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As a part of our Economics course in MBA we have done market analysis in Aviation Sector. Jet Airways & Qatar Airways are the companies taken for analysis. Report generated by Rajesh Kumar & Chaitanya.
Citation preview
AVIATION SECTOR
By Rajesh Kumar S
By GVSK Chaitanya
Production Function &
Market Analysis
VIT Business School
Vellore & Chennai Campus:
VIT University was established in 1984 by well-known educationalist and
former parliamentarian, Dr. G. Viswanathan, Founder and Chancellor.
Dr. V. Raju Vice Chancellor, Dr. Anand A. Samuel, Pro-Vice Chancellor.
Chennai Campus is in Vandalur-Kelambakkam Road.VIT University has more
than 17 Bachelor’s and 32 Masters’ programmes, 29000 (including 1000 foreign
students from 44 countries) and 4000 faculty members
Accreditation:
The National Assessment and Accreditation Council (NAAC) of the University
Grants Commission (UGC) has accredited the university with a 'A'.
The Institution of Engineering and Technology (IET), and the Energy Institute,
UK have audited the teaching-learning processes at VIT and accredited the
programmes in 2004, with the highest validity of five years
Programmes at VIT are accredited by the Institution of Engineers, India (IEI).
The Accreditation Board for Engineering and Technology (ABET) of the USA
accredited the Civil, Mech, CSE, biomedical, ECE, EEE programmes.
VIT Business School, under the aegis VIT University has created a niche for
itself as an institution promoting excellence in management education and research
with Dr. M J Xavier as its Executive Director.
Contents
VIT Business School ....................................................................................................................................... 2
Vellore & Chennai Campus: .......................................................................................................................... 2
Introduction to Aviation Sector .................................................................................................................... 5
Introduction to Airline Industry: ................................................................................................................... 6
Market Share Analysis .................................................................................................................................. 8
Segments Airline Industry Depends ..................................................................................................... 9
Capital Labour Ratio ................................................................................................................................... 13
Airline Economics .................................................................................................................................. 13
JET AIRWAYS ............................................................................................................................................... 16
MARKET SHARE (DOMESTIC) ...................................................................................................................... 16
REVENUE (Domestic services) : ................................................................................................................... 17
REVENUE (International services): .............................................................................................................. 18
Turnover Vs Employees Ratio: .................................................................................................................... 19
WEKA Prediction: ........................................................................................................................................ 20
SPSS Forecasting: ........................................................................................................................................ 21
Partners of Jet Airways: .............................................................................................................................. 22
More Information about Jet Airways: ......................................................................................................... 23
Specifics in Jet Airways: .............................................................................................................................. 24
CONCLUSION: .............................................................................................................................................. 25
Company Analysis: ...................................................................................................................................... 26
Network Across The World ........................................................................................................................ 28
BAR GRAPH REPRESENTATION OF TURNOVER ............................................................................. 28
BAR GRAPH REPRESENTATION OF TURNOVER AND EMPLOYEES OF QATAR AIRWAYS ... 29
LABOUR CAPITAL RATIO OF QATAR AIRWAYS ............................................................................. 30
DIFFERENT SECTORS IN QATAR AIRWAYS ..................................................................................... 31
Qatar Duty Free....................................................................................................................................... 31
Al Maha Services .................................................................................................................................... 32
Qatar Aircraft Catering Company ........................................................................................................... 32
Qatar Airways Cargo .............................................................................................................................. 33
Qatar Aviation Services .......................................................................................................................... 33
The Qatar Distribution Company ............................................................................................................ 34
Internal Media Services .......................................................................................................................... 34
Hamad International Airport ................................................................................................................... 35
Qatar Executive ....................................................................................................................................... 35
AWARDS AND REWARDS TO QATAR AIRWAYS 2014 .................................................................. 36
Conclusion .................................................................................................................................................. 37
Introduction to Aviation Sector
“Aviation is the practical aspect or art of aeronautics, being the design,
development, production, operation, and use of aircraft."
Airlines Of India ( Domestic)
1. Air India
2. IndiGo
3. Jet Airways
4. SpiceJet
5. Go Air
6. King Fisher (Suspended)
7. Air Asia
8. Jagson
9. Vistara. (Introducing)
Airlines in India ( International)
1. British Airways
2. Qatar Airways
3. Singapore Airlines
4. Emirates
5. Etihad Airlines
6. Qantas Airlines
7. American Airlines
8. Malaysian Airlines
9. Thai Airways
10. Kuwait Airlines.
Introduction to Airline Industry:
Airline Industry is a system of transportation
Part of Aviation industry
Moving people and goods
Utilizing the airways
One of the only true global businesses
This Airline Industry has almost a big network
84% of International traffic
240 member airlines
188 countries
Economic and Social Impact of Airline Industry:
2.5 billion Passengers
5.5 million Airline Employees
9.5 million Airline Supply chain Employees
18 million Indirect Tourism Jobs
Freedom of Air
1: Right to fly across a country’s territory without landing
2: Right to land for non-traffic purposes
3: Right to carry passengers and goods from OWN’s country to another
4: Right to carry passengers and goods from another country to one
OWN’s
Cargo Division:
Airline Industry Features :
Market Share Analysis
Factors That Airline Industry Depend On:
Segments Airline Industry Depends
Market Share in Different Countries
Global Air Traffic Trends
Domestic Airline Turnover:
Fuel Growth Effect On Airline Cargo Industry
Profit And Loss Over Four Years
Over a last Four Years Airline Industry Has Suffered A lot Of Loss And
less Profit because of increase in fuel charges and global crisis and also
airline companies has to decrease the prices accordingly to attract more
passengers for cover their loss.
Low cost Carriers Across Asian Countries And Penetration Rate
Capital Labour Ratio
Airline Economics
Chief Characteristics of the Airline Business
Capital Intensive
Unlike many service businesses, airlines need more than storefronts and
telephones to get started. They need an enormous range of expensive
equipment and facilities, from airplanes to flight simulators to
maintenance hangars. As a result, the airline industry is a capital-
intensive business, requiring large sums of money to operate effectively.
Most equipment is financed through loans or the issuance of stock.
Increasingly, airlines are also leasing equipment, including equipment
they owned previously but sold to someone else and leased back.
Whatever arrangements an airline chooses to pursue, its capital needs
require consistent profitability.
High Cash Flow
Because airlines own large fleets of expensive aircraft which depreciate
in value over time, they typically generate a substantial positive cash
flow (profits plus depreciation). Most airlines use their cash flow to
repay debt or acquire new aircraft. When profits and cash flow decline,
an airline's ability to repay debt and acquire new aircraft is jeopardized.
Labor Intensive
Airlines also are labor intensive. Each major airline employs a virtual
army of pilots, flight attendants, mechanics, baggage handlers,
reservation agents, gate agents, security personnel, cooks, cleaners,
managers, accountants, lawyers, etc. Computers have enabled airlines to
automate many tasks, but there is no changing the fact that they are a
service business, where customers require personal attention. More than
one-third of the revenue generated each day by the airlines goes to pay
its workforce. Labor costs per employee are among the highest of any
industry
Pilot A best Job In Comparsion With Other Sector :
JET AIRWAYS
MARKET SHARE (DOMESTIC)
"Market share is the percentage of a market defined in terms of either
units or revenue accounted by a specific entity."
“Market share is said to be a key indicator of market competitiveness.”
Indigo leads,Followed by Jet Airways 21% in the second place.
REVENUE (Domestic services) :
The Revenues of the companies are shown in BILLIONS.
Jet Airways is in the first position even though the market share is less.
REVENUE (International services):
Revenue has been specified in US dollars (Billions)
Emirates is the successful airlines in the world with highest revenue.
Jet Airways Revenue is 12 times less than Emirates Airways.
Turnover Vs Employees Ratio:
The turnover vs. employees ratio shows the efficiency of the company.
It clearly shows the company profitable by efficiently using their human
resource.
Jet Airways has 13256 Employees as per 31st March 2014.
Jet Airways Revenue per year.
WEKA Prediction:
The WEKA forecast has been done from the one month data of NSE.
The forecast shows that the share value of jet airways will keep on
increasing for a particular period of time.
The Chart shown here shows the variation of share price from the year
2005 to 2014.
It has been increased in years between except the year 2009.
The chart was presented by Moneycontrol.com.
SPSS Forecasting:
The SPSS forecast has been done using the 3 months historical data of
NSE india.
The lag values are Price and Quantity.
The predicted accuracy is nearly equal to 80%.
Partners of Jet Airways:
A code share agreement is an aviation business arrangement where two
or more airlines share the same flight i.e. Sharing in this sense means
that each airline publish and market the flight under its own airline
designator and flight number as part of its published time table/schedule.
A frequent-flyer partners (FFP) is a loyalty program offered by many
airlines. Typically, airline customers enrolled in the program accumulate
frequent-flyer miles (kilometres, points, segments) corresponding to the
distance flown on that airline or its partners.
More Information about Jet Airways:
Specifics in Jet Airways:
Jet Lite
Jet Konnect
Jet Privilege
Jet Mobile
Jet Spark
Jet Boutique
Jet Kids
Jet Konnect airline operates scheduled services connecting metropolitan
centres in India. Originally operated under its own name Jetlite, it began
to trade as JetKonnect in 2012. It will be phased out by the end of 2014
as part of Jet airways' plans to reposition itself as a uniform full-service
operation.
Jet Kids is for the children boarding in the age between 03 to 12
Jet Boutique services the women boarding the airlines by shopping
during the travel.
Jet Mobile connects the customers through mobile phone and all the
transactions can be done through SMS.
CONCLUSION:
As per the domestic market share of airlines in India
Indigo leads all other airlines with a Market share of 26%
Jet Airways has 21% in the second place.
The Revenue of Jet Airways is in the first position even though the
market share is less.
Emirate is the successful airlines in the world with highest revenue.
Jet Airways Revenue is 12 times less than Emirates Airways.
Jet Airways has 13256 Employees as per 31st March 2014.
The forecast shows that the share value of jet airways will keep on
increasing for a particular period of time.
Company Analysis:
QATAR AIRWAYS
Top 10 Airline Companies
Emirates
Qatar Airways
Singapore Airlines
ANA All Nippon Airways
Asiana Airlines
Cathay Pacific Airways
Etihad Airways
Garuda Indonesia
Turkish Airlines
Qantas Airways
Qatar Airways Company Q.C.S.C. (Arabic: القطرية , l
atariyah ) operating as Qatar Airways, is the state-owned flag
carrier of Qatar.
Founded In 22 November 1993 & Commenced operations
20 January 1994
Akbar Al Baker (CEO) OF QATAR AIRWAYS
The airline also won the Best Airline in the Middle East for the
eighth time in the Skytrax World Airline Awards.
Headquartered in the Qatar Airways Tower in Doha the airline
operates a hub-and-spoke network, linking over More than 125
international destinations across from its base at Hamad
International Airport, using a fleet of more than 100 aircraft.
Akbar Al Baker (CEO)
Network Across The World
As of July 2014, Qatar Airways serves 144 points worldwide
In July 2013, Qatar Airways became FC Barcelona's primary shirt
sponsor
THE TOTAL NO OF FLEETS IS-- 135
ORDERED FLIGHTS IS—294
BAR GRAPH REPRESENTATION OF TURNOVER
Emirates 9%
Qatar Airways 15%
Singapore Airlines
11%
ANA All Nippon Airways
23%
Asiana Airlines
11%
Cathay Pacific Airways
5%
Etihad Airways 9%
Garuda Indonesia 6%
Turkish Airlines 9% Qantas Airways
2%
Turnover(millions)
This Bar graph Representation shows the turnover ratio of top 10 airline
companies compared with different airline companies across the world
in this Qatar Airline Company Occupies 15% of Total Turnover
Next Top Company is ANA All Nippon Airways Which Japan Airways
Owns 23% of Total Turnover
BAR GRAPH REPRESENTATION OF TURNOVER AND
EMPLOYEES OF QATAR AIRWAYS
Bar graph Representation shows the turnover and the Employees Ratio
of All Top Airline Companies in this Qatar Airways owns the Second
Position And First Position is Occupied by ANA All Nippon Airways
with 1570 Million USD
0 10000 20000 30000 40000 50000 60000
Emirates
Qatar Airways
Singapore Airlines
ANA All Nippon Airways
Asiana Airlines
Cathay Pacific Airways
Etihad Airways
Garuda Indonesia
Turkish Airlines
Qantas Airways
Emirates
Qatar Airways
Singapore
Airlines
ANA All Nippon Airways
Asiana Airlines
Cathay Pacific
Airways
Etihad Airways
Garuda Indones
ia
Turkish Airlines
Qantas Airways
Employees 49950 30000 14240 32884 10000 29800 10656 15274 18,882 33265
Turnover(millions) 622 1000 760 1570 760 338 610 372 600 150
BAR GRAPH
LABOUR CAPITAL RATIO OF QATAR AIRWAYS
This Labour Capital Ratio Is the Company Salaries Details in this we
can determine the exact salary the company pays to a employee
accordingly with their own capital value
This can be calculated by Capital value /Total no of Employees
In given chart Emirates owns the First Position and 2nd
is owned by
Etihad Airways and QATAR Airways owns the 4th
position in the top 10
airline companies
0
0.001
0.002
0.003
0.004
0.005
0.006
0.007
0.008
Labour capital ratio
Labour capital ratio
DIFFERENT SECTORS IN QATAR AIRWAYS
The atar irways Group provides everything you’ll need for a smooth
journey including airport ground services, onboard catering, private jet
travel, and more.
Qatar Duty Free
One of the fastest growing duty free retailers in the world. Qatar Duty
Free, located at Hamad International Airport, is a subsidiary of Qatar
Airways, the national carrier of the State of Qatar.
Al Maha Services
Fast track your way through the airport.
Experience a true taste of Arabian hospitality with our unique meet and
greet service. Whether departing, arriving, or in transit, your Al Maha
representative will ensure your time on the ground is as seamless as your
time in the air.
Qatar Aircraft Catering Company
Award-winning catering and fine dining
Qatar Aircraft Catering Company (QACC) provides exclusive catering
services to Qatar Airways and other airlines that service Hamad
International Airport
Qatar Airways Cargo
One of worlds the fastest growing cargo networks Qatar Airways Cargo
(QAC) is a well-established force in the Middle East and one of the
fastest growing cargo networks in the world. Based at Hamad
International Airport, QAC uses the latest automated tracking
technology to meet the Ever Growing demands for cargo services.
Qatar Aviation Services
Ground support for all airlines at Hamad International Airport.
Qatar Aviation Services (QAS) is responsible for providing ground
handling services at Hamad International Airport for Qatar Airways and
a host of other airlines. This covers everything from porters to baggage
handlers/loaders, aircraft cleaners to equipment operators, and drivers to
customer service agents.
The Qatar Distribution Company
The Qatar Distribution Company (QDC) is the only licensed retail
distributor of wines and spirits in Qatar. The store has wide range of
beverages that can be purchased by licensed hotels and qualifying
private individuals.
Internal Media Services
Advertising at Hamad International Airport
Internal Media Services is responsible for all advertising the Airport
Hamad International Airport
Your Gateway to the World
Comfort Convenience Choice These are the things that matter most to
today’s traveler and is at the heart of Hamad International Airport,
atar irways’ new home
Qatar Executive
Personal Attention onboard our private jet division.
Qatar Executive provides luxurious, private jets for business and
pleasure travel. The service enables travellers to book an aircraft in as
little as four hours before departure and check-in 10 minutes prior to
take-off.
AWARDS AND REWARDS TO QATAR AIRWAYS 2014
World's Best Business Class Skytrax World Airline Awards
World's Best Business Class Airline Lounge Skytrax World Airline Awards
Best Airline in the Middle East Skytrax World Airline Awards
Best Business Class Best in Business Travel Awards
Best Business Class in the Middle East Best in Business Travel Awards
Best Airline in the World for International Travel Best in Business Travel Awards
Business Airline of the Year UK Business Travel Awards
Conclusion
In a relatively short time, Qatar Airways has grown to more than 140
destinations worldwide, offering unmatched levels of service excellence
that have helped excel the award-winning carrier to become best in the
world.
Travel by air has reached the point where it is now taken for granted in
all corners of the globe. With a larger number of passengers and more
choice available in the skies today, airlines looking to maintain or grow
their position in the marketplace must provide high-quality service with
ever-increasing efficiency.
Since the airline’s relaunch in 1997, atar irways has earned many
awards and accolades, becoming one of an elite group of airlines
worldwide to have been awarded a 5-Star rating by Skytrax.
Part of this excellence is offering you a 5-Star travel experience online at
the newly-relaunched qatarairways.com where you can book flights and
search for information on the airline.
Qatar Airways takes corporate social responsibility very seriously. We
are leading new-generation fuel research and giving back to the
communities that we serve.
I Hereby submit my market analysis on Qatar airways in the different
field like market turnover and labour capital ratio and its different
sectors according to my knowledge.
Author Details : Rajesh Kumar S VIT Business School, Chennai Campus
Mob: 9566972942.
GVSK CHAITANYA 14MBA1084 VITBS
MAIL ID : [email protected]
For Further details Contact:
Dr P James Daniel Paul, Professor, VIT- BS, Chennai, [email protected] Tel: +91 44 3993 1040 HP: +91 98402 94590