final analysis on aviation sector in india

8/8/2019 Final Analysis on Aviation Sector in India

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Padmashree Dr. D. Y. Patil UniversityDEPARTMENT OF BUSINESS MANAGEMENT

ANALYSIS ON AVIATION SECTORIN INDIA

SUBJECT:

TREASURY & FOREX MANAGEMENT

SUBMITTED TO:

PROF. SHWETA BHOSLE

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ACKNOWLEDGEMENT

We are privileged to introduce this assignment for Treasury and Forex

Management. Being a management student of MBA we need to acquire knowledge

of each and every aspect of management tactics. Keeping this objective in mind, this

project has been written in a paper and systematic manner. While all necessary

information has been covered and care has been taken to avoid information overload.

We had great pleasure in preparing this project. We are confident that the

information given in this project is true as per our knowledge. We shall be eagerly

waiting for any suggestions given by our respected professor.

We take this opportunity to thank our honorable Mrs. Shweta Bhosle for her

support and encouragement extended to us.

Submitted By, Submitted To,

Kinchit R. Pandya Prof. Shweta Bhosle.

MBA-CORE 09064.

(Finance)

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TABLE OF CONTENT

Scope of Aviation Sector in India.

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SR. NO. TOPIC PAGENO.

1 Scope of Aviation Sector in India 4

2 Classification of Indian Aviation Sector 5-6

3 Growth of Aviation Sector in India 7

4 Trends in Aviation Industry 8-9

5 Aviation Sector Boomed 10-11

6 Current Domestic Airline Companies OperatingIn India.

12

7 Air India 13-14

8 Go Air Airlines 15-16

9 Indigo Airlines 17-18

10 Jet Airways 19-21

11 Kingfisher Airlines 22-25

12 Spicejet Airlines 26-28

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With a growth rate of 18 percent per annum, the Indian Aviation Industry is

one of the fastest growing aviation industries in the world.. The government &

apposes open sky policy has led to many overseas players entering the market and

the industry has been growing both in terms of players and number of aircrafts.

Today, private airlines account for around 75 per cent share of the domestic

aviation market.

India is the 9th largest aviation market in the world. According to the

Ministry of Civil Aviation, around 29.8 million passengers traveled to/from India

during 2008, an increase of 30 per cent on previous year. It is predicted that

international passengers will grow up to 50 million by 2015. Further, due to

enhanced opportunities and international connectivity, 69 foreign airlines from 49

countries are flying into India.Growth Rate 24% annual growth.

AAI manages 128 airports, which include 15 International Airport, 08

Customs Airports, 81 Domestic Airports and 28 Civil Enclaves at Defense

airfields. There are over 450 airports and 1091 registered aircrafts in the country.

The genesis of civil aviation in India goes back to December 1912 when the first

domestic air route between Karachi and Delhi became operational. In the early

fifties, all airlines operating in the country were merged into either Indian Airlines

or Air India and, by virtue of the Air Corporations Act 1953, this monopoly

continued for the next forty years.

Classification of Indian Aviation Sector

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The Indian aviation sector can be broadly divided into the following main

categories:

1Scheduled Air Transport Services- It includes domestic and international airlines.

2. Non-scheduled air transport service - It includes charter operators and air taxi

operators.

3.Air cargo service - It includes air transportation of cargo and mail.

Scheduled air transport service:

It is an air transport service undertaken between two or more places and operated

according to a published timetable. It includes:

1. Domestic airlines, which provide scheduled flights within India and to select

international destinations. Air Deccan, Spice Jet, Kingfisher Airline and Indigo are

some of the domestic players in the industry.

2. International airlines, which operate scheduled international air services to and

from India.

Non-scheduled air transport service:

It is an air transport service other than the scheduled one and may be on charter

basis and/or non-scheduled basis. The operator is not permitted to publish time

schedule and issue tickets to passengers.

Air cargo services:

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It is an air transportation of cargo and mail. It may be on scheduled or non-

scheduled basis. These operations are to destinations within India. For operation

outside India, the operator has to take specific permission of Directorate General

of Civil Aviation demonstrating his capacity for conducting such an operation.

At present, there are 2 scheduled private airlines (Jet Airways and Air Sahara),

which provide regular domestic air services along with Indian Airlines. In addition

there are 47 non-scheduled operators providing air-taxi/non-scheduled air transport

services.

Apart from this, the players in aviation industry can be categorized in three groups:

Public players

Private players

Start up players

There are three public players: Air India, Indian Airlines and Alliance Air. The

private players include Jet Airways, Air Sahara, Kingfisher Airlines, Spice Jet, Air

Deccan and many more. The startup players are those planning to enter the

markets. Some of them are Omega Air, Magic Air, Premier Star Air and MDLR

Airlines

Growth of Aviation Sector in India

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Domestic airlines flew 3.67 million passengers in August 2009an increase

of 25 per cent.

The Centre for Asia Pacific Aviation (CAPA) forecasted that domestic

traffic will increase by 25 per cent to 30 per cent till 2010 and internationaltraffic growth by 15 per cent, taking the total market to more than 100

million passengers by 2010.

The government plans to invest US$ 9 billion to modernise existing airports

by 2010. The government is also planning to develop around 300 unused

airstrips.

India ranks fourth after US, China and Japan in terms of domestic

passengers volume. The number of domestic flights grew by 69 per centfrom 2005 to 2008. The domestic aviation sector is expected to grow at a

rate of 9-10 per cent to reach a level of 150-180 million passengers by 2020.

The industry witnessed an annual growth of 12.8 per cent during the last 5

years in the international cargo handled at all Indian airports. The airports

handled a total of 1020.9 thousand metric tones of international cargo in

2006-07.

Further, there has been an increase in tourist charter flights to India in 2008with around 686 flights bringing 150,000 tourists. Also, there has been an

increase in non-scheduled operator permits 99 in 2008 as against 66 in

2007.

Trends in Aviation Industry

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1. Consolidation in aviation sector: In aviation industries the rise in the number

of alliances will help in promote the growth of aviation sector in India. Example of

the Jet-Sahara merger is just the beginning. Indian aviation industry is looking

forward to more consolidations.

2. The number of passengers travelling by air is on the rise: By 2025

passenger boarding expected to double and by the same time aircraft operations are

expected to triple, the number of passengers travelling by air is on rise.

3. For the travelling public, price is paramount in choosing a carrier: Airfaresare fully transparent to the public and travellers are choosing the lowest price

option because of the Internet and round-the-clock search facility. Even business

travellers, who have been less price-sensitive, are resisting fare increases.

Travellers are not giving preference to brand but the only premiums they are

willing to pay for are time-of day and direct flights.

4. Capacity is growing without much constraint: The new aircraft have beenordered by Indian carriers for delivery in the coming period, without clear plans to

retire older planes. Significant numbers of regional jets are also adding by them.

Kingfisher Airlines has already ordered 5 Airbus A380 aircrafts that will operate

on international routes

5. Cost structures will continue to handicap legacy carriers as they compete

with newer airlines, as well as with overseas carriers: Great threats are being

posed by the low cost carriers to legacy carriers, as a result of which they are

reshuffle, their pricing policies. Apart from this, they are also facing competition

from overseas players.

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6. Outsourcing: Private airlines are famous to hire foreign pilots, get expatriates

or retired personnel from the Air Force or PSU airlines, in senior management

positions. Airlines are also famous to take on contract employees such as cabin

crew, ticketing and check-in agents.

Aviation Sector Boomed

Reason for Boom in Aviation Industry:

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1. Foreign equity allowed: Without any Government approval, foreign equity up

to 49 per cent and NRI (Non-Resident Indian) investment up to 100 per cent is

allowable in domestic airlines.

2. Low entry barriers: Nowadays, to launch an airline venture capital of $10

million or less is enough. Private airlines are hiring foreign pilots, get expatriates

or retired personnel from the Air Force or PSU airlines in senior management

positions.

3. Attraction of foreign shores: Many private players like Jet and Sahara have

gone international by starting operations, first to SAARC countries, and then to

South-East Asia, the UK, and the US and many more domestic airlines too will be

entitled to fly overseas by using unutilized bilateral entitlements to Indian carriers.

4. Rising income levels and demographic profile: Ascompared to the developed

country standards, India's GDP (per capita) at $3,100 is still very low but as India

is shining, at least in metro cities and urban centres, where IT and BPO industrieshave made the young generation prosperous.

Demographically, In India people in age group of 20-50 among its 50 million

strong middle class, has the highest percentage with high earning potential. It

contributes the boost in domestic air travel, particularly from a low base of 18

million passengers.

5. Untapped potential of India's tourism: Presently India attracts 3.2 million

tourists every year, while China gets 10 times the number. Due to the open sky

policy Tourist arrivals in India are expected to grow exponentially.

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6. Glamour of the airlines: An airline is as glamorous as the film-making

industry. Today Airline tycoons, like J. R. D. Tata and Howard Hughes, Sir

Richard Branson, Dr. Vijaya Mallya, have been idolized. Airlines have an aura of

glamour around them, and high net worth individuals can always toy with the idea

of owning an airline.

Current Domestic Airline Companies Operating In India

Following are the airline companies which are currently operating in India:1. National Aviation Company of India Limited (NACIL) Air India

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2. GoAir Airlines

3. Indigo Airlines

4. Jet Airways + JetLite (Air Sahara)

5. Kingfisher Airline +Kingfisher Red (Air Deccan)

6. Spicejet Airlines

Market Share of Scheduled Domestic Airlines

Source: Directorate General of Civil Aviation

Air India

Founder of Air India is J.R.D Tata & it was the first Indian airline, wasowned by T ata Sons Ltd. Tata Airlines converted into a Public LimitedCompany on July 29, 1946 and renamed AIR INDIA.

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Air India is a state-owned flag carrier and currently the oldest and largestairline of the Republic of India. It is a part of the Indian government-owned

National Aviation Company of India Limited (NACIL). The airline operates a fleet

ofAirbus and Boeing aircraft serving Asia, Europe andNorth America.It is the16th largest airline in Asia. Air India has two major domestic hubs at Indira Gandhi

International Airport and Chhatrapati Shivaji International Airport. Currently it has31 fleets & it has ordered 30 more fleets. Aircraft In service Orders Passengers FirstBusinessEconomy

Current Scenario of Air India

The director general of civil aviation (DGCA) has approved phasing out thecommercial mandatory agreement for airlines, which stipulates that foreigncarriers operating to India have to enter into seat block arrangement and

code sharing with state carriers, by January 1, 2010.

The move would mean that foreign carriers can choose code-sharingpartners other than Air-India and will not have to pay royalty fees. In 2004-05, Air-India earned Rs 550 crore through commercial mandatoryagreements, an increase of 18.36% over the previous fiscal. It woulddefinitely be a setback for Air-India since revenues from block spaceagreement contribute to 4.5% of the total revenue earned.

Nacil, which runs the national carrier Air India, is expected to incur a loss of

approximately Rs 5,400 crore during 2009-10, only marginally lower thanthe preceding fiscal despite a host of cost-saving measures being initiated. In2007-08, Nacil had incurred a loss of Rs 2,226.16 crore and then Rs 5,548crore in 2008-09. The airlines total outgo on lease rental payments for2007-08 was Rs 717.2 crore, for 2008-09, Rs 811 crore and for 2009-10 (upto February 2010) Rs 759.25 crore. Currently its total Working Capital loanis Rs. 16000 crore & total debt is Rs, 79,000 crore.

Analysis on NACIL (Air India)

1) It should focus more on risk management practices.

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http://en.wikipedia.org/wiki/State-ownedhttp://en.wikipedia.org/wiki/Flag_carrierhttp://en.wikipedia.org/wiki/Airlinehttp://en.wikipedia.org/wiki/Republic_of_Indiahttp://en.wikipedia.org/wiki/National_Aviation_Company_of_India_Limitedhttp://en.wikipedia.org/wiki/Airbushttp://en.wikipedia.org/wiki/Boeinghttp://en.wikipedia.org/wiki/Asiahttp://en.wikipedia.org/wiki/Europehttp://en.wikipedia.org/wiki/North_Americahttp://en.wikipedia.org/wiki/Indira_Gandhi_International_Airporthttp://en.wikipedia.org/wiki/Indira_Gandhi_International_Airporthttp://en.wikipedia.org/wiki/Chhatrapati_Shivaji_International_Airporthttp://en.wikipedia.org/wiki/State-ownedhttp://en.wikipedia.org/wiki/Flag_carrierhttp://en.wikipedia.org/wiki/Airlinehttp://en.wikipedia.org/wiki/Republic_of_Indiahttp://en.wikipedia.org/wiki/National_Aviation_Company_of_India_Limitedhttp://en.wikipedia.org/wiki/Airbushttp://en.wikipedia.org/wiki/Boeinghttp://en.wikipedia.org/wiki/Asiahttp://en.wikipedia.org/wiki/Europehttp://en.wikipedia.org/wiki/North_Americahttp://en.wikipedia.org/wiki/Indira_Gandhi_International_Airporthttp://en.wikipedia.org/wiki/Indira_Gandhi_International_Airporthttp://en.wikipedia.org/wiki/Chhatrapati_Shivaji_International_Airport


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2) It requires an effective turnaround management to rebuild their brand image

in aviation sector.

3) NACIL should be given autonomy in decision making.

4) The government should provide capital in the form of convertible debt.

Convertible debt would provide the government the option to convert into

equity.

5) They should opt for IPO to generate more revenue which will help them to

reduce the losses.

6) There should be transparency in their working process.

7) Corporate governance is required to be taken into consideration. NACIL

requires visionary leader which would drive NACIL in a better way.

8) As per Civil Aviation Minister Praful Patel informed that turnaround plan of

National Aviation Company of India Limited (NACIL) has projected

benefits of Rs 1,911 crore during Financial Year (FY) 2010. However,

NACIL has achieved savings of Rs 753 crore in the FY 2010, which is a

good recovery & it will benefit them to compete with the private players in

aviation sector.

Go Air Airlines

Go Airlines (India) Pvt. Ltd. is the aviation foray of the Wadia Group, one ofIndias top business houses. The airline operates its services under the brand Go

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Air. Go Air launched its operations in 2005. Go Air is a low-fare carrier launchedwith the objective of commoditizing airline travel by offerings airline seats atmarginal premium to first class train fares across India.

Go Air is positioned as The Smart People's Airline. Its captivating theme, FlySmart is aimed at offering passengers a consistent, quality-assured and time-efficient service. Its unique product portfolio comprises of some of the mostinnovative offerings in the industry including GoSave, GoFlexi, GoHappy and a

bundle of Red Eye flights. The airline uses the state-of-the-art Airbus A320aircraft fleet. Its product offering is driven by frequency based service betweenvarious commercial hubs of the country. Go Air has been honored with the BestAirline Award for Efficient & Quality service by PATWA for two consecutiveyears in a row. The airline currently operates across 18 destinations 160 dailyflights and approximately 1120 weekly flights.

Current Scenario of Go Airlines

Go Air Indias smartest airline, today announced that it has registered an 84

per cent load factor for the month of June 2010. During the last quarter

(April 2010 June 2010), Go Air has consistently registered average

passenger loads in excess of 83 per cent. During the past year Go Air has

been on a continuous growth phase.

For the period of April 2009 -March 2010, Go Air flew 2.41 millionpassengers as against 0.95 million passengers during the same period in

2008-2009 thus achieving a 153 per cent growth rate in passenger traffic.

Similarly for the Quarter ended 30th June, 2010 Go Air flew 787000+

passengers which were almost 52% higher than in the similar period last

year.

Go Air Indias smartest airline, announced the addition of two new stations

to its growing network namely Nagpur and Nanded. Services has commence

from 6th of April 2010. This move comes as part of Go Airs growth

strategy and to strengthen its existing network. The introduction of these 2

new stations will take the total number of weekly flights to 700 and 50

routes.

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Wadia group-promoted budget air- carrier Go Air is in the process of raisingaround $100 million to fund its aircraft acquisition programmed, airlinesources said on Tuesday. The airline is currently in talks with financialinstitutions and a deal is expected to be arrived at over the next 2-3 months,

they said. GoAir, which currently has 10 Airbus A-320s in its fleet, plans totake delivery of another 10 aircraft over the next three years.

Analysis on Go Air Airlines

1. Go Air is having a very sound business in low cost carrier by comparing

with other private players in aviation sector as their performance speaks for

them.

2. Go Air is doing a good business within domestic market but they should opt

for towards expanding their business by starting international flights. This

will help them to increase their customers.

3. Go Air should go for joint venture with international airline company which

will aid them with new technology and new innovative tariff structure which

will attract more customers.

4. Wadia group can generate more funds for Go Air Company by listing in

stock market as the performance of the company is good in domestic sector

which might attract investors in it.

5. They should use some fleets on lease which will help them to reduce their

cost of capital & will help them to utilize their fund in an efficient manner.

Indigo Airlines

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Indigo commenced operations on 4 August 2006 with a service from Delhito Imphal via Guwahati. The airline is owned by the Gurgaon based InterGlobeEnterprises. It took delivery of its first Airbus A320-200 aircraft on 28 July 2006and received six aircraft during 2006. Nine more aircraft were delivered in 2007

taking the total to 15. Former US Airways Executive Vice-President, Marketingand Planning Bruce Ashby joined IndiGo as theirChief Executive Officer.

The airline has also acquired 3 parking spots in Indira Gandhi InternationalAirport and Chhatrapati Shivaji International Airport. Recently IndiGo changedthe outfits for their crew members on occasion of its 4th anniversary.IndiGo is a

private domestic low-cost airline based in Gurgaon, Haryana, India. It operatesdomestic services linking 24 destinations. Its main base is Delhi's Indira GandhiInternational Airport. It was awarded the title of Best Domestic Low Cost Carrierin India for 2008.

Current Scenario of Indigo Airlines

Indigo plans to launch international services on 15 routes starting from themiddle of next year, according to a proposal it has submitted to the aviationministry. The Gurgaon-based carrier, which has a 13.6 % share in thedomestic passenger market, will complete five years of local operations inAugust, meeting a key requirement for local airlines to fly overseas. Indigo,with at least 16 Airbus A320 aircraft to augment its fleet of 32 A320s

between now and 2011, plans to launch international services in a phasedmanner from August.

Indias leading low-fare carrier IndiGo, run by InterGlobe Aviation Pvt. Ltd,is planning to raise $500 million (Rs2,215 crore) through its initial publicoffering (IPO), the highest ever for an Indian airline, and this may lead to are-rating of airline stocks. The IPO is scheduled for the last quarter of thecurrent fiscal ending March 2011.

The countrys biggest discount airline IndiGo, run by InterGlobe Aviation

Pvt. Ltd, has sought in-principle approval from the civil aviation ministryfor a possible future order of 150 aircraft. The carrier wants approval forimport/acquisition of an additional 150 aircraft for scheduled air transport,it said in a letter to the ministry that has been reviewed by Mint. The airlinehad ordered 100 Airbus A320 jets in 2005, deliveries for which will run till2015.

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In the fiscal, considered to be the worst for the industry, the unlisted carrierearned a profit of Rs82.16 crore, the first since its launch three years ago,according to its annual submission to the Directorate General of Civil

Aviation (DGCA). The profit, on revenue of Rs1,876.35 crore, comparedwith a loss of Rs212.28 crore in 2007-08 and Rs174.13 crore in 2006-07.

Analysis on Indigo Airlines

1) Indigo Airlines is currently making a decent brand image in low cost carrierswith having a market share of 13.6%. It was awarded the title of BestDomestic Low Cost Carrier in India for 2008.

2) To raise the funds they have opt for the IPO which will benefit them to

improve their business growth which will keep them stable in the currentcompetitive environment.

3) Indigo Airlines should currently to be more focused to increase their numberof fleets as they are going for expansion of business which is very crucial forthem to capture more customers along with their loyal customers.

4) They can also give more focused on risk management practices.

5) In future they are now focusing to start an international route which is verygood as now only Jet; Kingfisher & NACIL are given permission forinternational routes that will lead to competition among companies.

Jet Airways

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Jet Airways is a majorIndianairline based in Mumbai, Maharashtra. It isIndia's largest airline and the market leader in the domestic sector. It operates over400 flights daily to 67 destinations worldwide. Its main hub is ChhatrapatiShivaji International Airport, with secondary hubs at Delhi, Chennai,

Bengaluru, Pune and Kolkatta. It has an international hub at Brussels Airport,Belgium. Jet Airways is owned by Naresh Goyal.

Jet Airways was incorporated as an air taxi operator on 1 April 1992. Itstarted Indian commercial airline operations on 5 May 1993 with a fleet of fourleased Boeing 737-300 aircraft. In January 1994 a change in the law enabled JetAirways to apply for scheduled airline status, which was granted on 4 January1995. It began international operations to Sri Lanka in March 2004. The companyis listed on the Bombay Stock Exchange, but 80% of its stock is controlled by

Naresh Goyal (through his ownership of Jets parent company, Tailwinds). It has

10,017 employees (as at March 2007).

Naresh Goyal who already owned Jetair (Private) Limited, whichprovided sales and marketing for foreign airlines in India set up Jet Airways as afull-service scheduled airline to compete against state-owned Indian Airlines.Indian Airlines had enjoyed a monopoly in the domestic market between 1953,when all major Indian air transport providers were nationalised under the AirCorporations Act (1953), and January 1994, when the Air Corporations Act wasrepealed, following which Jet Airways received scheduled airline status.

Air Sahara Buyout

In January 2006 Jet Airways announced that it would buy Air Sahara forUS$500 million in an all-cash deal, making it the biggest takeover in Indianaviation history. The resulting airline would have been the country's largest but thedeal fell through in June 2006.

On 12 April 2007 Jet Airways agreed to buy out Air Sahara for INR14.5billion (US$340 million). Air Sahara was renamed JetLite, and was marketed

between a low-cost carrier and a full service airline. In August 2008 Jet Airwaysannounced its plans to completely integrate JetLite into Jet Airways.

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Jet Konnect

Jet Konnect is the low-cost brand of India-based Jet Airways. It was launched on 8May 2009, and shares the same airline code and call sign as Jet Airways. It

operates a mixed fleet ofATR 72-500s and Boeing 737-800s.

Current Scenario of Jet Airways

Jet Airways (India) Ltd, the countrys largest carrier by passengers, swungto a profit in the second quarter from a loss in the year-ago period onimproved seat occupancy and greater efficiency, underscoring the revival ofthe Indian aviation industry. The airline, which has a market share of 26.9%along with its low-fare subsidiary, reported a stand-alone net profit of Rs.12.40 crore for the quarter ended 30 September against a net loss of Rs.

406.69 crore in the same period last year.

In a first for any Indian carrier, Jet Airways (India) Ltd plans to strike dealswith European railway operators to let passengers reach destinations its airnetwork doesnt cover. Foreign airlines such as Lufthansa, Air France SA,Emirates and Continental Airlines Inc. already have such arrangements withrailway firms, allowing passengers to carry on with their journey by trainafter a flight, or vice versa, on a single ticket. The concept is particularly

popular in Europe. Jet Airways has sought the civil aviation ministrys

approval to sign such agreements before it approaches Europeangovernments for similar clearances, said a government official, requestinganonymity.

Indias largest airline by passengers, Jet Airways (India) Ltd, is set tobecome the countrys first carrier to fly to South Africa.The airline is alsoentering into an agreement with Kenya Airways to connect to the northernregions of Africa, coinciding with Indias recent thrust to improve economicdiplomacy in the continent.

Indias largest airline by passengers carried Jet Airways (India) Ltd plans tojoin a global alliance soon, chairman Naresh Goyal said, changing its policyof reaching separate pacts with individual carriers. Joining an alliance cantake as long as 18 months and typically increases revenue by about 5%,depending on the network feed and the agreements signed between memberairlines and the alliance.

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Passengers carried by domestic carriers rose 19.3% to 33.9 millionpassengers in Jan-Aug with Jet Airways recording the highest market shareamong domestic carriers, government data showed.

Analysis on Jet Airways

1) Jet airways are the market leaders in the aviation sector in India with highestnumber of passengers carried i.e. 33.9 million so it can be said that they arethe market driver in this sector & also they are having the maximum numberof fleets with them i.e. around 100 fleets are with them which are currentlyoperating.

2) Due to hike in fuel price & recession period the company is currently

suffering from debt burden of around Rs. 1,236crore so in order to reducethe debt burden company can go for further public offer or they can sell theirsome stake to another company to recover their debt.

3) They should tap the cargo market which they have not venture till now.JetAirways (India) Ltd, which runs Indias largest airline, is in initialdiscussions with FedEx Corp. for a dedicated cargo airline that it wishes toset up either as a joint venture or in alliance with the multinational logisticsfirm.

4) They should use turnaround strategy by improving their services regardingcustomer enquiring, in flight entertainment, change in meals which willthem to distinct themselves from their competitor i.e. kingfisher airlines.

5) In current year they have generated revenue more than 37% higher andprofitability was superior to Kingfisher due to a higher share of full-servicecarrier operations which is very good & they should sustain this growth infuture also.

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Kingfisher Airlines

Kingfisher Airline is a private airline based in Bangalore, India. The airlineis owned by Vijay Mallya of United Beverages Group. Kingfisher Airlines started

its operations on May 9, 2005 with a fleet of 4 Airbus A320 aircrafts. Thedestinations covered by Kingfisher Airlines are Bangalore, Mumbai, Delhi, Goa,Chennai, Hyderabad, Ahmedabad, Cochin, Guwahati, Kolkata, Pune, Agartala,Dibrugarh, Mangalore and Jaipur.

In a short span of time Kingfisher Airline has carved a niche for itself. Theairline offers several unique services to its customers. These include: personalvalet at the airport to assist in baggage handling and boarding, exclusive loungeswith private space, accompanied with refreshments and music at the airport, audioand video on-demand, with extra-wide personalized screens in the aircraft,

sleeperette seats with extendable footrests, and three-course gourmet cuisine.

Kingfisher Airlines is one of six airlines in the world to have a 5-star ratingfrom Skytrax, along with Asiana Airlines, Cathay Pacific, Malaysia Airlines, QatarAirways and Singapore Airlines. Kingfisher operates more than 375 daily flights to71 destinations, with regional and long-haul international services. In May 2009,Kingfisher Airlines carried more than a million passengers, giving it the highestmarket share among airlines in India.

Kingfisher Airlines is also the sponsor of F1 racing outfit, Force India, in

which Vijay Mallya also owns.Kingfisher Airlines serves 63 domestic destinationsand 8 international destinations in 8 countries across Asia and Europe. Kingfisher'sshort haul routes are mostly domestic apart from some cities in South Asia,Southeast Asia and Western Asia. All short haul routes are operated on the AirbusA320 family aircraft. ATR 42s and ATR 72s are used mainly on domestic regionalroutes. Kingfisher has its medium, long-haul destinations in East Asia, SoutheastAsia, and Europe.

Its first long haul destination was London, United Kingdom which was

launched in September 2008. It has plans to launch new long haul flights to citiesin Africa, Asia, Europe, North America and Oceania with deliveries of newaircraft. All long haul routes are operated on the Airbus A330-200.

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http://en.wikipedia.org/wiki/Skytraxhttp://en.wikipedia.org/wiki/Asiana_Airlineshttp://en.wikipedia.org/wiki/Cathay_Pacifichttp://en.wikipedia.org/wiki/Malaysia_Airlineshttp://en.wikipedia.org/wiki/Qatar_Airwayshttp://en.wikipedia.org/wiki/Qatar_Airwayshttp://en.wikipedia.org/wiki/Singapore_Airlineshttp://en.wikipedia.org/wiki/Force_Indiahttp://en.wikipedia.org/wiki/Vijay_Mallyahttp://en.wikipedia.org/wiki/South_Asiahttp://en.wikipedia.org/wiki/Southeast_Asiahttp://en.wikipedia.org/wiki/Western_Asiahttp://en.wikipedia.org/wiki/Airbus_A320_familyhttp://en.wikipedia.org/wiki/Airbus_A320_familyhttp://en.wikipedia.org/wiki/ATR_42http://en.wikipedia.org/wiki/ATR_72http://en.wikipedia.org/wiki/East_Asiahttp://en.wikipedia.org/wiki/Southeast_Asiahttp://en.wikipedia.org/wiki/Southeast_Asiahttp://en.wikipedia.org/wiki/Londonhttp://en.wikipedia.org/wiki/United_Kingdomhttp://en.wikipedia.org/wiki/North_Americahttp://en.wikipedia.org/wiki/Oceaniahttp://en.wikipedia.org/wiki/Airbus_A330-200http://en.wikipedia.org/wiki/Skytraxhttp://en.wikipedia.org/wiki/Asiana_Airlineshttp://en.wikipedia.org/wiki/Cathay_Pacifichttp://en.wikipedia.org/wiki/Malaysia_Airlineshttp://en.wikipedia.org/wiki/Qatar_Airwayshttp://en.wikipedia.org/wiki/Qatar_Airwayshttp://en.wikipedia.org/wiki/Singapore_Airlineshttp://en.wikipedia.org/wiki/Force_Indiahttp://en.wikipedia.org/wiki/Vijay_Mallyahttp://en.wikipedia.org/wiki/South_Asiahttp://en.wikipedia.org/wiki/Southeast_Asiahttp://en.wikipedia.org/wiki/Western_Asiahttp://en.wikipedia.org/wiki/Airbus_A320_familyhttp://en.wikipedia.org/wiki/Airbus_A320_familyhttp://en.wikipedia.org/wiki/ATR_42http://en.wikipedia.org/wiki/ATR_72http://en.wikipedia.org/wiki/East_Asiahttp://en.wikipedia.org/wiki/Southeast_Asiahttp://en.wikipedia.org/wiki/Southeast_Asiahttp://en.wikipedia.org/wiki/Londonhttp://en.wikipedia.org/wiki/United_Kingdomhttp://en.wikipedia.org/wiki/North_Americahttp://en.wikipedia.org/wiki/Oceaniahttp://en.wikipedia.org/wiki/Airbus_A330-200


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Kingfisher Red

Formerly known as Air Deccan, the airline was previously operated byDeccan Aviation. It was started by Captain G. R. Gopinath and its first flight

took off on 23 August 2003 from Hyderabad to Vijaywada.

[3]

It was knownpopularly as the common man's airline, with is logo showing two palms joinedtogether to signify a bird flying. The tagline of the airline was "Simpli-fly,"signifying that it was now possible for the common man to fly. The dream ofCaptain Gopinath was to enable "every Indian to fly at least once in his lifetime."Air Deccan was the first airline in India to fly to second tier cities like Hubballi,Mangalore, Madurai and Visakhapatnam from metropolitan areas like Bangaloreand Chennai.

Current Scenario of Kingfisher Airlines

Vijay Mallya-promoted Kingfisher Airlines Ltd joined other leadingoperators in making a turnaround when it posted an operating profit in thesecond quarter, a traditionally weak season during which approximately30% of its medium-sized planes were grounded, resulting in an 18%reduction in seats offered. While Indias second largest airline by passengerscarried reported an operating profit of Rs175 crore for the quarter ended 30September against a year-ago operating loss of Rs65 crore, it reported a netloss of Rs230 crore for the second quarter, narrowing from the year-agoRs419 crore loss.

Kingfisher Airlines earned an average Rs4.56 lakh per flight during thequarter, 38.85% higher than the year earlier.Airline passenger growth rose12%, while airlines added 8% more capacity from the year ago.

The loss before tax and other income was RS240 crore compared with aRs416 crore loss in the year earlier. The airlines domestic division postedan operating profit of Rs108 crore against an operating loss of Rs147 crorein the year earlier.

International operations continued to be in the red, posting an operating lossof Rs53 crore versus an Rs134 crore loss in the year before. KingfisherAirlines said its going slow on international expansion and striving to putsix grounded planes back in the air.

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http://en.wikipedia.org/wiki/Deccan_Aviationhttp://en.wikipedia.org/wiki/G._R._Gopinathhttp://en.wikipedia.org/wiki/Hyderabad,_Andhra_Pradeshhttp://en.wikipedia.org/wiki/Vijaywadahttp://en.wikipedia.org/wiki/Kingfisher_Red#cite_note-2http://en.wikipedia.org/wiki/Hubballihttp://en.wikipedia.org/wiki/Mangalorehttp://en.wikipedia.org/wiki/Maduraihttp://en.wikipedia.org/wiki/Visakhapatnamhttp://en.wikipedia.org/wiki/Metropolitan_areahttp://en.wikipedia.org/wiki/Chennaihttp://en.wikipedia.org/wiki/Deccan_Aviationhttp://en.wikipedia.org/wiki/G._R._Gopinathhttp://en.wikipedia.org/wiki/Hyderabad,_Andhra_Pradeshhttp://en.wikipedia.org/wiki/Vijaywadahttp://en.wikipedia.org/wiki/Kingfisher_Red#cite_note-2http://en.wikipedia.org/wiki/Hubballihttp://en.wikipedia.org/wiki/Mangalorehttp://en.wikipedia.org/wiki/Maduraihttp://en.wikipedia.org/wiki/Visakhapatnamhttp://en.wikipedia.org/wiki/Metropolitan_areahttp://en.wikipedia.org/wiki/Chennai


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Kingfisher Airlines Indias second largest carrier by market share said onThursday its board has approved a debt recast that seeks to convert some ofits debt into equity. The move will help the company reduce its interest

burden and stem losses.

Kingfisher, controlled by United Breweries Holdings Ltd, will convertlenders loans of up to Rs13.55 billion into shares. It also plans to convertfounders debt of up to Rs6.48 billion into share capital. It plans to issue upto 575 million redeemable preference shares and up to 780 millionconvertible preference shares to its consortium of lenders. Its board alsoapproved issuing up to 648 million convertible preference shares to founderentities United Breweries (Holdings) Ltd. and to Kingfisher Finvest IndiaLtd.

Kingfisher Airlines Ltd, the countrys second largest airline by passengerscarried, will join Oneworld Alliance, a global grouping of airlines,

becoming only the second airline in the country to become part of a globalairline alliance after Air India which is already part of Star Alliance,according to the airlines request submitted to the civil aviation ministry.

Kingfisher Airlines received approval to run flights on seven newinternational routes this month. The carrier, which runs 14 daily flights onseven international routes, said it will announce the launch dates of flights

for the new routes later. Four of the new routes connect New Delhi toLondon, Hong Kong, Bangkok and Dubai, while the others link Mumbaiwith Colombo, Bangkok and Dubai

Analysis of Kingfisher Airline

1) Kingfisher Airlines currently operates with a brand new fleet of 8 Airbus

A320 aircraft, 3 Airbus A319-100 aircraft and 4 ATR-72 aircraft. It was the

first airline in India to operate with all new aircrafts. Kingfisher Airlines is

also the first Indian airline to order the Airbus A380. It placed orders for 5A380s, 5 A350-800 aircrafts and 5 Airbus A330-200 aircrafts in a deal

valued at over $3 billion on June 15, 2005.

2) Kingfisher Airlines has launched Five Star Privileges, an exclusiveprogram that entitles guests to avail of great deals at partner establishmentaround the country.

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Spicejet Airlines

SpiceJet is a low-cost airline headquatered in Gurgaon, India. It beganservice in May 2005 and by 2008, it was India's second-largest low-cost airline in

terms of market share after Indigo airline. SpiceJet was voted as the best low-costairline in South Asia and Central Asia region by Skytrax in 2007. SpiceJet, India'sleading low cost airline, is a reincarnation of ModiLuft. It is promoted by AjaySingh and the Kansagra family. SpiceJet marked its entry in the Indian skies with99 fares for the first 99 days, with 9,000 seats available at this rate.

This deal was followed it up with a 999 promotional scheme on selectroutes. Their marketing theme "offering low 'everyday spicy fares' and great guestservices to price conscious travelers. Their aim is to compete with the IndianRailways passengers travelling in air conditioned coaches.

On 15 July 2008 Billionaire Wilbur Ross suggested he would invest 345crore (US$76.25 million) in the low cost airline. The board of directors of SpiceJetaccepted an offer in-principle from the US-based PE firm that would makeavailable about 345 crore (US$76.25 million) to SpiceJet, a joint statement issued

by SpiceJet and WL Ross & Co.

Indian media baron Kalanidhi Maran acquired a major stake (37.7%) in thisairline on June 2010. On December 9, 2010, SpiceJet made a firm order for 15Bombardier Dash 8 Q400 and options for another 15.

Currently, SpiceJet operates 21 Boeing 737-800/900ER aircraft across 19destinations and has a 14% share of the Indian market. SpiceJet flies to 22destinations across India, Nepal and Sri Lanka. It commenced internationaloperations with flights from Chennai to Colombo, Sri Lanka on 7th October 2010,and flights from New Delhi to Kathmandu, Nepal on 9th October 2010.

Current Scenario of Spicejet Airlines

Low-cost carrier Spice Jet plans to buy as many as 30 planes from CanadasBombardier in a deal worth up to $900 million intended to help boost itsfleet. The airlines board approved the order for 15 turboprop planes alongwith an option to buy 15 more as part of a drive to boost services to smallercities in India as demand for air travel expands. The plane purchaseannouncement came as the airline reported it swung to a profit of Rs. 10.10

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crore ($2.30 million) in the three months ended September from a loss ofone billion rupees a year earlier.

Chennai-based Sun TV Network Ltd chief Kalanithi Maran took control of

Gurgaon-based carrier SpiceJet Ltd on Monday by inducting new boardmembers and a new chief operating officer, concluding the acquisition. Hewill be the new chairman of the company with the single largest stake of38.66% through KAL Airways Pvt. Ltd. It paid Rs. 746 crore after the Juneannouncement for a 37.7% stake in the airline, which was followed by anopen offer to buy another 20%.

SpiceJet Ltd, buoyed by second-quarter profit, announced on Tuesday that itwill begin regional flights next year with newly ordered planes.Thecompany made a profit of Rs. 10 crore in the three months ended September

compared with a loss of Rs. 101.29 crore in the year-earlier period aspassenger traffic continued to grow and helped by Rs. 25.17 crore from thesale and lease-back of planes.

SpiceJet Ltd has been cleared to fly overseas in June, starting with Dhaka,Kathmandu and the Maldives, after the airline completes five years ofdomestic service later this month. The countrys carriers that fly overseasare Air India, Jet Airways, Kingfisher Airlines and JetLite, making SpiceJetthe fifth to do so.

SpiceJet Ltd announced net losses of Rs133.50 crore in the year to March,around 85% more than the Rs72.1 crore it lost the previous year, in the wakeof steeply rising aviation fuel prices and slowing growth in passenger traffic.

Analysis of Spicejet Airlines

1) Comparing with all other players in aviation sector Spicejet is performingwell as its revenue increased by 37% on compare with kingfisher which

reduced by 6.58%.

2) Appointment of Kalanithi Maran as a CEO of the company had a positiveimpact on the company & also the value of the shares of Spicejet hasincreased as investors are having faith in the capabilities of Kalanithi Maran.

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3) Currently company is using few fleets on lease for their business which isvery good as it will help them to reduce their expenses to buy a new fleet butin future when the company is performing extremely well than they should

buy new fleets which will help them to increase their market share in the

business.

4) Currently the fleets of the Spicejet are flying overseas in Dhaka, Maldives &Nepal which is very good as it is the only Low Cost Carrier to get approvalfor overseas business. In future they should focus to increase their overseas

businesses which will help them to generate more revenue.

5) They should go for merger with international alliance in order to increasetheir market share in overseas business too.

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Conclusion

Continuing an upward trend, India's domestic air traffic witnessed a 22%growth between January and April this year with airlines carrying over 1.62 crore

travelers. Between January and April, domestic airlines carried around 1.62 crorepassengers as against the 1.33 crore during the same period last year. This cameagainst the backdrop of continued downward trends witnessed in the globalaviation sector since it was hit by recession and experienced negative growth since2008.

In contrast, the scheduled Indian airlines flew a total of 41.88 lakh domesticpassengers in April against 39.03 lakhs in March this year. Of these, Jet Airwaysand JetLite combined carried 10.84 lakh, Kingfisher 8.98 lakh, while Air India(domestic) remained at the third spot with 7.62 lakh passengers.

Among the low cost carriers, 6.58 lakh passenger preferred to fly withIndiGo, SpiceJet carried 5.27 lakh and GoAir 2.46 lakh while all-business airline.Barring Kingfisher, all other airlines witnessed a growth in their market share.

So it can be said that it was an average performance of the airline companiesin the current year due to hike in fuel price & recession it did not performed wellup to the potential it should be, but in future there is a scope for the companies to

perform well as government is trying to take measures to reduce inflation whichwill benefit them. May be the year 2011 will be more joyful than the 2010 year for

the aviation sector in India.

final analysis on aviation sector in india

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