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    Presentation On Aviation Industry

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    aashna171
    The Indian aviation industry saw significant growth in the early 2000s as private airlines entered the market and increased competition. However, airlines now face difficulties like high fuel prices, excess capacity from rapid expansion, and huge debt burdens. The industry has consolidated through mergers but continues to be weighed down by poor infrastructure and regional connectivity issues. High operating costs and losses have forced airlines to rethink their business models to improve sustainability.

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    Presentation On Aviation Industry

    Uploaded by

    aashna171
    472 views20 pages
    The Indian aviation industry saw significant growth in the early 2000s as private airlines entered the market and increased competition. However, airlines now face difficulties like high fuel prices, excess capacity from rapid expansion, and huge debt burdens. The industry has consolidated through mergers but continues to be weighed down by poor infrastructure and regional connectivity issues. High operating costs and losses have forced airlines to rethink their business models to improve sustainability.

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    The Indian aviation industry saw significant growth in the early 2000s as private airlines entered the market and increased competition. However, airlines now face difficulties like high fuel prices, excess capacity from rapid expansion, and huge debt burdens. The industry has consolidated through mergers but continues to be weighed down by poor infrastructure and regional connectivity issues. High operating costs and losses have forced airlines to rethink their business models to improve sustainability.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    472 views20 pages

    Presentation On Aviation Industry

    Uploaded by

    aashna171
    The Indian aviation industry saw significant growth in the early 2000s as private airlines entered the market and increased competition. However, airlines now face difficulties like high fuel prices, excess capacity from rapid expansion, and huge debt burdens. The industry has consolidated through mergers but continues to be weighed down by poor infrastructure and regional connectivity issues. High operating costs and losses have forced airlines to rethink their business models to improve sustainability.

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    of 20

    A PRESENTATION

    ON
    INDIAN AVIATION
    INDUSTRY
    GLIMPSE OF PRESENTATION

    Introduction to Indian aviation Industry


    Initial growth of aviation industry
    Which difficulties they are facing
    Possible corrective measures
    Conclusion
    Bibliography
    Introduction to Indian aviation
    Industry

    In 1994 the Air Corporation Act of 1953 was repealed


    with a view to remove monopoly of air corporations on
    scheduled services.
    Enable private airlines to operate scheduled service,
    convert Indian Airlines and Air India to limited company
    and enable private participation in the national carriers.
    In beginning of 1990 private airline companies were
    allowed to provide limited services.
    That resulted in the increase of the share of private airline
    operators in domestic passenger carriage to 68.5% in 2005
    from 0.4 of 1991.
    Share of Different aircraft operators (in %)

    NAME OF THE OPERATOR % Share In Market

    Kingfisher Airlines and


    Kingfisher Red (previously Air 28%
    Deccan)
    Jet Airways and Jet lite
    25%
    (previously Air Sahara)
    Air India and Indian
    16%
    (previously Indian Airlines)
    Indigo 14%
    Spicejet 12%
    Go air 3%
    Paramount Airways 2%
    MDLR airways 0.004%
    Initial growth of aviation industry

    The Indian aviation sector had witnessed


    strong growth in 2005 with the entry of
    many low cost carriers (LCC).
    The increased competition resulted in
    lower air fares for travelers.
    passenger traffic grew from 19.8 million
    during July 2004 and June 2005 to 27.5
    million during July 2005 and June 2006.
    Difficulties for Domestic Airlines

    Low fares because of competition


    Huge Advertising
    High fuel prices
    Poor infrastructure
    Excess capacity
    Huge debt burden
    INCREASE IN COMPETITION INCREASE IN ADVERTISING
    Huge Aviation Turbine Fuel (ATF)
    Prices
    ATF prices now form around 80% of the total
    operating costs of Airline Industry.
    ATF prices have almost doubled over the last year.
    ATF prices which have demonstrated the inverse
    relationship between airline stock prices and fuel
    prices.
    The industry reported a $10.4 billion loss in the last
    year.
    Excess Capacity
    Driven by the drastically increasing passenger traffic
    over the last 3 years, almost all domestic players built
    their capacity
    Assuming the growth would continue over the next few
    years. Several new aircrafts were bought within a short
    span of time which resulted in excess capacity of
    around 15% to 20%.
    Aircrafts ordered during good times are being delivered
    during recession.
    Maintaining such low levels of fares will be difficult
    due to excess capacity, especially during the ongoing
    global slowdown.
    Huge Debt Burden
    Healthy profits and increasing passenger
    traffic saw airlines raising significant
    amount of capital from bank to fund their
    aggressive expansion plans.
    Banks also were liberal in lending airlines.
    The top three airlines including Air India,
    Kingfisher Airlines and Jet Airways are
    now carrying a cumulative debt burden of
    approximately $8 billion.
    Poor Infrastructure
    Infrastructure continues to be a major
    constraint for Indian Airline Industry today
    Due to excess capacity created during good
    times.
    Maintenance and Air Traffic Control (ATC)
    infrastructure are grossly inadequate if the
    industry expects to grow any further.
    Security concerns still remain to be addressed.
    Regional Connectivity
    Even though the industry is weighed down
    with excess capacity, regional connectivity
    continues to be poor.
    Primarily due to the lack of infrastructure.
    Employee shortage
    There is clearly a shortage of trained and
    skilled manpower in the aviation sector
    There is cut-throat competition for
    employees
    The industry is unable to retain talented
    employees.
    cut-throat competition drives wages to
    unsustainable levels.
    Huge loses
    In August 2006, Spicejet had reported a net loss
    of Rs. 414.2 million for the first year of
    operations.
    In 2006, Air Deccan, the largest LCC in India,
    reported a net loss of Rs. 3.4 billion for the 15
    month period ended June 30, 2006.
    Jet Airways, a full service carrier, had also
    reported a net loss of Rs. 1.0 billion for the half
    year ended September 30, 2006.
    Corrective measures
    October 16, 2006, the representatives of major
    carriers decided to set up the Federation of Indian
    Airlines.
    Improving aviation infrastructure facilities and
    reducing taxes on ATF.
    The minister said that there would be closer
    scrutiny of new applications before issuing
    licenses to new carriers.
    Ministry would take up the issue of high aviation
    turbine fuel (ATF) prices with the oil companies
    and the petroleum ministry.
    Mergers between Air Deccan and
    Kingfisher airlines.
    Conclusion
    Indian Airline Industry was one of the fastest growing Airline Industry

    across the world during the last decade. However, skyrocketing fuel prices,

    economic slowdown, slashed corporate travel budgets over the last 3 years

    has forced all Indian Airlines to rethink their business model. Excess

    capacity build-up and poor infrastructure continue to plague the industry

    which is also experiencing a decline in passenger traffic at the same time.

    Mergers, liquidation and consolidations seem to be necessary. Improving

    energy efficiency of engines, developing infrastructure, increasing regional

    connectivity will definitely have a positive impact on the industry.


    Bibliography
    Websites www.wikipedia.com
    www.kingfisher.com
    Newspapers
    Magazine
    Any Queries…?
    THANK YOU...

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