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-An analysis of the strategies followed by airlines
India with special focus on low-cost airlines 0|Page

- And A Detailed Report on Kingfisher Airlines

An analysis of the strategies followed by Airlines in India
with special focus onSubmitted
Submitted by
Sanober Haidri -(0701AAM006)
Razif Malik -(0701AAM007)
Bhavana N Reddy-(0701AAM011)
Batch – 2011
E-mail: haidri.theg8@gmail.com
DATE OF SUBMISSION: April 20, 2011 1|Page
This report is submitted as partial fulfilment of the requirement of B.S-Airline &
Date: January
& TECHNOLOGY, 06, 2010
HYDERABAD. The report on the title “COMPETITIVE
AIRLINES-An analysis of the strategies followed by Airlines in India with special
focus on low-cost airlines“ And A Detailed Report on Kingfisher Airlines is an
original work and has not been submitted to any other institution or university for the
award of any degree or diploma.
Apart from our individual efforts, the success of any project depends largely
Ionconsider it my pleasant
the encouragement of duty
involvedmy deep sense
directly of
and indirectly. I
am equally
to thankful
my Facultyto my friends
Guide- for their
Prof.Anoop valuable
Bandopadhayand timely
take this opportunity to express my heartfelt gratitude to the people hisinputs
in April
thehave 20,direction
guidance and 2011
of the project.
to the exercise.
who been
Place: Hyderabad influential in the progress of this project.
JET STRATEGIES…………………………………………………………………..24
 SPICEJET…………………………………………………………………………………
…………44 -
…………53 ……..45 4|Page
Since its maiden flight in the chilled winters of December 1912, from
Karachi to Delhi, Indian aviation Industry has traversed a long journey 5|Page
evolving synchronously and has metamorphosed into one of the most
competitive airline industry in the globe. From being a privilege of the
hedonist class, it has transformed into a more utilitarian way of
travelling and is catering to more value seeking functionalist and
pragmatist class of consumers too, in the form of no frill low cost
airlines. The hegemony of the government owned monopoly of the
sector has been thwarted long back with the effect of open sky policy
of April 1990. As a repercussion, a plethora of airlines has pullulated
and has transformed the arena into adrenaline gushing venture. As the
percentage of fliers among the Indian population is only a paltry 0.8%
and in order to survive and grow the airlines have been devising various
strategies. It would be interesting to extricate the intriguing strategies
adopted by these players parrying and pummeling the opponents. The
study aims at learning the financial, marketing and operational
strategies the airlines in India are following, albeit with a clinical
approach. The project shall envelope studying the airlines industry in
India in relation to various business models and also come up with
suggestions, whose implementation would be in favour of the sector.
The project aims at analyzing individual brands in the industry and
chooses their strong points and come up with an idle hypothetical
brand. A market survey of the existing fliers is planned to know their
likings and disliking.
To have a holistic study of the industry, analyze the current
 To study
scenario in business models
perspective of thesuch
of models existing airline majors
as Porter’s 5 ForceinModel,
 T o list
country. up various strategies adopted in the industry by
Ansof’s Model, SWOT analysis etc., thus gain a multidimensional various
 A market
players and survey
have of the existent
a clinical study offliers in order to know their taste
 of the
come up with constructive ideas for the benefit of the industry.
To study the Indian Aviation Industry
To study the industry in various
To study
marketing the major branding
To study
strategies. the flier preferences.
I have decided to do the project in two parts. The first part of the project is
comprised of the study of the Indian Aviation Industry as a whole and the second
part deals with the fliers perception regarding different brands of airlines and
different facilities with them.
The first part of the project i.e. descriptive study comprises an overall study of the
Indian Aviation Industry, the different brands of airlines, the strategies followed
by them besides learning the various applications of marketing concepts in the
industry. It will greatly be done with the assistance of the secondary sources such
as the available books, research papers, the company websites and magazines.
The second part of the project will try to bring out the brand preferences and the
components of the brands and their services that made them score over the
other brands. This shall be done by firsthand experience gained through the
meetings with the existing fliers. Self administered questionnaire would be the
tool in the implementation of the programme.
For the purpose of studying the population sample of 50 will be chosen among
the fliers. Population will not be segmented on any basis for the purpose.
The work will be carried out through self administered questionnaires. The
questionnaire will include both open ended and close ended questions.
The data which will be collected for the study can be broadly classified into two
Primary Source: It includes questionnaires, interviews and word of mouth.
DATA Secondary
ANALYSIS source: It includes company records, past data records, internet
The data will beand
sources analyzed
books.byAsusing mathematical
the project techniques.
entails analysis Variousstrategies
of existing statisticala lot
tools would be considered and Primary
used to accomplish
of secondary source of data is to be banked upon. the job.
Word of mouth

The history of civil aviation in India started with its first commercial flight on February 18, 1911.
It was
The a journey
aviation from in
industry Allahabad to Naini
India gathered made by aafter
momentum Frenchthreepilot
yearsMonseigneur Piguetof
with the opening covering
a a
distance of about 10 km. Since then efforts were on to improve the health
regular airmail service between Karachi and Madras by the first Indian airline, Tata Sons Ltd. of India's Civil
At Industry.
the timethis
ofservice Thefailed
first to
independence domestic
Air air
nine anyroute between
Transport fromKarachi
Companies the were and
Indian Delhi wasinopened
operational in
the Indian
With 1912
Later the
an attempt by the Indian State
to farther Air
reduced tothe Services
basewhen in collaboration
of thetheaviation
Orient sector with
Airways the Imperial
in India, Airways,
its Government
base to UK
of an extension
Pakistan. The
India together of London-Karachi
Air flight
(earlier of
Tata the
Tata Imperial
Airline) Airways.
set upIndian
a in
joint National
sector Airways,sector
Lockheed constellation aircrafts, Air India started its journey the Indiancompany,
aviation Air on
of India,
For Deccan
8, 1948
many years Airways,
since 1948.
its Ambica
With an Airways,
inception theinitial
Indian Bharat
air route.Airways
Aviation of Rs. and
Industry wasMistry
2 crore and Airways.
plagued a fleet of three
by inappropriate
Corporationand andoperational procedures resulting
Air India International in either
for domestic andexcessive or no
international aircompetition.
services respectively.
These two companies enjoyed monopoly power in the industry until 1991,aviation
of Indian Airlines (IA) in 1953 brought the domestic civil sectorairlines
when private under
the purview of Indian Government. Government's intervention in
were given permission to operate charter and non scheduled services under the ‘Air Taxi’ this sector was meant for 9|Page
scheme to theboostoperational limitations
tourism. These arising
carriers wereout notofallowed
excess competition.
at the time, toInfly 1953, the Airflights
Corporation Act nationalized
or issue air tickets to passengers. all existing airline
As a result, assets and
a number established
of private playerstheincluding
Indian Airline
Jet Airways,
Air Sahara, Modiluft, Damania Airways, NEPC airlines and East West Airlines commenced
domestic operations. In 1994, following the repeal of the Air Corporation Act, private players
were permitted to operate scheduled services. Ultimately the carriers with more efficient
operations and strategies survived and by 1997, only Jet Airways and Air Sahara made the cut
The the original
big change group.
in the industry came in late 2003 with the emergence of India’s first no-frill
and Airare
tickets Deccan. It revolutionized
available for as little as the
0.99. In offering
fact, nowfares
many as airline
low as tickets
INR 500 can(USD 10
be bought
roughly), compared with Full Service fares offered by the incumbents,
for a price comparable to an upper class railway ticket for the same route. averaging about INR
3000 or more.2004,
In December SinceIndian
then, Spice Jet (restructured
scheduled carriers withRoyal Airways
a minimum of and Modiluft),
5 years Go Airways and
of continuous
As Air have also
and a minimum
a consequence entered
today wefleet the
have,size industry.
of 20
eight Paramount
private Airways
were permitted
scheduled is
operators to another
viz., player, though Ltd.,
Jet Airways(India) it is
Jet Lite share on
Airlinesthe other
to internationals end of the spectrum,
Ltd., Kingfisher as
On 2009
Airlines, an
Deccan ‘all
11, business
Aviation the class’ airline.
(P) government
Ltd., Spicejet, With the
Paramount further
Market of these airlines as on April – (source: DGCA)
Pvt. Ltdof, Go
scheduled online
Indian ticket
Airways, sales
carriers through
and(Air India,
Inter companies
Globe such
Aviation as makemytrip.com,
Jet Airways
Ltd.(IndiGo) were and prices
Air Sahara)
operating have crashed
to operate
as Scheduled Private
10 | P a g e
Airlines. servicestotothese
In addition and from Singapore,
private Malaysia,
airlines, two Thailand,
more airlines HongAlliance
namely Kong, the UK
Air, and the of
Indian Airlines and Air India Express, subsidiary of Air India also commenced their operations in
1996 -97 and 2005-06 respectively. Air India, Air India Express, Jet Airways and Jet Lite Airlines
Ltd as the designated airlines of the Government of India under various bilateral air services
agreements have been authorized to operate long and medium haul scheduled international air
services. Recently Kingfisher too have started international flights.
Sector structure/Market size
The Indian aviation industry is one of the fastest growing aviation industries in the world. The
India is the 9thopen skyaviation
largest policy has led toinmany
market overseas
the world. players to
According entering the market
the Ministry andAviation,
of Civil the
from has million
4929.8 been growing
countries flyingboth
arepassengers inIndia.
terms to/from
intotraveled of players andduring
India number of aircrafts.
2008, an increaseToday,
of 30private
per cent
on account
Growth year.for
It around 75 per
is predicted cent
that share of thepassengers
international domestic aviation
will growmarket.
up to 50 million by
2015. Further, due to enhanced opportunities and international
The Indian Civil Aviation market grew at a compound annual growth rate (CAGR) connectivity, 69 foreign
of 18airlines
per cent,
and was worth
Domestic US$
airlines 5.63.67
flew billion in 2008.
million Airlinesinrecorded
passengers a double-digit
August 2009, as against growth in air traffic
2.92 million in thein
The 2009,
Centre foraccording
period lasttoyear—an
Asia Pacific data released
Aviation by the
(CAPA) industry
26 regulator
per cent. Directorate
that domestic traffic General of Civil
will increase by 25
By cent to(DGCA).
2020, 30 perairports
Indian cent tillare 2010 and international
expected to handle more traffic growth
than by 15 per
100 million cent, taking
passengers the total
including 60
million to more
domestic than 100
passengers million
and passengers
around 3.4 by 2010.
million tonnes of cargo per
Moreover, significant measures to propel growth in the civil aviation sector are on the anvil. annum.
The government
India ranks fourthplansaftertoUS, invest US$
China and9 Japan
modernize existing
of domestic airports by
passengers 2010. The
volume. The
government is also planning
number of domestic to develop
flights grew around
by 69 per cent300fromunused
2005 to airstrips.
2008. The domestic aviation
The is expected
industry to grow
witnessed an at a rategrowth
annual of 9-10ofper
reach a level
during theoflast
5 yearsmillion
in the
passengers bycargo
international 2020.handled at all Indian airports. The airports handled a total of 1020.9 11 | P a g e
thousand metric tonnes of international cargo in 2006-07.
Further, there has been an increase in tourist charter flights to India in 2008 with around 686
flights bringing 150,000 tourists. Also, there has been an increase in non-scheduled operator
Low cost
permits in 2008 as against 66 in 2007.
– 99services
Major full-service carriers have converted around half their capacity into low-cost services,
which has resulted
Kingfisher Airlinesinandbringing down have
Jet Airways the average fares
converted of airlines
around as a whole
half their byinto
capacity about 30 per
services. thereby
It already increasing
While, has
government demand
a low-cost carrier
airline from
Air the domestic
called plans passenger
to launch
India Expressa whichmarket.
low-cost modelon
operates in international
the domestic
Jet Airways has also increased the number of low-cost seats in the system by around 50 per
Low cost carriers (LCCs) such as Indigo and Spice Jet have increased the total number of seats
by 40 periscent
SpiceJet alsoand 53 peron
working cent, respectively,
a plan in the past operations
to start international year. next year, making it the third
private Indian
Road Ahead carrier after Jet Airways and Kingfisher to fly overseas.
The Indian aviation sector is likely to see clear skies ahead in the years to come.
Passenger traffic is projected to grow at a CAGR of over 15 per cent in the next 5 years.
The Vision 2020 statement announced by the Ministry of Civil Aviation, envisages
creating infrastructure
Investment opportunities to handle
of US$280 110million passengersup
billion envisaged byto2020.
2020 with US$ 80 billion in
new aircraft and US$ 30 billion in development of airport infrastructure.
Associated areas such as maintenance repair and overhaul (MRO) and training offer high
investment potential. A report by Ernst & Young says the MRO category in the aviation
Aerospace sector
up to US$ 120
that thebillion
marketof will
investments by 2020.
require 1,000 commercial jets in
the next 20 years, which will represent over 3 per cent of Boeing Commercial Airplanes’ 12 | P a g e
forecasted market worldwide. This makes India a US$ 100 billion market in 20 years.
PESTE Analysis
The literature on marketing provides one, particularly useful, model for the study of a firm’s
Marketing Environment.
Political factors This model proposes that the relevant factors should be divided into
the categories of Political,
Economic factors Economic, Social, Technological and Environmental. These factors are
not mutually
Social factors but then the classification helps in understanding each ones influence.
Following are the factors
Technological -
Environmental factors
The political situation of the country has a direct impact over the aviation industry of the
Open SkyThe policies
Policy and taken up at this level such as the nationalization of the carriers, open sky
policy, and taxation all have impact
Throughout its history, the airline on the has
industry marketing policies of by
been constrained thedecisions
carriers. made by
In and governments.
recent years India has openGovernments haveforeign
up its sky to the controlled where
players. airlines
It has signedcan
upfly, and
with aspects
nations all
of their
up thetheproduct planning
world (though
competition. and
of them)
there policies.
are to allow
76 They have
carriers 49also
of their had a major
countries involvement
operating foranthe
as in the
In ‘Openthrough
1953, the Air theItownership
Corporation to of
has led Act airlines.
led in Finally,
the number
to nationalizationpolitical
of the
of decisions
players have
in the
airlines. It often
thehas the
of natureindustry
the airline and geographical
in India. Itdistribution
was in 1994ofthat
the Air Corporation Act was repealed and 13 | P a g e
thus this allowed private operators to operate in the domestic airline and aviation industry.
Today FDI up to 49% into airlines and 100% for airports. A brief of the various decisions taken
by the government in deregulation of the sector and opening to the foreign policy.
Aviation Policy
Many policies supporting infrastructure are now in place.
100 per cent FDI under automatic route is permissible for Greenfield airports.
For airline
foreign existingcompanies.
airports, FDI 100up pertocent
74 per centownership
equity is permitted bythrough automatic
Non-Resident approvals
Indians (NRIs)
is and up
permitted. to 100 per cent through special permission (from FIPB).
Over the past year, various companies have shown an interest in the Indian aviation industry.
74 per
in(PPP) developers
airport allowedin
according toto
was setup
aover captive
studyUS$ airstripsin
by 5research
billion and general
firm airports
Frost go up150
Sullivan. US$km away
9 billion
The from
by 2013, Indian
of an
which existing
close airport.
to plans
US$ 6.8 to set
billionup an
is Airport
expected Economic
to come Regulatory
Tata Advanced System Limited (TAS), a unit of the Tata Group, will set up a US$ 113.63 publicAuthority
private to
provide aper centplaying
tax exemption for airport projects for a period of 10 years. Zone (SEZ) in
four tolevel
five field
India.to all players.
years tomanufacturing unit at the Aerospace Special Economic
49 per
Major Investments
Adhibatla cent FDI
village is permissible
near theairports. in
Hyderabaddomestic airlines under the automatic route, but has
not by
companies Airports International
in developing Theinternational
is ready to enter into
company, airport.
joint has
which Further,
ventures theamore
up company
26 per cent
stake fora US$
opportunities. joint 20venture
millionwith US-based
in Bengal Sikorsky Aircraft
Aerotropolis Pvt Ltdto make aerospace
(BAPL) is lookingcomponents
at other
in India.
State-owned aerospace firm Hindustan Aeronautics Limited (HAL) has signed an 14 | P a g e
US aircraftwith
agreement maker, Boeing
Boeing Co, willflaperons
to supply deliver 100 planes
for the worth777
Boeing's US$series
17 billion over the next
jetliners. It is understood that HAL will supply 600 units of flaperons to Boeing which will
be delivered in phases by 2019.
European passenger plane maker Airbus SAS will move 20 per cent of its engineering
and design activities to low-cost countries, a majority of it to India, by 2012.
Airport Infrastructure
Mumbai and Delhi airports have already been privatized and are being upgraded at an
estimated investment
undertaken through PPP of US$
mode.4 billion over 2006-16.Greenfield airports are operational
Over the next five years, AAIThese
Bangalore and Hyderabad. are built
has planned by private
a massive consortiaofatUS$
investment a total investment
3.07 billion—43
of over
an aerospace US$ 800 million.
per cent ofengineering
which willand be for the three metro
manufacturing airports in Kolkata,
company—was Chennai
undertaken at anand
A second
Foreign Travel of Greenfield
Tax US$ and
(FTT) the
32.5 airport
rest andbeing
Rs500 [Nov
15% planned
go into
inland airattravel
upgrading Navi
otherMumbai is going
(IATT) to be
charged developed
Basic airfare has
using public-private
Abolishment the partnership
existing (PPP)
aeronautical mode at
facilities. an estimated cost of US$ 2.5 billion.
Reduction on of
abolished Taxes
by theDuty
Excise government w.e.f from January 9, 2004 to reduce fares.
35 other
An city airports
investment of US$ are
million to bebe
will upgraded.
made by The city side
industries in development
the Aerospace will
From January 9, 2004, the excise duty on ATF was reduced from 16 to 8 per cent. The average
domestic Precision Engineering
price of ATF Special
is 99accounts
per centfor Economic
higher Zone at Adibatla, Ranga Reddy district.
airlines drastically as ATF 30 tothan prices
40 per centinofforeign countries
operating costs. and affects domestic
The country's first special economic zone (SEZ) dedicated to the aerospace industry has
Charges abolishedin Belgaum district, Karnataka. The SEZ—promoted by Quest Global,
Landing charges for aircraft with less than 90 seats were abolished and landing charges for
larger aircraft have been reduced by 15% with effect from February 11, 2004. 15 | P a g e
The demand for air travel is characterized by very high income elasticity. Therefore, as the
world economy
unacceptable grows, so theconsequences,
environmental demand for airand travel can bethe
to exploit expected
demand towhilst
increase too. Thisthe
air growth
travelers, whichgives
however thethe both
recent recession opportunities
has so often foundup
showed andmust
we great challenges
be to
a clearin
cautious the airline
pattern of growth,
increment. The
are uneven
down turn come
had with
ledtime. the chance
to losses as one to
worth exploit
millions a growing
due toair market,
inadequate something
capacity growth 16 | P a g e
rates would be the envy
tied closely
utilization. of managers
to those in the worldin many other Ifindustries.
economy. growth inThe
the challenges
economy isare to in a
particular year,the
so growth throughinsuitable
is the increase infrastructure
air travel development
demand. Periods and without
of economic stagnation see a
significant slowing of the rate of increase in demand. This pattern has immense strategic and
marketing implications. It is not sufficient for carriers to implement policies which allow for
profits during prosperous periods if these same policies result in heavy losses or bankruptcy
during the downturns in the trade cycle. The rising income of the Indians will see a rise in the
Trends in social factors will have widespread consequences for airline marketing – indeed, in
some senses,
Change this is the most significant component of the PESTE analysis model as far as
in Lifestyle
The policies
changing are concerned.
demographics have profound effect on the marketing strategies of the airlines.
society is more open to embracethrough
Indian population is going a transition
new ideas of singlephase.
parentThe high percentage
children, of youth
nuclear families, live in
coupled with
promotional increasing
relationships,strategies. job
childless couples, avenues certainly
etc. All
For example, these
Spice hints
Jetcalls at the growing
for newer
has taken income
special initiativetoand the
todesign aspirations.
of of child
take care
There inhave
Rise beentravel
Leisure rise in the old aged population also due to medical breakthroughs. And the
There has been a significant rise in the number of the tourists in the country. India had acquired
a total
The 5.5 million
Female businesstourists traversing the country. Number of foreign tourists has seen a growth
Female population has shown atourists’
5.6% whereas the domestic numbers in
higher numbers have
theseen a growth
business o 8.5%.
scenario. TheThis is seen
growing as a
huge booster to the airlines
have led to call for theFACTORS
decrease in sexually provocating skimpy clad air hostesses. Moreover
there has been
Technology rise of
is one in the
the number of male and
most important steward amongfactor
interesting the cabin
can This meant
be both thereashas
an ally
been a change
well as an enemy.
efficiency. in the attitude
Larger aircrafts towards
likehas the
the enabled crew staff.
Boeing 787 sector
can take uptotosoar
840 greater heights
passengers with more
reducing the per
capita fuel consumption whereas Embraer with greater are just the idle for shorter distances. 17 | P a g e
The CAT technology employed in International airports of the country has helped the pilots to
take off and move in even during the low visibility hours. But then some of the technological
developments have posed to be fierce competitors.
Video Conferencing
Video conferencing has enabled to make real time meetings possible at the minimum of cost.
This has helped the organizations to cut down on the cost. But that leaves the aviation industry
of greaterhas
Internet challenge
enabled to to attract
providethe business
real travelers. of flight schedules and availability. It has
time information
also enabled check in facility.
Surface Transport Investment Even some of the airlines are providing internet facility over the
The investment in the surface transport has lead tothemajor
however internet has raised questions over distribution
losses ofchannel commission.
domestic passengers. With
the plans in anvil to launch
ENVIRONMENTAL FACTORShigh speed bullet trains in some corridors, if that comes to reality
As shall take away
concerns a major
for the portion of
environment the revenue.
grows with the rise in global temperatures. It becomes
obvious that the
infrastructure airlines
is not are criticized
conducive to handleall the
the world by the pro environmentalists.
Government too in order charges higher taxes in order to dissuade the short distance travelers 18 | P a g e
from taking the air routes. There are high ATF charges. On the other hand the available
Porter’s Five forces Analysis
Threat of New Entrants
Aviation industry is highly cost intensive. Besides it has to go through a number of regulatory
•compliance before it gets an excusatory order. The factors which make entry of new entrants in
• Indian Aviation sector a difficult task are the following -
The capital requirement- An airline is required to have capitalization of minimum thirty
crores without
Expected which it ismarket
retaliation-The not allowed to takeoff.in the hands of a few players thus any new
is concentrated
player would
Airways to face stiff competition and retaliation from the existing players such as Jet
and Indian.

Inadequate airport infrastructure often makes it difficult for the new entrants to get right
flying slotoftime.
Shortage pilots and high fuel costs also pose a threat as the existing demands itself are
not being
Exit fulfilled.high capital requirement makes it difficult for the companies to exit the
Power but being a growing industry the existing players are willing to acquire and make
of Buyers
• exit for an operator less difficult.
The power of buyers is low because they are large in number and highly fragmented. The
However GDP and is
power thenot
as low as itofcould
low cost airlinesofhas
be because not only
minimal increased
switching theand
cost existing
which of buyers
alternatives but
the opened the buyers.
A customer
power of the doors
does for
not ahave
with this cost toofmove
the various from one
options airline to
another he
• between mightand
airlines incur a cost
even if he
other has signed
modes a contract
of transport helpsotherwise
the buyers.no costs are involved
Further there is no differentiation among the players in the same segment example the
• differences between Air Deccan and Spice Jet is minimal.
19 | P a g e
Power of Suppliers
The power of the suppliers is limited and thus their power is high.

Concentration of suppliers-The suppliers of pilots and ATF are highly concentrated which
increases their
Switching power.
costs-If we look at the aircrafts there are only two suppliers Boeing and Air Bus
thus thevalue-Less
Brand options available
number with the airlines
of suppliers to switch
results between
in a high brand is verywhich
value limited and thus
works the
in their
favor costs are high
and increases their but sometime
bargaining the competition between the two manufacturers
• reduces the costs to some extent.
Forward integration-The airlines also face a threat of forward integration. Though such an
There hasacute
is an not taken placeofinpilots
shortage the past it may
which taketheplace
makes in thedependent
industry future as the suppliers have
on them.
or know
High fuelabout most or
costs-Fuel the technical
accounts aspects
for nearly 35%ofofthe
total cost and the cost of fuel is
• increasing rapidly posing a threat to the company’s profits.

Availability of Substitute

Product for product substitution-Consumers has various options in terms of airlines to
choose from.for
Substitution They may
need- alsothe
With switch to other
advent modes ofoptions
of technology transport such
such as as roadconferencing
video and rail.
and conference
Competitive Rivalry calls reduces the need to travel thus the option of substitution of need in
present but itinisthe
The competition marginal
is notbut
possible to totally
the intensity do competition
of the away with traveling.
has been reduced
•as it is an expanding market.
The number of airlines is increasing which increases the level of competition among
airlines. Earlier when we thought of airlines the only name would be Indian Airlines but
• today the list is long and growing with new carriers like Goair trying to make a mark in the
High fixed More
costsoverandsix new
input low cost airlines
constraints also addare
to expected to comepressures
the competitive up. in the industry.
20 | P a g e

Like every industry mergers and acquisitions take place here too which increases
competitive rivalry between airlines which in turn force more airlines to opt for mergers
• and acquisitions thus forming a viscous circle of competition.

Low level of differentiation between the services offered by the different airlines increases
the risk
The of switching
industry and to
is expected thereby
grow adds to which
at 22% the competition.
actually gives scope to the existing players
and new ones to operate and reduces the extent of competition. 21 | P a g e
SWOT Analysis
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
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.
22 | P a g e
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%
Government Regulations; though the govt. is making changes in the regulations, it needs
 at ainmuch
viation India faster
is overpace on this.and needs to free itself from govt. shackles.
Inadequate infrastructure.
Acute shortage of Pilots and maintenance engineers.
Security and safety.
Low profit margins and high operating costs.
Other faster means of transportation
23 | P a g e
Uniqueness perceived by the customer
Low cost position
Industry wide
Particular segment
Overall Cost Leadership
A Cost Leader firm has a set of clear requirements it must satisfy if it is to be successful. Firstly,
it must achieve, and then sustain, significantly lower operating costs than its rivals. If it loses its
cost concept
The advantage, it will is
of Focus beone
in serious
where adifficulties.
firm choosesSecondly
to give and crucially,
up all it must
the potential correctly
benefits of identify
what its
synergy customers
by are
Differentiation prepared
on one to give up,
activity. and
Their what
aim they
is to are not
achieve prepared
such to
in up,
this inone
to gain
that theyaccess
will to
be cheap
able to prices.
hold Eg.
off SpiceJet,
the challengeJetlite.
of those who are benefiting from
The concept of differentiation holds on that the product or service should be designed in such a synergies in
either thethe
way that Cost Leader
user or Differentiation
perceive it to be differentsectors. Eg.competitors.
from its Paramount Airways on business
This would travelers. 24 | P a g e
increase the
change cost and thus help in charging even a premium.eg Jet Airways.
Jet Airways is a Mumbai based airline promoted by Mr. Naresh Goyal, is the second largest
The in the
First country
class serviceafter
thegovernment owned
picture on right) Air India
available in and the market
the airlines has leader in the
been airways.
recently ratedItbyoperates
as thethan
bestdaily flights
in the to These
world. 65 destinations
are the worldwide. With Jet25 | P a g e
first fullyand Jet Lite
enclosed (formerly
suite provided AirbySahara), it caters
any Indian to all
airline. categories.
They are equipped
with 21 inch LCD screen and AVOD besides all the features of premiere
class. as Jetair
3 star by leasing
rating 4 Boeing
for its service 737-300
by skytrax.it received scheduled airlines
The in 1995. class
It went for inorganic
is provided withgrowth
10.5 inchby LCD
the acquisition
and AVOD. of Air
All Sahara
the threeforclasses
14.5 billion
feature Mood
Lighting onthat
April 12, 2007
adjusts itselfand renamed
to the time ofit the
Jet Lite.
day. It also helped in market penetration as Jet Lite
was directed to serve lower class segments. Today it has 84 aircraft under its service. The airline
runs on hub and spoke model.
Jet started operations in International routes since March 2004 when it had its first
international flight between Chennai and Colombo. Currently Jet Airways serves 21 destinations
in 17 countries across Asia, Europe and North America.
During the recent recession in 2008 the company got into alliance with Kingfisher Airlines,
agreed upon code sharing on both domestic and international flights, joint fuel management to
reduce expenses, common ground handling, joint utilization of crew and sharing of similar
frequent flier programs.
Codeshare agreements
It has code share agreement with a number of airlines like Air Canada, All Nippon Airways,
American Airlines, Brussel Airlines, Etihad Airways, Jet Lite, Malaysia Airlines, Qantas and Virgin
Atlantic. Similarly it has marketing agreements with a number of airlines.
The premiere class shown here on the left is available on International
flights configured in herringbone pattern and is equipped with 15.4 inch
flat screen LCD TV. USB ports and laptop chargers are available. On the
domestic arena the business class seats have the massager.
The Jet Lite division has withdrawn the complimentary food service
and has implemented buy on board. Unlike the parent airline Jet lite
Jet its hub atairways
New Delhi.
is theThe airline
other is also
low cost no into
frill charter flights
airline by andairways group. To
the Jet
In service.
the Jet Lite service it focuses more on southern states.
Flight Entertainment
All the Jet Airways flight provide, “Jet Screen”, which offers audio-video on demand
125 titles. The It has over
system 100 movies,
operates 80 TV touch
via individual programmes, 11 audio at
screen monitors channels andand
each seat, a CD
is library of
Airport in all classes.
Jet Airways Lounges are offered to First and Première Class passengers, along with Jet Privilege
Platinum, Gold
Bangalore, or Silver
Chennai, card members.
Kolkata, The international
Delhi, Hyderabad, lounge at Brussels has showers,
Jaipur, Mumbai.
business centre,
Marketing Strategies entertainment facilities and children's play areas. Lounges are located in
Frequent Flier Programme
Known as JetPrivilege it helps to redeem points earn for miles traversed.
Jet Mall
This is the unique mall provided by the Jet Airways to shop souvenirs at 30000 feet.
Jet Wings
Jet Wings is the inflight magazines.
Jet Travel
Jet has alliance with a number of hotels Such as Leela and Taj where the passengers can get
They if they
provide are privilege
special members
service for infants,of the medical
olds, Jet. emergencies, expectant mothers and
animals. Check in can be done by SMS, on Net, and Kiosks. Their Website has the option to 26 | P a g e
choose from a plethora of language to cater to understanding of people from different parts of
Kingfisher Airlines is a Bangalore based Airline owned by the United Breweries Group led by
Vijay Mallaya. The only Indian and the one of the six in the world to have received the 6 stars
It forthe
started its services
business byonthe
May Skytrax operates
2005, with dry more
of 4400
Airbusa day connecting 72
A320-200.Today the world
the over.
group has into its umbrella 69 aircrafts and is
as of January 2009 was 2.3 years. During the recent recession it went into codesharing alliance
committed to become the country’s largest in the nearest future. It is
with Jet Airways.
again based on theand
Both on domestic hubinternational
and spoke model.routesKingfisher
there are thewas the first First and Kingfisher Class.
Indian Airline
Bollywood and to introduce
Hollywood in-flight
firstmovies. entertainment in every
is the higher premium one. Kingfisher seat. Kingfisher Airlines' fleet
First passengers
currently consists of ATR42,
are provided ATR
withversion 72 and
reclinerofseats Airbus A320 family
which bendFirst aircraft
up towith
125reduced for domestic
degreesservices and short haul
for the however
Kingfisher Class is the lower the Kingfisher it too
services and domestic
Airbus A330-200s for
routes andthough
degrees in long-haul
the services.
international The
routes. average
All of age
them of its fleet
has the entertainment facilities with a much smaller range of choices.
After Kingfisher Airlines acquired Air Deccan, its name was changed
are provided with personal television
to Simplifly Deccan with
andAVOD screen 16
subsequently channels ofRed. Kingfisher
to Kingfisher 27 | P a g e
Live TV, Bose noise cancellations headphones, a wide collection of
Red is Kingfisher Airline's low-cost class on domestic routes. Passengers are given
complimentary in-flight meals and bottled water. A special edition of Cine
Blitz magazine
Kingfisher Eliteisisthe
theonly reading
charter material
service provided.
provider to individual clients. This is
Airport via helicopters and charter plains. On the right is the picture of
the bar of aLounges
Kingfisher Kingfisher areelite aircraft.
offered to Kingfisher First passengers, along with King Club Silver and
and Club Gold members. Lounges are located in India at Bangalore, Chennai, Delhi, Hyderabad
Marketing Strategies
The Frequent-flyer program of Kingfisher Airlines is called the King Club in which
Kingfisher members earn King
allows booking of Miles
ticketsevery time
as well as they fly of
inquiry with Kingfisher or its partner
Kingfisher Holidays in association with Kingfisher Airlines provide There
through airlines,
mobile. Ithotels,
has co car rental,
branded finance
with and
American lifestyle
on holidayare four levels
package to its
in the
passengers. King
tickets and Club Base,
allowed 8 %Red, Silver
rebate on and
the Gold
ticket levels.
charges. Members
The Little wings programme is designed for the kids that focus on their entertainment can redeem points for over
They have
comics,Powerof schemes.
also special Gold and
packages Silver
magazines, interactive games, etc. themembers
corporate enjoy access
travelers. to the Kingfisher Lounge, priority
check-in, excess baggage allowance, bonus miles, and 2 Kingfisher First upgrade vouchers for
Kingfisher Airlines believes in the iconic power of the personality and so
Gold membership.
for brand
Its the promotion
endorsersalways usesGupta
are Yana the celebrities.
and Deepika Vijay Malaya himself
maintains a celebrity aura. The website maintains that Vijay Malaya 28 | P a g e
himself listen to the grievances of the passengers.
SpiceJet is a low-cost airline based in Delhi, India. It began service in May 2005 and by 2008, it
was India's
market 2009second-largest
award. low-cost airline in terms of market share. SpiceJet was earlier known
as Royal Airways, a reincarnation of ModiLuft. It is promoted by Ajay Singh and the Kansagra
SpiceJetThe Airlines
marked has its
its entry in base at Delhi
service with Rs.and99covers
formajor 1899
the first airports throughout
days, with the length
9,000 seats
On breadth
July 15, of the
at this country
2008rate. with
This deal
Billionaire its fleet
was followed
Wilbur of 21 aircrafts.
up with he
Ross suggested SpiceJet
a Rs. was
would voted
promotional as the
$80 million best low-cost
on select
(about Rs 345
routes. in South
Their Asia
Central Asia
‘offeringof low,byeveryday
Skytrax in 2007.
spicy Spicejet also wins World Travel
from in the low
US-based cost
PEairline. The
firm that make directors of about
available Rsfares’
SpiceJet and an
345 crore great
toofferguest services
a joint to
price conscious travelers. Their
statement issued by SpiceJet and WL aim is to compete
Ross 737-800
Boeing with
& Co. They the
(189haveIndian Railways passengers travelling
tried to achieve better efficiency by
in air conditioned
quickly imbibing the coaches.
curve tooand follows the hub
experience curveand spokethe
among model.
crew. For the same they 29 | P a g e
have utilised the service of only single type of aircraft namely Boeing 737.
Spicejets on-time performance is amongst the best in India and coupled with a Technical
Dispatch passengers
SpiceJet Reliability are of 99.6%,
insuredmakesagainstit aanpremium
airline with least cancellations.
(included in the fare) of Rs 129 of any
accidents, flight
Marketing delays, baggage loss, flight cancellation, accidental medical reimbursements,
etc with the Tata Spicejet
AIG. This hashas
up withthethe
finest hotels to that
youloss out of
a host of the above
great circumstances.
offers.It includes hotels such as Sheraton, Golkonda, Trident,
Park and the Kenilworth Goa. To avail the programme on need to member of Privelege Ista, Maidens, Rain Tree,
Pass. The
For the service men and women SpiceJet gives special discount upto
100% discount
Corporate Benefiton Program
base fare.addresses the business traveler's needs. The program is a
Similarly program
volume designed
based to provide
incentives are alsomaximum
availablecost savingsbookings.
for group to the organization while
offering loads of benefits for the individual
SpiceJet business
has tied up with traveler. The tickets
State Bank of Indiaareandprovided
its debitatcard can be
discounted priceItofhas up appointed
to 50%used and are
to coupled
book with
tickets. Invarious
i-Vista Digital Solutions to other
context incentives
it is to be on volumethat
mentioned basis.
most of
handle its online marketing initiatives.
Services airlines provide the booking facilities only against credit cards.
SpiceJet does not provide complimentary food, however they have the facility to buy on board.
One water
of the most is innovative
provided free of charge.started
programme Thereby areSpiceJet
no entertainment
is that theyfacilities.
take care of the
The minorall
website provides from
the the take off airport
information to the
regarding PNR destination airport
status, flight without
status, any extra
bookings, and also
web Thisin,means
check besides nowtheone can even leave
promotional offersthere young ones
and corporate also underactivities.
governance the guardianship of 30 | P a g e
IndiGo is a private domestic low-cost airline based in Gurgaon, Haryana,
Strategies India. It operates domestic services linking 17 destinations. Its main base
is Delhi'sall
Indigo connects to 17 destinations Indira Gandhi
within India.International Airport.
They have only AirbusIndiGo
A320Air is owned
– 200 under by an| P a g e
fleet to garner quicker fromIndian named Mr
the learning andRahul Bhatia.curve.
experience The airline commenced
They have operations
the youngest on 4
fleet in
India with an average ageAugust
of only2006
2 yearand
as today it has
on April 23 aircrafts
2009. to its fleet.
Large expansion plan is on anvil.
IndiGo placed an order for 100 Airbus A320 family aircraft during the 2005 Paris Air Show. The
total order was worth US $6 billion, one of the highest by any domestic carrier during the show.
The carrier has set a target of serving approximately 30 Indian cities by 2010 with a fleet size of
40 A320 and A321 aircraft. The airline will receive all 100 A320 family aircraft by 2016. The
Indian Government has approved the airline's aircraft import plan "in principle". It focuses on
the Eastern region much more than others.
Being a low cost carrier, IndiGo does not offer a complimentary meal
service to its passengers. However, it does offer a buy-on-board food
service where items such as sandwiches, parathas, cookies, nuts and soft
drinks can be purchased. Mineral water is provided free of charge.
They emphasize on the punctuality and have been maintaining the best record in the industry
in that aspect.On time performance
They have tried to keep things simple by cutting the cost in every possible manner. They focus
only on their core business and have refrained from any tie ups with business of other spheres
like hotel and travel. As recognition of their feat in passing the benefits of to the consumers it
has been recognised by a number of organizations. This is the only other airline to provide
tickets on debit cards
Indigo bagged the NDTV Profit Business Leadership Award 2009 in the category of Aviation.
Indigo also won the CNBC AWAAZ Travel Award ‘09 and was adjudged the best low cost carrier.
Paramount Airways is an airline based in Chennai, India. It operates
scheduled services, mainly targeting business travelers. Its hub is Chennai 32 | P a g e
International Airport. It is promoted by Mr.Thiagarajan who is a Pilot and
a keen Aviation enthusiast. He hails from a illustrious Industrial family from
South India that have been Pioneers in the field of Textiles.
In India the Government does not levy landing charges on aircrafts of capacity below 90
passengers. Paramount airways has taken the point well off for its benefit. They are the first in
the country to employ the New Generation Embraer 170/190 aircraft. These crafts are often
been abbreviated as e-jets too. They are shorter than the normal aircraft that are employed in
the business, and with great fuel efficiency makes it idle for the short hauls. In addition they
escape the landing charges as they accommodate only 88 passengers. Paramount Airways
connects point to point and unlike the others have targeted cities with lower air traffic. These
help to save on the costly fuel wasted due to congestion. They operate in 12 cities of the
Starting in 2005, currently they have a fleet size of 5 with an average age of 3.4 years which are
due to enlarge once they start the international services from the year 2011. To meet the target
they have already placed order for 10 Airbus A321. To meet the financial needs they have
loaned from the European Central Bank. They are the only Airline in India to offer Full Business
Class service at prices comparative to Normal Economy class fares of other Airlines. Their focus
is to provide unparalleled comfort and convenience. It focused initially in South India and holds
share of market leader in the region.
They don’t have any middle seats and provide larger space than the competitors
in the same category. They provide a wide variety of to satiate the palate. The
dishes have been design taking in consideration various tastes and nutritional
requirements. The website provides detail on that.
Marketing strategies
Paramount has started the Paramount Royal membership which allows the fliers to redeem
points earned corresponding the mileage. Accrued points can be redeemed for free air travel,
benefits, privileges and upgrades across Paramount Airways flights.
They provide e check in facility, booking of tickets by credit cards.
They have also tied up with a number of hotels of all ranges and help the fliers to book them
online through their website.
They have won the “Arch of Europe” award recently.
Wadia Group owned, GoAir is a low cost airline based in Mumbai. It operates domestic
passenger services to 11 cities with 385 weekly flights. Its main base is Chhatrapati Shivaji 33 | P a g e
International Airport, Mumbai. GoAir took the wings on 9 June, 2005.
It started by leasing of Airbus A 320. Today it has 8 A320s in its fleet. Choosing a single type of
aircraft has helped them get efficiency quicker. It also follows hub and spoke model. They have
tied up with TATA AIG to cover insurance for all its passengers for all delays, accidents,
cancellations, baggage loss, etc. GoAir has outsourced all reservation and passenger
managemnt functions to Radixx International of Orlando.
Being no-frills airlines, Go does not offer a complimentary meal service to its passengers.
However, it does offer a buy-on-board food service where items such as sandwiches, parathas,
cookies, nuts and soft drinks can be purchased. Mineral water is provided free of charge.
However for the business class they provide complimentary food. They also allow up to 35 kgs
of free baggage which is one of the highest in the sector.
Marketing Strategies
GoAir invests a lot into brand promotion. GoAir airliners come in green,
orange, blue, and pink. This has been done consciously to grab the
attention of people. They have also roped in Preity Zinta to become the
brand ambassador of the airline. GoAir is positioned as ‘The Smart
People's Airline’. Its captivating theme, ‘Fly Smart’ is aimed at offering
passengers a consistent, quality-assured and time-efficient service. It’s unique product
portfolio comprises of some of the most innovative offerings in the industry including GoSave,
GoFlexi, GoHappy and a bundle of Red Eye flights. From time to time they launch variety of
offers to boost the sale of tickets. For group bookings they give special discounts. They also give
special discounts to Defence, Paramilitary and police personnel. They also help in booking of
buses and hotels through their websites.
It has the distinction of least cancelled flight – 0.9% between June and November 2009.
The survey for the purpose was conducted in Kolkata Domestic Airport in between April 04,
2009 and April 11, 2009. The sample wasPROFILE
DEMOGRAPHIC picked up OF from Dumdum
THE SAMPLE Airport, Kolkata. The
sample size is 50 with
Sample Size :50 respondents between 17 and 55 years of age. The average age of the
respondents is 33.4 years and
Location: Dumdum Airport, the median age
LIMITATIONS is 35 OF THE STUDY the respondents
years. The income of
varied from
Age a yearly
: income of Rs. 2,75,000
The results obtained from the survey and the outcomes alongto Rs. 15,00,000. The averageand
with suggestions income of the
respondent is
 Rs.
M 5,17,000
aximum – and
55 the
years median income is Rs.4,46,000. The
recommendations have been presented in the following pages. However at this stage of the respondents were 34 | P a g e
chosen without
 M any class
inimum –differentiation.
17 years The survey was
report it is needed to keep the following limitations of the study in mind.conducted through structured
sample sizeofM besides
ean- 50
only a lot
33.4years may notdiscussion wastrue
elucidate the done with respondents.
picture prevailing in the
 M edian- 35 years
population. Hence the results must not be generalized for the whole population.
It is believed that the respondents have revealed the true views. However any false details
on the part of 
aximum – Rs.1500000
will spoil the picture.
Comparison of only
Low Cost- Rs.airlines
275000has been considered while other has not been taken
into consideration - Rs.517000
which could have given some more reasons.
The study willreflect
Median- theRs. 446000
scenario present only in the present economic scenario which is
going through extreme volatile conditions and may change with the change in market
The sample chosen are of the above mentioned area and the findings will reflect the
scenario of that area only.
1. What is your preferred mode of travel between distant cities in India?
Preferred mode of Travel
Others Car
0% 8%
16% Rail
From the sample of 50, 21 people equivalent to 42%, preferred railway as the mode of travel to
transverse long distant cities within the country. Railways are preferred because unlike airports 35 | P a g e
they are situated inside the cities. This helps in better connectivity. Moreover they escape the
hassle of reporting much ahead the departure time to comply all the security check ups,
besides railways being much cheaper. This situation is particularly true for distances around 500
kms. Superfast trains like Shatabdi Express and Rajdhanis help in commuting at much cheaper
rate with comfort and saves time related to pre departure issues. Airlines are preferred over
larger distances as it definitely saves a great amount of time and people find it worth paying in
that case. In addition one more important point to be considered is that that as the taxes and
air fuel surcharge for all the distances remain the same in India, over the long distances the
price seems to be much more economical. Car And Coaches are neither cheap nor as
comfortable as the other two. However for distances around 500 kms it is still preferred for
going on vacations and family visits as it provide people with greater convenience. As other
long distance mode of travel like waterways airships are not popular I the country and even we
can consider them to be nonexistent we did not find any respondent using those mode.
2. How would you categorize yourself in terms of air travel?
Business Traveler

Self Reflection
Leisure/ personal
Business Traveler
14 Leisure/ personal
16 Both
32% or 16 of the respondents acknowledged that they use airway for leisure and personal 20
reasons. As it has tipped the number of business
3. Which class do you usually travel in by air? travelers, it’s a good sign that shows that the
average residual income of the Indians is increasing. In the recent years leisure or vacation has
turned up to be an important factor pushing upWhich
Business the number.Class?
The success of Incredible India
campaign has turned India into a major tourist
26% destination. In addition to that HR policies of
organizations have recognized recreation, leisure as an important
8% Economyemploy motivation factor.
They are also paying up for the employee vacations. This has also 66%given fillip to the growth
factor. On the other hand this may have been because of cutting on air travel by organizations
due to recession. Decrease in business travel might haveBusiness
helped leisure/ personal factor to
dominate the scene. 13 First
Low cost airlines have revolutionized the travel industry. It has made air travel within the reach4
of middle class. No surprise we find 66% of the respondent are travelling by economy class. This 36 | P a g e
low cost no frill service gives the middle class value for the money. Even the organizations are
utilizing the service. This has helped them to reduce the cost. Business class is preferred by rich
and the top level executives. First class is again utilized by higher class.
4. How many times did you travel by air in the last one year?
Count your numbers
1 to 5
6 to 10
11 to 20
21 to 30
31 and above
1 to 5
24 6 to 10
11 11 to 20
8 21 to 30
5 31 and above
We find around half the sample has travelled by air less than 5 times in the last one year2and
5. What two third has
factors do isyou
under the double
consider digitbuying
before number.aThis proves that Indians still does not
use air travel as frequently as
1 people in America and Europe. The double digit number is
touched mainly by the persons who are travelling
2 due to business reasons. Again higher
frequency is generally touched by the business class 3and first class travelers. So these classes
are more profitable and CRM techniques must be employed to serve 4 them better. Having a
team to attend to the organizational travelers is important as they are the more5 frequent
Price of the Quality and
Ticketservice Airport
location Safety and Availability
reliabilityof seat
As most of the sample was favoring the economy class it’s obvious it was the money that was
the prime factor. Lowering of fares has resulted in zooming of numbers of fliers. Airlines often 37 | P a g e
employ several promotional methods to lure the customers. Quality of service is again very
important especially for those who travel by business and first class. Comfortability and
legspace are important aspect under this service factor. Location of airport arrives at a third
distant evaluation choice. But it is an important factor when one considers a distance around
500 kms or so. Under such circumstances there may not be much difference between the travel
time of airline and other mode of transport. Safety and reliability is an important factor
considered by all. As most of the airlines maintained a high safety standard it is the reliability
that draws the attention. No wonder some of the airlines are boisterous in reflecting their on
time performance. Availability of seat is of least consideration.
6. How do you book your airline tickets?
Airline company
Travel agent
72% Internet
Internet 6%
11 Travel 22%
36 Airline company office
Travel agents are the most important medium of ticket booking in the country. This 3 is reflected
in the survey also. Because travel agents give big concessions to the customers
7. How do you rate the Indian low cost airlines on the following parameters from their
30 it is favored
against their peers worldwide?by the customers. Moreover Travel agents also help in proper
25 of airlines as they have up to date information about all the offers and schemes given
by 20
the airlines at any point of time. To gain same amount of information it would require a lot
of time
15 collecting the data. Besides internet providing 24 hour booking facility, the presence of
agents such as makemytrip.com, yatra.com has helped internet to gain popularity.
6 Safety
Very Good
In all the categories most of the respondents
24 have conveyed to be just satisfied. This translates
that if foreign players join the competition then it may pose a threat to the Indian Players. Air 38 | P a g e
Asia is already planning to launch service in the country. Pricing is a big factor. With the cheaper
fuel in other countries foreign players have an advantage. In this case government can help by
reducing the taxes and ATF charges. Most of the Indian LCA players are using aircraft which are
not old enough to replace. But then perhaps it has been influenced by tarnished image of the old
players. However the lack of quality trained pilot is a concern for the country. This has resulted
into skidding of air planes on runways as the pilots are not trained enough. Also the airports
infrastructure is to be blamed as they are not equipped with latest technology. Service wise
some foreign have clearly identified as benchmarks. Indian Players need to catch up with them.
8. Rank the following qualities 1 being the most desired and 5 being the least
desired among the cabin staff. 1
Grooming or Friendliness
Appearanceof staff Staff
attitude cabin staff Total service
Friendliness and Staff Attitude came up to be the most desired qualities. It is obvious that the
9. Givenindustry
below is gives a lotdesired
are few of training to its staff
qualities of onto help
boardthem imbibe this
flight Rank qualities.
them. A well
groomed with right attitude and friendly staff 1 can become a great factor in retaining the
customers. They are the face 2 of the airlines and their interactions have immense impact in the
brand image of the organization. Cabin staff presence throughout the flight may 3 not be
required as the distance is not too large within the country. However
4 it is desired they help out
when called. Seating Comfort
Catering Reading
Cleanliness is the most desired quality by the fliers. They don’t like left over glasses and pet
bottles of water. This is often the phenomenon in non one go flight. Seating comfort has been 39 | P a g e
placed by the respondents second on the list. Leg space, seat texture, seat width are taken in to
consideration. As the distance between two cities in India do not take a long time onboard
catering is not of much important aspect. However they appreciate good reading materials as
that help in recreation and passing time.
10. Please list up the names of the low Cost Airlines in India.
Konnect Spice jet
Go Air
Airways Jet Lite
This question was designed to know the top of the mind brand among the fliers. Though Jet
Airways and Kingfisher have the largest market shares in the domestic market, it was surprise 40 | P a g e
to note that Spice jet has topped the chart when the respondents were asked to write the
names of Low Cost Airlines of India. The probable reason could have been umbrella branding.
Jet Connect and Jet lite still has not been able to differentiate itself from its parent brand Jet
Airways. In fact it was a Jet airway that was coming to the mind of the respondents. Similarly
Kingfisher Red has not been able to come out of shadow of its parent brand. This is benefit for
the low cost divisions of these two companies but then may also dilute the brand image of
parent companies in long period. Paramount Airways came rank 5, probably because the
frequency of flights of Paramount Airways in Eastern India is low. Spice jet has maintained the
distinction because of its focus strategy to portray the image of low cost airline only.
Though all of these Low cost Airlines are targeting the same crowd, with almost same product
is benefit for the money,
RED- but their
Euphoric, associations and little alterations in product has led to
Some JET perceptions
the among
strategies the passengers.
to improve Following is the perception of individual brand-
brand image-
- People- pragmatist.
the recruited people are the face of the organization. Attitude, friendliness and 41 | P a g e
GO AIR- pragmatist,
Grooming are the desiredinformative.
qualities of them.
- Keeping informative
quality magazines on board will go a long way from increasing customer
satisfaction AIRWAYS-
to customer delight.Functionalist
Some of the Strategies
- International that help
recognitions andinawards
bringing down
help the cost
in better of airline operation-
Leasing ofinaircraft.
- Investing internetItmarketing
helps in acquiring
is a cheapthe aircrafts
and withof
better way thetargeting
latest technologies
customer. for
operation with
- Concession the minimum
in fares cost. people, and retirees.
for the defence
- Hedging
If it is lowofcost
– it helpsonetoneed
reducenotavoid the fluctuations
promote in the price
through celebrities. of fuel.
Ordinary people as
- Code Share Agreement-
models will help the cause. it helps in maximum utilization of aircraft.
- Employing E-jets- better fuel efficiency and avoid taxes in the short routes.
- Scheduling flights in non peak hours.
- For new organizations point to point destination is better choice of operation for bigger
players it the hub and spoke model.
- Pricing- the industry is price sensitive hence revenue management is an important
aspect to lure in the customers. Switching is more frequent in case of low fare airlines
whereas business segments are more brands loyal.
- Using similar kind of aircrafts.
- Outsourcing the non core activities will help in better focus in core activities.
- Co-Branding helps in increasing efficiency and reducing cost. Strategic partnerships with
hotel chains, tour operators, and credit card issuers are beneficial to both the parties.
- Debit Cards- As low cost airlines are targeting middle class where Debit cards are more
pervasive it is prudent to include debit cards also for paying the fares.
- A well managed sales team and relationship managers are to be employed to establish
relationship with corporate who constitutes almost a third of the fliers.
- On board purchase of goods and food will help in increasing revenue and lowering cost.
This research is being done for academic purpose only. All the information provided shall be kept confidential.
A survey on people preferences about airlines
………………. OCCUPATION:………………………………..
CONTACT :………………………………………………………..………………………………………….
1. What is your preferred mode of travel between distant cities in India?
2. How would you categorize yourself in terms of air travel?
I am mostly
3. Which class doa business traveler.
you usually travel in by air?
I am mostly a leisure/personal traveler.
EconomyBusiness First
I am a bit of both.
4. How many times did you travel by air in the last one year?
1 to 56
5. What to 1011
factors do to
you2021 to 3031
consider and above
before buying a ticket?
6. How allocate a priority
do you book your from
airline1 tickets?
to 5, 1 being theselect
Please mostone
preferred and 5ofbeing
from each the least.)
the pair.
7. How do you of Agents
the Indian low cost airlines on the following parameters against their peers
Airport location
Travel AgentsAirline
worldwide? company office
Price ofcompany
the ticketofficeInternet 42 | P a g e
Airline PoorSatisfactionGoodVery goodExcellent
Pricing and Service
Safety and reliability
8. Rank the following qualities 1 being the most desired and 5 being the least desired among the cabin
staff. A survey on people preferences about airlines
9. Given below are few desired qualities of on board products. Please assign points based on your
10. and Appearance
Please listsoupthat
thethe total of
names points addCost
the low up toAirlines
100. Theinhigher
India. the number allotted to a particular sector
the higher itsof staff
importance is to you and vice versa.
Staff attitude 43 | P a g e
………. comfort
Cabin staff presence through the flight
………. service consistency
Reading Materials
Airlines typically follow two types of business models: the Point to Point and the Hub-and-
Point to Point Model:
This model is based on flights that are provided to and from a city. Unit costs are lower in this
Hub and as Spoke
are utilized more often because they do not have to wait for connecting
This model is used byfixed
thus reducing most costs,
of thewhich
major accounts for a largeJetpercentage
airlines including of operatingSpicejet,
Airways, Kingfisher, costs. etc.
Costs are spread out over many hours of flying, thereby driving down the unit
The Hub and Spoke system allows the airlines to maximize passenger enplanements on each cost. Low fare 44 | P a g e
flight by offering connections to both domestic and international destinations. This more See
like Paramount Airways is example of airline following the point to point system.
figure below.route system provides customers with a much larger number of route options,
which in turn maximizes revenue opportunities. The downside to this is the increase in aircraft
wait time and lower aircraft utilization time, which increases the airlines' unit cost. See figure
Highlights of the Yearly Report (2007-08) [source: DGCA]
Domestic Indian Carriers
The country has twelve domestic carriers with four National Carriers and eight private
The fleet operators.
size of the Of these eight,
scheduled Jet Airways
domestic airlinesand Jetlite operate
increased from 305 onaircrafts
international sectorstoas81
in 2006-07
aircrafts in 2007-08, which indicated a total increase of 24.9 % in the fleet size.
Of the 381 aircrafts, only 146 belonged to the National Carriers in 2007 -08. Presence of
Private Carriers has increased from just two airlines (Jet Airways and Paramount Airlines) till
2002 -03 to eight as on 31st March 2008. Number of aircrafts has also increased from 53 in
2002 -03 to 235.
The total operating revenue of all the domestic Indian carriers was Rs.344,877.4 million
during 2007-08 and
Both National whereas theCarriers
Private operating expenses for
experienced the same
a loss duringperiod was the
2007-08, Rs.406,911.8
respective million
resulting in overall loss of Rs.62,034.4
being Rs.2529.78 crore and Rs.3673.66 million.
crore respectively.
Carriers engaged in DomesticOnly 2 airlines viz., Air India Express
and Paramount
A total of 44.38 Airways
millionhad made a profit.
passengers were carried by all the scheduled domestic Indian Carriers
during the year 2007-08.
The scheduled domestic traffic passengers witnessed a growth rate of 24% during 2007-08.
corresponding figure forcargo
scheduled domestic the year 2006 -07
(including was
Blue 42%.grew by 14.50% during the year 2007-08.
While passengers carried by the National and Private Carriers are in the ratio 1:4, that of
freight carried
Scheduled is 1:2. Aircraft departures per day increased from 1153 in 2006-07 to 1367
The the year
domestic 2007-08.
average PAX load factor increased marginally from 68.8% in 2006-07 to 68.9%
domestic Thisaverage
factor was
loadfor the National
factor decreasedCarriers as against
from 67.1% 7 1.6%tofor
in 2006-07 the private
65.7% in 2007-
08. .
Weight load factor was 56.9% and 68.3% respectively for national and private carriers. 45 | P a g e
The number of pilots engaged by all the d omestic Indian carriers increased from 3302 during
2006-07 to 3997 in 2007-08.
The number of technical employees engaged by all the domestic Indian carriers decreased
The 13343
numberduring 2006-07
of cabin to 13308 ineng
crew employees 2007-08.
aged by all the domestic Indian carriers increased
from 9774 during 2006-07 to 11696 in 2007-08.
The average no. of employees per aircraft declined from 197 in 2006-07 to 169 in 2007-08.
Expenditure on personnel accounted for 17% of the total expenses in case of national carriers
as aginst 9.5% for private carriers during 2007 -08.
The market share in terms of domestic passenger carried was highest for Jet Airways
The marketfollowed byterms
share in Air Deccan (15.99%)
of domestic andcarried
freight Indianwas
for Jet Airways (31.03%)
followed by Indian Airlines (23.04%) and Blue Dart (17.79%).
Airport Statistics
Total passengers handled at the Airports were 116.7 million during the year 2007-08. Of
these, international
On an average 3606airports handled
flights were 103.3
handled permillion andairports
day by the domestic airports
in 2007 13.42931
-08 with million only.
Total cargoto(freight
pertaining domesticandtraffic
handled at the airports
the remaining was 1.8 million.
to international traffic.
Mumbai airport continued to be the busiest airport during the year 2007 -08. The average
flights handled
busiest per day
airports for international
handling internationaltraffic was
traffic 169 whereas
during the year the2007average no. of
-08 were
Mumbai, handled
The threeDelhi per day for
and airports
busiest the domestic traffic was 468. This was true for
Chennai.handling domestic traffic during the year 2007 -08 were cargo movement also.
Mumbai,Delhi and Bangalore.
46 | P a g e
Non -Scheduled Traffic
The no. of non scheduled operator increased from 66 in year 2007 to 99 in the year 2008.
The total no. of aircraft with non scheduled operator permit holder increased from 229 in the
year 2007 to 272 in the year 2008. This number has more than doubled in the last six years
A total2003). Growth
of 397062 rate overwere
passengers the previous year
carried by all was
non 10.4%.
scheduled operators (excluding Pawan
The Helicopters
growth rate in Limited)
terms ofduring the year
passenger 2007by-08.
carried all The corresponding
the non -scheduled figure for the
operators year 2006-
Pawan 355811.
growth Helicopters
rate in termsLimited)
of flightswas 11.6%by
operated during theNon
all the year-Scheduled
2007-08. The corresponding
operators figure
Pawan year
of 2006
Hans -07leased
aircrafts wasLimited)
out %.
by was
Hansduring the year
Helicopters 2007 -08.
Limited during the year 2007 -08
increased towere
passengers 29 from 24 in
carried bythe yearHans
Pawan 2006-07. A total
during no. of
the year about
2007 -08.4.35 lac.was a growth rate of
08. in terms of passengers carried by Pawan Hans Helicopters Limited during the year 2007-
The revenue earned by Pawan Hans Helicopters Limited witnessed a growth rate of 24.5%
during the year 2007-08. The corresponding figure for the year 2006 -07 was 6.4%. 47 | P a g e
Terms and Definitions
Aircraft: Any machine that can derive support in the atmosphere from the reactions of the air
other than
Aircraft the reactions
departures: Theof the airof
number against the earth's
take-offs surface;
of aircraft. For statistical uses, departures are
equal to kilometers
Aircraft the numberperformed:
of landingsAircraft
made orkilometers
flight stages flown;
equal to the sum of the product obtained by
multiplying the number of flights performed on each
Aircraft movement: An aircraft take-off or landing at an airport.flight stage For
by the stagetraffic
airport distance;
purposes one
arrival and
Aircraft oneof:
- type departure is counted
All aircraft as twobasic
of the same movements;
design including all modifications thereto except
those modifications,
Commercial which
air carrier: result performing
A carrier in a change scheduled
in handlingorornon flight characteristics;
-scheduled air transport services
or both, available
Distance flown pertopassenger:
the public The
for the carriage
average of passengers,
distance flown permail or cargo
passenger for remuneration;
is computed by
dividing the passenger-kilometres
Disembarkation: The leaving of anby the related
aircraft after anumber ofexcept
landing, passengers carried;
by crew or passengers
Domesticon the next
Flight: stagehaving
A flight of the same through
exclusively -flight; stages, See domestic flight stage;
Domestic flight stage: Domestic flight stages include all flight stages flown between points
within the Scheduled
Domestic domestic boundaries
airline: Anof a Statewhich
airline, by anoperates
airline registered
any scheduledin thatservice
State; wihin the
boundaries ofservices;
international the State where t he airline is registered but which does not operate, scheduled
Embarkation: The boarding of an aircraft for the purpose of commencing a flight, except by
Flightcrew or passengers
commercial as have The
air transport: embarked on aofprevious
operation aircraft stage
on oneoforthe same
more through
stages on aflight;
or non-scheduled
Flight basis, which
stage: The operation is available
of an to the
aircraft from publictoforitsremuneration
take-off next landing;and for hire;
Freight (or mail) tonne-Kilometres (performed): A metric tonne of freight or mail carried one
kilometre. Freight tonne-kilometres equal the sum of the products obtained by multiplying the 48 | P a g e
number of tonnes of freight, express, diplomatic bages carried on each flight stage by the stage
distance. Cargo and freight includes express and diplomatic bags but not passenger’s baggage.
Mail tonne -kilometres are computed in the same way as freight tonne-kilometres;
Freight (or mail) tonnes carried (performed): The number of tonnes of freight carried is
obtained by counting
International airport: Anyeachairport
tonne of freight onbya particular
designated flight (with
the Government of Indiaoneanflight number)
airport once
of entry
only and not repeatedly on each individual stage of t hat flight.
and departure for foreign airline for embarkation and disembarkation of scheduled The only exception to this is for
freight flown
international air
International on both the
Flight: international
A flight and
fo rmalitiesdomestic
one incident stages
or more to of the same flight,
customs, immigration,
international which is
flight stages;public health,
International inquarantine
flight andAboth
stage: similar
with oneand anboth
areorcarried out;
terminals shipment or dispatch.
in that territory The
of a State,
same principle should
other than thenon-scheduled be used in
State in whichoperator: calculating
the airlineAn mail
is operator tonnes
registered. carried;
Technical stops are service
not considered in
International offering international to the public
on flightonly;
a non-scheduled
scheduled basis stage;
basis only. Such an operator may also offer domestic services on a non-
International scheduled airline: An airline, which operates any scheduled international air
transport service
International regardless
traffic of theFor
(of airports): proportion of international
airport traffic purposes, service offered
international as compared
traffic means: a)with
all otherofkinds
airport of services
embarkation, or offered;
and mailvicedisembarked
versa; and at b) an airport located
Movements in a of
on flight country other
national than of aircraft
or foreign the
whose origin
airport or destination is located;
under consideration located in the territory of a State other than th at in which the
Mail: Dispatches of correspondence and other objects tendered by and intended for delivery to
postal administration;
Non-scheduled air transport operator: For statistical purposes an operator is nonscheduled air
transport operator if it offers air transport service to the public on a non - scheduled basis only; 49 | P a g e
Operating expenses per traffic-unit: This is a type of financial measurement, which relates the
traffic or capacity applicable to the operating expenses. It is computed by dividing the operating
expenses by
Operating the tonne
revenue per -kilometres
traffic-unit: performed or by
This is a type of the tonne measurement,
financial - kilometres available.
which relates the
traffic or capacity
Operator: A person, applicable to theoroperating
organization enterpriserevenues.
engaged It in isorcomputed
offering tobyengage
dividing theaircraft
in an operating
operations.by the tonne -kilometres performed or by the tonne - kilometres
Passengers Kilometres performed: A passengers kilometre is performed when a passenger is available.
carried one kilometre. Calculatio n of passenger-kilometres equals the sum of the products
stage by multiplying
distance. The resultantthe number
figure isofequal
revenue passengers
to the number ofcarried on each
kilometres flight stage
travelled by allby the
Passenger load factor: Passenger-kilometres performed expressed as a percentage of seat-
kilometres available;
Passengers carried: The number of passengers carried is obtained by counting each passenger
on particular
domestic stages flight (wisame
of the th oneflight
number) once only
be counted as and
bothnot repeatedly
a domestic andoninternational
each individual
stage of
passenger;that flight, with a single exception that a passenger flying on
Passengers carried per aircraft: The average number of passengers carried per aircraft both the international
is and
computed by
Passenger dividing
revenue per passenger-kilometres
traffic-unit: This is a typeby theofrelated
financial aircraft kilometreswhich
measurement, flown;relates the
revenues traffic applicable-kilometres
the passenger to the passenger revenues.
performed/ It is computed by dividing the passenger
Passenger weight: For converting aircraft passenger load into weight load, the number of
passengers is multiplied usually by 90 kilogrammes, which allows for the weight of the
Revenue plus both free
Refersandtoexcess baggage.
passengers However,
paying 25% orinmore reporting,
of the the conversion
normal is left
applicable to
the discretion
Scheduled of the operator
airline/air carrier: Anandair
transport factors
enterpriseother than 90any
offering kilogrammes
scheduled air may be used;
50 | P a g e
Scheduled services: Services provided by flights scheduled and performed for remuneration
according to a published timetable, or so regular or frequent as to constitute a recognizably
Seat series,available:
Kilometres which areSeat-kilometre
open to use byismembers
availableof the public;
when a seat isextra
flownrevenue flights Seat
one kilometre.
Speed byper
flownavailable are traffic
aircraft: equal from
This isto scheduled
an sum ofpertheflight; and
aircraft preliminary
measure revenue
by multiplying
computed flights onthe
the number
by dividing
aircraft new
passenger air
kilometres services:
seats available
flown by for
the sale on
related each flight
aircraft stage
hours. by the stage distance.
Stage distance flown per aircraft: The average distance flown per aircraft is computed by Seats not
actually available
Tonne: the mass forkilometres
equal thetocarriage
1000 flown of passengers because
by the related
kilograms. of the
number of weight
aircraftof fuel or other load
should be excluded in the calculations;
Tonne-kilometres available: A metric tonne of available payload space flown one kilometre.
stage available equals the sum of the products obtained by multiplying the number
by the stage distance;
of tonnes availableperformed:
Tonne-kilometres for the carriage of revenue
A metric tonne ofload (passengers,
revenue freight
load carried and
one mail) on Tonne-
kilometre. each flight
kilometres performed equals the sum of the product obtained by multiplying
Traffic: For air transport purposes, traffic means the carriage of passengers, freight and mail.the number of
tonnes of revenue load carried on each flight stage by the stage distance.
Weight load factor: Tonne-kilometres performed expressed as a percentage of tonne -
kilometres available. 51 | P a g e
www.tcil.com (Transport Corporation Of India Ltd.)
 I ndian Aviation Industry
www.dgca.nic.in (Director– Opportunities & Challenges
General of Civil Aviation) by Ravi 52 | P a g e
Kumar V.V. ; published by ICMR
ebsites Management
Aviation IndustrySPICEJET,
AIRWAYS, by D.Pitfield
 Journal of Transport
Go Air.