INTRODUCTION
With a growth rate of 18 per cent per annum, t he Indian aviation industry is one of the fastest growing aviation industries in the world.
India has jumped to 9th position in world's aviation market from 12th in 2006. The scheduled domestic air services are now available from 82 airports as against 75 in 2006.
By 2020, Indian airports are expected to handle more than 100 million passengers including 60
million domestic passengers and around 3.4 million tones of cargo per annum.
H ISTORY ISTORY
The history of civil aviation in India started with its first commercial flight on February 18, 1911. 11. It was a journey from Allahabad to Naini (u.p.) made by a French pilot Monseigneur Piguet covering a distance of about 10 km. km. Since then efforts were on to improve the health of India's Civil Aviation Industry. Industry. The first domestic air route between Karachi and Delhi was opened in December 1912 by the Indian State Air Services in collaboration with the Imperial Airways Airways,, UK as an extension of London-Karachi flight of the Imperial Airways. The aviation industry in India gathered momentum after three years with the opening of a regular airmail service between Karachi and Madras by the first Indian airline, Tata Sons Ltd. Ltd. However this service failed to receive any backing from the Indian Government. At the time of independence nine Air Transport Companies were operational in the Indian Territory. Later the number reduced to eight when the Orient Airways Airways shifted its base to Pakistan. The then operational airlines were Tata Airlines, Indian National Airways, Air service of India, Deccan Airways, Ambica Airways, Bharat Airways and Mistry Airways. With an attempt to farther strengthen the base of the aviation sector in India, the Government of India together with Air India (earlier Tata Airline) set up a joint sector company, Air India International, in early 1948. With an initial investment of Rs. 2 crore and a fleet of three Lockheed constellation aircrafts, aircrafts, Air India started its journey in the Indian aviation sector on June 8, 1948 in Mumbai (Bombay)-London air route.
P RESENT RESENT SCENARIO
11 serious private players.
low fares offered by LCC (Low Cost Carriers) like Deccan, Spice jet, Go Air etc.
Numbers of Flights operating: 2500 per day
Handful Handful cargo careers- increasing. increasing.
200 aircraft in operation. Avg. 12 on ground, due to pilot shortage.
Average 20 million domestic PAX (passengers) every year. 2500 pilots employed in schedule operations. About 100 business aircrafts.
Pilot shortage. (about 450, immediate).
IGRUA (Indira Gandhi Rashtriya Uran Akademi) output 40 pilots every year.
Pilot license applications : 300 in 2005, 1045 in 2006
S.W.O.T ANALYSIS STRENGT H S H S
Lower air fares Tourism in India Growing outbound travel in India Growth potential Liberalization of sector Modernization of non metro airports Rising share of low cost carriers Fleet expansion by state owned carriers The opening up of new international routes by Indian government Establishment of new airports and restructuring of old airports
WEAKNESS
Poor infrastructure at airports. Acute shortage of trained pilots and technicians. Stiff rules and regulations for operation. High operational cost for airlines. High security threats in the subcontinent. Training infrastructure incompatible both in terms of quality and quantity. Shortage of qualified instructors due migration to schedule operation. Pressure on quality standard of inducted pilots. Infrastructural constraints
S.W.O.T ANALYSIS O PP ORTUNITIES PP ORTUNITIES
The number of air travelers is about 0.8 per cent of the population India's civil aviation passenger growth, at 20 per cent, is among the highest in the world. India's civil aviation ministry expects 100 million passengers by 2020. India anticipates doubling of passenger traffic over the next decade. Economic Growth Vibrant middle class: Increasing Consumerism and Affordability ´common man´ Under-penetrated markets Growth in Tourism Currently domestic passenger market is growing at 50%
T H REATS H REATS
Government Regulations; Though the govt. is making changes in the regulations, it needs to move at a much faster pace on this. Aviation in India is over regulated and needs to free itself from govt. shackles. Inadequate infrastructure. Acute shortage of Pilots and and maintenance engineers. engineers. Security and safety. Low profit margins and high operating costs. Other faster means of transportation
P S STRATEGIC GROU P S
Full range carriers with medium price : Wide coverage coverage of services provided and have greatest potential to capture and can lead in market. But have less number of International destinations and the new comers can come up with low fares. For Example; Jet, Indian Airlines, King Fisher
Low cost carriers with low price : Great facilities and technology but no service for economic class. For Example ; Air Deccan, Spice Jet, Go Air, Indigo and other Low cost c arriers.
Very
high service with high price : Better service due to high fare and Attractive for t he growing middle class. But less coverage c overage within country.
For Example ; Taj airways, Club one airways
Good
service with medium price : Low fare as compared to higher service provider. Better services than LCC. Targeting to the middle class customers.
For Example ; Kingfisher, Jet airways
Introduction
Jet Airways Airways is an airline based in Mumbai, India. It is India's third largest airline after Air India and Kingfisher Airlines. It operates over 400 daily flights to 65 destinations worldwi de. de. Its primary base is Mumbai's Chhatrapati Shivaji International Airport with secondary hubs at Hyderabad, Kolkata, Pune as focus cities. Brussels, Chennai, Delhi and Ahmedabad, Bangalore, Hyderabad, Jet Airways Airways serves 44 domestic destinations and 21 international destinations in 17 countries across Asia, Europe and North America. It operates a scissors-hub at Brussels Airport. Jet Airways Airways in its typically 'trendsetter attitude' created India's first domestic full service and low cost model by announcing the launch of Jetlite, which will be positioned between between low cost and fullservice. Jet Airways Airways wins ³Most ³Most innovative product launch´ launch´ award. (Sept 2007)
STRATEGIES :
Maintain market leadership in the domestic market
Develop two equally strong pillars: domestic and international operations
Consistently provide a superior product to our passengers
Seamless connectivity spanning domestic and international routes
Improving cargo revenue potential -domestic and international
Reduce unit cost of operations ±Focus on reducing operating costs (specifically fuel) ±Reduction in selling and distribution cost (on-line bookings) ±Re-negotiation of agreements with various service providers
Best
Serve both business and economic class.
customer Service.
Acquired Sahara airlines thus getting stronger hold in market. Several Schemes to acquire and retain customers ;Regular customers enjoys discounted fare
Introduction
Formerly known as Air Deccan, the airline was previously operated by Deccan Aviation. It was started by Captain G. R. Gopinath and its first flight took off on 23 August 2003 from Hyderabad to Vijaywada. ijaywada. It was known popularly as the common man's airline, airline, with is logo showing two palms joined together 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 of Captain Gopinath was to enable "every "every Indian to fly at least once in his/her lifetime." lifetime." Air Deccan was the first airline in India to fly to second tier cities like Hubballi, Mangalore, Madurai and Vis akhapatnam from metropolitan areas like Bangalore and Chennai.
After the merger , Air Deccan is known as Kingfisher Red run by Kingfisher Airlines.
Air Deccan is positioning itself as a ³Low ³ Low Cost Carrier ´. ´.
Target market : Upper middle class in short term and lower middle class aggressively in long term.
STRATEGIES :
Advertisement through print, radio and billboards
In flight magazine for revenue generating
In flight shopping scheme called ³ Brand for less´ ±AVA Merchandising
Tie-up with Café Coffee Day
ICICI-Travel agent purchase card
Tie-ups with HPCL and Reliance Web World
Offers no in-flight service
Single class aircraft configuration
Internet booking and cheap fares
Offering non-trunk non-trunk short-haul short- haul routes routes and attracting high-end high-end railway traffic through comparable fares
Introduction
SpiceJet was earlier known as Royal Airways, Airways, a reincarnation of ModiLuft. It is promoted by Ajay Singh and the Kansagra family. SpiceJet is a low-cost airline based in New Delhi. It began service in May 2005 and by 2008, it was India's second-largest low-cost low-cost airline in terms of market share. SpiceJet was voted as the best low-cost airline in South Asia and Central Asia region by Skytrax in 2007. SpiceJet marked its entry in service with Rs. 99 fares for the first 99 days, with 9,000 seats available at this rate.
Marketing
Str ategy
Entered with Rs. 99 fares for first 99 days offering µlow everyday spicey fares¶
Aims to compete with Indian Railway¶s Railway¶s AC segment
Aims at future fleet expansion to increase market share
Offering free tickets
Corporate deal offers
Concessional fares for students
Introduction
Kingfisher Airlines Limited, is a major Indian airline. Kingfisher operates more than 400 flights a day and has a network of 69 destinations, with regional and long-haul international services.
Kingfisher Airlines is one of six airlines in the world to have a five-star rating from Skytrax, along with Asiana Airlines, Malaysia Airlines, Qatar Airw ays, Singapore Airlines and Cathay Pacific Airways.
It l ays stress upon
Full Service at True Value
Medium-cost operation
One single Kingfisher Class for all
Short flights and fast turnaround times (allowing maximum utilization of aircraft)
Kingfisher¶s Marketing Str ategy
Co-branding/Strategic Co-branding/Strategic partnerships with like-minded brands is an aggressive strategy of Kingfisher to promote its guest loyalty programme. The company is used to spend close to Rs 40 crore on various media and below-the below-the line marketing activities every year. The company has also launched Kingfisher First, which which is a print campaign to promote its first class service. The company is also planning a series of online promos to boost traffic in certain sectors such as Mumbai-Kolkata. They are running online contests to boost traffic on these sectors and are also looking at partnering with premium hotels. KINGFISHER KINGFISHER Airlines has announced special fares for all personnel serving in the Indian Armed Forces, the Union Government, State governments, and employees of all public sector units in the country. The immediate families of these personnel - parents, spouses and dependent dependent children are are also eligible for these reduced and special fares.
Conclusion Following are the insights that we derived , they are :
The Airlines industry is cyclical in nature due to uncertainties which are beyond its control. Due to this the brands have to be built in such a manner that they survive the lean periods on their strength of being able to differentiate themselves with others. This must be done by being clear as to what one¶s brand represents and sticking to its core values and not by raging a price war all the time. Through the study we have found out that the Low cost Airlines have positioned themselves in competition to railways by making travel affordable. They are compared to railways and road transports on the pricing front. But the reality is that it's not possible for them to compete with railways on price front. Rather they should try to highlight features such as lesser travel time and better in-flight facilities. Price discounts need to be carefully done to attract customers and simultaneously ensure that it does not affect the brand image or result in considerable reduction in revenue. In-flight advertising is an effective promotion medium as the audience is hundred percent captive. They can help airlines promote the brand image, promote new schemes, improve the brand recall and generate extra revenue if done without the passengers perceiving it as a forceful. Pricing is the most sensitive issue in airline industry and is done depending on the demand of the market. Switching is more frequent in case of low fare airlines whereas business segments are more brands loyal. From the market research we could infer that while deciding among low cost airlines fare acts as the deciding factor while in case of choosing among full service providers the determine factors are flight schedule, reliability, quality and connections with not much emphasis on fare.
P S T H H AT MENT NT S H HOULD ULD TAKE: STE P GOVERN M E O
Implement code sharing i.e. selling seats on a flight operated by another carrier. This saves direct costs and increase market presence. Allow foreign carriers cabotage rights( carriage for passengers and freight simultaneously) to increase competition
Eliminate regulatory structure completely to boost new entrants and allow more profit for existing.
Eliminate the fuel tax
Eliminate category III restrictions restrict ions i.e. operator needs to deploy on less popular routes as well.
Improve quality of and access to airports and hangars.
Reduce labor costs.
Simplify flight operations.
Offer more transparent pricing.
Get smart on fuel
Stop chasing market share
Questions...
