Avaition Industry 1

8/8/2019 Avaition Industry 1

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AVIATION INDUSTRYAVIATION INDUSTRY


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Aviation Industry in India :Aviation Industry in India :

CharacteristicsCharacteristics Huge Potential

Under penetrated market

o Total Passenger Traffic : 50 milliono Passenger trips per annum :

India : 0.05

United states : 2.02

Untapped air cargo market


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Aviation Industry in India :Aviation Industry in India :

CharacteristicsCharacteristicsConstraints :

o Infrastructure constraints

o Shortage of airport facilities

oAir traffic control facilities

o Takeoff and landing slots.

o Less than 100 airports having more than

one daily service.


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Macro Environment Analysis :Macro Environment Analysis :

PoliticalPolitical Open Sky Policy

Deregulations in different spheres

Low entry barriers

FDI limits :

o 49 % for airlines

o 100% for airports


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EconomicEconomic Growing middle class income

Consistent GDP growth of more than 8%

and projected rate in two digits Hike in average salary 14%(highest) in the

world

Tourism industry is growing


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TechnologicalTechnological Modernization & Privatization of Airports

Modern Technology for efficient handling of

aircraft, passenger and cargo. Developing Greenfield Airports with Private

Sector

Example : Bangalore Airport Corporation Ltd.


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Demographic and NaturalDemographic and Natural Changing pattern of consumers

Highest percentage people of age group 20-

25 Educational environment

Shift towards family concept

High energy cost


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Low Cost Carriers in IndiaLow Cost Carriers in India

Air Deccan taken over by kingfisher

SpiceJet

IndiGo Airlines Go Air

Jetlite (Formerly known as Air Sahara)


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Business Model of Low CostBusiness Model of Low Cost

CarriersCarriers A single Passenger class

A single type of airplane reducing trainingand service cost

No frills such as free food/drinks, lounges etc. Emphasis on direct sale of ticket through Internet

avoiding fee and commission paid to travel agents.

Employees working in multiple roles


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Airline Industry in India :Airline Industry in India :

Service Vs Price GraphService Vs Price Graph

S

E

R

V

I

C

E

P R I C E


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Market share(%)

Jet + JetLite 29.4

Kingfisher + Deccan 28.9

Air India + Indian 19.8

Indigo 8.4SpiceJet 8.3

Others 5.2


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1212


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Vision and MissionVision and Mission

Vision :

To ensure that flying is no longer only for CEOs and

business travelers, but for everyoneMission :

To become Indias preferred low-cost airline, delivering the

lowest air fares with the highest consumer value, to price

sensitive consumers


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Marketing StrategyMarketing Strategy

Entered with Rs. 99 fares for first 99 days

offering low everyday spicey fares

Aims to compete with Indian Railways ACsegment

Aims at future fleet expansion to increase

market share


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ChallengesChallenges

Small fleet structure

Small load efficiency compared to Air

Deccan Competition with new entrants

Market share of East-central India

High attrition rate


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Air Deccan now taken over byAir Deccan now taken over by

Kingfisher AirwaysKingfisher AirwaysCome SIMPLIFLY With UsCome SIMPLIFLY With Us


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Vision and MissionVision and Mission

Vision :

Empower every Indian to fly

Mission :

To demystify air travel in India by providing reliable, low

cost and safe travel to the common man by constantly

driving down the air fares as an ongoing mission


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Common Man :The Brand Ambassador for Air Deccan, the peoples airline

is Mr. R.K Laxmans Common Man

Free Tickets :


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Advertisement through print, radio and billboards

In flight magazine for revenue generating

In flight shopping scheme called Brand for less

AVA Merchandising

Tie-up with Caf Coffee Day

ICICI-Travel agent purchase card

Tie-ups with HPCL and Reliance Web World


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How Air Deccan cutsHow Air Deccan cuts

cost?cost? Quicker turnaround time

Lower distributions costs

All economy seating configuration

No free catering on board

Alternative revenue channels

100% web enabled bookings e ticketing

Enhanced cash flow management


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KINGFISHERKINGFISHER

Their VisionTheir Vision

"The Kingfisher Airlines family will consistently"The Kingfisher Airlines family will consistently

deliver a safe, valuedeliver a safe, value--based and enjoyable travelbased and enjoyable travel

experience to all our guests."experience to all our guests."

Their MissionTheir Mission

"Kingfisher Airlines will have 'Fly the Good Times'"Kingfisher Airlines will have 'Fly the Good Times'

approach and this will reflect in the experience weapproach and this will reflect in the experience wewill offer to passengers."will offer to passengers."


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Current Trends :Current Trends :

Consolidations All AroundConsolidations All Around Kingfisher-Air Deccan Deal

o Kingfisher buys out 26 % stake for Rs.550 crore.

o They have combinedM

arket share of 33%o They are second biggest player after Jet Sahara deal

Jet airways and Air Sahara merger

oAir Sahara name changed to JetLite


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Future TrendsFuture Trends

The projection for Indian Aviation for 2020 is estimated

at:

o 400 million passengers

o Including 180 million domestic passengerso 1,000 aircraft in the civil aviation sector

Likely to follow the footholds of International Low Price

Carriers e.g. Air Arabia, Southwest Airlines etc.


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Thank YouThank You

Documents

Avaition Industry 1