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    Airline Industry: Javeed Budhwani

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    Suraj Kant
    The Indian airline industry has grown rapidly in recent years with over 25 million domestic passengers and 22 million international passengers in 2007-2008. The industry is regulated by the Ministry of Civil Aviation and other bodies. Major airlines include Air India, Jet Airways, Kingfisher Airlines, and various low-cost carriers. Jet Airways is the largest domestic airline with a 31% market share while Kingfisher Airlines focuses on luxury services but has struggled financially in recent years. The industry is expected to continue growing at a fast pace in the coming years.

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    Airline Industry: Javeed Budhwani

    Uploaded by

    Suraj Kant
    91 views36 pages
    The Indian airline industry has grown rapidly in recent years with over 25 million domestic passengers and 22 million international passengers in 2007-2008. The industry is regulated by the Ministry of Civil Aviation and other bodies. Major airlines include Air India, Jet Airways, Kingfisher Airlines, and various low-cost carriers. Jet Airways is the largest domestic airline with a 31% market share while Kingfisher Airlines focuses on luxury services but has struggled financially in recent years. The industry is expected to continue growing at a fast pace in the coming years.

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    The Indian airline industry has grown rapidly in recent years with over 25 million domestic passengers and 22 million international passengers in 2007-2008. The industry is regulated by the Ministry of Civil Aviation and other bodies. Major airlines include Air India, Jet Airways, Kingfisher Airlines, and various low-cost carriers. Jet Airways is the largest domestic airline with a 31% market share while Kingfisher Airlines focuses on luxury services but has struggled financially in recent years. The industry is expected to continue growing at a fast pace in the coming years.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    91 views36 pages

    Airline Industry: Javeed Budhwani

    Uploaded by

    Suraj Kant
    The Indian airline industry has grown rapidly in recent years with over 25 million domestic passengers and 22 million international passengers in 2007-2008. The industry is regulated by the Ministry of Civil Aviation and other bodies. Major airlines include Air India, Jet Airways, Kingfisher Airlines, and various low-cost carriers. Jet Airways is the largest domestic airline with a 31% market share while Kingfisher Airlines focuses on luxury services but has struggled financially in recent years. The industry is expected to continue growing at a fast pace in the coming years.

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    of 36

    Airline Industry

    Javeed budhwani
    Airline Industry in India
     454 airports and airstrips
    (includes Operational, Non Operational, Abandoned and Disused

    Airports)
      127 are owned & operated by AAI
      16 - international, 7 custom airports, 28 civil enclaves
      Scheduled domestic air services - available from 82 airports
    May 2007- May 2008

      25.5 million domestic & 22.4 million international passengers


      20% growth – highest in the world
    Growth Rate Projections (for next 5 yrs)

      15% p.a (Passenger Traffic)


      11.4% p.a (Cargo Traffic)
    History
    • 1911
    first commercial flight airmails from allahabad to nani (10 km)
    • 1932
    the aviation department of tata sons ltd . Established
    • 1938
    tata airlines (successor to aviation sivision of tata son )
    • 1946
    Tata Air Lines converted into a public Company and
     renamed Air India Limited
    • 1948 Air India International incorporated
    • 1953 Nationalization of Aircraft Industry
      Air India (serving the international sectors)
      Indian Airlines (serving domestic sectors)
      Deccan Airways, Airways India, Bharat Airways,
     Himalayan Aviation, Kalinga Airlines, Indian National
     Airways and Air Services of India
    History
     1986 Private Sector Players permitted as Air taxi operators
      Players including Jet, Air Sahara, NEPC, East West,
     Modiluft, etc started service
    1990 Open sky policy
    1995 Private Carriers permitted to operate scheduled services
    2005 Entry of low-cost carriers
    2007 Merger of Indian Airlines into Air India
     Acquisition of Air Sahara by Jet Airways
    2008 Kingfisher acquired 49% stake in Deccan Aviation
    •
    Regulatory Authorities
    Ministry of Civil Aviation
      Responsible for the formulation of policy, development and regulation
    of Civil Aviation. Its functions also extend to overseeing airport facilities,
    air traffic services and carriage of passengers and goods by air
    • Other Attached/Autonomous Organizations:
     Directorate General of Civil Aviation (DGCA)
      Promote safe and efficient Air Transportation through regulation and
    proactive safety oversight system
    • Bureau of Civil Aviation Security (BCAS)
      Regulatory authority for civil aviation security in India
    • Airport Authority of India (AAI)
      Accelerate the integrated development, expansion and modernization
    of the operational, terminal and cargo facilities at the airports
    Policies
     Open Sky Policy
     FDI
      Airports
      100% for green field operations
      74% for existing airports - 100% with special permissions
      100% tax exemptions for 10 yrs.
     Airlines
      49% in domestic airlines - 100% for NRI’s
      74% in cargo & non-scheduled airlines
    Competitive Pressure
    Service

    Low cost Carriers


    changing the game

    Indigo

    Price
    MARKET SHARE
    Others Airlines Market Share
    Spice Jet 2%
    6%
    Kingfisher
    8%
    Jet Airwyas
    Indian Airline
    Jet Lite Jet Airways
    Air Deccan
    10% 35%
    Air Sahara
    Air Deccan Kingfisher
    15% Spice Jet
    Others
    Indian Airlines
    24%
    The Kingfisher
    AIRLINES
    The king of good times
    Kingfisher airlines
    • Dr Vijay Mallya is the Chairman and CEO of Kingfisher
    Airlines
    • Kingfisher Airlines Limited launched scheduled airline
    services on May 9, 2005 with 4 daily flights between
    BOM & BLR and one A-320 aircraft.
    • There are tools for mood lighting such as web chat, inseat
    plugins for music, liveTV with 16 channels on each seat
    • 100 percent E ticket airline
    •
    VISION

     The Kingfisher Airlines family will


    consistently deliver a safe, value-based
    and enjoyable travel experience to all
    our guests

    •
    STP
    SWOT Analysis
    • Strengths
     First airline with full new fleet of aircraft
     Quality hospitality provided to customers
     Route rationalization
     Already have training academy
    • Weaknesses
     Service delivery to metros and other big cities
     Yet not in profit
     High ticket pricing
     High attrition in top brass

     Opportunities
     Under penetrated domestic market
     International market
     Untapped air cargo market
     Expanding tourism industry
    PESTEL ANALYSIS

     POLITICAL FACTORS
     1) Open sky policy
     2) FDI limits: 100% for Greenfield airports
     74% for the existing airports
     100% through special permission
     49% for airlines.
    ECONOMICAL FACTORS

     1) Contribution to the Indian economy.


     2) Rising cost of fuel.
     3) Investment in the sector of aviation.
     4) The growth of the middle income group family affects the aviation
    sector.


    •
     SOCIAL FACTORS
     1) Development of cities leads to better services and airports.
     2)Employment opportunities.
     3)Safety regulations.
     4) The status symbol attached to a plane travel
    TECHNOLOGICAL FACTORS

     1) The growth of e-commerce and e-ticketing.


     2) Satellite based navigation system.
     3) Modernisation and privatisation of the airports.
     4) Developing green field airports with private sector for example in
    Bangalore the airport corporation limited.


     ENVIRONMENTAL FACTORS
     1)The increase in the global warming.
     2)The sudden and unexpected behavior of the atmosphere and the
    dependency on whether.
     3)Shortage of the infrastructural capacity
     4)Tourism saturation.
    LEGAL FACTORS

     1) FDI limits
     2) Bilateral treaties
     3) Airlines acquisitions and the leasing cost.


    7 P’s
    PORTERS FIVE FORCE
    MODLE
    KINGFISHER AIRLINES
    Performance

     Kingfisher has posted a net loss of Rs 577


    crore in the financial year ended March
    2007, the balance sheet of UB
    Holdings, which owns the airline, shows.
    Jet Airways
     Founded in 1993, Chairman - Mr.Naresh Goyal
    HQ in Mumbai

      Country’s second largest international airline


      Largest domestic airline - 31%
    Primary base - Mumbai's Chaatrapathi ShivajiAirport

    Secondary hubs - Bangalore, Brussels, Chennai, Delhi,

    Hyderabad, Kolkata and Pune.

     April,2007 - Acquired Air Sahara - JetLite


     Now JetLite integrated into Jet Airways


    Mission Statement

    Jet Airways will be the most preferred domestic airline in India. It


    will be the automatic first choice carrier for the travelling public and
    set standards, which other competing airlines will seek to match.

    Jet Airways will achieve this pre-eminent position by offering a high


    quality of service and reliable, comfortable and efficient operations.

    Jet Airways will be an airline which is going to upgrade the concept


    of domestic airline travel - be a world class domestic airline.

    Jet Airways will achieve these objectives whilst simultaneously


    ensuring consistent profitability, achieving healthy, long-term returns
    for the investors and providing its employees with an environment
    for excellence and growth
    •
    STP
     Primary Segments (Geographic) - Domestic & International
    Customer Segments

      First class, Premiere(Business) class & Economy class


    Target Segments

      Premiere(Business) class
    Business travelers, contribute 48% of passengers & 66% of revenues,

    ready to pay higher prices, last time booking, don’t like transit

      Economy class
    Leisure travelers, prefer low cost airlines, ready for transit if there is cost

    advantage, large % of passengers

     Seat Allocation – Yield Management Technique


     Positioning – High value for High price
    Unique Selling Price – Customer relationship and Punctuality
    Strengths
    SWOT Analysis
     Market driver

     Experience exceeding 14 year

     Only private airline with international operation

     Market leader

     Largest fleet size

    Weaknesses
     Loosing domestic market share

     Old fleet with average age around 4.79 years

     Scope for improvement in in-flight service


     Weak brand promotion


    Opportunities
      Untapped air cargo market

     Scope in international service and tourism

    Threats
     Strong competitors

     Fuel price hike

     Overseas market competition


    PEST Analysis
    Political Issue
     License issue for international

    operation

     Infrastructural constraint

     ATF price policy

    Economic Effects
     Rising income level

     Reduced fare but yet not enough


    Social Effects
     Sound Pollution

     Plane hijacking

     9/11 Incident

    Technology Effects
     Modernization of aircrafts

     Modern technology like CAT3

    and ILS

    •
    7P’s
    Price
    Economy & Club Premiere Fare

    Discounted fare for senior citizens & defense personnel

    Advance Passenger Excursion/ APEX Fares

    One Fare

    Night Saver Fares

    Check Fares

    US Dollar Fares & Visit India Fares

    Place

    Place of Service - Aircraft

    Various Destinations


    Promotion
    Offers

     Companion Free Offer, One Fare, Concessional fares, JetPrivilege

    Offers,
    Jet Airways Citibank Credit Cards, Corporate Deal Offers, International

    Specials, Camp Rock contest, Festival specials, Student specials,

    Surprises etc.
    Advertising and Branding

     Hoardings

     Brand Ambassadors

     Sponsorships

     Event Organization

    •
    Process
    People Processing
     People physically enter the service system to receive the service.
    Aircraft is the
    service factory where service is delivered.
    Possession Processing
     Cargo
     Luggage & Courier
    Physical Evidence
    Servicescape
     Servicescape usage - Interpersonal
     Complexity of Servicescape - Elaborate
    Flight
    Offices - Org. & Ticket Booking Agents
    Virtual Servicescape
    Jet Airways - Performance
     Annual Revenues - Rs.9481.5 crores (2007-08)
     Rs.7401 crores (2006-07)
    Profit(Loss) After Tax - Rs.253 croresloss (2007-
    08)
     Rs.27 crores profit
    (2006-07)
    - All Other Domestic Players showed loss(2006-

    07)
    THANK YOU

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