has
the potential to service not just Indian aircraft but also those from neighboring
regions."
Growth rates for the various services in the maintenance cycle are positive
and MRO service requirements in the country are expected to grow at a
compound annual growth rate (CAGR) of 13.5 percent between 2009 and
2015. Moreover, the current fleet of over 900 in India can bring in substantial
business for any MRO provider with the required capabilities and certificates.
Airlines tend to opt for MRO service providers with cost-effective and high-
quality services, optimal turn around time, and those that adhere to best
practices so that the aircraft lasts long, with the best operating efficiency and
safety standards. "The brand name and credibility of the MRO service
provider is expected to be the most critical success factor in India,".
Indian policies are mostly favorable to MRO operations and although service
providers face some restraints in terms of taxes and duties, they are
expected to become more transparent in the coming years. All segments of
the MRO chain can be addressed in the country, but in different time frames,
38
based on the need and ease of setting up the service. MRO service
providers will be encouraged by the establishment of special economic zones
(SEZs) and land allotment for setting up MRO operations. MRO services are
strictly defined by market needs; hence, it will be vital to understand existing
fleet details and arrive at the market addressability to design the business
model of the MRO. Airlines will also be keen to know the MRO's
operating/service structure; therefore, the strategy for MROs will be to
identify the key segments of the MRO value chain and address the needs of
the current fleet and expected fleet additions.
Industry reports say that India is emerging as an important and lucrative
MRO hub. The current Indian MRO industry is pegged at US$600 million,
which is expected to touch $1.06 billion in a couple of years (ministry of
Aviation, 2009). Recent studies have also showed that the country’s MRO
industry will be growing at 15% annually which should invite entrepreneurs
towards this lucrative industry. Although at a nascent stage, the Indian MRO
industry has tremendous growth opportunities.
The current challenge in the aviation maintenance industry has been focused
on the need to maximize operational efficiency. Faced with the challenge of
reducing maintenance costs, executives in Maintenance, Repair and
Overhaul Industries continually look for alternative ways to streamline their
maintenance operations.
The uncertainty of meeting the dynamic and complex needs of the changing
39
aviation industry, devoid of newer technology are widespread. The transition
to new technologies for managing maintenance programs will be challenging.
Research suggests that maintenance providers possessing strategic
technologies can define their position in the aviation industry and stand to
reap the greatest benefits. The shift towards utilizing innovation escalates
challenges, competition, cost and risk. The current demands of Maintenance,
Repair and Overhaul industry has a direct impact on the MRO Technicians,
which include maximum job efficiency; reduced down time, while maintaining
safety and reliability, impacted by emerging technology.
Today, the aviation industry is facing tremendous challenges. To compete,
aviation companies in all segments must strengthen their ability to increase
productivity and production rates with products and services that meet
customer demands, with a focus on continuous critical assessment of cost
and performance. So, the continued support for MRO is an intrinsic part of
Indian aviation industry, with service lifecycle management, reducing costs
and improving service quality.
The purpose of this study has been to determine what new or emerging
techniques entrepreneurs will have to apply to meet the challenges ahead
and keep afloat. Since there is a huge potential in Independent MRO
business and the over all growth in last 10 years has been slow there are
factors affecting the growth. This research tries to study the factors effecting
growth of entrepreneurs in Independent aviation MRO sector.
40
Air Charter business in India – Industry Overview
Air charter is the business of renting an entire aircraft as opposed to
individual aircraft seats. Airlines specialize in selling transportation by the
seat. On the other hand, air charter companies focus on individual private
aircraft and itineraries, urgent or time-sensitive freight, cargo, air ambulance
and any other form of ad hoc air transportation.
Air charter is also known as air taxi, executive charter, jet charter and is part
of general aviation. The Airline transportation system has become common
now and as a result the airports are crowded and traveling public has to
suffer in longer queues at check-in, airport security, lost luggage, less
amenities, cramped seating and air traffic delays at the major airport hubs
like Delhi and Mumbai. Today when you fly commercial airlines, in some
respects you are at the mercy of the airlines in terms of travel time, comfort,
and whether your luggage arrives with you.
Air Charter addresses the following needs of those who can afford.
• Efficiency: Your time is valuable so why waste it in airport check-in
and security lines or suffering through airline delays
• Comfort: Arrive for your meeting relaxed, rested and well prepared
• Productivity: Privacy and space to work, conduct meetings, or spend
quality time with family
• Flexibility: Air Travel on Your Schedule not the Airline Schedule
• Security: Control over who and how you travel
41
Obviously the cost of Air Charter can be a concern, however, there are many
cost effective charter options available to suit your needs. You can select
from a multitude of aircraft that vary in cost depending upon type and size.
Air Charters these days provide a wide variety of aircraft and deliver a high
quality experience leveraging the latest technologies to generate cost
effective solutions.
Chartering an aircraft means that you are basically renting the aircraft for a
specific trip and the cost of renting or chartering an aircraft will depend on the
itinerary of the desired trip. Although you may find some standardized air
charter pricing on per flight hour price, it does not always accurately reflect
the total cost for an Air Charter trip because there are several factors that will
determine the final cost.
Charter aircraft trips are customized to your needs, thus the charter price is
affected by many factors, including the aircraft availability, length of stay at
your destination, number of passengers, type of aircraft, and aircraft
repositioning; from its base to your choice of airport. This means that you
must provide a detailed trip itinerary in order to generate an accurate air
charter price or quotation. For most part an Air Charter quote or price will be
a one lump sum total that includes:
• Pilots
• Flight Attendant(s), if required
• Airport Landing fees (cost varies by airport)
• Fuel surcharge
42
• Aircraft: usually by flight hour, but there could be an aircraft daily
minimum
• Crew overnight costs or two roundtrips
For any country, the aviation sector is not only its gateway to the world but
also one of the most important sectors for its economy and its growth;
generating billions in revenues and creating hundreds of thousands of jobs.
In recent years, the global aviation industry has been through many ups and
downs. From skyrocketing fuel prices to pandemics to recent financial crisis,
aviation industry has confronted a very rough weather in last ten years or so.
Consolidation in mature markets, higher ticket prices, modernization of
airports, policies to reduce emissions and tremendous growth prospects in
emerging economies have been some of the trends during the decade.
According to recent industry reports, the global aviation industry is on the
path of recovery and future looks optimistic and would present ample
opportunities for the stakeholders.
Charter flights are used by wealthy individuals, large corporations, sports
teams and government agencies. In general, charter flight is more flexible,
extensive, and efficient than traditional commercial air travel. Air charter
planes have access to general aviation and military airports where scheduled
commercial aircraft are restricted to and cannot land.
Charter aircraft includes small piston-prop planes; helicopters; turboprop
aircraft; light, mid-weight, and heavy jets; and large, multi-engine jet airliners.
43
Of the charter aircrafts in operation, around 65 percent are fixed-wing aircraft
and 35 percent are helicopters. The smallest piston-prop charter plane
accommodates one pilot and one to three passengers, has a non-
pressurized aircraft cabin, and a range of several hundred miles. A typical
turboprop is cabin pressurized, accommodates one or two pilots and four to
eight passengers, has a range of around 1,000 miles, and travels 200 miles
per hour. Traveling up to 8,000 miles at 500 miles per hour, pressurized
heavy jets are flown by two pilots, can accommodate upto 18, and include a
full bathroom and flight attendant service. Depending on fuselage
configuration, large charter jet airliners can transport cargo or accommodate
up to 300 people.
A charter aircraft typically departs from a small general aviation terminal
known as a fixed base operation (FBO). On smaller charter aircraft, pilots
may be responsible for non-flying tasks such as checking baggage, seating
passengers, and performing minor aircraft maintenance or repairs. Upon
arrival, charter flights and crew may wait for the passengers until the return
flight to the home base. However, around 40 percent of charter travel is
comprised of "empty leg" flights: return trips to a plane's home base with no
passengers or cargo. Each chartered plane flies an average of 250 hours
annually. Charter flights last an average of two hour, and the average aircraft
consumes 80 liter of fuel per hour. Common metrics in the industry include
revenue passenger miles (the total distance traveled by all paying
customers); available seat miles (total number of seats available multiplied
by miles flown); and load factor (the ratio of revenue passenger miles to
44
available seat miles). The average industry load factor is 45 percent; the
commercial airline industry has an average load factor of 60 percent.
The emergence of Rich class in India has increased the demand for Charter
aircrafts for business and leisure travels, however the capital intensive nature
of the business and long breakeven period has held back entrepreneurs from
venturing into this business. Aircraft chartering remains as one of the sideline
businesses of the successful business houses and many a times it is started
with a view to cater to the internal travel needs of the Chairman, MD and
CEOs of the group companies and their aircrafts are chartered when not
flying for internal purpose.
Demand is driven by corporate profits and the needs of the business. The
profitability of individual companies depends on effective marketing and
customer service. Large companies have advantages in fleet size and name
recognition. Smaller companies can compete effectively by serving small
local markets and offering lower prices. The industry is capital-intensive.
Air charter once considered as super luxury, has now become the need of
the corporate world and the successful businessmen have started realizing
the need to fly in chartered aircrafts to save time and for privacy. Aircraft
charter has become an increasingly popular form of air travel, filling the need
for enhanced levels of security, convenience, confidentiality and comfort.
Time is Money, both can be squandered on missed opportunities or used
wisely to grow your company. And Business aircraft charters allow you to
45
take control of the time you spend on the travel. Now - Executives and their
Team can reach any place in the world in the shortest possible time. YES -
Save Time - which was lost at the Airports, Hotel Stay, Delayed Flights and
Unavailable connections.
Charter aircraft gives you the liberty, the freedom to land anywhere, anytime.
Charter flights allow you to plan your own schedule to land at small airstrips
inaccessible to routine commercial flights. So you can land in a small town
close to your factory or a tiny island beach resort away the crowd.
Flying by charter differs from scheduled aviation in many ways, but from the
point of view of the customer it can be summarized in three words: efficiency,
privacy and flexibility. Whatever your priorities, charter air travel gives you
the freedom to organize the trip around your needs.
Flying by scheduled airlines, you travel on the airline's schedule (assuming
they're on time) and zigzag along their hub-and-spoke routes, connecting
here, changing planes there, and sometimes doubling or tripling your travel
time. Long drives to and from large commercial international airports, time
spent reserving, picking up and clearing airline tickets and checking, tagging
or even losing luggage drains your productivity even further. A useful and
private business meeting on board a commercial airliner is impossible, and
completing work confidentially or otherwise is more than a challenge.
With chartered aircraft, you fly where you want, when you want, in the plane
46
you want, and with extra amenities you choose yourself. Increasingly more
and more business and pleasure travelers are discovering the advantages of
charter travel. Time is money and every wasted moment is a lost opportunity.
Aircraft charter puts you in control of your schedule by placing a fleet of
aircraft at your disposal anywhere you are in the world.
Since the air charter business caters to a niche of upper class rich people,
the entrepreneurs into this business face challenges to keep their patrons
satisfied with the quality of service. For the entrepreneurs in Air charter
business, these challenges are heightened by several unique characteristics.
Some of the main challenges requires them to:
• Manage varying schedules
• Fly into any of several thousand non-hub airports, some at far away or
remote destinations
• Communicate with a wide variety of business partners, such as fixed
base operators (FBOs), original equipment manufacturers (OEMs),
and other service providers
• Uphold high standards for quality of service
• Have a low tolerance for disruptions such as delays and cancellations
• Reduce the overall cost of ownership and aircraft management,
including maintenance
At the same time, Air charter is full of innovative entrepreneurs who
recognize the potential of modern information technology to help meet these
demands and streamline their operations.
47
Today, India has a business jet fleet of nearly 130 aircraft out of which only
50 – 60 are being used for Air Charter, versus 11,000 in the U.S out of which
6,000 are used for Air Charter, that provides considerable room for growth
(Akovenko, 2009). The Business Aviation Association for India predicts 400 -
600 business jets by 2015. Companies and individuals will need to fly farther
as business expands among continents, providing an incentive to the Air
charter business.
It's ironic that in a country where the fiery expansion of the aviation sector is
led by a dramatic growth in the economy, Air charter is hit the most as a
result of infrastructure restraints. Industry estimates that general aviation in
India is likely to grow by 30% to 40%. With more than 700,000 Indians
accounting for a cumulative wealth of $3 billion, this comes as no surprise.
Information through BAAI (business aviation association of India) reveals that
"One business jet will be added every week for the next two years.
"Deregulation, availability of finances, eased regulations for foreign
investment in Indian companies, and paradoxically, the painful experience of
travel on a commercial jet are driving this growth.
As major businesses and high-net-worth individuals lineup to travel by
Chartered Aircrafts, medium and some small company owners are also
jumping on the bandwagon.
Lack of space at airports is becoming a major hurdle for Air charter business
to expand. Operators face constraints at every step (Karan Singh, 2010) due
48
to non-availability of general aviation terminals, poor facilities for ground
handling, lack of hangar space and parking, and no heliports add to the woes
of operators.
Lack of MRO facilities for general aviation aircrafts with only line
maintenance available drives up the cost of maintenance, increasing
downtime for aircraft, which results in revenue losses. For all heavy
maintenance, aircraft components have to go to Singapore, Dubai, Europe,
or the U.S, depending on the type of aircraft and component.
With at least 300 to 400 general aviation aircraft to be added in the next four
years - provided infrastructure and airport space allow it, and there are
adequate pilots and engineers to operate them - the market Air Charter
business is enormous.
With such high level of growth expected in next 5 years, not much
information available about the entrepreneurs in this sector, a study was past
due to understand the entrepreneurial factors which were inhibiting the
growth. To carry out such a research, it was necessary that the evolution is
studied in detail, basis on which pattern and findings can be drawn about the
scenario in this sector.
49
CHAPTER II
LITERATURE REVIEW
50
CHAPTER II
REVIEW OF LITERATURE
Literature Review :
The purpose of this research is to study the evolution of entrepreneurs in
Independent Aviation MRO and Air Charter sectors in India and then find our
the factors effecting their sustenance. More specifically this research
determined the factors like a) family back ground b) entrepreneur’s back
ground c) source of funding d) break even e) instinct to take risk f) desire to
take challenges g) money and h) glamour, which contributed to the
motivation of an entrepreneur and affected his sustaining capacity. Thus the
review of literature was done with a focus to cover most of the above
mentioned factors.
In this chapter, few scholarly books, articles, journals and research papers
have been reviewed which are relevant to the current study on Evolution of
Entrepreneurs in the Indian aviation industry and factors effecting their
sustenance, with special reference to Independent aviation
maintenance companies and Charter Aircraft operators.
During the course of research, it was observed that very few books are
available on the aviation industry of India and hence the literature review has
been carried out on the basis of the limited literature available, and foreign
journals and publication have been referred.
51
Articles were gathered from Trade magazines and aviation reports, which
helped in collecting secondary data for the study.
Internet was extensively used to gather various literatures and articles
related to MRO and Air Charter industries in India. Data mining was done
using the software Proquest through the RBI library.
The research scholar Howard G. Jones has done a detailed study on the
history of WACO Aircraft company, which started in the year 1919 and
closed in 1963. His dissertation shows how the Waco aircraft company
reflects the transformation of economic conditions in the twentieth century.
Beginning just after the first world war, its entrepreneur, Clayton J.Brukner,
developed a network of relationships within the aviation industry. This
allowed his company to develop significant competitive advantage in the
private flying market. Those advantages and the popular appeal of aviation
helped Waco to become largest manufacturer of civilian aircrafts.
This research by Howard has emphasized on the networking and
relationships of entrepreneurs in the aviation industry. Waco aircraft
manufacturer’s entrepreneur Brukner was involved with the trade
associations and that revealed the critical role government played in the
development of his company.
Howard wrote in his findings that relationships play an important role for any
entrepreneur to be successful in his venture. Through the research on Waco
52
aircraft manufacturing company, Howard has concluded that Waco Aircraft
company is a case that highlights the importance of public and private
collaborations in encouraging innovative behavior amongst entrepreneurs. In
small firms the innovative drive often lies with one leader. His research has
studied this leader, the entrepreneur, as the key factor for economic growth
of any country.
This research’s findings show that the activities of an entrepreneur causes
market disequilibria that creates the opportunities for consumers and firms
to reallocate their resources more efficiently. A series of innovations
stimulates economic growth, adding a dynamic component to the static
equilibrium free market competition theoretically imposed on economies. The
research on Waco Aircraft company is particularly useful because it includes
both entrepreneurial success and a remarkable failure to continue innovative
efforts as market conditions changed.
This study reveals that although Brukner the promoter of Waco Aircraft
company was not flamboyant, his leadership helped him shape the early
expansion of an industry in which his country played a predominant role. He
personally forged the manufacturing, marketing and management
components into a coherent system that gathered market information and
translated it into products that won sales regularly exceeding the combined
efforts of his two closest competitors. A key to his success was his active
participation in every aspect of his company. He met people and fellow
aviation entrepreneurs at gatherings and learned about the competition first-
53
hand. This helped him design his strategy and shape his company.
Simon Buck and Zen Lei Strategic (2008), have conducted a research on the
topic Charter Airlines - Have they the future. Their report highlights factors in
both the internal and external business environment which are plaguing
Ryanair in terms of maintaining a strategic orientation that is completely
congruent with sales goals and growth initiatives. A micro- and macro-level
analysis of the firm in 2008 gives over all idea of the growth trends in Air
Charter business in the Europe which could be compared to the Air charter
business growth in India.
PEST analysis is an acronym for political, economic, social and technological
(Channon, 1997). Each of the aforementioned forces are categorised by a
particular macro-level external influence, each of which directly impacts
strategic direction of Air Charter business. The external political environment
is one of significant factors effecting the Air charter business. It is relatively
common knowledge that political stability effects the air charter business,
thus the operators do not experience issues with governmental instability as
a concern regarding passenger volumes or flight destinations.
Mathew J. Manimala (1999) contributes to this discussion through his
dissertation - Entrepreneurial Policies and Strategies. “Considering the fact
that the Government cannot be the sole employer, the role of entrepreneur in
alleviation of poverty is enormous, especially when entrepreneurs invest in
the area of ICT, which is a huge employer of labour directly and indirectly.
54
“Successful entrepreneurs are those who have the great ability to articulate
in a passionate way what their vision is, to not just their investors, but also to
their employees and potential customers. They should understand their
limitations, wiling to be held accountable, need to be focused, tenacious and
determined to succeed. As they grow their businesses, they must learn to
enlarge their inner circles and empower their professionals for their business
to grow.”
Mathew Manimal has done an extensive research on the traits of
entrepreneurs and development of Entrepreneurial policies and strategies for
Singapore government. During his research he has interview several small
and medium entrepreneurs and drawn conclusions about the common traits
found in them for achieving the success in business. The common goal
which he found with all the entrepreneurs interviewed was persuasive and
passion.
It is sited that the entrepreneurial skills are difference in different countries
depending on the socio economic conditions of there, however the
persuasion and passion are two traits which are common all over the world in
the entrepreneurs.
Shawn Wang and Peng Chau (1990), discuss the specific details about
success of Baidu the internet based entrepreneurship. China emerged as a
global powerhouse, poised to become one of the world's biggest economies
in the near future. Baidu, now one of that Asian country's major technology
55
companies, has played a critical role in this growth and is now looking to
expand beyond the Chinese market. In many ways the company exemplifies
the pioneering energy coming out of China, a movement Wang described as
"first generation entrepreneurship." "In China, if you want to be successful,
you really have to have the courage, you have to have the mentality to do
something that's never been done before," he said. "This is really first
generation entrepreneurship in China. This is becoming big. It only happened
in the last few years."
China's new entrepreneurs face major challenges, as they are forced to
come up with their own roadmaps to success, he said. Entrepreneurs and
executives from the United States and other countries can get guidance from
"corporate policies, corporate procedures, and corporate manuals that you
can just follow," he said. "We're starting from scratch,". The potential for
growth clearly is huge for companies such as Baidu as China's economy
steadily expands, Wang said. Baidu is a major Chinese language internet
search company and web platform for businesses. "Our biggest challenge is
managing our growth," he said. "We can only be our own competitor. Our
ability to execute, our ability to grow our people, manage our business, and
manage the scale of the operations—these are the challenges we face. And
this is the challenge all Chinese companies face." Wang joined Baidu as
chief financial officer in 2004. Before then, he was a partner at
PricewaterhouseCoopers, working with PwC's Global Capital Market Group
in such cities as New York, London, Hong Kong, and Beijing.
56
During the literature survey several national and international journals were
studied and an understanding made about the entrepreneurship skill related
to aviation industry.
Ko Chi Chung (2009), has greatly contributed to the study of
entrepreneurship through his research work and dissertation with topic
Entrepreneurial opportunity identification – Through Bisociative mode of
thinking in Aviation maintenance. Opportunity identification has increasingly
being viewed as a core attribute of entrepreneurship (Shane &
Venkataraman, 2000), without which entrepreneurship cannot take place
(Singh, 1998).
This dissertation addresses the fundamental question of entrepreneurship
from a cognitive perspective: why some people are able to identify
entrepreneurial opportunities. It suggests that social networks, information
diversity, prior knowledge, and entrepreneurial alertness are necessary but
not sufficient to explain the process of identifying entrepreneurial
opportunities. Whether an opportunity can be identified necessitates
cognitive processing in the form of bisociation , which refers to the bisociative
mode of thinking through connecting previously unconnected matrices or
domains of information (Koestler, 1964). By incorporating the role of
bisociation in process of opportunity identification, the framework of this
study differs from previous ones in that (1) it highlights the importance of an
individual’s bisociative mode of thinking to opportunity identification as a
mediator; (2) it looks into the moderating effects of high technology
57
entrepreneurs; (3) it considers a framework broader than firm creation with
respect to opportunity identification, by taking into account innovative
product, services, or technology opportunities in the existing business; (4) it
focuses on the identification of novel opportunities only; and (5) it examines
the influence of individuals and opportunities, rather than environmental
antecedents and consequences because entrepreneurial opportunity
identification is primarily an individual-level phenomenon (Hills, Shrader, &
Lumpkin, 1999).
While there was no relationship between social networks and entrepreneurial
opportunity identification, it was found that the bisociative mode of thinking
did act as a mediator for information diversity, prior knowledge and
entrepreneurial alertness with respect to the number of entrepreneurial
opportunities identified. Moreover, the relationship between prior knowledge
and number of entrepreneurial opportunities identified was stronger for high
technology entrepreneurs. One of the most important units of observation for
analyzing the determinants of entrepreneurship has been at the level of the
individual. Empirical tests of the model of income choice have focused on
personal characteristics. For example, using U.S data, Evans and Leighton
(1989a, 1989b and 1990) link personal characteristics, such as education,
experience and age as well as employment status, of almost 4000 white
males to the decision to start a new firm. Other studies, such as Bates (1990)
also using U.S data, and Blanch flower and Meyer (1994), emphasize human
capital in the income choice. Storey (1991, p.177) concluded that, "the
consensus is that time series analysis point to unemployment being, ceteris
58
paribus, positively associated with indices of new firm formation, whereas
cross-sectional, or pooled cross-sectional studies appear to indicate the
reverse. Attempts to reconcile these differences have not been wholly
successful. They may reflect possible specification errors in the estimating
equations, since none include all the independent variables which have been
shown to be significant in the existing literature. In particular, we suggest that
more attention is given to the issue of taxation, savings and state benefits
than has been the case in the past."
In the European context, Foti and Vivareli (1994) analyze self employment
data in Italy and find out that unemployment has a positive impact entry into
self-employment. Ritsila and Tervo (2002) found the existence of a positive
and non-linear effect of personal unemployment on the likelihood of an
individual to become an entrepreneur. However, DE Wit and Van Winden's
(1989) findings suggest that the probability of self employment is positively
influenced on the earnings differential between self-employed and wages
from employment, having a relatively high score on an IQ test applied at the
age of 12, and the employment status of the father (being self-employed).
Colombo and Delmastro (2001) examine the characteristics of high-tech
entrepreneurs in Itlay. In particular, they identify differences in the
characteristics found between the internet sector and other ICT industries.
Their findings suggest that entrepreneurs who started firms in internet based
businesses are systematically younger than their counterparts in other ICT
industries.
59
Thus, over the decades, many studies have been conducted on the
relationship between the entrepreneur's human capital and the post-entry
performance of new or entrepreneurial firms. These studies generally
demonstrate that the entrepreneur's age, education, work experience, and
other factors, have a positive effect on the post-entry performance. Among all
these, age of the entrepreneur is very important because on the one hand,
age increases individual ability to exploit opportunities. On the other hand,
however, opportunity costs and therefore reluctance to bear risk increases
with age. The empirical evidence on the effect of age on new firm formation
is controversial (see Reynolds, et. al.; 1994 for a survey). Age has also been
shown to correlate positively with entrepreneurial firm performance (Birley,
1987). Among them, Cressy (1996) emphasizes the role of the
entrepreneur's human capital, especially his or her age, and suggests a
model that assumes the probability of a new firm's survival is an increasing
function of an entrepreneur's age. In a study of 71 small business owners, it
was found that risk-taking propensities depended on the following factors:
age, education, years of business experience, span of life and size of the
business (Schwer and Yucelt, 1984). On the other hand, the life cycle
approach to business development (Kimberly and Miles, 1980; Scott and
Bruce, 1987) suggests that the risk-taking propensity of the entrepreneur
decreases over time; when the entrepreneur makes a transition to business
manager, then by definition, he or she becomes less of a risk -taker and
instead assumes a caretaker role. Several researchers in the typology field
(Cooper, 1997; Chell and Haworth, 1992; Miner et al., 1992; Westhead,
1990; Birch, 1987; Smith, 1967) have found in these studies is that risk-
60
taking propensity varies according to personality type.
Sinha's (1996) treatise covered human factors in entrepreneurship
effectiveness. The study revealed that successful entrepreneurs were
relatively younger in age, technically educated and had some business
background in the family. Thus, the link between the development of a
preference for an entrepreneurial career and factors such as parental role
models (Scherer et al., 1989), education and employment history (Cooper,
1973), age of the entrepreneur and family life cycle stage (Petrof, 1981),
socio-cultural (Terpstra et al., 1993) and economic factors (Gould and
Keeble, 1984) have all been explored in the literature (see Garavan et al.
1997 for a review). However, only a few fragmented studies have
concentrated mainly on entrepreneur's age which in this paper is
hypothesized to have an impact on firm entry, ownership and risk.
Rishikesha T. Krishnan (2008) have contributed to the literature survey
through their research paper with topic “The Indian Aviation Industry 2008”,
submitted to Indian Institute of Management, Bangalore. The focus of this
paper is on the domestic airline industry in India, their operations and growth
in next 5 years. This research paper gives details about the factors affecting
the operational costs of the airlines in India and how they are balancing these
costs to survive. This study also gives information on per hour maintenance
cost involved in flying of aircrafts and its impact on the overall cost of the
airline. This research paper compares the airline industry with the aircraft
manufacturers and the over all growth of this industry.
61
Research Gap :
Not much research work has been done in the past in the area of
entrepreneurship in Independent MRO and Air Charter business in India.
What are the difficulties faced by entrepreneurs in these two sectors and how
they over came it, has not been studied in detail. Based on the review of
literature, it is evident that very little academic material is available on the
evolution and sustenance of entrepreneurs in these two sectors of aivaiton
industry. However the importance of entrepreneurs for any economy can not
be marginalized. Entrepreneurs are the ones who drive the economy,
generate employment and contribute to the development of society. More
than any thing entrepreneurs stand on their own feet and support the country
by paying high tax and contributing to the over all growth.
As each individual entrepreneur carries different set of skills and behaves
differently in different situation, it is difficult to predict any trend. Studies in the
past have tried to evaluate the entrepreneurial traits and skills for the
success or failure of business, however very little research has been done
with focused on evolutionary factors with its effect on sustenance and further
growth of entrepreneurs. More over no research has been done in the area
of entrepreneurial sustenance in Independent MRO and Air Charter business
in India. This leaves a wide scope for a research on this subject to be
conducted and findings kept for reference by entrepreneurs as well as
creating a platform for further research on the related subjects.
Recently several researches have found scope in subjects related to
62
entrepreneurship, however during the literature survey as well as interaction
with research scholars not much information could be gathered on
entrepreneurship in MRO and Aircharter sectors. This reflects the gap for
research in this area. Past research have not adequately addressed the
evolutionary factors of entrepreneurs, thus no literature is available on the
entry barriers in MRO and Air charter sectors.
Further, this is the first such study correlating evolutionary factors with
sustenance of entrepreneurs. Findings of this research should contribute to
the emerging entrepreneurs who would like to venture into Independent MRO
and Air charter business not only in India but other parts of Asia too. Findings
of this research could also contribute to the government in framing the
aviation policies.
In view of the above and research gap, a need was felt to conduct a research
which covers all the aspects of entrepreneurship related to Independent
Aviation maintenance and Air charter segments.
63
CHAPTER III
OBJCTIVES OF RESEARCH
64
CHAPTER III
OBJECTIVES OF RESEARCH
Research Problem :
Studies suggest that aviation is a controlled and regulated industry due to
high level of precision required in work. Thus it requires courage and different
set of business skills for entrepreneurs to enter in aviation business. There
has been phenomenal growth in the number of aircrafts as well as the
passenger traffic in last 5 years, however the MRO business has not seen
growth in similar ratio. It is well understood that as the number of aircrafts
increase and they fly more, there will be need for more maintenance.
However the fact that Independent Aviation MROs in India have almost seen
negligible grown in proportion to the growth in Air traffic, gives rise to the
questions like; What are the factors effecting the growth of Independent
Aviation MROs in India ? Why entrepreneurs are not finding it attractive
enough to venture into MRO business ? Why the airlines have not developed
their own MRO subsidiaries like the airlines in western countries ? What are
the challenges faced by entrepreneurs in entering into Independent Aviation
MRO business ?
The economy of India is one of the fastest growing in the world and except
for the depression in 2007 and 2008, there has been exponential growth for
the past 10 years. Despite the fact that a rich class of businessmen have
emerged in India, the Air Charter business has not picked up in similar
65
proportion. Air charter is a very common mode of transport in the western
countries and many of the entrepreneurs tried to replicate similar business
model in India, however to their dissatisfaction the entrepreneurs in India
don’t seem to be spending much on their luxury and privacy of travel. This
gives rise to research problem based on, Why Air charter business has not
pickup as in the west ? What are the challenges being faced by
entrepreneurs in Air charter business ? What are the operational difficulties
which is holding back the growth of Air charter business in India ?
The research seeks to study and analyze these aspects of Indian
entrepreneurs who have established their organization despite the fact that
not a single component of Aircraft was manufactured in India till 1990s and
what are the challenges in sustenance and further growth of such
organizations.
Also the studies done so far have focused mostly on commercial angles of
the aviation industry and not touched the entrepreneurial factors effecting the
growth of aviation maintenance and Air charter businesses in India. This
study seeks to analyse the factors effecting entrepreneurship in these two
sectors of aviation – Independent MRO and Air charter.
Thus the research problems could be summarized as ;
• What are the motivational factors for entrepreneurs to engage
themselves in these two business activities ?
66
• What are the entry barriers in these two sectors ?
• What are the challenges faced by entrepreneurs in these sectors ?
• What are the Factors effecting their sustenance ?
• What are the rewards for accepting such challenges ?
Statement of Research Objectives :
• To analyze the general and financial facts related to entrepreneurs’,
which effect their motivation and sustenance in Independent aviation
MRO and Air Charter business.
• To understand the motivational factors of entrepreneurs to venture
into Independent aviation maintenance and Air Charter business
sectors.
• To identify the entry barriers of these two business sectors which
entrepreneurs face while entering.
• To analyze the evolutionary factors which have direct bearing on the
sustenance and growth of entrepreneurs in these two sectors.
• To identify the challenges faced by the entrepreneurs in sustenance
and further growth in both these sectors and to determine the
67
entrepreneurial skills required to overcome these challenges.
• To assess the impact of internal and external factors effecting the
development of these two sectors.
• To determine the effect of rewards on the motivation, evolution and
sustenance of entrepreneurs in both Independent Aviation MRO and
Air Charter businesses.
Hypothesis :
To pursue the proposed study, the following hypotheses are framed and their
validity tested through research techniques:
H01 : Family background did not play any role in motivating an
entrepreneur to venture into Independent MRO and Air charter
business.
H11 : Family background did play a role in motivating an entrepreneur
to venture into Independent MRO and Air charter business.
H02 : High profit margin is not a major motivating factor for
entrepreneurs to enter in Independent MRO and Air charter
business.
H12 : High profit margin is a major motivating factor for entrepreneurs
68
to enter into Independent MRO and Air charter business.
H03 : Motivation has no impact on the evolution of entrepreneurs in
these two sectors of aviation industry.
H13 : Motivation has a significant impact in the evolution of
entrepreneurs in these two sectors of aviation industry.
H04 : Source of funding has no impact on the capability of
entrepreneurs to over come entry barriers in these two sectors.
H14 : Self and family funded entrepreneurs are able to overcome the
entry barriers easily.
H05 : High initial investment and long break even period is not an
entry barrier for entrepreneurs to enter into Independent MRO
and air charter business.
H15 : High initial investment and long break even period is an entry
barrier for entrepreneurs to enter into Independent MRO and air
charter business.
H06 : Evolution of entrepreneurs in the Indian aviation maintenance
and Air charter sectors was not innovative idea based.
69
H16 : Evolution of entrepreneurs in the Indian aviation maintenance
and Air charter sectors was innovative idea based.
H07 : Evolution of entrepreneurs in the Indian aviation industry
(independent MRO and air charter) was not industry need
based.
H17 : Evolution of entrepreneurs in the Indian aviation industry
(independent MRO and air charter) was industry need based.
H08 : Stringent Regulatory norms are not a challenge for sustenance
of entrepreneurs in these two sectors of aviation.
H18 : Stringent Regulatory norms are a challenge for sustenance of
entrepreneurs in these two sectors of aviation.
H09 : High Initial Capital and high operating cost is not a challenge for
sustenance of entrepreneurs in Independent MRO and Air
charter business.
H19 : High initial cost and high operating cost is a challenge for
sustenance of entrepreneurs in Independent MRO and Air
charter business.
H010 : Glamour attached to the aviation industry does not attract
70
entrepreneurs to venture into air charter business despite poor
rewards.
H110 : Glamour attached to the aviation industry attracts entrepreneurs
to venture into air charter business despite poor rewards.
H011 : Rewards in Independent MRO and Air charter business are not
lucrative enough to motivate more entrepreneurs.
H111 : Rewards in Independent MRO and Air charter business are
lucrative enough to motivate more entrepreneurs.
Importance of the Research :
This research has sought to identify the factors effecting the evolutions,
sustenance and further growth of entrepreneurs in Independent Aviation
maintenance and Air Charter business. An endeavor has been made to study
the impact of these factors in the motivation of entrepreneurs and its effect
on the risk bearing capacity of entrepreneurs. The research is expected to
help the budding entrepreneurs by providing reference literature for them to
take decision and focus on areas which need attention for success in these
two sectors of Aviation industry. It would also help the industry at large.
71
CHAPTER IV
RESEARCH METHODOLOGY
72
CHAPTER IV
RESEARCH METHODOLOGY
Secondary data was collected from various Journals, Books, Research
papers, Theses, Internet, Annual reports and Industry magazines. Data was
also collected from Ministry of aviation, Air port authority of India (AAI),
Centre for Asia Pacific Aviation (CAPA), Business Aviation Association of
India (BAAI), International Civil Aviation organization (ICAO) and The
International Air Transport Association (IATA) data sources.
After the identification of gaps and finalization of research objectives a
questionnaire was prepared and a study was conducted on a pilot scale and
a few entrepreneurs were interviewed to get an initial opinion to decide the
factors to be taken into consideration to get the desired result from this
research. Later the information garnered from the pilot scale study and the
findings from the literature review were used to prepare a final questionnaire
to be used for the purpose of the research study. Data was collected through
structured interview of entrepreneurs in these two sectors Independent MRO
and Air charter.
Instrument development and measures :
Given the objectives of the research, instrument was developed to measure
1) General facts about the entrepreneurs 2) Financial facts about the
73
entrepreneurs 3) Motivational factors 4) Entry barriers in to the MRO and Air
Charter sectors 6) Evolutionary factors 7) Challenges faced in Sustenance
and 7) Rewards to the entrepreneurs. The data collected included location,
age at which they became entrepreneurs family back ground, personal back
ground i.e whether they did a job and then became entrepreneurs or they
directly became entrepreneurs, initial capital deployed, source of funding etc.
The data collected for internal motivational factors included aviation as a
hobby of any family member or friend (influence of closely associated people
on motivation), own interest in aviation, instinct to take risk (a natural
propensity of mind), desire to take challenges in life, passion towards
aircrafts / flying, strong desire to be ones own master, will to follow ones
dreams and ambitions, while the external motivation factors included money
and glamour.
Similarly data was also collected for Entry barriers - regulators constraints,
infrastructural constraints, capital, control of OEM, unavailability of industry
information, Evolutionary factors – industry need based, opportunity based,
innovative idea based, foresight / vision based, Challenges in sustenance –
regulatory controls, high cost of operation, difficulty in sourcing spare, getting
skilled man power and retaining them, support from OEM, effect of market
fluctuation, managing cash flow, Rewards – monetary, recognition,
satisfaction of employment generation, job satisfaction.
An effort was made to cover maximum number of variants of the factors
74
which affected the evolution and sustenance of entrepreneurs in the purview
of this study. Items of instrument were adapted from various previous studies
according to their relevance to the aviation sectors under study in Indian
context. Effort was taken to ensure that the domains were as relevant as
possible. The pilot stage (phase I) used a larger number of items for each
scale. These were reduced on the basis of the pilot test results to the
instrument that was used for final data collection. Table 4.1 gives a
description of the items used to measure the variables used in this study.
Table 4.1 : Research measures
Variables Items Scale
General -
Demographic
and
Socioeconomic
variables
(Facts)
1. Location
2. Category
3. Age at which you became
entrepreneur
4. Family back ground
5. Personal back ground
6. No. of Employees when you
started your enterprise.
7. Type of company when you
Mumbai / Delhi /
Bangalore
MRO / Air charter
< 30 yrs
30 – 50 yrs
> 50 yrs
Service / Business
or farming
Job to Entrepreneur
Direct Entrepreneur
< 20
20 – 100
> 100
Prop. / Partnership
75
started your enterprise. Pvt. Ltd.
Public Limited
Financial
(Facts)
1. Initial capital deployed at the
time of starting the enterprise.
2. Current capital involved
3. Source of funding
4. Break even period
5. Current financial condition
6. Return on Investment (ROI)
< 50 lacs
< 5 crore
> 10 crore
< 5 crore
5 – 50 crore
> 50 crore
Self / Partner / VC
Family
Bank / Stock mkt.
< 1 yr
1 – 3 yrs
> 3 yrs
Good profit
Average profit
Loss
Satisfactory
Average
Unsatisfactory
Motivational
factors
(Internal &
External)
1. Aviation as a hobby / job of any
family member or friend
2. Your own interest in aviation
3. Instinct to take risk
4. Desire to take challenges in life
Yes / No
Yes / No
Yes / No
Yes / No
76
5. Passion towards aircrafts / flying
6. Strong desire to be your own
master
7. Will to follow your dream
8. Ambitious / desire to make it big
in life
9. Money
10. Glamour
Yes / No
Yes / No
Yes / No
Yes / No
Yes / No
Yes / No
Entry barriers
(Government &
Industry)
1. Regulatory constraints
2. Infrastructural constraints
3. Capital
4. Control of OEMs
5. Unavailability of Data / reports
Yes / No
Yes / No
Yes / No
Yes / No
Yes / No
Evolutionary
factors
(Internal &
External)
1. Industry need based
2. Opportunity based
3. Innovative Idea based
4. Foresight / Vision based
Yes / No
Yes / No
Yes / No
Yes / No
77
Challenges
faced in
sustenance
(Government &
Industry)
1. Regulatory controls
2. High cost of operation / fixed
cost
3. Problem in sourcing spares
4. Retention of skilled man power
5. Support from OEM
6. Affected by market fluctuations
7. Problem managing cash flow
Yes / No
Yes / No
Yes / No
Yes / No
Yes / No
Yes / No
Yes / No
Pilot Test : It is always desirable to conduct a pilot test before administering a
questionnaire to the sample. The pilot test has a role in ensuring that the
instrument as a whole functions well without too much variations, which
would be difficult to measure.
Phase I
Rewards to
the
Entrepreneur
(Internal &
External)
1. Monetary / Financial
2. Recognition in Industry
3. Satisfaction of being an
employer
4. Job Satisfaction
Yes / No
Yes / No
Yes / No
Yes / No
78
Since the study involves evaluating the factors of evolution and thus finding
their impact on the sustenance of entrepreneurs in those two particular
sectors of the industry, a proper review of the questionnaire was made and a
preliminary examination of the questionnaire was conducted before data was
collected by face to face interview of the entrepreneurs. The purpose of the
test was;
1) To indentify any scales that were difficult to comprehend or had
redundant items and revise them prior to conducting the interview of
entrepreneurs.
2) For reliability testing
3) For testing the correctness of the scales of measurement and validity
evaluation
4) Calculating the variability of population under survey
5) Refine the questionnaire to cover indirect questions covering the
purpose of data collection at the same time not shooting direct
questions to the entrepreneurs
Research scholars, entrepreneurs and faculty at renowned management
institute participated in the phase I of pilot test. Since the questionnaire was
addressed at matured entrepreneurs, it was necessary to test it to a similar
kind of group with intellect and maturity levels to answer such questions.
Predominantly the pilot test was conducted of the people in age group of 30
to 50 years who showed entrepreneurial maturity towards the questions in
questionnaire. The pilot test was conducted on actual entrepreneurs,
research scholars and faculty keeping into mind that both academic and
79
industry inputs are tested before finalization of the questionnaire for relevant
data collection.
Suggestions received during the pilot study included framing indirect
questions, thus not embarrassing the entrepreneurs with odd questions at
the same time gathering all the required information out of them. Some of the
suggestions also included casual chat with the entrepreneurs during the face
to face interview to know more about them and then include that information
in the final summery of questionnaire. According to the suggestions and
results, the initial pool of items was revised and some corrections made in
the final questionnaire. After ensuring that validity and reliability were
adequate, several categories were reduced to 7 categories consisting of 41
relevant factors for this study. This involved testing the dimensionality for all
the factors using factor analysis. This practice of reducing and refining the
factor items has been used by many previous researchers during the scale
development process (Michael henrehan and Sirkosky 1978, Rubin marto,
1994 and Fenwisk 1975). Due to the limited size of the population, the whole
population was selected as the sample.
Phase II
The questionnaire finalized after Phase I was tested with some known
entrepreneurs related to Independent MRO at Mumbai to identify whether the
questionnaire suffered any major drawbacks and whether the questions
needed to be restructured. Reliability tests gave acceptable results and
indicated that factors must be measure on two scale (yes or no) to reduce
80
the variance. The data from this stage was incorporated into the final data
sheet.
Validity and Reliability :
Validity
Based on the literature review and followed by the pretest survey (Phase I),
items were generated to operationalise the variables under study. A measure
is considered valid to the degree that it really does measure what it is
intended to measure. The internal validity can be discussed as under :
1) Face validity or content validity, 2) Construct validity 3) Criterion validity
and 4) Measurability (copper and schindler, 2003)
Face validity
The face validity or content validity of a measuring instrument is the extent to
which it provides adequate coverage of the investigative questions guiding
the study. Determination of content validity is judgmental and can be
approached is several ways (Cooper and Schindler, 2003). In this study, the
first step involved a careful definition of evolution of entrepreneurs and the
factors to be scaled and the scales to be used. Further, these factors were
evaluated through conducting a screening exercise or judgmental method
(Litwin, 1995; Sekaran, 1992). The aim of the exercise was to determine the
extent to which each factor reflected dimensions of effect on entrepreneurs.
Construct validity
81
In the measuring construct validity, both theory and the measuring instrument
are considered. Once it is established that the constructs are meaningful in a
theoretical sense, the adequacy of the instrument is investigated. In order to
ensure that items measure hypothetical concepts, evolution and sustenance
factors or entrepreneurs from other industries studied in previous research
were used.
The adequacy of an instrument can be tested either through convergent
validity or discriminant validity. Convergent validity involves correlating the
results of the present study with pre-existing validated scales. In their
absence or of they having not used, the construct validity of a measure is
shown by showing that it related to other variables to which it should be
related (Campbell and Friske, 1959; green and Tull, 1980). Internal
consistency therefore is a good test for construct validity. The factors were
checked to identify whether the factors of motivation, entry barrier, evolution
and sustenance formed sensible relationships with the general and financial
facts through correlations and cross table analysis. Beyond internal
consistency, evidence for new factoral scales is difficult to find. The most
general practice is to assume, unless there is evidence to the contrary that
the respondent is responding accurately. Much stronger evidence on
construct validity can come from category by category and factor by factor
convergent and discriminant validity. Discriminant validity involves seperating
it from other constructs in theory or related theories. While these have not
been attempted, here factor analysis has been used to establish the constuct
adequacy of the measuring device (Cooper and Schindler, 2003).
82
Criterion Validity
Criterion related validity reflects the success of measure used for prediction
or estimation. Cooper and Schindler (2003), suggests that any criterion
measure must be judged in terms of four qualities : 1) Relevance 2) Freedom
from bias 3) Reliability and 4) Availability. A criterion is relevant if it is defined
and scored in terms we judge to be a proper measure. Freedom from bias is
attained when the criterion gives each respondent an equal opportunity. A
reliable criterion is stable or reproducible. Finally, information specified by the
criterion should be available. After these were ensured, the criterion validaty
was established in this study by correlating the factors affecting evolution and
sustenance of entrepreneurs in MRO and Air charter business. Predictive
validity is established by the ability to predict the summed or averaged
behavior of large numbers of individuals. Discriminant analysis was used to
establish that the constructs under study had validity 9Cooper and Schindler,
2003; Wells 1975)
Validation of Discriminent model
Validation of the discriminent model was ensure by segregating the sample
of both the segments i.e MRO and Air charter into two. The internal validity of
the discriminant function was calculated using the levels of predictive
accuracy. A cross classification of the results with the original classification
indicated the accuracy of prediction. An acceptable overall hit ratio for both
the samples under study is considered as support for the discriminant model
(Hair et al).
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Table 4.2 : Summary of Internal Validity methods
Reliability
Reliability of a factor, measures how consistent or stable the ratings
generated by the factor are likely to be. Reliability focuses on whether the
factor consistently measures the construct or not. (Parashuraman, Grewal
and Krishnan, 2007). Reliability is therefore concerned with the estimates of
the degree to which measurement is free of random or unstable error.
No Type What is measured ? Methods used
1 Content Validity Degree to which the
content of the catagory
adequately represents
the universe of all
relevant factors under
study
Choice of relevant
dimensions from
existing literature.
Researcher’s
judgement
Panel evaluation
2 Construct Validity Attempts to identify the
underlying constructs
being measured and
determine how well the
test represents them
Internal consistency
Factor analysis
3 Criterion Validation Degree to which the
predictor is adequate in
capturing the relevant
aspects of the criterion
Correlations
Cross table analysis
Discriminant analysis
84
Reliable instruments can be used with confidence that transient and
situational factors do not much interfere. Mathematically, reliability is defined
as the proportion of the variability in the responses to the survey that is the
result of differences in the respondents. That is, answers to a reliable survey
will differ because respondents have different opinions or went through
different situation, not because the survey was confusing or has multiple
interpretations. Reliable instruments are robust and, they work well at
different times and under different conditions. This distinction of time and
condition is the basis for frequently used perspectives on reliability: Stability,
Equivalence and Internal consistency. While stability of a scale measure the
reliability whether consistent results can be secured with repeated measures
of the same person with the same instrument, equivalence is concerned with
variations at one point in time among observers and samples of items.
Ideally, in order to obtain a good estimate of the reliability of a survey, we
would like to administer the survey twice to the same group of people and
then correlate the two sets of results. However, this is often impractical
because bias may be introduced in the second set of answers or because
respondents may be unwilling or unable to take the survey a second time.
Sample design :
For the purpose of research, the data has been collected from Mumbai, Delhi
and Bangalore due to the concentration of aviation related businesses in
these 3 cities in India. To get a clear understanding of the factors effecting
sustenance and growth of entrepreneurs in aviation maintenance and Air
Charter business, the following determinants have been studied in detail:
85
• General facts / background of the respondents.
• Financial facts about the respondents.
• Motivational factors for entrepreneurs.
• Entry barriers in aviation maintenance sector.
• Evolutionary factors
• Challenges faced in sustenance.
• Rewards to the entrepreneurs
Samples Size :
In this study the population size was very limited and hence 100% population
was considered as the sample and each member of the population was
carefully examined and interviewed.
Due to the limited number of entrepreneurs in Aviation maintenance and Air
Charter businesses, primary survey was conducted for the whole population
without applying any sampling technique.
Table 4.3 : Population of MRO and Air Charter entrepreneurs
Sr. No
CITY No of Independent MRO
No. of Air Charter companies
1 Mumbai 7
9
2 Delhi 8 9
3 Bangalore 3
1
Total 18
19
Source : Director General of Civil Aviation CAR-145 companies (DGCA)
86
Data Collection and measures to reduce sample bias :
Given the nature of this research, a face to face interview was preferred. A
questionnaire was used to give structure to the interview and keep the
questions specific to the determinants under evaluation. The rationale is
based on the theory that respondents will be more attentive to the questions
asked during the face to face interview when they informal and comfortable
with the researcher (Dawson et al, Blair, 1983). Opinion of the respondents
were recorded in simple two alternate method (Yes / No).
Data Processing and Analysis :
The data collected through interviews with the help of questionnaire was then
analysed using Statistical Package for Social Sciences (SPSS) version 12.0.
Descriptive statistics, bivariate analysis and multivariate analysis were
adopted.
0 2 4 6 8
10
No of Independent MRO
No. of Air Charter companies
87
Descriptive
The general and financial facts are described using multiple scales relevant
to each fact and means have been used to describe high, average and low
significance. Each parameter was converted into a numerical value 1, 2 and
3 depending on the significance, where 1 measure low and 3 highest. For
some of the facts the numbers 1, 2 and 3 were classified and did not show
any significance.
Bivariate
Cross table analysis
Cross table analysis or cross tabulation is a technique for comparing data
from two categorical variables. Cross table is the first test in identifying
relationships between variable of two different categories. The technique
uses tables having rows and columns that correspond to each variable
category. Each cell contains a count of cases of joint classification and also
the row and column and the total percentages. Cross table analysis is used
to describe the significance of entrepreneurs of each category i.e MRO and
Air charter with respect to each factor under analysis.
Multivariate
Factor Analysis
Principal component analysis with varimax rotation was used on the
questionnaire items for general facts (7 items), Financial facts (6 items),
Motivational factors (10 items), Entry barriers (5 items), Evolutionary factors
(4 items), Challenges in sustenance (7 items) and Rewards (4 items) to
88
reduce the data. Principal component analysis is a model of factor analysis
that considers total variance and derives factors that include small
proportions of unique variance. It is appropriate when the primary concern is
a minimum number of factor that are needed to account for maximum
amount of variance.
Factor analysis is a generic name given to a class of multivariate statistical
methods whose primary function is to define underlying structure in the data
matrix. With factor analysis, the researcher can first identify the separate
dimensions of the structure and then determine the extent to shich each
variable is explained by each dimension. These dimensions or factors when
interpreted and understood describe the data in much smaller number of
concepts that the original individual variables. Data reduction can be
achieved by calculating scores for each underlying dimention. (Hair et al,
2003)
Testing of Hypothesis
Chi-Square
One of the most commonly used tests of significance is the chi-square test. It
is useful in tests involving nominal data. Using this technique we look for
significant difference between the observed distribution of data among the
categories and the expected distribution based on the null hypothesis.
Testing of the impact of one factor on the other in some other category was
89
accomplished by calculating the chi-square, the degree of freedom, and the
significance impact at 0.5 level. Null hypothesis was framed for each of the
variables and tested for validity. The null hypothesis was rejected for p
values less than 0.05.
Pearson Correlation
The application of correlation is to measure the degree of association
between the sets of metric data (Nargundkar, 2003). The hypothesized facts
to the motivation, entry barriers and sustenance is tested using Pearson’s
correlation analysis. The correlation coefficient indicated the strength of the
association between the variables. The sign + or – can indicate the direction
of the relationship. The values can range from -1 to +1 with +1 indicating a
perfect positive relationship, 0 indicating no relationship and -1 indicating a
perfect negative relationship (Hair et al 2003). This technique was used to
test the hypotheses.
Limitations of Research :
The data collection was carried out from the existing entrepreneurs who have
been able to survive. There would be several such entrepreneurs who could
not survive and had to close their enterprise. Since there was no information
available about them, it was not possible to conduct their interview. This
could be a limitation of this study as the entrepreneurs who could not survive
would have given important inputs for this study.
90
Entrepreneurial challenges differ in different time periods, specialy depending
upon the condition of the industry, so also the motivation of entrepreneurs
differ in direct co-relation to the industry scenario. This study was carried out
during the recession period of 2008-2010, during which most of the
entrepreneurs were struggling to survive due to the global economic
slowdown and downturn of aviation industry. Their response could be
influenced by the industry scenario.
This study was restricted to Independent maintenance organizations (MRO)
and Air charter operators and hence the inferences may have limitations.
This study can further be extended to other areas of aviation industry.
Some of the respondents were not forthcoming during the interview due to
the tight control of regulatory authorities on Independent MRO and Air
charter business and hence there could be chances that there might be
difference between the actual fact and response recorded.
In many cases the Air charter business was backed up by strong financial
partners and the respondents did not like to reveal information, hence the
actual impact of funding could differ in some cases and this could vary the
conclusions of the research.
91
CHAPTER V
EVOLUTION OF ENTREPRENEURS
IN INDIA
92
CHAPTER V
EVOLUTION OF ENTREPRENEURS IN INDIA
Evolutionary phases :
The story of the Indian entrepreneurship is replete with paradoxes and
surprises. During the pre-colonial and colonial era, the entrepreneur was
seen more as a trader-money lender merchant, bound rigidly by caste
affiliations and religious, cultural and social forces ranging from the
philosophy of Karma to the system of joint family. Entrepreneurship as we
understand it today was definitely not forthcoming from this social segment.
A number of political, economic factors too had an inhibiting effect on the
spirit of enterprise among Indians. Lack of political unity and stability,
absence of effective communication systems, existence of custom barriers
and oppressive tax policies, prevalence of innumerable currency system – all
these combined together to restrict the growth of native entrepreneurship
until around the third decade of the 19th century. The religious system of
education and the low social esteem accorded to business were the other
potent forces that discourage the emergence of large scale commercial
ventures in the pre-independence India.
The first half of the present century witnessed a gradual change in the
scenario. During this period, there was a visible tendency among the natives
to take to business. The spread of secular education, rising nationalist
feelings and social reform movements must have given a fillip to this initial
phase of the emergence of entrepreneurship. Further, the two world wars
93
and the enormous opportunities they created for the growth of Indian
industrial ventures brought about a radical change in the societal attitudes in
favour of industrial entrepreneurship and broadened the vision of Indian
businessmen. The independent India thus could claim to have created a
conductive climate for spread of entrepreneurship. It is in this broad backdrop
that the later evolution and growth of Indian entrepreneurship has to be
located.
In a mixed economy, as India was defined by architects of this republic, with
the public sector having the definite upper hand, the role of the state
becomes very crucial. By its very nature such an economic system could not
adequately focus entrepreneurs as catalyst of economic development. The
state rather assumed the role of the major entrepreneur. Possibly and
rightfully so, the overriding concern of the newly independent country related
to correcting the anomalies and distortions created by the colonial rule.
Issues like employment generation, distributive justice and balanced regional
development thus occupied the centre stage of industrial policy making in
India. The first Industrial policy resolution of 1948 was a solid statement of
the country's philosophy of growth, the vital aspect of which was
industrialization under government regulation. Naturally neither this policy nor
the subsequent ones made any specific reference to the entrepreneur or
entrepreneurship. It is interesting to note that even the small scale sector,
which later came to be known as 'the breeding ground of indigenous
entrepreneurship', has been promoted and nurtured for its potential for
94
addressing the larger developmental concerns. Such concerns, together with
a gradually expanding public sector had set out a framework of
industrialization where the cornerstones were controls, regulation and
restrictions for the large industries and a wide protective umbrella with
special incentives and institutions for the small ones. This was the scenario
till late 1980s.
In spite of the domineering presence of large and medium enterprises in the
economic scene (the history of many such enterprises goes back to the pre-
independence era) it is the small sector that has always dominated the
inquiries into Indian entrepreneurship. In fact, this is quite characteristic of
many of the developing countries. It is not that the large and medium
enterprises do not manifest entrepreneurship as their small counterparts. The
reason could well be that it is in the small enterprise that the presence of the
entrepreneur, is most visible. Also in a country like India which is vast,
diverse, and less developed, small enterprises have a very definite role to
play not only by contributing towards employment and income generation,
but also in attending to the specific needs of a large proportion of customers.
Their greater visibility may also be attributable to the fact that inspite of all
odds on the policy and market fronts, several thousands of small enterprises
thrive in a large number of production spheres. More importantly, the small
scale sector has helped widen the entrepreneurial base by giving rise to a
new class of entrepreneurs from the ranks of employees, business executive,
technicians and professionals.
95
This has broken the earlier myth that entrepreneurship is an exclusive
domain of the socially conservative, traditional trading communities. In fact,
in a study of small entrepreneurs in the then State of Madras, James Bean
observed that entrepreneurs could emerge from a wide range of social and
economical backgrounds.
Though unrecognized by policy statements, entrepreneurial initiative was
breaking new grounds in the small industry scene over the past four decades
banking mainly upon the ingenuity and determination of individuals. The late
sixties and early seventies also witnessed a few sporadic attempts to create
entrepreneurs from non traditional communities with a view to breaking the
monopoly of the dominant groups and diversifying the entrepreneurial base
in the country. The state of Gujarat was the forefront of this movement.
By the late sixties it became quite evident that two resources are the most
critical (inspite of favourable policies) for development of entrepreneurship,
finance (credit) and managerial capabilities. The industrial policy exercises
were woefully oblivion of these two basic factors though there were
incentives and special institutions. When industrial development picked up in
the sixties the bankers limited credit mainly to established industrialists and
merchants for existing projects with assured success and sufficient
collaterals. A study of 53 projects financed by banks and the Gujarat State
Financial Corporation during the period 1965-68 revealed many interesting
things. More than two thirds of institutional loans were for diversifications and
expansion of existing enterprises. Of the new loans, 30% were given to
96
merchants and traders with adequate financial resources and hence the
required collateral. The entrepreneur's financial stake stood very high in the
transactions at a debt equity ratio 1:1. Such policies evidently were holistic to
an aspiring and an otherwise competent young entrepreneurs but without
enough financial resources and tangible assets. Despite efforts made by a
host of institutions, only less than 20% of the new entrepreneurs have access
to training every year. This means that a large mass of the potential
entrepreneurs are still outside the reach.
Evolution of Entrepreneurs in Independent MRO : The evolution of entrepreneurs into the Indian Aviation Maintenance sector is
not too old. The Indian aviation industry was liberalized in 1990s and it took
almost a decade to see the entry of entrepreneurs into the MRO industry.
Prior to the liberalization there were a few MROs who handled the repair and
maintenance of general aviation aircrafts, however their operation was
limited to maintaining the business jets.
The below diagram prepared on the basis of study of the market and
interview of entrepreneurs during the research shows that MRO industry in
India developed post liberalization.
97
Exhibit : 5.1 : Evolution of Independent MRO sector in the Indian Aviation
industry
Source : CIRSIL report on Analysis of MRO industry in 2009.
Prior to 1990 as such there was no Independent MRO sector in existence.
Most of the airlines carried out all the maintenance and repair work in-house
including the minor as well as major maintenance. This was an era when the
aviation industry was completely regulated by the Aircraft manufacturers and
even the part manufacturers (OEMs) were not allowed to interact with the
Airlines directly. All the spare parts as well as repair requirements of the
airlines were routed through the aircraft manufacturer. The technology was
completely controlled by these aircraft manufacturers and even a minor
maintenance used to be carried out in the presence of engineers deputed by
Aircraft manufacturer. This was called the dark era of Aviation industry in
India. Prior to 1990 India had not significant role in the total aviation industry
of the world, because of very few aircrafts owned by the legacy carriers Air
India and Indian Airlines which flew selected sectors and did not allow the
industry to grow. 8
In-house Core Competency One Stop shop
All work In-house Partial Outsourcing All work Outsourced
Prior to 1990 1990 to 2006 2007 onwards A
irlin
e
Engineering and Planning
Airframe
Engine
Line maintenance and components M
RO
A
irlin
e Engineering Planning
and line maintenance
Air Frame
Engine
Components
Engineering and Planning
Airframe
Engine
Line maintenance and components M
RO
98
The post liberalization era gave opportunities to entrepreneurs, when the
Indian skies were opened for the private players. During this era the Private
Airlines started operating and it was not possible for them to handle all the
maintenance work in-house, hence they started outsourcing their
maintenance and repair jobs to Independent MROs in the US and Europe.
This opened up opportunities for entrepreneurs in India to explore the MRO
business by setting up small maintenance organisations. Initially, it all began
with labor jobs like cleaning of aircrafts, line inspections and line
maintenance being outsourced, which later progressed into outsourcing of
minor maintenance like breaks and wheels, seats, carpets etc, which were
not critical in nature and did not effect the airworthiness of the aircraft.
In the third phase i.e post 2006, there are more entrepreneurs setting up
MROs to handle complex maintenance jobs in India. The growing complexity
of airframes, systems, engines, and related components is leading to
increased inspection and maintenance time, leading to a higher demand for
MROs. Besides Tighter Safety regulation by Director General of Civil Aviation
(DGCA) leading to a situation where regular upgrades of different aircraft
components are becoming essential, has increased the maintenance
requirements of the airlines. This gave rise to entrepreneurs considering it as
a growing and high potential sector to enter into it.
As the low cost carriers (LCC) started occupying space in the India skies, the
need for MROs was felt, as the LCC model of Airlines did not had provision
for setting up their own maintenance department. The LCC business model
99
had to outsource most of their maintenance work and this intensified the
industry need for local MROs to handle minor as well as major maintenance
work. Since the evolution of MRO sector in India began very late and the
growth was quite slow, the foreign MROs too advantage of the poor
maintenance facilities in India and entered into long term agreements with
the LCC as well as full service airlines in India. Thus the Indian MRO sector
which could have otherwise take off was deprived of the initial momentum.
Due to heavy regulation and tight control of the OEMs over the repair
schemes and repair manuals, India MRO sector had to accept the less
technical jobs like brakes and wheels, seat overhaul and other non-critical
maintenance. OEMs were quick enough to envisage the growth in Asia and
India in specific, so they set up their own MROs at Singapore which
developed as a aviation hub for Asia pacific.
Exhibit 5.2 : Region wise share of MRO market in 2008
Source : Report published by Boeing in the year 2008.
Europe; 26%
North America; 39%
Asia Pacific; 17%
China; 4%
Latin America; 4%
Middle East; 4%
Africa; 3% East Europe; 2%
India; 1%
100
The above pie chart shows region wise share of MRO market in 2008. It is
seen that market share of India in the world MRO market is hardly 1 % which
is negligible. The no of aircrafts being inducted in India has almost tripled in
last 5 years, however the pie diagram above shows a grim picture of the
growth of MRO sector in India.
This research through the statistical analysis is an attempt to study the
factors effecting slow growth of entrepreneurs in MRO sector.
Evolution of Entrepreneurs in Air Charter sector :
The Air charter industry has seen a phenomenal growth since its start in the
light of open sky policy implemented by Government of India in the year
1994. The market has experienced quick growth ever since, because of
developments in the genre of aeronautics and increasing demand for
alternate types of air travel services.
In the 1990s the Managing directors, presidents and owners of large
companies in India owned private jets, however they faced several
challenges in owning the aircraft for their personal travel. The main challenge
were infrastructural constraints like very few airports, poor landing and
parking facilities, strict license regime, unavailability of maintenance facility
etc. Thus the growth of Air charter did not happen during that period. Some
of these large business houses shared their personal jets with other equally
successful businessmen in their city. In few cases two or three businessmen
101
jointly owned a single aircraft, like in the example of Kirlosker, Bajaj and
Garwares in Pune. They owned a single aircraft jointly and shared it for their
business travel as well as personal travel. At times this was inconvenient as
the travel dates would clash and priorities had to be adjusted. This gave rise
to the concept of Air Charter, wherein without owning the aircrafts they could
travel by private jets as per the convenience.
Entrepreneurs took advantage of this opportunity and started Air Charter
companies which would rent the aircrafts on a daily basis from business
houses which owned it and offer to other businessmen who wanted to fly in
private jet at the same time could not afford to buy one. This went on for a
while until end of 1990s. Once there was sufficient demand and infrastructure
to support such private jets to fly and land in major cities in India,
entrepreneurs brought in business jets specially for the purpose of
chartering. The growth that came after 2000 was phenomenal as the
economy was growing fast and demand kept rising.
Customers felt convenient chartering aircrafts than owning them, due to the
hassles of operational and maintenance difficulties. Thus Air charter
emerged as a full fledge business in early 2000. Entrepreneurs taking
advantage of the opportunity established Air Charter companies and
designed their business models to cater to the need of the customers. This
business was mostly influenced by the contact that the promoter of Air
Charter company had with the business tycoons of India. One of the
successful models of Air Charter business was to bring in refurbished pre-
102
owned private jets from America where they got these aircrafts at reasonable
price and fly in India. Most of the air charter companies followed this
business model, since this reduced their initial capital investment and they
could offer competitive pricing to meet the needs of the Indian customers.
The Air charter business saw a sharp rise in 2005 when the economy of India
was growing at double digits and the main reason for this sudden spurt was
that "Indian business leaders had began to realise that a business aircraft is
not a luxury but a productivity tool that contributes directly to the bottomline
by allowing them to use their time more productively and respond to
opportunities with agility, whether they are across the country or across the
world". Growing opportunities in B-class cities of India has been the key
market for charter aviation; as more and more businessmen from Mumbai
and Delhi were expanding their businesses in these B-class cisties like
Nashik, Chandigarh, Bhopal, Raipur, Indore etc and had to travel regularly to
these places.
Then came the entry of large business houses in Air Charter business. Tata
Group picked up a significant stake in Bjets - a business jet operator that had
plans to start aircraft charter and fractional ownership programmes in India.
In 2007, 30 business jets were delivered in the country and another 45 are
likely to be delivered in 2008.
While Air Charter business was taking shape, the concept of fractional
ownership evolved. Fractions ownership market has also witnessed a strong
103
demand in recent years, as customers (owners) have the option of buying a
fractional ownership of the aircraft, which ensures cost-effectiveness as well
as convenience of a private jet. As per the Ernst & Young report, owners
have a guaranteed access to 50-400 aircraft hours annually, depending on
their share size
The web has been additionally major issue in the boom of the Air charter
business. It has brought charter commuting within the realm of a much
broader range of clientele by making it easy for people to find an agreeable
charter flight provider. There is no longer any want to hunt down a charter
company in local locators or through contacts in the industry. Any traveler
can presently locate a charter company and contact them online to ensure a
flight.
Now there is a rise in the Air charter services, because of the rising
availability and falling prices, and also due to the rising mobility of the people.
People expect to be able to fly whenever they pick, whether they are going
on fun trips or traveling for work purposes. The popularity of charter services
in particular has also been helped by the growing dissatisfaction of elite
customers with the commercial air carriers, as security measures and delays
have increased.
The survival and growth of the air charter market in India will much depend
on high utilisation of the available fleet which would allow operators to reduce
rates and thus make these services affordable to a larger section of our
104
population and encourage the use of business jets for various purposes.
Also, immediate improvement in infrastructure, more players entering into
this market with a sizeable fleet, relaxation on taxes, airport charges, and
liberal policies by government agencies will encourage investments in this
sector.
The most efficient way of traveling in a private jet is to utilize a charter
service, whether chartering the entire plane or simply a single seat. There is
no reason to obtain one the mortgages of plane ownership, like hiring a pilot.
Charter flights also give more options than part ownership, since it is possible
to obtain a flight at any moment to any location. Shared ownership means
sharing use to the jet, and moreover chancing not being permitted to use the
craft since one of the other owners is making use of it. The simplest and
private way to fly is to lease a whole plane, since it is then an ability to dictate
the time of the flight and its destination, as well as to have exclusive use of
the total plane.
Private jets are leased bynumerous different sorts of traveler, for many
different purposes. Some of these persons pick charter flights as a result of it
provides greater room in their travel arrangements. They may need to fly to a
destination that is badly frequented by the commercial airlines, or to travel at
the spur of the moment. This is particularly true of medical professionals,
who may need to fly unexpectedly and cover the distance rapidly, perhaps in
order to conduc surgery or to transport vital medical supplies.
105
Other charter flight travelers are more concerned with the quality of the
service. They could need to travel as quickly as possible, without needing to
check in early and pass inefficiently through the security checks required for
passengers on a commercial airline flight. Since they are in control of their
own small plane, things can be conducted much more quickly and more
efficient. Efficiency is particularly important for executive travelers, who often
need to spend as little time as can be in the airport and in the air while they
are on their way to an important agenda. Commercial airlines, which only
provide flights on their own schedules, may add significantly to the flight time
by permitting travelers to fly to merely a limited selection of destinations so
that they may have to transfer between numerous flights, using only specified
major airports that are a lot of itmes a substantial distance from the middle of
the nearest city, and requiring extensive check in time.
Another point that is a need for some flyers who choose charter flights is
privacy. The one way in which it is an option to fly with utter privacy is to
lease a plane. There shall be no other people, and the small size of the plane
equates that there will be few crew members on board, who will be trained to
be unseen and unobtrusive. This promise of absolute privacy is the reason
why chartered private jets are a popular mode of travel for celebrities, which
includes famous bands and movie stars. Having control who can access to
the craft ensures that passengers keep their privacy, and it also makes a
charter flight safer than a commercial flight for any flyers who may want to
consider security risks. This is the winningest method to travel when there
are any thoughts over the safety of the travelers.
106
Charter flights are also popular with people who are coordinating large
amounts of people, or who might need to transport equipment safely,
specifically when they need to make certain that everything gets there on
time in a remote locale. Lots of film production companies make use of
charter services whenever they are filming on location, for instance.
Off course, the boom in the economy had a significant role to play as well. As
businesses moved beyond the confines of Mumbai, Delhi, Bangalore, etc., to
tier-two and tier-three cities, Air Charter expanded further. Now with 35 non-
metro airports in the pipeline, the Indian aviation story is only going to get
more interesting. However, as increasing numbers of people take to air travel
and the number of aircraft grows in the country, travel through scheduled
carriers is becoming time-consuming for business and first-class travelers.
And that's where another era in Indian Air Charter business begins.
This research through the statistical analysis attempts to study the factors
effecting the sustenance of entrepreneurs in the Air Charter business.
107
CHAPTER VI
DATA ANAYLYSIS AND HYPOTHESIS
TESTING
108
CHAPTER VI
DATA ANAYLYSIS AND HYPOTHESIS TESTING
The data analysis and hypothesis testing were carried out using the
computer software package SPSS version 14.0. The relevant results are
enclosed in the appendix. The data was collected over a period of 10 months
on 37 entrepreneurs in Independent MRO and Air Charter businesses in
Mumbai, Delhi and Bangalore. The data collected through the personal
interview of entrepreneurs using a structured questionnaire is tabulated as
below.
Description of the sample
Table 6.1 : Sample Description - Facts
General and Financial fact Variables Frequency Percentage
Location
Mumbai + Pune 16 43.2
Delhi 17 45.9
Bangalore 4 10.8
Total 37 100
109
Location on respondents
Category
Independent MRO 18 48.6
Air Charter 19 51.4
Total 37 100
Category of respondents
Age
< 30 yrs 13 35.1
30-50 yrs 16 43.2
> 50 yrs 8 21.6
Mumbai + Pune; 43%
Delhi; 46%
Bangalore; 11%
Independent MRO; 49% Air Charter;
51%
110
Total 37 100
Age of respondents
Family Background
Service 18 48.6
Business 17 45.9
Farming 2 5.4
Total 37 100
Family background of respondents
Personal Background
Job to Entrepreneur 23 62.2
< 30 yrs; 35%
30-50 yrs; 43%
> 50 yrs; 22%
Service; 49%
Business; 46%
Farming; 5%
111
Direct Entrepreneur 14 37.8
Total 37 100
Personal back ground of respondents
No. of Employees
< 20 12 32.4
20 – 100 21 56.8
> 100 4 10.8
Total 37 100
Type of Company
Pvt. Ltd. 32 86.5
Public Ltd 5 13.5
Total 37 100
Initial Capital
< 50 lacs 11 29.7
< 5 crores 6 16.2
> 10 crore 20 54.1
Total 37 100
Job to Entrepreneur;
62%
Direct Entrepreneur;
38%
112
Initial capital
Current Capital
< 5 crores 1 2.7
5 - 50 crores 7 18.9
> 50 crores 29 78.4
Total 37 100
Current capital
Source of funding
Self / Partner / Venture Capital 22 59.5
Family 11 29.7
< 50 lacs; 30%
< 5 crores; 16%
> 10 crore; 54%
< 5 crores; 3%
5 - 50 crores; 19%
> 50 crores; 78%
113
Bank / Stock market 4 10.8
Total 37 100
Source of funding
Break even period
< 1 yr 2 5.4
1 - 3 yrs 17 45.9
> 3 yrs 18 48.6
Total 37 100
Break-even period
Current financial condition
Self / Partner / VC; 59%
Family; 30%
Bank / Stock market; 11%
< 1 yr; 5%
1 - 3 yrs; 46%
> 3 yrs; 49%
114
Good Profit 9 24.3
Average Profit 17 45.9
Loss 11 29.7
Total 37 100
Current financial condition
Current ROI
Satisfactory 9 24.3
Average 14 37.8
Unsatisfactory 14 37.8
Total 37 100
Current ROI
Good Profit; 24%
Average Profit; 46%
Loss; 30%
Satisfactory; 24%
Average; 38%
Unsatisfactory; 38%
115
The general and financial facts of the entrepreneurs interviewed during this
study are tabulated above. It reveals important information about the
entrepreneurs which would help in validating the hypothesis, as well as draw
conclusions about the impact of general and financial factors on the
motivation, capability to over come barriers, factors responsible for the
evolution of the entrepreneurs, challenges faced by them in sustenance and
the rewards to the entrepreneur.
The study reveals that entrepreneurs in the Independent MRO and Air
Charter business are clustered in three cities Mumbai, Delhi and Bangalore.
Out of these three cities most of them are based at Mumbai and Delhi, since
these two cities are the aviation hubs with most number of flights taking off
and landing from these airports. Mumbai and Pune together have 43.2 % of
the entrepreneurs, while Delhi has 45.9 % and Bangalore 10.8 % of the
sample size studied. The total sample of 37 entrepreneurs interviewed
contained 18 (48.6%) from Independent MRO and 19 (51.4%) from Air
Charter.
The data analysis reveals interesting facts about the age at which
entrepreneurs ventured into business. 35.1 % of the entrepreneurs
interviewed had entered into business when they were below 30 years of
age, 43.2 % when they were between 30 to 50 years of age and 21.6 % after
50 years of age. This indicates that 43.2 % of the entrepreneurs entered into
business when they attained certain maturity level and experience to do
business. The second highest percentage was of entrepreneurs who entered
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into business below 30 years of age. It was interesting to learn during the
interview that most of such young entrepreneurs were highly enthusiastic and
motivated when they decided to get into Independent MRO or Air charter
business. Also the facts reveal that such entrepreneurs came with either a
business family background or started business in partnership. This study
also shows that 21.6% of the entrepreneurs entered into business above the
age of 50 years. This is quite an interesting fact and during the interview it
was found that most of such entrepreneurs always dreamt of doing
something of their own but couldn’t gather the courage until they were
financially stable and had enough experience to jump into it. They were more
calculative and ventured into business based on their experience and in the
related field.
Family background plays an important role in the risk taking ability and
motivation of any entrepreneur. Study shows that 48.6 % of the
entrepreneurs came from service class family where their parents were in
service, 45.9 % of the entrepreneurs were with business family back ground
and only 5.4 % from farming background. This shows that entrepreneurs
from upper strata of society got attracted towards Independent MRO and Air
Charter businesses and those who were living in metros or had traveled
abroad and had wider exposure.
Personal background gives an indication about the past experience of the
entrepreneurs. It is seen that 62.2 % of the entrepreneurs came with job
experience and only 37.8 % were the ones who directly entered into the
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business without any past job experience. It was observed that people with
past job experience had concrete idea of what they were doing. They
followed their past experiences and hence were not too innovative or
adventurous.
Source of funding was studied in detail and hypothesis was framed on the
effect of source of funding in the motivation, capacity to handle entry barriers
and sustenance of entrepreneurs. Data shows that 59.5 % of the
entrepreneurs were self funded or had a financial partner or had a venture
capitalist supporting them. 29.7 % of the entrepreneurs were family funded
and only 10.8 % of the entrepreneurs entered into business with funding from
bank or share market. Such entrepreneurs were the ones who already had
some other business and diversified into aviation with their previous
successful credentials. Facts found during this study reveals that banks have
not played an important role in funding entrepreneurs in MRO and Air
Charter businesses. In further discussion of this research the impact of
source of funding on motivation and other factors has been studied in detail.
ROI (return on investment) is one of the parameters to measure the success
of any industry. Interview of entrepreneurs in MRO and Air charter business
reveals that only 24.3 % of the entrepreneurs were satisfied with the ROI,
while 37.8% said that it was average and the rest 37.8% were unsatisfied
with the ROI. This shows that the returns on investment in both these
businesses are not lucrative, which could be one of the factors for not
attracting many entrepreneurs into this industry. Contrary to the general
118
perception about aviation related business, facts reveal that returns are not
very high i.e it is not a very high margin business due to the continuous
investment in technology up-gradation, training, tools etc and the high
operating costs.
Motivational factors of entrepreneurs
Table 6.2 : Significance of motivational factors in evolution of entrepreneurs
Variables - Motivational factors Frequency Percent
Aviation as a hobby of any family member or friend
No 28 75.7
Yes 9 24.3
Own Interest in Aviation
No 6 16.2
Yes 31 83.8
Adventurous / Craving to take risk
No 7 18.9
Yes 30 81.1
Desire to take challenges in life
No 5 13.5
Yes 32 86.5
Passion towards Aircrafts / Flying
119
No 14 37.8
Yes 23 62.2
Being your own master
No 4 10.8
Yes 33 89.2
Follow your dream
No 11 29.7
Yes 26 70.3
Ambitious / Desire to make it big in life
No 11 29.7
Yes 26 70.3
Money
No 13 35.1
Yes 24 64.9
Glamour
No 28 75.7
Yes 9 24.3
Motivation is one of the main factors in the evolution and sustenance of
entrepreneurs. For the purpose of this study 10 motivational factors were
identified and questions related to these 10 motivational factors were
included in the questionnaire. The above table shows a summery of all the
10 motivational factors and their significance as single variant. A correlation
120
of motivation to the other factors is studied during this research and it was
observed that highly motivated entrepreneurs have better sustenance
capacity and greater chances of success. A study of individual motivational
factors gives exact idea of which factors have highest significance and
correlation to the other factors.
Aviation as a hobby of any family member or friend
Table 6.3 : Correlation analysis : Aviation as a hobby of any family member
or friend * Personal back ground
Personal Background Total
1-Job to
Ent 2-Direct
Ent.
Aviation as a hobby of any family member or friend
No Count
19 9 28
% within Personal Background 82.6% 64.3% 75.7%
Yes Count 4 5 9
% within Personal Background 17.4% 35.7% 24.3%
Total Count 23 14 37
% within Personal Background 100.0% 100.0% 100.0
%
The above Correlation analysis shows that not many entrepreneurs were
motivated by external factor like Aviation as a hobby of any family member or
friend. When compared to the personal background of entrepreneurs who
121
entered into business after being into job, 82.6 % of the respondents within
the group said that they were not motivated by any external factor like family
members or friends, while 64.3 % of the respondents within the group said
they were also not motivated by any external factor. Hence external
motivational factor like Aviation as a hobby of any family member or friend
had less correlation and did not play any role in the evolution of
entrepreneurs in Independent Aviation maintenance and Air Charter
business. This probably indicates that external motivational factor did not had
much impact on entrepreneurs. Further study will help to establish this fact.
Table 6.4 : Chi-Square test for Aviation as a hobby of any family member * Personal Background
Chi-square test does not show any significance as the value is much above
0.05. Thus it could be established that entrepreneurs were not motivated by
external factors like influence of family members or friends due to their hobby
of aviation.
Own Interest in Aviation
Table 6.5 : Correlation analysis : Own interest in Aviation * Personal back ground
Value df Asymp. Sig. (2-
sided)
Pearson Chi-Square 1.587(b) 1 .208
Personal Background Total
1-Job to
Ent 2-Direct
Ent.
122
The above correlation table shows that most of the entrepreneurs were self
motivated by their own interest in aviation. Self motivation being an internal
factor acted strong in forcing an entrepreneur to enter into Independent
aviation maintenance and Air charter business. Entrepreneurs with both type
of personal back grounds, those who entered after being into job 87% and
those who entered directly 78.6% show strong significance to internal
motivation factor or own interest in Aviation. This indicates that internal
motivation factors acted as major factor with such high level of correlation
83.8% in encouraging the entrepreneurs to venture into business.
Table 6.6 : Chi-Square test for Own interest in Aviation * Personal
Background
Your own Interest in Aviation
0-No Count 3 3 6
% within Personal Background
13.0% 21.4% 16.2%
1-Yes Count 20 11 31
% within Personal Background
87.0% 78.6% 83.8%
Total Count 23 14 37
% within Personal Background
100.0% 100.0% 100.0%
123
Value Df Asymp. Sig. (2-sided)
Pearson Chi-Square .450(b) 1 .502
Though the Chi-Square test does not show significant between own interest
in aviation to the personal back ground of the entrepreneur, it can be seen
that entrepreneurs were internally motivated by their interest in aviation.
Adventurous / Craving to take risk
Table 6.7 : Correlation analysis : Adventurous / Craving to take risk * Personal back ground
Personal Background Total
1-Job to
Ent 2-Direct
Ent.
Adventurous / Craving to take risk
0-No Count 7 0 7
% within Personal Background 30.4% .0% 18.9%
1-Yes Count 16 14 30
% within Personal Background 69.6% 100.0% 81.1%
Total Count 23 14 37
% within Personal Background 100.0% 100.0% 100.0
%
Being adventurous is one of the main characteristics of an entrepreneur.
Through this research an attempt has been made to study the significance of
adventurous behavior of the entrepreneurs in their evolution in MRO and Air
Charter business. The above Correlation analysis shows that 69.6% of the
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entrepreneurs who entered into business after being into job and 100 %
entrepreneurs who entered into business directly said that adventure was
one of the major motivating factor and they had craving for taking risk in life.
Here risk does not mean blind risk, but they all said that they like to take
calculated risks. The total correlation was as high as 81 % which clearly
shows that this was one of the major motivating factor for entrepreneurs with
both types of personal background. More over the direct entrepreneurs show
correlation of 100%, which means all of them were highly adventurous and
had a craving for taking calculated risk in business. Such entrepreneurs were
found to be more successful.
Table 6.8 : Chi-Square test for Adventurous / Craving to take risk * Personal Background
Value Df Asymp. Sig. (2-sided)
Pearson Chi-Square 5.255(b) 1 .022
Chi-square results shows significance when these two parameters were put
to test to measure against each other. Chi-square shows significance of
0.022 which is much below 0.05 and hence it is relevant.
Desire to take challenges in life
Desire to take challenges in life is a willingness to take large risks and face
the challenges. Not all men and women have such a behavioral pattern. It is
one of the main characteristics of entrepreneurs, which differentiates them
from others. Through this research an attempt has been made to test the
significance of this characteristic (desire to take challenges) against the facts.
125
Table 6.9 : Correlation analysis : Desire to take challenges in life * Personal back ground
Personal Background Total
1-Job to
Ent 2-Direct
Ent.
Desire to take challenges in life
0-No Count
3 2 5
% within Personal Background
13.0% 14.3% 13.5%
1-Yes
Count 20 12 32
% within Personal Background
87.0% 85.7% 86.5%
Total Count 23 14 37
% within Personal Background
100.0% 100.0% 100.0%
In the Correlation analysis it is found that desire to take challenge shows a
strong correlation irrespective of the personal background of the
entrepreneur. The combined correlation of this factor compared against the
personal back ground is 86.5%, where in the entrepreneurs who came from
job show 87 % correlation and those who became entrepreneur directly show
85.7% correlation.
Though the chi-square does not indicate significance within these two
126
factors, it can be seen that entrepreneurs with both types of personal back
ground had strong desire to take challenges in life.
Similar study has been done for other factors against personal back ground
of the entrepreneurs and it reveals that internal motivational factors had
higher correlation and were significant in comparison to the external factors.
Further comparison of factors against family back ground is described below
for understanding purpose.
Passion towards Aircrafts / Flying
Passion is something which makes even the impossible things happen.
Aviation being a hi-flying industry attracts many entrepreneurs who had
passion for aircrafts or flying. Flying in the sky has always been a dream of
human beings and with the invent of aircraft, it gave wings to this dream.
Some people got into the aviation business because they carried passion
towards the aircrafts.
Table 6.10 : Correlation analysis : Passion towards Aircrafts / Flying * Family background
Family Background Total
1-
Service
2-Business/F
arming
Passion towards Aircrafts / Flying
0-No Count
7 7 14
% within Family Background
38.9% 36.8% 37.8%
% within Family Background
38.9% 36.8% 37.8%
127
Family background plays an important role in nurturing passions, moreover
to keep a passion of aircrafts or flying could be very expensive and not
affordable to all. Family back ground also affects the motivation level of an
entrepreneur to a certain extent, hence it becomes important to study the
motivational factors in the backdrop of family back ground. Here family
background relates to whether father was in service or business. For the
shake of convenience farming has been clubbed with business as there were
not many counts for it.
The comparative analysis shows that entrepreneurs had effect of their family
background on their motivation of passion for aircrafts / flying. Respondents
with business family background showed correlation of 63.2% over
entrepreneurs with service family background who showed 61.1%. Hence it
is established that family background has a role in the passion of an
entrepreneur, which in-turn becomes the motivation for him to take large
calculated risks.
Table 6.11 : Chi-Square test for Passion towards Aircrafts / Flying * Family background.
1-Yes Count 11 12 23
% within Family Background
61.1% 63.2% 62.2%
Total Count 18 19 37
% within Family Background
100.0% 100.0% 100.0%
128
Value Df Asymp. Sig. (2-sided)
Pearson Chi-Square .016(b) 1 .898
Although the chi-square does not show significance, it is observed that family
background may have positive impact on the passion of entrepreneurs.
Being your own master
Table 6.12 : Correlation analysis : Being your own master * Family background Family Background Total
1-
Service
2-Business/F
arming
Being your own master
0-No Count 3 1 4
% within Family Background
16.7% 5.3% 10.8%
1-Yes Count 15 18 33
% within Family Background
83.3% 94.7% 89.2%
Total Count 18 19 37
% within Family Background
100.0% 100.0% 100.0%
129
Table 6.13 : Correlation analysis : Being your own master * Personal background
The above two tables show the Correlation analysis of motivational factor
‘being your own master” to the family background as well as the personal
background of the entrepreneurs. In both the tables the motivational factor
being your own master shows strong correlation when compared to the
family background as well as personal background of the entrepreneurs. In
the first table, entrepreneurs from service family background showed 83.3%
correlation while entrepreneurs from business family background showed
94.7% correlation and combined was 89%. Similarly in the second table,
entrepreneurs who entered into business after doing job showed 82.6%
Personal Background Total
1-Job to Ent
2-Direct Ent.
Being your own master
0-No Count 4 0 4
% within Personal Background
17.4% .0% 10.8%
1-Yes Count 19 14 33
% within Personal Background
82.6% 100.0% 89.2%
Total Count 23 14 37
% within Personal Background
100.0% 100.0% 100.0%
130
correlation and those who entered directly into business showed 100 %
correlation and combined was 89.2%. These high values of correlation show
that entrepreneurs had will to be their own master in all cases and this acted
as a major motivational factor.
Follow your dream
Follow your dream means find ways to make your dream come true. Dream
is not something that you see while sleeping, but dream is something which
doesn’t let you sleep. Most entrepreneurs have been found to carry big
dreams, which they bring into reality by their hard work and dedication. This
could be one of the major motivating factor for entrepreneurs who entered
into Independent aviation MRO and Air Charter business. The following
tables measure its correlation to the family background and personal
background of the entrepreneurs.
Table 6.14 : Correlation analysis : Follow your dream * Family background
1-
Service
2-Business/F
arming
Follow your dream
0-No Count 7 4 11
% within Family Background
38.9% 21.1% 29.7%
1-Yes Count 11 15 26
% within Family Backgrou
61.1% 78.9% 70.3%
131
nd
Total Count 18 19 37
% within Family Background
100.0% 100.0% 100.0%
Table 6.15 : Correlation analysis : Follow your dream * Personal background
The above 2 tables compare the correlation of “follow your dream” as a
motivational factor to family and personal background of entrepreneurs. In
the first table entrepreneurs with service family background showed 61.1 %
Personal Background Total
1-Job to
Ent 2-Direct
Ent.
Follow your dream
0-No Count 8 3 11
% within Personal Background
34.8% 21.4% 29.7%
1-Yes Count 15 11 26
% within Personal Background
65.2% 78.6% 70.3%
Total Count 23 14 37
% within Personal Background
100.0% 100.0% 100.0%
132
correlation, while those with business family background showed 78.9%
correlation and a combine of 70.3%. In the second table, entrepreneurs who
entered into business after being into job showed 65.2% correlation, while
those who entered into business directly showed 78.6% correlation and a
combine of 70% correlation. These higher values of correlations indicate that
irrespective of the family and personal background of entrepreneurs “follow
your dream” was a major motivating factor for them to enter into Independent
aviation MRO and Air charter business.
Money
It is a general perception that money is the biggest motivator for most people
to do things in life. Through the statistical analysis, an attempt has been
made to study the impact of money as a motivational factor for entrepreneurs
to venture into MRO and Air Charter business.
Table 6.16 : Correlation analysis : Money * Family background
Family Background Total
1-Service
2-Business/Farming
Money 0-No Count 5 8 13
% within Family Background
27.8% 42.1% 35.1%
1-Yes Count 13 11 24
% within Family Background
72.2% 57.9% 64.9%
Total Count 18 19 37
133
% within Family Background
100.0% 100.0% 100.0%
Table 6.17 : Correlation analysis : Money * Personal background
Personal
Background Total
1-Job to
Ent 2-Direct
Ent.
Money 0-No Count 9 4 13
% within Personal Background
39.1% 28.6% 35.1%
1-Yes Count 14 10 24
% within Personal Background
60.9% 71.4% 64.9%
Total Count 23 14 37
% within Personal Background
100.0% 100.0% 100.0%
The tables above reveal interesting facts about money as a motivational
factors for entrepreneurs to enter into business. Money is an external
motivation factor. In the first table, entrepreneurs with service family
background showed 72.2% correlation when compared to the entrepreneurs
with business family background who showed 57.9% correlation. This shows
that entrepreneurs from service family background were more attracted
towards money in comparison to the entrepreneurs who came from business
134
family background. In the second table, entrepreneurs who entered into
business after being into job showed a correlation of 60.9% over
entrepreneurs who directly entered into business, showing correlation of
71.4%. This shows that entrepreneurs who directly entered into business had
eye on money. Overall money remained as one of the motivating factors to
the entrepreneurs irrespective of their personal and family backgrounds.
Glamour
It is a fact that aviation has some component of glamour attached to it and
this attracts many entrepreneurs towards it. However glamour is an external
motivating factor and its significance to entrepreneur in his overall business
sense needs to be established.
Table 6.18 : Correlation analysis : Glamour * Family background
Family Background Total
1-
Service
2-Business/F
arming
Glamour 0-No Count 12 16 28
% within Family Background
66.7% 84.2% 75.7%
1-Yes Count 6 3 9
% within Family Background
33.3% 15.8% 24.3%
Total Count 18 19 37
% within Family Background
100.0% 100.0% 100.0%
135
Table 6.19 : Correlation analysis : Glamour * Personal background
Personal Background Total
1-Job to
Ent 2-Direct
Ent.
Glamour 0-No Count 18 10 28
% within Personal Background
78.3% 71.4% 75.7%
1-Yes Count 5 4 9
% within Personal Background
21.7% 28.6% 24.3%
Total Count 23 14 37
% within Personal Background
100.0% 100.0% 100.0%
The above two tables reveal that, Glamour as a motivational factor did not
show high correlation to the entrepreneurs. In the first table only 33.3% of the
entrepreneurs with service family background and 15.8 from business family
background, thus a total of 24.3% of the entrepreneurs, felt that Glamour was
a motivational factor. Similarly in the second table only 21.7% who came
from job background and 28.6% who entered directly into business, showed
correlation towards Glamour as a motivational factor. Thus not much
correlation, and it could be established that Glamour did not act as a
motivation for most of the entrepreneurs surveyed during this research.
136
Entry barriers faced by entrepreneurs
Table 6.20 : Entry barriers in the evolution of entrepreneurs
Variables - Entry barriers Frequency Percent
Difficulty in getting Permissions / Approvals
No 13 35.1
Yes 24 64.9
Infrastructural constraints
No 22 59.5
Yes 15 40.5
Capital Intensive
No 23 62.2
Yes 14 37.8
Control of OEMs
No 22 59.5
Yes 15 40.5
Unavailability of data
No 16 43.2
Yes 21 56.8
Entry barriers are the hurdles faced by the entrepreneurs when getting into
the MRO and Air charter industries and these are the main factors affecting
the evolution of entrepreneurs. For the purpose of this study 5 entry barriers
137
were identified and questions related to these 5 entry barriers included in the
questionnaire. The above table shows a summery of all the 5 entry barriers
and their significance as single variant. A correlation of these entry barriers
to the other factors is studied during this research and it was observed that
highly motivated entrepreneurs had better capacity to overcome the entry
barriers and those could handle the entry barriers successfully had better
chances of sustenance. A study of each entry barrier gives exact idea of the
factors which have highest significance and correlation to the other factors.
Difficulty in getting Permissions / Approvals
Aviation being a highly regulated industry due to the sensitive nature of its
operation, has difficult norms for getting permissions / approvals. These
difficult norms and lengthy procedures act as barriers to the entrepreneurs
who want to enter into this field. Both Independent MRO and Air Charter
business face these regulatory barriers, however in case of Air charter they
also have to deal with operational regulations while MRO only has to deal
with approval and certification.
Table 6.21 : Correlation analysis : Difficulty in getting Permissions / Approvals * Motivation
Motivation category Total
Low (<4) Moderate
(4-6) High (>6)
0-No Count 0 0 13 13 Difficulty in getting Permissions / Approvals
% within Motivation category
.0% .0% 68.4% 35.1%
138
1-Yes
Count 4 14 6 24
% within
Motivation category
100.0% 100.0% 31.6% 64.9%
The above Correlation analysis shows the effect of motivation factor on entry
barrier “Difficulty in getting Permissions”. 68.4 % of the entrepreneurs who
were highly motivated did not face difficulty in getting permission while
entrepreneurs with moderate and low over all motivation level faced difficulty
in getting permissions. Here permission means license and getting
government approvals to start MRO and Air Charter business.
Table 6.22 : Correlation analysis : Difficulty in getting Permissions / Approvals * Evolution Evolutionary category Total
Low (1) Moderate (2)
High (3-4)
0-No Count 0 4 9 13
% within Difficulty in getting Permissions / Approvals
.0% 30.8% 69.2% 100.0%
1-Yes
Count 9 7 8 24
Difficulty in getting Permissions / Approvals
% within Difficulty
in getting Permissions / Approvals
37.5% 29.2% 33.3% 100.0%
The Correlation analysis of entry barrier “Difficulty in getting permission” over
evolution shows that those who faced difficulty in getting permissions did not
139
necessarily face evolutionary problem. Hence this entry barrier does not
show correlation to evolution. Figures show that 69.2 % of the entrepreneurs
did not face high evolutionary problem and 30.8% of the entrepreneurs did
not face moderate evolutionary problems over the entry barrier “Difficulty in
getting permission”. This particular Correlation does not show relevance of
barrier over evolution.
Infrastructural constraints
Table 6.23 : Correlation analysis : Infrastructural constraints * Motivation
Motivation category Total
Low (<4)
Moderate (4-6)
High (>6)
Infrastructural constraints
0-No Count 1 5 16 22
% within Motivation category
25.0% 35.7% 84.2% 59.5%
1-Yes Count 3 9 3 15
% within Motivation category
75.0% 64.3% 15.8% 40.5%
Total Count 4 14 19 37
% within Motivation category
100.0% 100.0% 100.0% 100.0%
The above Correlation analysis of the barrier “Infrastructural constraint” over
motivational level of the entrepreneur shows that those with high level of
140
motivation did not face much of infrastructural constraint. Here 84.2% of the
entrepreneurs with high level of motivation did not face infrastructural
constraint as a barrier. In over all percentage, 59.5% of the entrepreneurs
with average motivation level did not feel that infrastructural constraint was a
barrier.
Table 6.24 : Correlation analysis : Infrastructural constraints * Evolution
Evolutionary category Total
Low (1) Moderat
e (2) High (3-4)
Infrastructural constraints
0-No Count 4 4 14 22
% within Infrastructural constraints
18.2% 18.2% 63.6% 100.0%
1-Yes Count 5 7 3 15
% within Infrastructural constraints
33.3% 46.7% 20.0% 100.0%
Total Count 9 11 17 37
% within Infrastructural constraints
24.3% 29.7% 45.9% 100.0%
Here 45.9% of the entrepreneurs showed high evolutionary factor. Within the
category comparison, shows that 63.6% of the entrepreneurs who evolved
better did not face “Infrastructural constraint” as a barrier. In other words only
20% of the entrepreneurs who faced barrier of infrastructural constraint as a
barrier had high evolutionary problems.
141
Capital Intensive
Table 6.25 : Correlation analysis : Capital intensive * Motivation
Motivation category Total
Low (<4) Moderate
(4-6) High (>6)
0-No Count 0 5 18 23
% within Motivation category
.0% 35.7% 94.7% 62.2%
1-Yes Count 4 9 1 14
Capital Intensive
% within
Motivation category
100.0% 64.3% 5.3% 37.8%
Total Count 4 14 19 37
% within Motivation category
100.0% 100.0% 100.0% 100.0%
The above Correlation analysis does not show correlation between Capital
intensive nature of the MRO and Air Charter business as a barrier against
motivation. Entrepreneurs upto 94.7% who were highly motivated said that
Capital was not a barrier. This is contrary to the normal belief that Capital
intensive nature of the aviation related business acts as a barrier to the
entrepreneurs. In fact this correlation establishes that entrepreneurs with
high level of motivation were able to over come this barrier easily. A further
study shows that 100% of the entrepreneurs with low level of motivation
faced capital as a strong barrier.
Table 6.26 : Correlation analysis : Capital intensive * Evolution
142
Evolutionary category Total
Low (1) Moderate (2)
High (3-4)
Capital Intensive
0-No Count 5 4 14 23
% within Capital Intensive
21.7% 17.4% 60.9% 100.0%
1-Yes Count 4 7 3 14
% within Capital Intensive
28.6% 50.0% 21.4% 100.0%
Total Count 9 11 17 37
% within Capital Intensive
24.3% 29.7% 45.9% 100.0%
Evolution is an after effect of the ability of entrepreneurs to overcome the
barriers. Table 6.3.7 above is a Correlation comparison of Capital intensive
barrier against the evolutionary level of the entrepreneur in these two sectors
of business. The analysis here shows that 60.9% of the entrepreneurs in
MRO and Air charter business who evolved better did not face Capital as an
entry barrier. This goes to say that evolution did not had any significant effect
on capital as an entry barrier. Only 21.4% of the entrepreneurs faced
evolutionary problems due to capital intensive nature of the industry.
Control of OEMs
Table 6.27 : Correlation analysis : Control of OEM * Motivation
Motivation category Total
143
Low (<4)
Moderate (4-6)
High (>6)
Control of OEMs
0-No Count 1 8 13 22
% within Motivation category
25.0% 57.1% 68.4% 59.5%
1-Yes Count 3 6 6 15
% within Motivation category
75.0% 42.9% 31.6% 40.5%
Total Count 4 14 19 37
% within Motivation category
100.0% 100.0% 100.0
% 100.0%
The analysis here does not show any correlation between Control of OEMs
as a barrier against the motivation level of the entrepreneur. 68.4% of the
entrepreneurs who were highly motivated did not find control of OEM as a
barrier at the same time 75% of the entrepreneurs with low level of
motivation found control of OEMs as a strong barrier.
Table 6.28 : Chi-Square tests : Control of OEM * Motivation
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 2.635(a) 2 .268
Chi-square test conducted on these factors did not show significance as the
value of Chi-square is 0.268 which is much above 0.05 significance level.
144
Table 6.29 : Correlation analysis : Control of OEM * Evolution
Evolutionary category Total
Low (1) Moderate
(2) High (3-4)
0-No Count 2 9 11 22
% within Control of OEMs
9.1% 40.9% 50.0% 100.0%
1-Yes Count 7 2 6 15
Control of OEMs
% within
Control of OEMs
46.7% 13.3% 40.0% 100.0%
Total Count 9 11 17 37
% within Control of OEMs
24.3% 29.7% 45.9% 100.0%
The above Correlation analysis does not give a clear indication for impact of
Control of OEMs as a barrier over evolution of entrepreneurs. 50% of the
entrepreneurs who evolved better did not face control of OEM as a barrier,
however 50% of the entrepreneurs who evolved moderate of low faced
Control of OEMs as a barrier.
Table 6.30 : Chi-Square tests : Control of OEM * Evolution
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 7.652(a) 2 .022
The chi-square shows significance of Control of OEMs as a barrier over
145
evolution of entrepreneurs, result being 0.022 which is lower that 0.05.
Unavailability of data
Since there is not much research done in this area in the past, entrepreneurs
may have difficulty getting related information and data about the industry.
This would not give them any pattern or trend of entrepreneurial success in
MRO and Air Charter industries for reference. The below analysis may
highlight some of the factors effecting entrepreneurs in the absence of
industry related information.
Table 6.31 : Correlation analysis : Unavailability of data * Evolution
Evolutionary category Total
Low (1) Moderat
e (2) High (3-
4)
Unavailibility of data
0-No Count 3 5 8 16
% within Unavailibility of data
18.8% 31.3% 50.0% 100.0%
1-Yes Count 6 6 9 21
% within Unavailibility of data
28.6% 28.6% 42.9% 100.0%
Total Count 9 11 17 37
% within Unavailibility of data
24.3% 29.7% 45.9% 100.0%
Unavailability of industry related data does not show correlation between
146
barrier over evolution of entrepreneurs. Although 50% of the entrepreneurs
who evolved successfully found unavailability of information not a barrier, the
other 50% who had difficulty in evolution found it as an entry barrier.
Table 6.32 : Chi-Square tests : Unavailability of data * Evolution
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square .483(a) 2 .785
The chi-square test results do not show any significance in this case while
comparing the evolution of entrepreneurs over unavailability of data as a
barrier.
Evolutionary factors
Table 6.33 : Factors significant to the evolution of entrepreneurs
Variables - Evolutionary factors Frequency Percent
Industry Need based
No 22 59.5
Yes 15 40.5
Opportunity based
No 5 13.5
Yes 32 86.5
147
Idea based
No 20 54.1
Yes 17 45.9
Foresight / Vision
No 16 43.2
Yes 21 56.8
There are several factors, which affect the evolution of entrepreneurs in any
industry. As this research has its focus on studying the evolution of
entrepreneurs in Independent MRO and Air Charter business to find out the
factors of sustenance and growth, it becomes very important that all the
factors effecting the evolution of entrepreneurs are studied in detail and
inferences drawn based on analysis of data. Evolution is the process of
development or growth of individual entrepreneurs in the industry and factors
which affected their development i.e helped them evolve or were the hurdles
in evolution.
For the purpose of this study 4 evolutionary factors - Industry need based,
Opportunity based, Innovative idea based and Foresight / Vision based, were
identified and questions related to these 4 evolutionary factors included in the
questionnaire. The above table shows a summery of all the 4 evolutionary
factors and their significance as single variant. A correlation of these
evolutionary factors to the other factors is studied during this research and it
was observed that highly motivated entrepreneurs evolved better than the
entrepreneurs with lower level of motivation. A study of each evolutionary
148
factor gives exact idea of the factors which have high significance and
correlation to the other factors.
Industry Need based
Table 6.34 : Correlation analysis : Industry need based * Motivation
Motivation category Total
Low (<4) Moderate (4-6)
High (>6)
0-No Count 2 9 11 22
% within Motivation category
50.0% 64.3% 57.9% 59.5%
Industry Need based
1-Yes Count 2 5 8 15
% within Motivation category
50.0% 35.7% 42.1% 40.5%
Total Count 4 14 19 37
% within Motivation category
100.0% 100.0% 100.0% 100.0%
It is seen that over all 59.5% of the entrepreneurs who were highly motivated
felt that their evolution was not industry need based. Which means, there
was no need by the industry but the entrepreneurs still evolved. It is hard to
establish such a fact quantitatively with such a study, however the data
analysis shows that Industry need was not significant for the entrepreneurs
who were motivated. 50% of the entrepreneurs with low level of motivation
felt that their evolution was industry need based.
149
Table 6.35 : Chi-Square tests : Industry need based * Motivation
Value Df Asymp. Sig. (2-sided)
Pearson Chi-Square .303 2 .859
Further the chi-square tests also do not show any significance of motivation
over industry need based evolution of entrepreneurs. The Chi-square results
show negative significance due to 0.859 which is higher than 0.05 required to
measure the significance.
Table 6.36 : Correlation analysis : Industry need based * Challenges faced in sustenance.
Challenge category Total
Low
(1-4) Moderate (5-6) High (7)
0-No Count 15 5 2 22
% within Industry Need based
68.2% 22.7% 9.1% 100.0%
1-Yes Count 10 4 1 15
Industry Need based
% within Industry Need based
66.7% 26.7% 6.7% 100.0%
Total Count 25 9 3 37
% within Industry Need based
67.6% 24.3% 8.1% 100.0%
The above table shows that there was not much correlation between the
150
challenges faced by entrepreneurs to the Industry need based evolutionary
factor. Only 8.1% of the entrepreneurs who faced high challenges in
sustenance felt that their evolution was Industry need based, however it
shows a fact that 66.7% of the entrepreneurs who faced less challenges in
sustenance said that their evolution was industry need based as against
68.2% who said no. Thus it could be concluded that the evolutionary factor
“Industry need based” has less correlation with the challenges faced by the
entrepreneurs in sustenance.
Table 6.37 : Chi-Square tests : Industry need based * Challenges faced in sustenance
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square .125(a) 2 .940
Chi-square test does not show any significance.
Opportunity based
Table 6.38 : Correlation analysis : Opportunity based * Motivation
Motivation category Total
Low (<4) Moderate (4-6)
High (>6)
Opportunity based
0-No Count 2 2 1 5
% within Motivation category
50.0% 14.3% 5.3% 13.5%
151
1-Yes Count 2 12 18 32
% within Motivation category
50.0% 85.7% 94.7% 86.5%
Total Count 4 14 19 37
% within Motivation category
100.0% 100.0% 100.0% 100.0%
The data compiled in above table shows high level of correlation between
motivational factors and opportunity based evolution of entrepreneurs. 94.7%
of the highly motivated entrepreneurs said that their evolution was
opportunity based, which means that they saw an opportunity of growth in
MRO and Air Charter and hence ventured into it. Their evolution was based
on their grabbing the opportunity. This emphasizes the fact that
entrepreneurs find their own path in every opportunity that they see. It further
establishes a fact that motivation plays a very important role in making of an
entrepreneur, his evolution and further sustenance.
Table 6.39 : Correlation analysis : Opportunity based * Challenges faced in sustenance
Challenge category Total
Low (1-
4) Moderate (5-6)
High (7)
Opportunity based
0-No Count 3 2 0 5
% within Opportunity based
60.0% 40.0% .0% 100.0%
152
1-Yes Count 22 7 3 32
% within Opportunity based
68.8% 21.9% 9.4% 100.0%
Total Count 25 9 3 37
% within Opportunity based
67.6% 24.3% 8.1% 100.0%
The above table shows that opportunity based entrepreneurs did not face too
many challenges. It also shows that non of the opportunity based
entrepreneurs in MRO and Air Charter business faced high challenges in
sustenance and only 9.4% of them faced high challenges. 68.8% of the
opportunity based entrepreneurs, said that they faced low challenges.
Hence, it could be said that opportunity based entrepreneurs faced very few
challenges in sustenance.
Table 6.40 : Chi-Square tests : Opportunity based * Challenges faced in sustenance
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 1.102(a) 2 .576
Pearson Chi-square tests do not show any significance.
Idea based
Table 6.41 : Correlation analysis : Idea based * Motivation
153
Motivation category Total
Low (<4)
Moderate (4-6)
High (>6)
Idea based
0-No Count 2 10 8 20
% within Motivation category
50.0% 71.4% 42.1% 54.1%
1-Yes Count 2 4 11 17
% within Motivation category
50.0% 28.6% 57.9% 45.9%
Total Count 4 14 19 37
% within Motivation category
100.0% 100.0% 100.0
% 100.0%
The data above shows that 57.9 % of the entrepreneurs who were highly
motivated, evolved on the basis of their ideas, i.e their evolution was idea
based. It is also observed that 71.4% of the entrepreneurs with moderate
level of motivation did not evolve on the basis of their ideas. Thus is can be
inferred that higher the motivation level, better the idea based evolution. Also
it can be seen that those who evolved on the basis of their ideas, were highly
motivated.
Chi-square tests do not show any significance in this case.
Table 6.42 : Correlation analysis : Idea based * Challenges faced in sustenance
Challenge category Total
154
Low
(1-4) Moderate (5-6) High (7)
Idea based
0-No Count 12 5 3 20
% within Idea based 60.0% 25.0% 15.0% 100.0%
1-Yes Count 13 4 0 17
% within Idea based 76.5% 23.5% .0% 100.0%
Total Count 25 9 3 37
% within Idea based 67.6% 24.3% 8.1% 100.0%
Entrepreneurs whose evolution was idea based, faced less challenges.
Above table shows that 76.5% of the entrepreneurs whose evolution was
idea based faced low challenges in sustenance. Non of the idea based
entrepreneurs faced high challenges in sustenance.
Foresight / Vision
Table 6.43 : Correlation analysis : Foresight / Vision * Motivation
Motivation category Total
Low (<4) Moderate (4-6)
High (>6)
0-No Count 3 10 3 16
% within Motivation category
75.0% 71.4% 15.8% 43.2%
Foresight / Vision
1-Yes Count 1 4 16 21
155
% within Motivation category
25.0% 28.6% 84.2% 56.8%
Total Count 4 14 19 37
% within Motivation category
100.0% 100.0% 100.0% 100.0%
It is seen through the Correlation analysis above that, entrepreneurs with
high level of motivation had high level of foresight and vision. 84.2% of the
entrepreneurs who had high motivation, evolved on the basis of their
foresight and vision towards business. While 75% of the entrepreneurs who
had low motivation did not evolve on the basis of their foresight and vision. It
could be established that entrepreneurs with high motivation also had clear
vision.
Table 6.44 : Chi-Square tests : Foresight / Vision * Motivation
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square
12.010(a) 2 .002
The Pearson Chi-Square tests show distinct significance between the two
factors motivation and vision of an entrepreneur.
Table 6.45 : Correlation analysis : Foresight / Vision * Challenges faced in sustenance
Challenge category Total
Low (1-
4) Moderate (5-
6)
High (7)
156
Those who had foresight and clear vision did not face challenges as can be
seen in the table above. Non of the entrepreneurs who had vision and
foresight faced high challenges. Similarly 81% of the entrepreneurs with
foresight and vision faced low challenges.
Challenges faced in Sustenance
Table 6.46 : Significance of Challenges faced in sustenance
Variables – Challenges faced in Sustenance Frequency Percent
Regulatory controls
No 18 48.6
Yes 19 51.4
High cost of operation / Fixed cost
Foresight / Vision
0-No Count 8 5 3 16
% within Foresight / Vision
50.0% 31.3% 18.8% 100.0%
1-Yes Count 17 4 0 21
% within Foresight / Vision
81.0% 19.0% .0% 100.0%
Total Count 25 9 3 37
% within Foresight / Vision
67.6% 24.3% 8.1% 100.0%
157
No 18 48.6
Yes 19 51.4
Availability of Spares
No 19 51.4
Yes 18 48.6
Difficulty retaining Skilled Man power
No 16 43.2
Yes 21 56.8
Difficulty getting support from OEM
No 20 54.1
Yes 17 45.9
Affected by Market fluctuations
No 19 51.4
Yes 18 48.6
Problem Managing Cash flow
No 23 62.2
Yes 14 37.8
The purpose of this research is to study the evolution and sustenance of
entrepreneurs in Independent MRO and Air charter business. Having tested
the significance of evolutionary factors and established facts, challenges
158
faced in sustenance are discussed in this section. Different variables of
challenges faced are compared against factors that affect the sustenance of
entrepreneurs. Challenges are of 3 types 1) Government 2) Industry and 3)
Economic. The factors of challenges are Regulatory controls, High cost of
operation or salaries, Problem in sourcing spare parts, Difficulty to find and
retain skilled manpower, Difficulty in getting support from OEMs, Effect of
market fluctuations (seasonal, sentimental, socio-economical) and Problem
in managing the funds flow. These variables are studied against evolution
and rewards, which are the immediate pre and post functions affecting the
sustenance of entrepreneurs in MRO and Air Charter business.
Regulatory controls
Table 6.47 : Correlation analysis : Regulatory controls * Motivation
Motivation category Total
Low (<4)
Moderate (4-
6) High (>6)
0-No Count 0 2 16 18
% within Regulatory controles
.0% 11.1% 88.9% 100.0%
1-Yes Count 4 12 3 19
Regulatory controls
% within Regulatory controles
21.1% 63.2% 15.8% 100.0%
Total Count 4 14 19 37
% within Regulatory
10.8% 37.8% 51.4% 100.0%
159
controles
Entrepreneurs with high level of motivation did not face challenge of
regulatory controls. Data shows that 88.9% of the entrepreneurs who were
highly motivated either did not feel that regulatory control was a challenge or
were able to overcome the challenge with ease. Only 15.8% of the highly
motivated entrepreneurs felt that regulatory control was a challenge in their
sustenance. This shows that motivation has high significance in sustenance
of entrepreneurs in MRO and Air charter business. As such the category of
motivation consists mainly of internal motivational factors hence it could be
derived that overcoming the challenges depends on the internal drive of an
entrepreneur.
Table 6.48 : Chi-Square tests : Regulatory controls * Motivation
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square
20.025(a) 2 .000
For this distribution, the chi-square test shows high significance.
Table 6.49 : Correlation analysis : Regulatory controls * Rewards
Rewards category Total
Low (1) Moderate
(2) High (3-4)
Regulatory controles
0-No Count 0 3 15 18
160
% within Regulatory controles
.0% 16.7% 83.3% 100.0%
1-Yes Count 6 8 5 19
% within Regulatory controles
31.6% 42.1% 26.3% 100.0%
Total Count 6 11 20 37
% within Regulatory controles
16.2% 29.7% 54.1% 100.0%
In the above table the correlation of challenge in sustenance “Regulatory
control” is tested against rewards received by the entrepreneur. It shows that
people who faced high challenge due to regulatory control did not get high
reward. 83.3 % of the entrepreneurs did not get reward due to the challenges
faced in sustenance and only 26.3 % of the respondents said they got high
reward despite facing regulatory control challenges.
Table 6.50 : Chi-Square tests : Regulatory controls * Rewards
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square
13.255(a) 2 .001
The chi-square test shows significance between challenges faced and
rewards derived.
High cost of operation / Fixed cost
Cost of operation is the total fixed expense done every month irrespective of
161
the turnover. In MRO and Air Charter business the fixed costs are high and
this factor of challenge is studied and evaluated in the below table.
Table 6.51 : Correlation analysis : High cost of operation * Motivation
Motivation category Total
Low (<4)
Moderate (4-6)
High (>6)
0-No Count 1 3 14 18
% within High cost of operation / Fixed cost
5.6% 16.7% 77.8% 100.0%
1-Yes Count 3 11 5 19
High cost of operation / Fixed cost
% within High
cost of operation / Fixed cost
15.8%
57.9% 26.3% 100.0%
Total Count 4 14 19 37
% within High cost of operation / Fixed cost
10.8%
37.8% 51.4% 100.0%
Study of High Cost of operation as a challenge against motivation of an
entrepreneur shows that 77.8% of highly motivated entrepreneurs were not
affected by High operating cost and it was not a challenge for them. Only
5.6% of the entrepreneurs with low level of motivation felt that high operating
cost was a challenge to them. The operating cost mainly considered in this
study consisted of salaries and maintenance cost. Further 26.3% of the
highly motivated entrepreneurs felt that high operating cost was a challenge.
Hence it shows that for entrepreneurs with high level of motivation high cost
of operation was not a challenge.
162
Table 6.52 : Chi-Square tests : High cost of operation * Motivation
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 9.815(a) 2 .007
The chi-square test results show significance.
Table 6.53 : Correlation analysis : High cost of operation * Rewards
Rewards category Total
Low (1) Moderate (2)
High (3-4)
High cost of operation / Fixed cost
0-No Count 2 2 14 18
% within High cost of operation / Fixed cost
11.1% 11.1% 77.8% 100.0%
1-Yes Count 4 9 6 19
% within High cost of operation / Fixed cost
21.1% 47.4% 31.6% 100.0%
Total Count 6 11 20 37
% within High cost of operation / Fixed cost
16.2% 29.7% 54.1% 100.0%
Table 6.54 : Chi-Square tests : High cost of operation * Rewards
163
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 8.300(a) 2 .016
The above table shows that high cost of operation had a direct bearing on
rewards. 77.8% of of the entrepreneurs said that returns were not high when
the cost of operation was high. Only 31.6% of the entrepreneurs said that the
rewards were high even though the cost of operation was high. Chi-square
tests show significance. Thus challenges in sustenance have inverse impact
on rewards, more the challenges lesser the rewards. 21.1% of the
entrepreneurs who had low rewards said that high cost of operation is a
challenge.
Availability of Spares
Aviation being a highly regulated and OEM controlled business, spare has
always been a challenge to get. Most entrepreneurs have to buy the spares
from the OEMs at very high cost, more over the lead time to get the spare is
also very high. Hence this becomes a challenge in the sustenance of
entrepreneurs in the MRO and Air charter business, as this increases the
cost and also effects their operations directly.
Table 6.55 : Correlation analysis : Availability of spares * Motivation
Motivation category Total
Low (<4) Moderate
(4-6) High (>6)
Spares 0-No Count 1 6 12 19
164
% within Spares
5.3% 31.6% 63.2% 100.0%
1-Yes Count 3 8 7 18
% within Spares 16.7% 44.4% 38.9% 100.0%
Total Count 4 14 19 37
% within Spares 10.8% 37.8% 51.4% 100.0%
Table 6.56 : Chi-Square tests : Availability of spares * Motivation
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 2.576(a) 2 .276
The above tables no correlation between motivation and availability of
spares. 63.2 % of the entrepreneurs with high level of motivation felt that
there is no impact of difficulty in availability of spares as a challenge in
sustenance. While 38.9% of the highly motivated people said that availability
of spares is a challenge in sustenance. The chi-square tests do not show
significance here.
Table 6.57 : Correlation analysis : Availability of spares * Rewards
Rewards category Total
Low (1) Moderate
(2) High (3-
4)
Spares 0-No Count 2 5 12 19
% within Spares 10.5% 26.3% 63.2% 100.0%
165
1-Yes Count 4 6 8 18
% within Spares 22.2% 33.3% 44.4% 100.0%
Total Count 6 11 20 37
% within Spares 16.2% 29.7% 54.1% 100.0%
Table 6.58 : Chi-Square tests : Availability of spares * Rewards
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 1.532(a) 2 .465
Rewards are a type of motivation to the entrepreneurs. The above
Correlation and chi-square tables show that there is not much correlation
between availability of spares and the reward of entrepreneurs. 44.4% of the
entrepreneurs said that rewards had no effect, when the availability of spares
was a challenge. Against which 63.2 % of the entrepreneurs said that
rewards were low when availability of spare was a challenge. As such the
Chi-square tests do not show significance on comparison of these two
factors.
Difficulty retaining Skilled Man power
It is a known fact that aviation needs precision and that requires highly skilled
manpower to do the job. Thus manpower becomes a crucial factor of MRO
and Air Charter business. With the growth in overall Aviation industry trained
manpower has become an acute problem. This research has tried to
understand the impact of skilled manpower as a challenge in sustenance of
166
the entrepreneur.
Table 6.59 : Correlation analysis : Difficulty retaining Skilled man power * Motivation Motivation category Total
Low (<4)
Moderate (4-6)
High (>6)
Skilled Man power
0-No Count 2 4 10 16
% within Skilled Man power
12.5% 25.0% 62.5% 100.0%
1-Yes Count 2 10 9 21
% within Skilled Man power
9.5% 47.6% 42.9% 100.0%
Total Count 4 14 19 37
% within Skilled Man power
10.8% 37.8% 51.4% 100.0%
Table 6.60 : Chi-Square tests : Difficulty retaining Skilled man power * Motivation Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 1.985(a) 2 .371
Entrepreneurs with high level of motivation did not face the problem of
167
retaining skilled manpower. 62.5% of the highly motivated entrepreneurs did
not feel that retaining skilled manpower was a challenge in sustenance. For
them it was part and parcel of business and they were able to manage it as
other factors. 9.55 of the entrepreneurs with low level of motivation felt that
retaining skilled manpower was a challenge in their sustenance. Also the
42.9% highly motivated entrepreneurs felt that retaining skilled manpower
was a challenge in sustenance. The Chi-Square tests did not show any
significance. Entrepreneurs with high level of motivation were able to keep
the employee turnover low, which had a positive impact on their over all
business.
Table 6.61 : Correlation analysis : Difficulty retaining Skilled man power * Rewards Rewards category Total
Low (1) Moderate
(2) High (3-
4)
0-No Count 2 3 11 16
% within Skilled Man power
12.5% 18.8% 68.8% 100.0%
1-Yes
Count 4 8 9 21
Difficulty retaining Skilled Man power
% within
Skilled Man power
19.0% 38.1% 42.9% 100.0%
Total Count 6 11 20 37
% within Skilled Man power
16.2% 29.7% 54.1% 100.0%
168
Table 6.62 : Chi-Square tests : Difficulty retaining Skilled man power * Rewards Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 2.510(a) 2 .285
Rewards are an effect of the challenges faced by the entrepreneur in
sustenance. If the entrepreneur was able to sustain better, rewards were
higher. In the above table, 68.8% of the entrepreneurs said that rewards
were low when there was difficulty in retaining skilled manpower and only
42.9% of the entrepreneurs showed high reward even though they faced
difficulty in retaining skilled manpower. This shows an inverse correlation
between rewards and retaining skilled manpower as a challenge in
sustenance. In this case the Chi-square results do not show any significance.
Difficulty getting support from OEM / Control of OEM
Aviation being a highly regulated industry both from regulatory authorities
and technology inventors, continues to suffer under the tight control of OEMs
who do not share their technology with the world and charge high royalty one
the spares. This is the reason for spare parts being expensive and also poor
or delayed response from OEMs. In some cases the support from OEMs is
very poor and this is a major challenge of aviation industry. Due to the
advance technology, there are several acquisitions and mergers of
manufacturers, hence many times the customers suffer due to this. Some of
the OEMs who are more focused on R&D and manufacturing do not support
after sales service to the customers and this is a major challenge for MROs
169
and Air Charter operators. Also due to the presence of 90% of the OEMs in
US and Europe there is time difference and communication gap, which adds
to the difficulty in getting support from the OEMs. Within the scope of this
study an attempt has been made to measure the impact of poor support from
the OEMs on the over all business of MROs and Air Charter operators and
the challenges faced by them on this front. Although it is difficult to quantify
this factor, it has been categorized and measure the impact on 3 scale.
Difficulty faced by entrepreneurs due to the control of OEMs is measured as
Yes or No and then its significance is measured.
Table 6.63 : Correlation analysis : Control of OEM * Motivation
Motivation category Total
Low (<4) Moderate
(4-6) High (>6)
0-No Count 1 6 13 20
% within Control by OEMs
5.0% 30.0% 65.0% 100.0%
1-Yes Count 3 8 6 17
Control by OEMs
% within Control by OEMs
17.6% 47.1% 35.3% 100.0%
Total Count 4 14 19 37
% within Control by OEMs
10.8% 37.8% 51.4% 100.0%
Table 6.64 : Chi-Square tests : Control of OEM * Motivation
170
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 3.645(a) 2 .162
Control of OEMs as a challenge, when studied against the correlation of
motivation, did not show correlation. In the table above 65% of the
entrepreneurs with high level of motivation said that control of OEMs was not
a challenge to them in sustenance, while only 35.3% of the entrepreneurs felt
that control of OEMs was a challenge. This shows that highly motivated
entrepreneurs had better capability to over come the challenges and many of
the factors did not affect them as a challenge in sustenance. In this case too
Chi-square did not show any significance.
Table 6.65 : Correlation analysis : Control of OEM * Reward
Rewards category Total
Low (1) Moderat
e (2) High (3-
4)
0-No Count 2 4 14 20
% within Control by OEMs
10.0% 20.0% 70.0% 100.0%
1-Yes Count 4 7 6 17
Control by OEMs
% within
Control by OEMs
23.5% 41.2% 35.3% 100.0%
Total Count 6 11 20 37
% within Control by OEMs
16.2% 29.7% 54.1% 100.0%
171
Table 6.66 : Chi-Square tests : Control of OEM * Reward
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 4.471(a) 2 .107
Control of OEM has a direct effect on the rewards of the entrepreneurs, as
the cost of operation increases due to this. In the above table it can been
seen that there is very little correlation between control by OEMs and
rewards to the entrepreneurs. 70% of the entrepreneurs who faced challenge
from control of OEM did not get high reward. 35.3% of entrepreneurs agreed
that they got high rewards despite the fact that there was control of OEM on
the business. The Chi-square tests do not show any significance.
Affected by Market fluctuations
Aviation unlike any other mode of transport has fluctuations based on season
and travel requirements of general public. People travel more during
vacations and festival seasons and hence the passenger load factor of the
airlines vary accordingly. The economic fluctuations also effect the travel
industry and airlines are the most effected. The business travel drastically
reduced when the economy is down and hence this reduces the off season
load factor of the airlines. All these fluctuations in the airlines directly affect
the MRO and Air charter business as both of these are a part of the same
industry and their business depends on the flying of aircrafts. This study is to
know the effect of market fluctuation as a factor of sustenance of
entrepreneurs. Here comparison has been made with motivation level of
172
entrepreneurs and the rewards that they get.
Table 6.67 : Correlation analysis : Effect of market fluctuations * Motivation
Motivation category Total
Low (<4)
Moderate (4-6)
High (>6)
Market fluctuations
0-No Count 1 9 9 19
% within Market fluctuations
5.3% 47.4% 47.4% 100.0%
1-Yes Count 3 5 10 18
% within Market fluctuations
16.7% 27.8% 55.6% 100.0%
Total Count 4 14 19 37
% within Market fluctuations
10.8% 37.8% 51.4% 100.0%
Table 6.68 : Chi-Square tests : Effect of market fluctuations * Motivation
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 2.170(a) 2 .338
The above table shows correlation between effect of market fluctuation and
motivation of entrepreneurs and vise-versa. 55.6% of the highly motivated
entrepreneurs said that they faced the effect of market fluctuations as
challenge in sustenance. Since market fluctuation is an external factor, it
shows that all entrepreneurs are equally affected by the external factors
irrespective of their motivation level. In the table above 47.6% of the highly
173
motivated entrepreneurs said that market fluctuations did not affect them.
This again shows that motivation does not affect the challenge of market
fluctuations much. The Chi-square tests do not show any significance in this
case.
Table 6.69 : Correlation analysis : Effect of market fluctuations * Rewards
Rewards category Total
Low (1) Moderate
(2) High (3-4)
Market fluctuations
0-No Count 3 5 11 19
% within Market fluctuations
15.8% 26.3% 57.9% 100.0%
1-Yes Count 3 6 9 18
% within Market fluctuations
16.7% 33.3% 50.0% 100.0%
Total Count 6 11 20 37
% within Market fluctuations
16.2% 29.7% 54.1% 100.0%
Table 6.70 : Chi-Square tests : Effect of market fluctuations * Rewards
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square .264(a) 2 .876
Market fluctuation may have direct impact on the rewards of the
entrepreneurs. In the above table 57.9% of the entrepreneurs did not show
174
effect of market fluctuation on the rewards received by them, while 50% of
the entrepreneurs from within the category said that market fluctuations had
effect on rewards. The Chi-square tests do not show significance.
Problem Managing Cash flow
Cash flow is the difference of inflow of fund and out flow of fund in any
company. Problems of cash flow badly effect the business, as shortage of
working capital results in reduced turnover and reduced margin. Cash flow
could be a big challenge in the sustenance of entrepreneurs in the MRO and
Air Charter industries, as problem managing cash flow badly affects the
business. Due to seasonal fluctuations of aviation industry the cash flow
could be a challenge for the MROs which are completely dependent on the
airlines. The below tables show the correlation between cash flow and
motivation as well as rewards.
Table 6.71 : Correlation analysis : Problem managing cash flow * Motivation
Motivation category Total
Low (<4)
Moderate (4-6)
High (>6)
Problem managing Cash flow
0-No Count
1 8 14 23
% within Cash flow
4.3% 34.8% 60.9% 100.0%
1-Yes Count 3 6 5 14
175
% within Cash flow
21.4% 42.9% 35.7% 100.0%
Total Count 4 14 19 37
% within Cash flow
10.8% 37.8% 51.4% 100.0%
Table 6.72 : Chi-Square tests : Problem managing cash flow * Motivation
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square .264(a) 2 .876
The above table shows that problem in managing cash flow as a challenge in
sustenance was not affect by level of motivation. 60.9% of the highly
motivated entrepreneurs had problem managing cash flow. This shows that
level of motivation had little effect on the external factors of challenges.
35.7% of the highly motivated entrepreneurs said that motivation had a role
to play in handling the cash flow challenge. Thus it shows a negative
significance here. Also the Chi-square tests did not show any significance.
Table 6.73 : Correlation analysis : Problem managing cash flow * Rewards Rewards category Total
Low (1) Moderat
e (2) High (3-
4)
Cash flow
0-No Count 2 5 16 23
% within 8.7% 21.7% 69.6% 100.0%
176
Cash flow
1-Yes Count 4 6 4 14
% within Cash flow 28.6% 42.9% 28.6% 100.0%
Total Count 6 11 20 37
% within Cash flow 16.2% 29.7% 54.1% 100.0%
Table 6.74 : Chi-Square tests : Problem managing cash flow * Rewards
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 6.131(a) 2 .047
Problem managing cash flow cross referred to rewards reveals the fact as in
the above table. 69.6% of the entrepreneurs said that rewards were not high
when there was a challenge of managing the cash flow. Where as 28.6% of
the entrepreneurs said that they received high rewards when there were
challenges of managing the cash flow. In this case the Chi-Square test show
significance.
Rewards
Table 6.75 : Significance of Rewards to the Entrepreneur
Variables - Rewards Frequency Percent
177
Monetary / Financial
No 16 43.2
Yes 21 56.8
Recognition in the Industry
No 16 43.2
Yes 21 56.8
Satisfaction of being an employer
No 14 37.8
Yes 23 62.2
Job satisfaction
No 4 10.8
Yes 33 89.2
Reward is the result of efforts taken by an entrepreneur. For the convenience
of study rewards are categorized as internal and external. Within the scope
of this research 4 reward factors have been studied and questions related to
them were asked to the entrepreneurs. The first 2 reward factors Monetary /
Financial and Recognition in the industry are considered as the external
reward factors which are beyond the direct control of the entrepreneur. The
second 2 reward factors Satisfaction of being an employer and Job
satisfaction are internal factors of the entrepreneurs. A study of all the reward
factors reveals that rewards have a lot to do with the motivational level of an
entrepreneur and the way he evolves as well as handles the challenges in
sustenance.
178
Monetary / Financial
Monetary reward is a direct reward. It is an external factor and many a times
not within the control of the entrepreneur. Monetary reward could be a major
motivational factor to some of the entrepreneurs and it could a measure of
the success of the entrepreneur. However it varies from entrepreneur to
entrepreneur how much this factor contributes to their total rewards.
Table 6.76 : Correlation analysis : Monetary / Financial * Motivation
Motivation category Total
Low (<4)
Moderate (4-6)
High (>6)
Monetary / Financial
0-No Count 3 9 4 16
% within Monetary / Financial
18.8% 56.3% 25.0% 100.0%
1-Yes Count 1 5 15 21
% within Monetary / Financial
4.8% 23.8% 71.4% 100.0%
Total Count 4 14 19 37
% within Monetary / Financial
10.8% 37.8% 51.4% 100.0%
Table 6.77 : Chi-Square tests : Monetary / Financial * Motivation
Value df Asymp. Sig. (2-sided)
179
Pearson Chi-Square
7.981(a) 2 .018
The above tables show a positive significance between rewards and
motivation. It shows that level of motivation of an entrepreneur has a direct
impact on the rewards received by him. 71.4% of the entrepreneurs with high
level of motivation said they received high rewards in comparison to the 4.8%
of the entrepreneurs with low motivation level. The values here have clear
significance which reflect that level of motivation has a direct relation to the
rewards received by the entrepreneurs. Higher the motivation, higher the
rewards. The Chi-square tests show significance.
Recognition in the Industry
Recognition is the attention that an entrepreneur gets after achieving certain
level in his business. This is an external reward that an entrepreneur
receives after his achievements are recognized by the industry. Recognition
is a mark of his success as he overtakes the other competitors and makes a
position for himself in the market. Recognition as a reward can not be
measured quantitatively but may a times has greater importance than the
monetary rewards.
Table 6.78 : Correlation analysis : Recognition in the Industry * Motivation
Motivation category Total
Low (<4) Moderate (4-6)
High (>6)
Recongnition in the Industry
0-No Count 3 12 1 16
180
% within Recongnition in the Industry
18.8% 75.0% 6.3% 100.0%
1-Yes
Count 1 2 18 21
% within Recongnition in the Industry
4.8% 9.5% 85.7% 100.0%
Total Count 4 14 19 37
% within Recongnition in the Industry
10.8% 37.8% 51.4% 100.0%
Table 6.79 : Chi-Square tests : Recognition in the Industry * Motivation
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square
23.100(a) 2 .000
The above tables clearly show high significance of motivation on industry
recognition received by an entrepreneur. 85.7% of the entrepreneurs with
high level of motivation received industry recognition as a reward and 4.8%
of the entrepreneurs with low level of motivation received recognition as
reward. Chi-square tests show clear significance in this case, showing a
direct correlation between motivation and reward. Higher the motivation of an
entrepreneur, better the reward / recognition in the industry.
Satisfaction of being an employer
181
Table 6.80 : Correlation analysis : Satisfaction of being an employer *
Motivation
Motivation category Total
Low (<4) Moderate (4-6)
High (>6)
Satisfaction of being an employer
0-No Count
1 6 7 14
% within Satisfaction of being an employer
7.1% 42.9% 50.0% 100.0%
1-Yes Count 3 8 12 23
% within Satisfaction of being an employer
13.0% 34.8% 52.2% 100.0%
Total Count 4 14 19 37
% within Satisfaction of being an employer
10.8% 37.8% 51.4% 100.0%
Table 6.81 : Chi-Square tests : Satisfaction of being an employer * Motivation
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square .438(a) 2 .803
The above tables show that satisfaction of being an employer has an impact
of motivation on it. Those who were motivated were more satisfied to be an
employer. 52.2% of the entrepreneurs with high level of motivation were also
182
satisfied to be employers and this acted as a reward to them. Although the
chi-square tests do not shoe significance here, it could be established that
entrepreneurs with high level of motivation received better results of being
satisfied as employers.
Job satisfaction
Table 6.82 : Correlation analysis : Job satisfaction * Motivation
Motivation category Total
Low (<4) Moderate (4-6)
High (>6)
Job satisfaction
0-No Count 0 2 2 4
% within Job satisfaction .0% 50.0% 50.0% 100.0%
1-Yes Count 4 12 17 33
% within Job satisfaction 12.1% 36.4% 51.5% 100.0%
Total Count 4 14 19 37
% within Job satisfaction 10.8% 37.8% 51.4% 100.0%
Table 6.83 : Chi-Square tests : Job satisfaction * Motivation
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square .662(a) 2 .718
Entrepreneurs with high level of motivation had higher job satisfaction of
being their own master. They were satisfied by doing their own work, rather
183
than being employed. 51.5 % of the entrepreneurs with high level of
motivation derived better job satisfaction and 12.1% of the entrepreneurs
with low level of motivation derived job satisfaction. To a certain level
motivation and job satisfaction were interrelated. Chi-square does not show
significance.
Results of Hypothesis testing
Family back ground * Motivation
Null Hypothesis H01 : Family background did not play any role in
motivating an entrepreneur to venture into
Independent MRO and Air charter business.
Alternate Hypothesis H11 : Family background did play a role in
motivating an entrepreneur to venture into
Independent MRO and Air charter business.
Validation of hypothesis was tested through Chi-square test. As discussed
above various correlations were studied based on the statistical analysis of
the hypothesis.
Table : 6.84 : Cross tabulation : Family Background * Motivation category Motivation category Total
Low (<4)
Moderate (4-6)
High (>6)
1-Service Count 3 7 8 18 Family Background
% within Family 16.7% 38.9% 44.4% 100.0
%
184
Background
16.7% 38.9% 44.4% 100.0%
2-Business / Farming
Count 1 7 11 19
% within Family Background
5.3% 36.8% 57.9% 100.0%
Total Count 4 14 19 37 % within
Family Background
10.8% 37.8% 51.4% 100.0%
Table : 6.85 : Chi-Square Tests : Family Background * Motivation category
Value df Pearson Chi-Square 1.448 2
Validity of Null hypothesis H01 was tested using the Person Chi-square tests.
Here the calculated value at 2 degree of freedom is 1.448. According to the
Chi-square tests, for 2 degree of freedom the table value is 5.99. If the
calculated value is < (less than) the table value, then Chi-Square test is
accepted i.e H01 is accepted and the null hypothesis is valid.
In this case the null hypothesis states “Family background did not play any
role in motivating an entrepreneur to venture into Independent MRO and Air
charter business” which is accepted through the Chi-square test and hence
the Null hypothesis is valid. Which means that entrepreneurs were not
motivated by their family background which is an external motivating factor.
185
Result : Null hypothesis is valid and accepted and hence the Alternate
hypothesis is rejected.
Monetary reward * Motivation
Null Hypothesis H02 : High profit margin is not a major motivating
factor for entrepreneurs to enter in
Independent MRO and Air charter business.
Alternate Hypothesis H12 : Hight profit margin is a major motivating
factor for entrepreneurs to enter into
Independent MRO and Air charter business.
The Validity of hypothesis was tested through Chi-square tests. Various
correlations related to both the factors of hypothesis were studied and have
been explained in previous pages.
Table : 6.86 : Cross tabulation : Current Financial condition * Motivation
category
Motivation category Total
Low (<4)
Moderate (4-
6) High (>6)
1-Good Profit
Count 0 1 8 9
% within Current financial condition
.0% 11.1% 88.9% 100.0%
2-Average Profit
Count 2 10 5 17
2-Average Profit
Count 2 10 5 17
186
Table : 6.87 : Chi-Square Tests : Current Financial condition * Motivation
category
Value df Pearson Chi-Square 9.627 4
Validity of null hypothesis H02 was tested using the Person Chi-square tests.
Here the calculated value at 4 degree of freedom is 9.627. According to the
Chi-square tests, for 4 degree of freedom the table value is 9.49. If the
calculated value is < (less than) the table value, then Chi-Square test is
accepted and if the calculated value is > (greater than) the table value, then
the Chi-square test is rejected, hence the alternate Hypothesis H12 is
accepted and valid.
In this case the null hypothesis states “High profit margin is not a major
motivating factor for entrepreneurs to enter in Independent MRO and Air
charter business” which is rejected through the Chi-square test, since the
calculated value 9.627 is higher than the table value 9.49 at 4 degree of
% within Current financial condition
11.8%
58.8% 29.4%
100.0%
3-Loss Count 2 3 6 11 % within
Current financial condition
18.2% 27.3% 54.5
% 100.0%
Total Count 4 14 19 37 % within
Current financial condition
10.8% 37.8% 51.4
% 100.0%
187
freedom. Thus the alternate hypothesis H12 is accepted and valid. Which
states that High profit margin was a major motivating factor for entrepreneurs
to enter in Independent MRO and Air charter business.
Result : Null hypothesis is Rejected and hence the Alternate hypothesis is
accepted and valid.
Evolution * Motivation
Null Hypethesis H03 : Motivation has no impact on the evolution of
entrepreneurs in these two sectors of
aviation industry.
Alternate Hypothesis H13 : Motivation has a significant impact in the
evolution of entrepreneurs in these two
sectors of aviation industry.
Validation of hypothesis was done through Chi-square test on data. Various
correlations related to both the factors of hypothesis were studied and have
been explained in previous pages.
Table : 6.88 : Cross tabulation : Evolution * Motivation
Motivation category Total
Low (<4)
Moderate (4-6)
High (>6)
Evolutionary category
Low (1) Count 2 6 1 9
% within Motivation category
50.0% 42.9% 5.3% 24.3%
Moderat Count 1 6 4 11
188
e (2) % within
Motivation category
25.0% 42.9% 21.1% 29.7%
High (3-4)
Count 1 2 14 17
% within Motivation category
25.0% 14.3% 73.7%
45.9%
Total Count 4 14 19 37 % within
Motivation category
100.0% 100.0% 100.0
% 100.0
%
Table : 6.89 : Chi-Square Tests : Evolution * Motivation
Value df Pearson Chi-Square 13.840 4
Validity of null hypothesis H03 was tested using the Person Chi-square tests.
Here the calculated value at 4 degree of freedom is 13.840. According to the
Chi-square tests, for 4 degree of freedom the table value is 9.49. If the
calculated value is < (less than) the table value, then Chi-Square test is
accepted and if the calculated value is > (greater than) the table value, then
the Chi-square test is rejected, hence the alternate Hypothesis H13 is
accepted and valid.
In this case the null hypothesis states “Motivation has no impact on the
evolution of entrepreneurs in these two sectors of aviation industry” which is
rejected through the Chi-square test, since the calculated value 13.840 is
higher than the table value 9.49 at 4 degree of freedom. Thus the alternate
hypothesis H13 is accepted and valid. Which states that “Motivation has a
significant impact in the evolution of entrepreneurs in these two sectors of
189
aviation industry”. The entrepreneurs who were highly motivated evolved
better.
Result : Null hypothesis is Rejected and hence the Alternate hypothesis is
accepted and valid. The entrepreneurs who were highly motivated, evolved
better.
Source of funding * Entry Barriers
Null Hypothesis H04 : Source of funding has no impact on the
capability of entrepreneurs to over come
entry barriers in these two sectors.
Alternate Hypothesis H14 : Self and family funded entrepreneurs are
able to overcome the entry barriers easily.
Hypothesis is validated using Chi-square tests. Various individual factor
correlations related to the hypothesis were studied and have been explained
in previous pages.
Table : 6.90 : Cross tabulation : Source of funding * Entry barriers
Barriers category Total
Low (0-1)
Moderate (2-3)
High (4-5)
1-Self / Partner / VC
Count 4 10 8 22
% within Source of funding
18.2% 45.5% 36.4
% 100.0%
Source of funding 2-Family Count 6 4 1 11
190
% within Source of funding
54.5%
36.4% 9.1% 100.0%
3-Bank / Stock market
Count 2 2 0 4
% within Source of funding
50.0% 50.0% .0% 100.0%
Total Count 12 16 9 37 % within
Source of funding
32.4% 43.2% 24.3
% 100.0%
Table : 6.91 : Chi-Square Tests : Source of funding * Entry barriers
Value df Pearson Chi-Square 6.938 4
Validity of null hypothesis H04 was tested using the Person Chi-square tests.
Here the calculated value at 4 degree of freedom is 6.938. According to the
Chi-square tests, for 4 degree of freedom the table value is 9.49. Since the
calculated value is < (less than) the table value, then Chi-Square test is
accepted i.e H04 is accepted and the null hypothesis is valid.
In this case the null hypothesis states “Source of funding has no impact on
the capability of entrepreneurs to over come entry barriers in these two
sectors” which is accepted through the Chi-square test and hence the Null
hypothesis is valid. This means that source of funding did not had much
impact on the capability of entrepreneurs to over come entry barriers.
Result : Null hypothesis is valid and accepted and hence the Alternate
hypothesis is rejected.
191
Initial Capital + Break-even * Entry Barrier
Null Hypothesis H05 : High initial investment and long break even
period is not an entry barrier for
entrepreneurs to enter into Independent
MRO and air charter business.
Alternate Hypothesis H15 : High initial investment and long break even
period is an entry barrier for entrepreneurs to
enter into Independent MRO and air charter
business.
Hypothesis is validated using Chi-square tests. Various individual factor
correlations related to the hypothesis were studied and have been explained
in previous pages.
Table : 6.92 : Cross tabulation : Initial Capital * Entry Barrier
Barriers category Total
Low (0-1)
Moderate (2-3)
High (4-5)
1- < 50 lacs Count 2 4 5 11 % within
Initial Capital
18.2% 36.4% 45.5
% 100.0%
2- < 1 crore Count 1 3 2 6
Initial Capital
% within Initial Capital
16.7% 50.0% 33.3
% 100.0%
3- > 1 crore Count 9 9 2 20 % within
Initial Capital
45.0% 45.0% 10.0
% 100.0%
Total Count 12 16 9 37 % within
Initial 32.4
% 43.2% 24.3% 100.0%
192
Capital Table : 6.93 : Chi-Square tests : Initial Capital * Entry Barrier
Table : 6.94 : Cross tabulation : Break-even period * Entry Barrier
Barriers category Total
Low (0-1)
Moderate (2-3)
High (4-5)
1- < 1 yr
Count 0 1 1 2
% within Break even period
.0% 50.0% 50.0% 100.0%
2- 1-3 yrs
Count 7 6 4 17
% within Break even period
41.2%
35.3% 23.5%
100.0%
3- > 3yrs
Count 5 9 4 18
Break even period
% within Break even period
27.8% 50.0% 22.2
% 100.0%
Total Count 12 16 9 37 % within
Break even period
32.4% 43.2% 24.3
% 100.0%
Table : 6.95 : Chi-Square tests : Break-even period * Entry Barrier
Value df Pearson Chi-Square 2.208 4
Validity of null hypothesis H04 was tested using the Person Chi-square tests
Value df Pearson Chi-Square 6.227 4
193
as shown in tables 6.92, 6.93, 6.94, 6.95. The null hypothesis here is
measured against 2 variables to one category, we have performed two
separated chi-square tests and tabulated above. Here the calculated values
at 4 degrees of freedom are 6.227 and 2.208. According to the Chi-square
tests, for 4 degrees of freedom the table value is 9.49. Since both the
calculated values are < (less than) the table value, the Chi-Square test is
accepted i.e H05 is accepted and the null hypothesis is valid.
In this case the null hypothesis states “High initial investment and long break
even period is not an entry barrier for entrepreneurs to enter into
Independent MRO and air charter business.” which is accepted through the
Chi-square test and hence the Null hypothesis is valid. This shows that high
Initial capital and long break-even period were not the entry barriers for them
to enter the MRO and Air charter business.
Result : Null hypothesis is valid and accepted and hence the Alternate
hypothesis is rejected.
Innovative Idea based * Evolution
Null Hypothesis H06 : Evolution of entrepreneurs in the Indian
aviation maintenance and Air charter sectors
was not innovative idea based.
Alternate Hypothesis H16 : Evolution of entrepreneurs in the Indian
194
aviation maintenance and Air charter sectors
was innovative idea based.
Validity of null hypothesis H06 was tested using Chi-square test, the results of
which are tabulated as below. Chi-square was run after studying all the
factors in details and then catagorise it to get scores.
Table : 6.96 : Cross tabulation : Innovative Idea based * Evolution
Evolutionary category Total
Low (1) Moderate
(2) High (3-
4) 0-No Count 7 8 5 20 % within
Idea based 35.0% 40.0% 25.0% 100.0%
1-Yes Count 2 3 12 17
Idea based % within
Idea based 11.8% 17.6% 70.6% 100.0%
Total Count 9 11 17 37 % within
Idea based 24.3% 29.7% 45.9% 100.0%
Table : 6.97 : Chi-Square tests : Innovative Idea based * Evolution
Value df Pearson Chi-Square 7.741 2
Validity of null hypothesis H06 was tested using the Person Chi-square tests.
Here the calculated value at 2 degree of freedom is 7.741. According to the
Chi-square tests, for 2 degree of freedom the table value is 5.99. Since the
calculated value is > (greater than) the table value, Chi-Square test is
rejected i.e H06 is rejected and hence the alternate hypothesis is valid and
accepted
195
In this case the null hypothesis states “Evolution of entrepreneurs in the
Indian aviation maintenance and Air charter sectors was not innovative idea
based” which is rejected through the Chi-square test and hence the Alternate
hypothesis “Evolution of entrepreneurs in the Indian aviation maintenance
and Air charter sectors was innovative idea based” is valid and accepted.
Result : Null hypothesis is Rejected and hence the Alternate hypothesis is
valid and accepted.
Industry need base * Evolution
Null Hypothesis H07 : Evolution of entrepreneurs in the Indian
aviation industry (independent MRO and air
charter) was not industry need based.
Alternate Hypothesis H17 : Evolution of entrepreneurs in the Indian
aviation industry (independent MRO and air
charter) was industry need based.
Validity of null hypothesis H07 was tested using Chi-square test, the results of
which are tabulated as below. Chi-square was run after studying all the
factors in detail and then catagorise it to get scores.
Table : 6.98 : Cross tabulation : Industry need based * Evolution
Evolutionary category Total Low (1) Moder High
196
ate (2) (3-4) 0-No Count 8 6 8 22 % within
Industry Need based
36.4% 27.3% 36.4% 100.0%
1-Yes Count 1 5 9 15
Industry Need based % within
Industry Need based
6.7% 33.3% 60.0% 100.0%
Total Count 9 11 17 37 % within
Industry Need based
24.3% 29.7% 45.9% 100.0%
Table : 6.99 : Chi-Square tests : Industry need based * Evolution
Value df Pearson Chi-Square
4.428 2
Validity of null hypothesis H07 was tested using the Person Chi-square tests.
Here the calculated value at 2 degrees of freedom is 4.428. According to the
Chi-square tests, for 2 degrees of freedom the table value is 5.99. Since the
calculated value is < (less than) the table value, Chi-Square test is accepted
i.e H07 is accepted and the null hypothesis is valid.
In this case the null hypothesis states “Evolution of entrepreneurs in the
Indian aviation industry (independent MRO and air charter) was not industry
need based” which is accepted through the Chi-square test and hence the
Null hypothesis is valid. This means that the evolution of entrepreneurs in
these two sector was not based on industry needs.
Result : Null hypothesis is valid and accepted and hence the Alternate
197
hypothesis is rejected.
Regulatory norms * Sustenance
Null Hypothesis H08 : Stringent Regulatory norms are not a
challenge for sustenance of entrepreneurs in
these two sectors of aviation.
Alternate Hypothesis H18 : Stringent Regulatory norms are a challenge
for sustenance of entrepreneurs in these two
sectors of aviation.
Validity of null hypothesis H08 was tested using Chi-square test, the results of
which are tabulated as below. Chi-square was run after studying all the
factors in detail and then catagorise it to get scores.
Table : 6.100 : Cross tabulation : Regulatory norms * Sustenance
Challenge category Total
Low (1-4)
Moderate (5-6)
High (7)
0-No Count 12 1 0 13 % within Difficulty
in getting Permissions / Approvals
92.3% 7.7% .0% 100.
0%
1-Yes Count 13 8 3 24
Difficulty in getting Permissions / Approvals % within Difficulty
in getting Permissions / Approvals
54.2%
33.3% 12.5%
100.0%
Total Count 25 9 3 37
198
% within Difficulty in getting Permissions / Approvals
67.6%
24.3% 8.1% 100.0%
Table : 6.101 : Chi-Square tests : Regulatory norms * Sustenance
Value df Pearson Chi-Square 5.720 2
Null hypothesis H08 was tested for its validity using the Person Chi-square
tests. Here the calculated value at 2 degrees of freedom is 5.720. According
to the Chi-square tests, for 2 degrees of freedom the table value is 5.99.
Since the calculated value is < (less than) the table value, Chi-Square test is
accepted i.e H08 is accepted and the null hypothesis is valid.
In this case the null hypothesis states “Stringent Regulatory norms are not a
challenge for sustenance of entrepreneurs in these two sectors of aviation.”
which is accepted through the Chi-square test and hence the Null hypothesis
is valid. Validation of null hypothesis means that stringent regulatory norms
do not effect the sustenance of entrepreneurs.
Result : Null hypothesis is valid and accepted and hence the Alternate
hypothesis is rejected.
Capital Intensive * Sustenance
Null Hypothesis H09 : High Initial Capital and high operating cost is
199
not a challenge for sustenance of
entrepreneurs in Independent MRO and Air
charter business.
Alternate Hypothesis H19 : High initial cost and high operating cost is a
challenge for sustenance of entrepreneurs in
Independent MRO and Air charter business.
Validity of null hypothesis H09 was tested using Chi-square test, the results of
which are tabulated as below. Chi-square was run after studying all the
factors in detail and then catagorise it to get scores.
Table : 6.102 : Cross tabulation : Capital Intensive * Sustenance
Challenge category Total
Low (1-
4) Moderate (5-6)
High (7)
0-No Count 18 4 1 23 % within
Capital Intensive
78.3% 17.4% 4.3% 100.0%
Capital Intensive
1-Yes
Count 7 5 2 14
% within Capital Intensive
50.0% 35.7% 14.3% 100.0%
Total Count 25 9 3 37 % within
Capital Intensive
67.6% 24.3% 8.1% 100.0%
Table : 6.103 : Chi-Square tests : Capital Intensive * Sustenance
200
Value df Pearson Chi-Square
3.290 2
Null hypothesis H09 was tested for its validity using the Person Chi-square
tests. Here the calculated value at 2 degrees of freedom is 3.290. According
to the Chi-square tests, for 2 degrees of freedom the table value is 5.99.
Since the calculated value is < (less than) the table value, Chi-Square test is
accepted i.e H09 is accepted and the null hypothesis is valid.
In this case the null hypothesis states “High Initial Capital and high operating
cost is not a challenge for sustenance of entrepreneurs in Independent MRO
and Air charter business ” which is accepted through the Chi-square test and
hence the Null hypothesis is valid. Validation of null hypothesis means that
high initial capital and high operating costs were not a challenge in the
sustenance of entrepreneurs.
Result : Null hypothesis is valid and accepted and hence the Alternate
hypothesis is rejected.
Glamour * Rewards
Null Hypothesis H010 : Glamour attached to the aviation industry
does not attract entrepreneurs to venture into
air charter business despite poor rewards.
201
Alternate Hypothesis H110 : Glamour attached to the aviation industry
attracts entrepreneurs to venture into air
charter business despite poor rewards.
Hypothesis is validated using Chi-square tests. Various individual factor
correlations related to the hypothesis were studied and have been explained
in previous pages.
Table : 6.104 : Cross tabulation : Glamour * Rewards
Rewards category Total
Low (1) Moderate (2)
High (3-4)
0-No Count 6 10 12 28 % within
Glamour 21.4% 35.7% 42.9% 100.0%
Glamour
1-Yes Count 0 1 8 9 % within
Glamour .0% 11.1% 88.9% 100.0%
Total Count 6 11 20 37 % within
Glamour 16.2% 29.7% 54.1% 100.0%
Table : 6.105 : Chi-Square tests : Glamour * Rewards
Value df Pearson Chi-Square 5.985 2
Validity of null hypothesis H010 was tested using the Person Chi-square tests.
Here the calculated value at 2 degrees of freedom is 5.985. According to the
Chi-square tests, for 2 degrees of freedom the table value is 5.99. Since the
calculated value is almost = (equal) to the table value, Chi-Square test is
rejected as a border line case. Here the null hypothesis H010 is rejected and
hence the alternate Hypothesis H110 is accepted and valid.
202
The alternate hypothesis states that the Glamour attached to the aviation
industry attracts entrepreneurs to enter into independent MRO and Air
Charter industries.
Result : Null hypothesis is rejected and hence the Alternate hypothesis is
valid and accepted.
Rewards * Motivation
Null Hypothesis H011 : Rewards in Independent MRO and Air
charter business are not lucrative enough to
motivate more entrepreneurs.
Alternate Hypothesis H111 : Rewards in Independent MRO and Air
charter business are lucrative enough to
motivate more entrepreneurs.
Hypothesis is validated using Chi-square tests. Various individual factor
correlations related to the hypothesis were studied and have been explained
in previous pages.
Table : 6.106 : Cross tabulation : Rewards * Motivation
Rewards category Total
Low (1) Moderat
e (2) High (3-4)
203
Low (<4) Count 0 3 1 4 % within
Motivation category
.0% 75.0% 25.0% 100.0%
Motivation category
Moderate (4-6)
Count 5 6 3 14
% within Motivation category
35.7% 42.9% 21.4% 100.0%
High (>6)
Count 1 2 16 19
% within Motivation category
5.3% 10.5% 84.2% 100.0%
Total Count 6 11 20 37 % within
Motivation category
16.2% 29.7% 54.1% 100.0%
Table : 6.107 : Chi-Square tests : Rewards * Motivation
Value df Pearson Chi-Square
17.840 4
Validity of null hypothesis H011 was tested using the Person Chi-square tests
as shown in tables 6.7.23 and 6.7.24. The null hypothesis here is measured
against one category of variable to one category of constant factor. Here the
calculated value at 4 degrees of freedom is17.840. According to the Chi-
square tests, for 4 degree of freedom the table value is 9.49. Since the
calculated value is > (greater than) the table value, the Chi-Square test is
rejected i.e H011 is rejected, hence the alternate hypothesis H111 is valid.
In this case the null hypothesis states “Rewards in Independent MRO and Air
charter business are not lucrative enough to motivate more entrepreneurs”
204
which is rejected through the Chi-square test and hence the alternate
hypothesis “Rewards in Independent MRO and Air charter business are
lucrative enough to motivate more entrepreneurs” accepted and valid. This
shows that returns or rewards in both these business sectors are
satisfcatory.
Result : Null hypothesis is rejected, hence the alternate hypothesis is
accepted and valid.
Summary of Hypothesis Validation
Table 6.108 : Summery of Hypothesis acceptability
Sr.No. Null Hypotheses Alternate Hypotheses
H1 Family background did not play
any role in motivating an
entrepreneur to venture into
Independent MRO and Air
charter business.
- ACCEPTED
Family background did play a
role in motivating an
entrepreneur to venture into
Independent MRO and Air
charter business.
- REJECTED
H2 High profit margin is not a major
motivating factor for
entrepreneurs to enter in
Independent MRO and Air
charter business.
- REJECTED
Hight profit margin is a major
motivating factor for
entrepreneurs to enter into
Independent MRO and Air
charter business.
- ACCEPTED
205
H3 Motivation has no impact on the
evolution of entrepreneurs in
these two sectors of aviation
industry.
- REJECTED
Motivation has a significant
impact in the evolution of
entrepreneurs in these two
sectors of aviation industry.
- ACCEPTED
H4 Source of funding has no impact
on the capability of
entrepreneurs to over come
entry barriers in these two
sectors.
- ACCEPTED
Self and family funded
entrepreneurs are able to
overcome the entry barriers
easily.
- REJECTED
H5 High initial investment and long
break-even period is not an
entry barrier for entrepreneurs
to enter into Independent MRO
and air charter business.
- ACCEPTED
High initial investment and long
break even period is an entry
barrier for entrepreneurs to
enter into Independent MRO
and air charter business.
- REJECTED
H6 Evolution of entrepreneurs in
the Indian aviation maintenance
and Air charter sectors was not
innovative idea based.
- REJECTED
Evolution of entrepreneurs in
the Indian aviation maintenance
and Air charter sectors was
innovative idea based.
- ACCEPTED
H7 Evolution of entrepreneurs in
the Indian aviation industry
(independent MRO and air
Evolution of entrepreneurs in
the Indian aviation industry
(independent MRO and air
206
charter) was not industry need
based.
- ACCEPTED
charter) was industry need
based.
- REJECTED
H8 Stringent Regulatory norms are
not a challenge for sustenance
of entrepreneurs in these two
sectors of aviation.
- ACCEPTED
Stringent Regulatory norms are
a challenge for sustenance of
entrepreneurs in these two
sectors of aviation.
- REJECTED
H9 High Initial Capital and high
operating cost is not a challenge
for sustenance of entrepreneurs
in Independent MRO and Air
charter business.
- ACCEPTED
High initial cost and high
operating cost is a challenge for
sustenance of entrepreneurs in
Independent MRO and Air
charter business.
- REJECTED
H10 Glamour attached to the
aviation industry does not
attract entrepreneurs to venture
into air charter business despite
poor rewards.
- REJECTED
Glamour attached to the
aviation industry attracts
entrepreneurs to venture into
air charter business despite
poor rewards.
- ACCEPTED
H11 Rewards in Independent MRO
and Air charter business are not
lucrative enough to motivate
more entrepreneurs.
- REJECTED
Rewards in Independent MRO
and Air charter business are
lucrative enough to motivate
more entrepreneurs.
- ACCEPTED
207
The above table giving acceptability of hypothesis gives facts about the
entrepreneurs in Independent MRO and Air Charter business.
Major findings
The findings of this research could be listed as below.
1 Contrary to the common myth that entrepreneurs from business family
back ground are more successful, this study shows that family
background did not play any significant role in motivating an entrepreneur
and thus in his success.
2 It is very common to hear from the entrepreneurs that they did not start
their business for money and money is not a driving factor. However this
study reveals a different fact, that monetary gain and profit was one of the
major motivating factor for entrepreneurs.
3 This study establishes a fact that motivation plays a very important role in
the evolution of entrepreneurs. Statistical analysis also reveals that
internal motivational facts plays important role in the success of an
entrepreneur in comparison to the external motivating factors, thus
emphasizing that Self motivation was a key to success in business.
208
4 Source of funding for any business is considered to be an important
factor for its growth. Family funded business are considered to be stable
as there is no interest to be paid on the capital. However this study
reveals that source of funding did not had impact on the capability of
entrepreneurs to over come entry barriers. Thus it gives to understand
that entrepreneurs in Independent MRO and Air charter business were
not affected by the source of funding.
5 Aviation is considered to be a capital intensive industry with long break-
even period and all activities related to aviation need high initial
investment. However this study reveals an interesting fact that high initial
investment and long break-even period is not a deterant for
entrepreneurs to enter the Independent MRO and Air charter business.
This shows the determination and motivation level of entrepreneurs which
gives them the capacity to wait for such long periods.
6 This study shows that entrepreneurship in the Independent MRO and Air
charter business was driven by the innovative ideas of the entrepreneurs.
Which means that each entrepreneur has a unique business model to
make his business successful. Moreover in the air charter industry
entrepreneurs were found to be aggressive and innovative and drove
their business on their ideas. Some of the entrepreneurs replicated the
American models of Air Charter with their own ideas and make it
209
successful.
7 Study shows that evolution of entrepreneurs was not industry need
based, which means that although every industry has needs,
entrepreneurs enter the business based on their perception on
opportunities and not the need of the industry. Thus the entrepreneur has
the capacity to change his business line even when the industry demand
for his product or service decreases.
8 Aviation is a highly regulated industry, however the entrepreneurs
interviewed during this study did not feel it as a challenge. They were
able to over come these challenges by adopting to the requirements of
the industry and organizing themselves accordingly. This shows the
diehard instinct of entrepreneurs and their capability of not accepting the
defeat easily. Entrepreneurs who are able to survive through the
challenges were successful and received rewards. This classifies the
entrepreneurs into a different category.
9 According to the common belief, aviation is a high investment business.
However the entrepreneurs interviewed and the results of hypothesis
testing shows that entrepreneurs in these sectors of aviation were able to
manage the requirements of funds and also the high operating costs.
Since aviation is a high precision industry with various checks and
210
balances to keep the quality standards high, the operating costs are high.
The research findings show that successful entrepreneurs did not find the
high investment and high operating cost as a challenge in sustenance as
they were able to manage finance. Here it was observed that most of the
Air charter operators were backup by strong financial partners.
10 As discussed in previous chapters, aviation has some component of
glamour attached to it due to the swanky airports, large aircrafts and
charming airhostesses being a part of the business. It attracts attention of
most of the people and thus glamour is a part of this business.
Entrepreneurs are not aloof of this glamour component in this industry.
This research and validation of hypothesis establishes the fact that
entrepreneurs were attracted into Air charter business due to the glamour
attached to it. Air charter is also known as the Hi-flyer’s industry as it
caters to the super rich customers in India, it requires additional care and
service levels. Hence there is glamour attached to it and this study shows
that glamour had some influence on the entrepreneurs who ventured into
Air charter business.
11 The findings of this research show that rewards in MRO and Air Charter
business were reasonably sufficient to motivate the entrepreneurs into
these two sectors of aviation. Entrepreneur’s felt that returns on
investment was reasonable and had long term prospects. Most of
entrepreneurs felt that they will ripe the befit of being into this industry
211
after 2015 when the industry gets matured and more and more people
get habitual of flying.
212
CHAPTER VII
CONCLUSION
213
CHAPTER VII
CONCLUSION
The primary purpose of the study was to understand the evolution of
entrepreneurs in Independent Aviation MRO and Air Charter sectors of
aviation, study the factors which had positive or negative correlation in the
evolution, and on the basis of those factors study the sustenance and further
growth of entrepreneurs in these two sectors.
To do so, first parameters which affected the evolution process, were studied
using literature on this subject. Since there was not much literature available
on this subject, trade magazines and industry journals were extensively
searched to gather as much information as possible. Available literature did
not indicate any trend or pattern of evolution of entrepreneurs in these two
sectors. Then attempt was made to determine the factors that influenced the
entrepreneurs to enter into these areas. A multi attribute model was also
used to understand the growth of MRO and Air Charter industries in India.
Using this information the profile of entrepreneurs were segregated and their
motivational factors studied.
The analysis of data collected through primary and secondary surveys show
that family background and source of funding did not had much significance
on the motivation level of entrepreneurs. Motivation was the main factor to
effect the capability of entrepreneurs in over coming entry barriers and
sustain in their business.
214
Testing of the hypothesis indicates similar trend and source of funding did
not had much significance on motivation of entrepreneurs. Motivation was
the main criterion of entrepreneurs to affect their risk taking capacity. Level of
motivation had a direct impact on their aggressiveness and thus capacity to
over come the entry barriers with less effort.
The findings of this research brings out an interesting fact that entrepreneurs
were found to be of a different breed and had the maneuvering skills to
handle their business in different situations. Both Independent MRO and Air
Charter businesses being in their nascent stage, require special skills to keep
afloat, move over when these two sectors are capital intensive.
Entrepreneurs interviewed during the survey were found to be highly
motivated and visionary to think ahead of time. This quality of these
entrepreneurs helped them in evolving despite all the challenges.
Table 7.1 Summary of Pearson correlation test
Number of
Motivational
Factors
Number of
Barriers
Number of
Evolution
Factors
Number of
Challenges
Number of
Rewards
Number of Motivational Factors
Pearson Correlation
1 -.876(**) .587(**) -.532(**) .531(**)
Sig. (1-tailed) . .000 .000 .000 .000
N 37 37 37 37 37
215
Number of Barriers
Pearson Correlation
-.876(**) 1 -.531(**) .590(**) -.572(**)
Sig. (1-tailed) .000 . .000 .000 .000
N 37 37 37 37 37
Number of Evolution Factors
Pearson Correlation
.587(**) -.531(**) 1 -.534(**) .666(**)
Sig. (1-tailed)
.000 .000 . .000 .000
N 37 37 37 37 37
Number of Challenges
Pearson Correlation
-.532(**) .590(**) -.534(**) 1 -.637(**)
Sig. (1-tailed)
.000 .000 .000 . .000
N 37 37 37 37 37
Number of Rewards
Pearson Correlation
.531(**) -.572(**) .666(**) -.637(**) 1
Sig. (1-tailed)
.000 .000 .000 .000 .
N 37 37 37 37 37
Results of data analysis by Pearson correlation test gives following
conclusions;
Motivation ! Entry barriers, Evolution, Challenges in sustenance, Rewards.
216
• Those with high motivation faced low entry barriers.
High motivation level is a state of preparedness to handle difficult
situations. The Pearson correlation analysis shows that there is a
negative correlation between motivation and entry barriers.
Entrepreneurs with high level of motivation faced low entry barrier.
(correlation = - 0.876)
• Those with high motivation level evolved better.
It is seen that entrepreneurs with high level of motivation evolved
better. Pearson correlation test gives a positive correlation between
motivation and evolution (correlation = 0.587). Entrepreneurs were
able to find solution to the problems and handle things tactfully to
become successful. Evolution is a continuous process and
entrepreneurs with high level of motivation find solution to their
problems with ease. Entrepreneurs with high level of motivation had
clear vision / foresight of what they have to achieve in their business.
They were also innovative and developed their business on the basis
of Innovative ideas.
• Those with high level of motivation did not face many challenges.
Entrepreneurs with high level of motivation faced less number of
challenges in sustaining through the tough times and ups and downs
of business. Pearson correlation test shows a negative correlation
between motivation and challenges faced (correlation = -0.532).
Motivation played a key role in the sustenance of entrepreneurs, and
217
there was a -ve correlation, thus both were inversely proportional.
Challenges remained the same for all the entrepreneurs but those with
positive motivation were able to face the challenges smoothly and
come out as a winner, thus sustain.
• Those with high level of motivation received better rewards.
The pearson correlation for these two factors shows a positive
correlation (correlation = 0.531). The entrepreneurs with high level of
motivation received better rewards both monetary and job satisfaction.
Since the motivated entrepreneur had the drive and he faced lesser
challenges, he was able to manage his enterprise better and thus
achieve better results / rewards.
Entry barriers ! Evolution, Sustenance, Rewards
• Those who faced less entry barriers evolved better.
The entrepreneurs who faced less entry barriers or to say handled the
entry barriers tactfully, evolved better. They found better opportunities
than others and were able to sell their innovative ideas more
successfully. The Pearson correlation test shows a negative
correlation between entry barriers and evolution (correlation = -0.531).
The negative correlation shows that lesser the entry barriers, better
the evolution. This has a direct impact from motivation level of
entrepreneurs as shown by correlation of motivational factors to
218
others.
• Those who faced more entry barriers also faced more challenges.
The Pearson correlation of entry barriers to Challenges faced in
sustenance shows that the entrepreneurs who faced higher entry
barriers also faced more challenges in sustenance. It shows a positive
correlation between entry barriers and challenges faced (correlation =
0.590).
• Higher the entry barriers, lesser the rewards.
The data analysis done through Pearson correlation test shows
negative correlation between entry barriers and rewards, hence higher
the entry barriers lesser the rewards (correlation = -0.572). Since there
are two types of entry barriers observed under this study, government
and industrial, both being external barriers, these need to be
addressed by industry and a proper representation of facts could be
made to reduce the barriers.
Evolutionary factors ! Challenges in sustenance, Rewards
• Those who evolved better faced less challenges in sustenance.
The Pearson correlation test shows a negative correlation between
evolution and challenges faced in sustenance (correlation = -0.534).
Entrepreneurs who were able to over come the entry barriers and
219
evolve successfully, faced lesser challenges in sustenance. Hence it
could be said that during the evolution process entrepreneurs could
judge their further sustenance and they can decide whether their skill
levels are good enough to fit into the industry or not. Many
entrepreneurs eject out during the evolution phase, realizing that their
sustenance may have difficulty later and this could be a good
decision.
• Those who evolved better received better rewards.
Reward is the tangible or intangible return that an entrepreneur
receives for the efforts and risks that he takes during his
entrepreneurial journey. In most probability he starts to understand
what rewards he will get after successfully going through the evolution
process and crossing over the sustenance phase. The Pearson
correlation test shows a positive correlation between evolutionary
factors and rewards (correlation = 0.666). Entrepreneurs who evolved
successfully, received better rewards.
Challenges in sustenance ! Rewards
• Entrepreneurs who faced more challenges received lesser rewards, or
to say, entrepreneurs who were able to successfully over come the
challenges received better rewards. The Pearson correlation analysis
shows a negative correlation between Challenges faced and rewards
220
(correlation= -0.637). Entrepreneurs who faced higher challenges in
sustenance received lesser rewards. This clearly indicates that
entrepreneurs who faced higher challenges either had to come out of
business or struggled to continue with very little reward and over a
period of time that may have impact on the motivation level of the
entrepreneur. Challenges are government, industry and market
fluctuation based.
This study adds to the existing literature by throwing light on some of the
facts about entrepreneurship in Indian aviation industry with focus on
Independent aviation maintenance and Charter Aircraft operators, its growth
and sustenance.
The research has focused on examining various factors related to
entrepreneurs related to aviation maintenance and air charter and the
strategies pursued by both highly motivated and innovative entrepreneurs.
One of the contributions of this research is that it provides a means to
understand the role of motivation and innovation in entrepreneurship. From
the information gathered through survey it is observed that motivated
entrepreneurs are characterized by a desire for intrinsic results; a need for
constant inquiry into the unknown; a need for integrating future growth
synergistically with the internal strengths and with the exigencies of the
external environment; and a vision.
One of the benefits of this research would be that it provides the first
221
documented evidence of innovative entrepreneurs in Indian Aviation
Maintenance and Aircraft Charter business. The results found show that the
experience in India may be different than in the West. The focus on self-
financing and the willingness to move to new regions of the country to find a
partner are typical in India, but not in the West.
Independent MRO
This study found that social networks were not positively related to
opportunity identification. With respect to particularity of aviation MRO
business, innovative idea-based entrepreneurs form the sample of this study
who engage in developing and / or deploying their ideas to establish the
business.
The business ideas are not readily articulated or available from their social
encounters and hence the entrepreneurs have to confine themselves to the
conditions of their business scenario.
This study shows that Aviation maintenance business, although profitable
needs to be organized in cluster, i.e comprehensive repair capabilities will
have to be developed for survival.
Entrepreneurs in the Aviation maintenance business will have to invest in
increasing their capabilities to repair the related components. Further more
they will have to develop capabilities to manufacture PMA (parts
manufacturers approval) parts to feed their internal requirements.
222
Studies show that the next biggest boom in the global Aviation industry will
be triggered from India and the current trends are already proving this.
Entrepreneurs in the aviation maintenance sector will have to prepare
themselves for this exponential growth during 2010 – 2020. This will require
special efforts to associate with the OEMs (original equipment
manufacturers) who can authorize these entrepreneurs to handle the after
sales support of their products here in India.
Air Charter
Many entrepreneurs entered the Air charter business due to the glamour
attached with aviation industry, only to realize later that Air Charter is not a
profitable business. This study found that non of the Air Charter companies in
India have ever made profit and continue to operate as a support to their
parent companies which have used them for internal travel purpose.
Air charter business in India can either survive as a supporting activity to the
parent company or its business model has to be designed in a way to make
private air travel affordable, only then volumes can come from this business.
Entrepreneurs in Air Charter business will have to shift their focus on near by
overseas destinations like Singapore, Dubai and Hong Kong to offer
economical Air charter. There is enough passenger load for such
destinations, however the small jets owned by these Air charter companies
presently operating in India does not allow them to cover mid haul flights over
223
3 hours of flying and they will have to consider buying bigger aircrafts.
Promotion of a business is surrounded with uncertainties and the
entrepreneur has to perform in an unsure environment. The entrepreneur has
to confront many such uncertainties such as; will the proposed product /
service be accepted in the market ? Does the product / service have demand
and how long the demand will last ? Will the entrepreneur be able to yield
reasonable profits ? Will there be an assured supply of spares and
consumables as per requirement ? What kind of skilled and unskilled
manpower will be required ? Will labour with these skills be available or not ?
Government regulation and control in the concerned sector ? Will there be
any difficulty in fulfilling with the legal formalities ? What will be the source of
initial capital etc ?
Before making his/her efforts to start the business, the entrepreneur has to
seek pros and cons to the factors mentioned above and take important
decisions in that light.
Scope of Future Research
This study gives an understanding about the evolution and challenges faced
by entrepreneurs in both the sectors of aviation i.e Independent MRO and Air
Charter. However there is a further scope of detail analysis of the external
factors effecting the entrepreneurial growth in these two sectors. While the
aviation industry is growing by leaps and bounces and India is the 2nd fastest
growing market for aviation industry in the world, proportionate growth is not
224
seen in MRO sector, this leaves a scope for further research to find out the
actual reasons affecting the growth of this sector in India. The current
research has tried to study this sector from entrepreneurial angle, however
there are several challenges at the industry level which need to be further
researched.
Air Charter and Independent aviation MRO are labor and technology driven
industries and there is a need to study these sectors from the perspective of
technology and manpower. Some information is gathered about the impact of
high cost of labor and operation, however there is a need for an elaborate
study in these two areas.
Government policies have an impact on growth of any industry in India as
well as other countries, aviation not left aside. There is a need to study the
impact of government policies on these two sectors, which is holding back
the growth of revenue generations streams like MRO and Air charter, while
the aircraft manufacturers are taking away forex from India without any
commitment to the development of these sectors here.
225
APPENDIX – I
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226
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www.Ibeforg.com , www.businessworld.in, www.airsafe.com, www.faa.gov.com www.airliners.net, www.icmrindia.org, www.dgca.gov.in
235
APPENDIX – II
RESEARCH QUESTIONNAIRE
236
STUCTURED INTERVIEW SCHEDULE-1
OPEN-ENDED (FACE-TO-FACE)
Respondent :
Q-1 Personal Details
Res
Age : Designation : Category :
Q-2 Family background
Res
Service : Business : Farming :
Q-3 Name and address of the enterprise
Res
Location : Type of Company :
Q-4 Brief profile of business
Res
237
Category : No. of Employees :
Q-5 What motivated you to venture into business over a salaried job ?
Res
Aviation as a hobby : Own interest in Aviation :
Q-6 Please list the motivating factors which drove you to take to
entrepreneurship.
Res
Instinct to take risk : Desire to take challenges :
Passion towards Aircraft : Strong desire to be your own master
:
Will to follow your dream : Desire to make it big in life:
Glamour : Money :
Q-7 Was money a motivating factor for you to become an entrepreneur ?
238
Res
Yes : No :
Q-8 When did you start nursing dreams of doing something on your own
and taking control of your destiny ?
Res
Q-9 When did your enterprise take shape of a company ? Please narrate
the financial conditions.
Res
Type of Company : Current capital :
Current financial condition : Current ROI
Break even :
Q-
10
Please narrate the evolutionary phases of your entrepreneurship
and the mistakes made by you.
239
Res
Job to Ent. / Direct Ent : Capital :
Unavailability of Data : Control of OEMs:
Capital :
Q-
11
How important do you think is the support of Parents / Spouse in the
seed stage of a businessman ?
Res
Source of funding : Financial and mental support :
Q-
12
Do you think an innovative idea is the most important thing required
for the success of business ?
Res
Industry Need based : Opportunity based :
Innovative idea based : Foresight / Vision based :
Q- How confident were you about the success of your idea ?
240
13
Res
Desire to take challenges : Will to follow your dreams :
Q-
14
What do you think is the relationship between education and attitude
towards undertaking risk in enterpreneurship ?
Res
Q-
15
What are the entry barriers you faced while setting up the MRO / Air
Charter business ?
Res
Regulatory : Infrastructural constraints :
Capital : Control of OEMs :
Unavailability of data :
Q-
16
How are you able to preserve the vision through the life cycle of your
business ?
241
Res
Q-
17
Preserving your vision through the business cycle, how do you
balance growth, risk and profitability ?
Res
Effect of market fluctuations : Cash flow :
Q-
18
What are the factors effecting the sustenance of an entrepreneur in
MRO / Air Charter business ?
Res
Regulatory conrtoles : High cost of operation :
Problems sourcing spares : Retaining Skilled man power:
Support from OEMs.
Q-
19
Did you do any formal market survey to estimate the market size for
your Service ?
242
Res.
Industry data : Survey :
Q-
20
How did you mobilize initial capital. Did you approach any of the
specialized financial institutions like SIDBI / how was the response?
Res
Source of funding :
Q-
21
How did you deal with the cash flow constraints during the growth of
your enterprise ?
Res
Managing cash flow :
Q-
22
How did you obtain the legitimacy necessary to enable you to
borrow from the banks / financial institutions ?
Res
243
ROI : Current financial condition of company :
Q-
23
Do you think the evolution of entrepreneurs in MRO / Air Charter
business was need based ?
Res
Need based : Opportunity based :
Q-
24
Have you changed your product / service over time?
Res
Business life cycle :
Q-
25
Did you have any mental, psychological blocks, how did you
overcome them.
Res
Q-
26
Your enterprise has grown from scratch to the present stage. How
do you think a visionary entrepreneur transfers the skills and
inspirations to lead his enterprise to a successful level ?
244
Res
Foresight / Vision based :
Q-
27
What are the rewards of owning own business?
Res
Monetary / Financial : Recognition :
Satisfaction of being Employer : Job satisfaction :
Q-
28
What economic conditions affect your business?
Res
Effect of market fluctuation : Problem managing cash flow
:
Q-
29
What is the greatest fear you have about your business ?
Res
245
Q-
30
What do you believe are the three most important reasons why your
business is so unique?
Res
Place :
Interviewed on :
Validated on :
The above questionnaire was filled up by the researcher after an informal
interview of the entrepreneurs and response were quantified on the basis of
significance of the reply of the questions by the entrepreneur. Interviews
were more of exploratory nature, rather than direct questions asked to the
entrepreneurs and interpretations were made after measuring the scores.
The general facts and financial facts were measures on High, Moderate and
Low scales, while the five factors motivations, entry barriers, evolutionary
factors, challenges faced in sustenance and rewards were measures on 0
and 1 scale where 0 = No and 1 = Yes.
246
APPENDIX – III
SURVEY DATA
247
1
Parameters
Sr. no. Name of Entrepreneur / Company Location Categorysno name Location Category1 Ravi Menon / Airworks 1 12 Nanda Kumar / Indamer 1 13 Bharat Malkani / Max Aerospace 1 14 Victor Sena / Interiors Aeroservices 1 15 Joseph Doss / Bharat Aviation 1 16 Manek Daver / Livewel Aviation 1 17 Rajendra Johri / Aman Aviation 1 18 Manav singh / A.R.Aerotech 2 19 Rahul Bhatia / Interglobe 2 110 Dev Mohan Gupta / Horizon Aircraft Maintenance 2 111 Vishal Varshney / Magnum Aviation 2 112 Trilochan Singh / Vikram Aviation 2 113 Satyajit Singh Majithia / Saraya Aviation 2 114 Chanchal Ghosh / Associated Air Support 2 115 Nandy Bhatia / HBE group 2 116 M.M.Varman / Varman Aviation 3 117 B.R.Taneja / Taneja Aerospace 3 118 Captain Gopinath / Deccan Aviation 3 119 Ravi Rishi / Global Vectra 1 220 Gautam Singhania / Raymond Aviation 1 221 Kishor Bafna / Kestrel Aviation 1 222 Tanveer Romani / Golden Wings 1 223 V.K.Malhotra / Malhotra Helicopters 1 224 Avinash Bhosale / Arki Aviation 1 225 Rishi Agarwal / ABG aviation 1 226 Gautam Adani / Adani group 1 227 Samir Gahlot / Airmid aviation 1 228 Captain Gopinath / Deccan Aviation 3 229 Rakesh Baderwal / S.K.B.Infracons 2 230 Asia Aviation / Capt Kukkar 2 231 Sanjay Bhatia / SRC Aviation 2 232 Kanwar Deep Singh / Alchemist Aviation 2 233 Aiok Sharma / Air One 2 234 H.S.Waraich / Prem Air 2 235 R.K.Saraf / India Flysafe 2 236 Simon Jolly / Air Charter Services 2 237 Manav singh / Clubone Air 2 2
1-Mumba + Pune1-Independent MRO2-Delhi 2-Air Charter3-Bangalore
Facts
248
2
Age at which you became entrepreneur
Family Background
Personal Background
No. of Employees
Type of Company
ageofentry fam_occup per_back nemp typ_comp1 2 2 3 22 1 1 2 22 2 2 2 23 1 1 1 22 1 1 1 22 2 1 3 22 2 1 1 21 1 2 2 21 2 2 2 21 2 2 2 21 2 2 2 23 1 1 1 23 1 1 2 22 1 1 2 22 1 1 2 23 1 1 2 21 1 1 3 33 3 1 2 22 1 1 2 31 2 2 2 31 2 2 1 22 1 1 1 22 1 1 1 22 1 1 2 21 2 2 1 31 2 2 2 32 2 2 2 23 3 1 2 22 2 1 2 22 1 1 1 21 2 1 1 22 1 1 2 23 1 1 1 23 1 1 1 21 2 2 2 22 2 2 2 21 2 2 3 2
1- < 30 yrs 1-Service 1-Job to Ent 1- <20 1-Prop / Part2- 30-50 yrs 2-Business 2-Direct Ent. 2- 20-100 2-Pvt. Ltd.3- > 50 yrs 3-Farming 3- >100 3-Public Ltd
Facts Facts Facts Facts Facts
General
249
3
Initial CapitalCurrent Capital
Source of funding
Break even period
Current financial condition
ini_cap curr_cap source_fund breakeve curr_fin_cond1 3 2 2 11 3 1 2 23 2 2 2 32 1 1 3 31 2 1 1 21 3 1 1 11 2 2 2 23 3 1 2 23 3 2 3 22 3 2 2 12 2 2 3 21 2 1 2 22 2 1 2 21 2 1 2 31 3 1 3 22 3 1 2 22 3 1 3 21 3 1 2 23 3 3 3 33 3 3 3 33 3 2 3 33 3 1 2 11 3 1 3 23 3 1 2 13 3 1 2 13 3 3 2 13 3 3 3 21 3 1 2 23 3 2 3 33 3 1 3 23 3 2 3 33 3 2 3 13 3 1 3 33 3 1 3 33 3 1 3 23 3 2 2 13 3 1 3 3
1- < 50 lacs 1- < 5 crore 1-Self / Partner / VC1- < 1 yr 1-Good Profit2- < 5 crore 2- 5 - 50 crore2-Family 2- 1-3 yrs 2-Average Profit3- > 10 crore 3- > 50 crore 3-Bank / Stock market3- > 3yrs 3-Loss
Facts Facts Facts Facts Facts
Financial
250
4
Current ROI
Aviation as a hobby of any family member
Your own Interest in Aviation
Instinct to take risk
Desire to take challenges in life
roi moti1 moti2 moti3 moti43 1 1 1 12 0 1 0 13 0 1 1 13 0 1 0 11 0 1 0 01 0 1 1 11 0 1 0 12 1 1 1 12 0 1 1 12 1 1 1 03 0 1 1 13 0 1 1 13 0 1 1 13 0 1 0 12 0 1 1 12 0 1 0 13 0 1 1 11 0 1 1 12 1 1 1 13 1 1 1 13 0 1 1 02 0 1 1 13 1 1 1 01 0 0 1 11 0 0 1 11 0 0 1 12 0 1 1 11 0 1 1 13 0 0 1 12 1 1 0 13 0 1 1 01 0 0 1 12 0 1 1 13 1 1 1 12 0 0 1 12 0 1 1 12 1 1 1 1
1-Satisftry 1-Yes 1-Yes 1-Yes 1-Yes2-Average 0-No 0-No 0-No 0-No3-Unsatisftry
Facts Internal Internal Internal Internal
Financial Motivational factors
251
5
Passion towards Aircrafts / Flying
Strong desire to be your own master
Will to follow your dream
Ambitious / Desire to make it big in life Money
moti5 moti6 moti7 moti8 moti91 1 1 1 01 1 0 1 10 1 1 1 11 1 0 0 10 1 0 1 11 1 1 1 01 1 1 1 01 1 1 1 01 1 1 1 11 1 0 1 10 1 0 1 11 0 1 0 01 0 1 1 00 1 0 0 10 1 0 0 11 0 1 0 01 1 1 1 11 0 1 1 00 1 1 1 11 1 1 1 00 1 0 1 10 1 1 1 11 1 1 0 00 1 1 1 10 1 1 1 11 1 1 1 10 1 1 1 11 1 1 1 00 1 0 1 11 1 0 0 10 1 1 0 00 1 1 1 11 1 1 0 11 1 0 0 11 1 1 0 11 1 1 1 11 1 1 1 0
1-Yes 1-Yes 1-Yes 1-Yes 1-Yes0-No 0-No 0-No 0-No 0-No
Internal Internal Internal Internal External
Motivational factors
252
6
Glamour Motivation
Difficulty in getting Permissions / Approvals
Infrastructural constraints Capital
moti10 Max 10 barr1 barr2 barr30 8 0 0 00 6 1 1 11 8 0 1 00 5 1 1 10 4 1 1 10 7 0 0 00 6 1 1 11 9 0 0 00 8 0 0 00 7 0 0 00 6 1 0 00 5 1 1 10 6 1 0 10 4 1 1 10 5 1 1 00 4 1 0 10 8 1 0 00 6 1 0 11 9 0 0 01 9 0 0 00 5 1 1 01 8 1 1 00 6 1 1 11 7 0 0 00 6 1 0 00 7 0 0 00 7 1 0 00 7 1 0 00 5 1 0 00 6 1 1 10 4 1 1 11 7 0 0 01 8 1 0 10 7 1 0 00 6 1 1 10 8 0 0 01 9 0 1 0
1-Yes 1-Yes 1-Yes 1-Yes0-No 0-No 0-No 0-No
External Government Government Industry
Motivational factors Entry Barriers
253
7
Control of OEMs
Unavailibility of data Barriers
Industry Need based
Opportunity based
barr4 barr5 Max 5 evolu1 evolu20 1 1 1 11 0 4 0 10 0 1 1 00 1 4 1 00 1 4 1 01 1 2 0 10 0 3 0 10 0 0 0 11 0 1 0 10 1 1 0 11 1 3 0 11 0 4 0 00 1 3 0 11 1 5 1 11 0 3 0 11 1 4 0 00 1 2 0 10 0 2 1 10 1 1 1 10 0 0 0 10 1 3 0 10 0 2 1 10 1 4 1 10 1 1 0 11 1 3 0 11 1 2 0 11 1 3 1 10 0 1 1 11 1 3 0 10 1 4 1 11 1 5 0 10 1 1 1 10 0 2 0 11 0 2 0 10 0 3 1 11 0 1 1 10 0 1 0 1
1-Yes 1-Yes 1- Yes 1- Yes0-No 0-No 0-No 0-No
Industry Industry External Internal
Entry Barriers Evolutionary factors
254
8
Innovative Idea based
Foresight / Vision based Evolution
Regulatory controles
High cost of operation / Fixed cost
evolu3 evolu4 Max 4 chall1 chall20 1 3 0 01 0 2 1 10 1 2 0 00 0 1 1 01 1 3 1 11 1 3 0 00 1 2 1 01 1 3 0 01 1 3 0 00 1 2 1 01 1 3 1 11 0 1 1 10 1 2 0 10 0 2 1 10 0 1 1 11 0 1 1 01 1 3 0 01 1 4 0 01 1 4 0 01 0 2 0 10 0 1 1 10 1 3 1 00 0 2 1 11 0 2 0 00 0 1 1 11 1 3 0 10 1 3 0 11 1 4 0 00 0 1 1 10 0 2 1 10 0 1 1 10 1 3 0 11 1 3 0 10 0 1 1 00 0 2 1 10 1 3 0 01 1 3 0 0
1- Yes 1- Yes 1-Yes 1-Yes0-No 0-No 0-No 0-No
Internal External Government Industry
Evolutionary factors Challenges faced in Sustenance
255
9
Problem sourcing Spares
Difficulty retaining Skilled Man power
Difficulty getting support from OEM
Affected by Market fluctuations
Problem Managing Cash flow
chall3 chall4 chall5 chall6 chall70 0 0 1 00 1 0 0 00 1 0 1 10 1 0 0 11 0 1 1 11 1 0 0 01 1 1 0 00 1 0 1 00 1 0 1 00 1 0 0 00 1 0 1 11 0 1 1 01 1 1 0 00 1 0 1 10 1 0 0 11 0 1 0 00 0 0 0 00 0 0 0 00 1 0 1 01 0 0 0 01 1 1 0 01 0 1 0 00 1 1 0 01 0 0 0 01 0 1 0 00 0 0 0 00 0 1 0 00 0 0 0 01 1 1 1 11 1 1 1 11 1 1 1 11 0 1 1 11 1 1 1 11 0 1 1 11 0 0 1 10 1 1 1 00 1 0 1 1
1-Yes 1-Yes 1-Yes 1-Yes 1-Yes0-No 0-No 0-No 0-No 0-No
Industry Industry Industry Other Industry Industry
Challenges faced in Sustenance
256
10
ChallengesMonetary / Financial
Recongnition in the Industry
Satisfaction of being an employer
Job satisfaction
Max 7 rewards1 rewards2 rewards3 rewards41 1 1 1 13 1 0 1 03 1 1 0 03 1 0 0 06 0 0 1 12 1 1 1 14 0 0 1 12 0 1 1 12 1 1 1 12 1 1 0 15 0 0 0 15 0 1 1 14 1 0 0 15 0 1 0 14 1 0 1 13 1 0 1 10 1 1 1 10 1 1 1 12 1 1 1 12 0 1 1 15 0 0 0 13 1 1 0 14 0 0 1 11 1 1 0 14 0 0 0 11 1 1 1 12 1 1 0 00 1 1 1 17 0 0 0 17 0 0 1 17 0 0 1 15 1 1 1 16 0 1 1 15 0 0 0 15 0 0 1 13 1 1 0 13 1 1 1 1
1-Yes 1-Yes 1-Yes 1-Yes0-No 0-No 0-No 0-No
External Internal Internal Internal
Rewards to the Entrepreneur
257
11
RewardsMax 44221242343132233444313231424122431234
258
APPENDIX – IV
SPSS OUT PUTS
259
Location
Frequency Percent Valid
Percent Cumulative
Percent 1-Mumba + Pune 16 43.2 43.2 43.2 Valid
2-Delhi 17 45.9 45.9 89.2 3-Bangalore 4 10.8 10.8 100.0 Total 37 100.0 100.0
Category
Frequency Percent Valid
Percent Cumulative
Percent 1-Independent MRO
18 48.6 48.6 48.6 Valid
2-Air Charter 19 51.4 51.4 100.0
Total 37 100.0 100.0
Age at which you became entrepreneur
Frequency Percent Valid
Percent Cumulative
Percent 1- < 30 yrs 13 35.1 35.1 35.1 Valid 2- 30-50 yrs 16 43.2 43.2 78.4
3- > 50 yrs 8 21.6 21.6 100.0 Total 37 100.0 100.0
Family Background
Frequency Percent Valid
Percent Cumulative
Percent 1-Service 18 48.6 48.6 48.6 Valid 2-Business 17 45.9 45.9 94.6
3-Farming 2 5.4 5.4 100.0 Total 37 100.0 100.0
Family Background
Frequency Percent Valid
Percent Cumulative
Percent Valid 1-Service 18 48.6 48.6 48.6
260
2-Business/Farming
19 51.4 51.4 100.0
Total 37 100.0 100.0
Personal Background
Frequency Percent Valid
Percent Cumulative
Percent 1-Job to Ent 23 62.2 62.2 62.2 Valid 2-Direct Ent. 14 37.8 37.8 100.0
Total 37 100.0 100.0
No. of Employees
Frequency Percent Valid
Percent Cumulative
Percent 1- <20 12 32.4 32.4 32.4 Valid 2- 20-100 21 56.8 56.8 89.2
3- >100 4 10.8 10.8 100.0 Total 37 100.0 100.0
Type of Company
Frequency Percent Valid
Percent Cumulative
Percent 2-Pvt. Ltd. 32 86.5 86.5 86.5 Valid 3-Public Ltd 5 13.5 13.5 100.0
Total 37 100.0 100.0
Initial Capital
Frequency Percent Valid
Percent Cumulative
Percent 1- < 50 lacs 11 29.7 29.7 29.7 Valid 2- < 1 crore 6 16.2 16.2 45.9
3- > 1 crore 20 54.1 54.1 100.0 Total 37 100.0 100.0
Current Capital
Frequency Percent Valid
Percent Cumulative
Percent
261
1- < 5 crore 1 2.7 2.7 2.7 Valid 2- < 10 crore 7 18.9 18.9 21.6
3- > 10 crore 29 78.4 78.4 100.0
Total 37 100.0 100.0
Source of funding
Frequency Percent Valid
Percent Cumulative
Percent 1-Self/Partner/VC
22 59.5 59.5 59.5 Valid
2-Family 11 29.7 29.7 89.2
3-Bank / Stock market
4 10.8 10.8 100.0
Total 37 100.0 100.0
Break even period
Frequency Percent Valid
Percent Cumulative Percent
1- < 1 yr 2 5.4 5.4 5.4 Valid 2- 1-3 yrs 17 45.9 45.9 51.4
3- > 3yrs 18 48.6 48.6 100.0 Total 37 100.0 100.0
Current financial condition
Frequency Percent Valid
Percent Cumulative
Percent 1-Good Profit 9 24.3 24.3 24.3 Valid
2-Average Profit 17 45.9 45.9 70.3
3-Loss 11 29.7 29.7 100.0 Total 37 100.0 100.0
Current ROI
Frequency Percent Valid
Percent Cumulative
Percent Valid 1-Satisftry 9 24.3 24.3 24.3
262
2-Average 14 37.8 37.8 62.2
3-Unsatisftry 14 37.8 37.8 100.0
Total 37 100.0 100.0
Aviation as a hobby of any family member
Frequency Percent Valid
Percent Cumulative
Percent 0-No 28 75.7 75.7 75.7 Valid 1-Yes 9 24.3 24.3 100.0
Total 37 100.0 100.0
Your own Interest in Aviation
Frequency Percent Valid
Percent Cumulative
Percent 0-No 6 16.2 16.2 16.2 Valid 1-Yes 31 83.8 83.8 100.0
Total 37 100.0 100.0
Adventurous / Craving to take risk
Frequency Percent Valid
Percent Cumulative
Percent 0-No 7 18.9 18.9 18.9 Valid 1-Yes 30 81.1 81.1 100.0
Total 37 100.0 100.0
Desire to take challenges in life
Frequency Percent Valid
Percent Cumulative
Percent 0-No 5 13.5 13.5 13.5 Valid 1-Yes 32 86.5 86.5 100.0
Total 37 100.0 100.0
Passion towards Aircrafts / Flying
Frequency Percent Valid
Percent Cumulative
Percent 0-No 14 37.8 37.8 37.8 Valid 1-Yes 23 62.2 62.2 100.0
Total 37 100.0 100.0
263
Being your own master
Frequency Percent Valid
Percent Cumulative
Percent 0-No 4 10.8 10.8 10.8 Valid 1-Yes 33 89.2 89.2 100.0
Total 37 100.0 100.0
Follow your dream
Frequency Percent Valid
Percent Cumulative
Percent 0-No 11 29.7 29.7 29.7 Valid 1-Yes 26 70.3 70.3 100.0
Total 37 100.0 100.0
Ambitious / Desire to make it big in life
Frequency Percent Valid
Percent Cumulative
Percent 0-No 11 29.7 29.7 29.7 Valid 1-Yes 26 70.3 70.3 100.0
Total 37 100.0 100.0
Money
Frequency Percent Valid
Percent Cumulative
Percent 0-No 13 35.1 35.1 35.1 Valid 1-Yes 24 64.9 64.9 100.0
Total 37 100.0 100.0
Glamour
Frequency Percent Valid
Percent Cumulative
Percent 0-No 28 75.7 75.7 75.7 Valid 1-Yes 9 24.3 24.3 100.0
Total 37 100.0 100.0
Number of Motivational Factors
Frequency Percent Valid
Percent Cumulative
Percent
264
4 4 10.8 10.8 10.8 Valid 5 5 13.5 13.5 24.3
6 9 24.3 24.3 48.6 7 8 21.6 21.6 70.3 8 7 18.9 18.9 89.2 9 4 10.8 10.8 100.0 Total 37 100.0 100.0
Difficulty in getting Permissions / Approvals
Frequency Percent Valid
Percent Cumulative
Percent 0-No 13 35.1 35.1 35.1 Valid 1-Yes 24 64.9 64.9 100.0
Total 37 100.0 100.0
Infrastructural constraints
Frequency Percent Valid
Percent Cumulative
Percent 0-No 22 59.5 59.5 59.5 Valid 1-Yes 15 40.5 40.5 100.0
Total 37 100.0 100.0
Capital Intensive
Frequency Percent Valid
Percent Cumulative
Percent 0-No 23 62.2 62.2 62.2 Valid 1-Yes 14 37.8 37.8 100.0
Total 37 100.0 100.0
Control of OEMs
Frequency Percent Valid
Percent Cumulative
Percent 0-No 22 59.5 59.5 59.5 Valid 1-Yes 15 40.5 40.5 100.0
Total 37 100.0 100.0
Unavailibility of data
Frequency Percent Valid
Percent Cumulative
Percent
265
0-No 16 43.2 43.2 43.2 Valid 1-Yes 21 56.8 56.8 100.0
Total 37 100.0 100.0
Number of Barriers
Frequency Percent Valid
Percent Cumulative
Percent 0 2 5.4 5.4 5.4 Valid 1 10 27.0 27.0 32.4
2 7 18.9 18.9 51.4 3 9 24.3 24.3 75.7 4 7 18.9 18.9 94.6 5 2 5.4 5.4 100.0 Total 37 100.0 100.0
Industry Need based
Frequency Percent Valid
Percent Cumulative
Percent 0-No 22 59.5 59.5 59.5 Valid 1-Yes 15 40.5 40.5 100.0
Total 37 100.0 100.0
Opportunity based
Frequency Percent Valid
Percent Cumulative
Percent 0-No 5 13.5 13.5 13.5 Valid 1-Yes 32 86.5 86.5 100.0
Total 37 100.0 100.0
Idea based
Frequency Percent Valid
Percent Cumulative
Percent 0-No 20 54.1 54.1 54.1 Valid 1-Yes 17 45.9 45.9 100.0
Total 37 100.0 100.0
Encouragement by family / Industry friends
Frequency Percent Valid
Percent Cumulative
Percent
266
0-No 16 43.2 43.2 43.2 Valid 1-Yes 21 56.8 56.8 100.0
Total 37 100.0 100.0
Number of Evolution Factors
Frequency Percent Valid
Percent Cumulative
Percent 1 9 24.3 24.3 24.3 Valid 2 11 29.7 29.7 54.1
3 14 37.8 37.8 91.9 4 3 8.1 8.1 100.0 Total 37 100.0 100.0
Regulatory controls
Frequency Percent Valid
Percent Cumulative
Percent 0-No 18 48.6 48.6 48.6 Valid 1-Yes 19 51.4 51.4 100.0
Total 37 100.0 100.0
High cost of operation / Fixed cost
Frequency Percent Valid
Percent Cumulative
Percent 0-No 18 48.6 48.6 48.6 Valid 1-Yes 19 51.4 51.4 100.0
Total 37 100.0 100.0
Spares
Frequency Percent Valid
Percent Cumulative
Percent 0-No 19 51.4 51.4 51.4 Valid 1-Yes 18 48.6 48.6 100.0
Total 37 100.0 100.0
Skilled Man power
Frequency Percent Valid
Percent Cumulative
Percent 0-No 16 43.2 43.2 43.2 Valid 1-Yes 21 56.8 56.8 100.0
267
Total 37 100.0 100.0
Control by OEMs
Frequency Percent Valid
Percent Cumulative
Percent 0-No 20 54.1 54.1 54.1 Valid 1-Yes 17 45.9 45.9 100.0
Total 37 100.0 100.0
Market fluctuations
Frequency Percent Valid
Percent Cumulative
Percent 0-No 19 51.4 51.4 51.4 Valid 1-Yes 18 48.6 48.6 100.0
Total 37 100.0 100.0
Cash flow
Frequency Percent Valid
Percent Cumulative
Percent 0-No 23 62.2 62.2 62.2 Valid 1-Yes 14 37.8 37.8 100.0
Total 37 100.0 100.0
Number of Challenges
Frequency Percent Valid
Percent Cumulative
Percent 0 3 8.1 8.1 8.1 Valid 1 3 8.1 8.1 16.2
2 7 18.9 18.9 35.1 3 7 18.9 18.9 54.1 4 5 13.5 13.5 67.6 5 7 18.9 18.9 86.5 6 2 5.4 5.4 91.9 7 3 8.1 8.1 100.0 Total 37 100.0 100.0
Monetary / Financial
Frequency Percent Valid
Percent Cumulative
Percent
268
0-No 16 43.2 43.2 43.2 Valid 1-Yes 21 56.8 56.8 100.0
Total 37 100.0 100.0
Recongnition in the Industry
Frequency Percent Valid
Percent Cumulative
Percent 0-No 16 43.2 43.2 43.2 Valid 1-Yes 21 56.8 56.8 100.0
Total 37 100.0 100.0
Satisfaction of being an employer
Frequency Percent Valid
Percent Cumulative
Percent 0-No 14 37.8 37.8 37.8 Valid 1-Yes 23 62.2 62.2 100.0
Total 37 100.0 100.0
Job satisfaction
Frequency Percent Valid
Percent Cumulative
Percent 0-No 4 10.8 10.8 10.8 Valid 1-Yes 33 89.2 89.2 100.0
Total 37 100.0 100.0
Number of Rewards
Frequency Percent Valid
Percent Cumulative
Percent 1 6 16.2 16.2 16.2 Valid 2 11 29.7 29.7 45.9
3 10 27.0 27.0 73.0 4 10 27.0 27.0 100.0 Total 37 100.0 100.0
269
Difficulty in getting Permissions / Approvals * Motivation category
Crosstab
Motivation category Total
Low (<4) Moderate (4-6)
High (>6)
Difficulty in getting Permissions / Approvals
0-No Count
0 0 13 13
% within Motivation category
.0% .0% 68.4% 35.1%
1-Yes Count 4 14 6 24
% within Motivation category
100.0% 100.0% 31.6% 64.9%
Total Count 4 14 19 37
% within Motivation category
100.0% 100.0% 100.0%
100.0%
Chi-Square Tests
Value df
Asymp. Sig. (2-sided)
Pearson Chi-Square
18.987(a) 2 .000
N of Valid Cases 37
a 3 cells (50.0%) have expected count less than 5. The minimum expected count is 1.41.
270
Symmetric Measures
Value Approx.
Sig.
Nominal by Nominal
Contingency Coefficient .582 .000
N of Valid Cases 37
a Not assuming the null hypothesis.
b Using the asymptotic standard error assuming the null hypothesis.
Infrastructural constraints * Motivation category
Crosstab
Motivation category Total
Low (<4) Moderate (4-6)
High (>6)
Infrastructural constraints
0-No Count 1 5 16 22
% within Motivation category
25.0% 35.7% 84.2% 59.5%
1-Yes Count 3 9 3 15
% within Motivation category
75.0% 64.3% 15.8% 40.5%
Total Count 4 14 19 37
% within Motivation category
100.0% 100.0% 100.0% 100.0%
271
Chi-Square Tests
Value df
Asymp. Sig. (2-sided)
Pearson Chi-Square
10.074(a) 2 .006
N of Valid Cases 37
a 2 cells (33.3%) have expected count less than 5. The minimum expected count is 1.62.
Symmetric Measures
Value Approx.
Sig.
Nominal by Nominal
Contingency Coefficient .463 .006
N of Valid Cases 37
a Not assuming the null hypothesis.
b Using the asymptotic standard error assuming the null hypothesis.
Capital Intensive * Motivation category
Crosstab
Motivation category Total
Low (<4) Moderate (4-6)
High (>6)
Capital Intensive
0-No Count 0 5 18 23
% within Motivation category
.0% 35.7% 94.7% 62.2%
1-Yes Count 4 9 1 14
% within Motivation category
100.0% 64.3% 5.3% 37.8%
% within Motivation category
100.0% 64.3% 5.3% 37.8%
272
Chi-Square Tests
Value df
Asymp. Sig. (2-sided)
Pearson Chi-Square
19.307(a) 2 .000
N of Valid Cases 37
a 2 cells (33.3%) have expected count less than 5. The minimum expected count is 1.51.
Symmetric Measures
Value Approx.
Sig.
Nominal by Nominal
Contingency Coefficient .586 .000
N of Valid Cases 37
a Not assuming the null hypothesis.
b Using the asymptotic standard error assuming the null hypothesis.
Control of OEMs * Motivation category
Crosstab
Motivation category Total
Low (<4) Moder
ate (4-
High (>6)
Total Count 4 14 19 37
% within Motivation category
100.0% 100.0% 100.0% 100.0%
273
6)
Control of OEMs
0-No Count 1 8 13 22
% within Motivation category
25.0% 57.1% 68.4% 59.5%
1-Yes Count 3 6 6 15
% within Motivation category
75.0% 42.9% 31.6% 40.5%
Total Count 4 14 19 37
% within Motivation category
100.0%
100.0%
100.0% 100.0%
Chi-Square Tests
Value Df
Asymp. Sig. (2-sided)
Pearson Chi-Square
2.635(a) 2 .268
N of Valid Cases 37
a 2 cells (33.3%) have expected count less than 5. The minimum expected count is 1.62.
Symmetric Measures
Value Approx.
Sig.
Nominal by Nominal
Contingency Coefficient .258 .268
274
N of Valid Cases 37
a Not assuming the null hypothesis.
b Using the asymptotic standard error assuming the null hypothesis.
Unavailibility of data * Motivation category
Crosstab
Motivation category
Low (<4)
Moderate (4-6)
High (>6) Total
Count 0 6 10 16 0-No
% within Motivation category
.0% 42.9% 52.6% 43.2%
Count 4 8 9 21
Unavailibility of data
1-Yes
% within Motivation category
100.0% 57.1% 47.4% 56.8%
Count 4 14 19 37 Total
% within Motivation category
100.0% 100.0% 100.0% 100.0%
Chi-Square Tests
Value df
Asymp. Sig. (2-sided)
Pearson Chi-Square 3.731(a) 2 .155
N of Valid Cases 37
a 2 cells (33.3%) have expected count less than 5. The minimum expected count is 1.73.
275
Symmetric Measures
Value Approx.
Sig.
Nominal by Nominal
Contingency Coefficient .303 .155
N of Valid Cases 37
a Not assuming the null hypothesis.
b Using the asymptotic standard error assuming the null hypothesis.
Oneway ANOVA
Descriptives
ANOVA
Number of Barriers
Sum of
Squares Df Mean
Square F Sig.
Between Groups 50.957 2 25.478 54.269 .000
Within Groups 15.962 34 .469
Total 66.919 36