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Simplify Deccan
Evolution of Low Cost Carrier in India
• Air Deccan was the largest private low cost sector in India.
• June 2007 vijay mallya bought 26% controlling stakes for Rs 5.5 billion.
• Launch in 2003 & serving two destination to 65 destination in 2007.
• Airline image came down due to unreliable services
• Facing competition from new low cost airline
• Vision was “Empowering every Indian to fly”.
• Operating loss of more than rs 6.5 million in 2005-2007.
Indian Aviation Market in 2007:• Confederation of Indian Industry (CII) report in 2000 between 45-70 million passengers
were expected to fly domestically by 2010.
• Centre for Asia Pacific Aviation (CAPA) estimates 60 million passengers by 2010.
• In 2006,delhi-mumbai air route became the 7th busiest air traffic route in the world.
• Aviation analyst in India estimated a total loss of more than 20 billion for the airline
industy in 2006-2007.
Demand Pattern
• Demand mainly driven by leisure/visiting friends & relatives(VFR).
• Between april-dec,2006 was the low cost carriers carried more than 31% of the total
passenger traffic.
• According to CAPA(centre for asia pacific aviation),low cost carriers were expected to
have a market share as high as 70% by 2010.
Airport Infrastructure• 2005-2006,airport authority of India(AAI) managed 94 civil airports,65 used actively.40
airports had runways of more than 5000 feet required for landing by large aircrafts.
• In 2003 85% of total passenger traffic handled by 10 airports which generates 80% of
total revenue for AAI
Aviation manpower
• increase in air traffic leads to increase in demand for pilots and cabin crews
• In 2006 AAI had talks with private sectors to setup a joint venture aviaton centre for
training pilots.
Some threats
• Lack of maintenance and repair facilities
• High fuel expenses
Opportunities
• Demand in smaller cities
• Amble opportunities as and when compared with America
• low cost air travel which can be taken as a substitute for train
travelling, where prime target market segment was upper class
train passengers