Vous êtes sur la page 1sur 40







Indian Aviation Industry

In December 1912, the first domestic air route was unwrapped between Delhi and Karachi by the Indian State Air Services (in collaboration with Imperial Airways of the UK). After the Indian aviation sector underwent liberalization in late nineties, it has seen a flurry of private service airlines entering the industry. The aviation sector in India holds immense potential for growth; more so because it receives great impetus from the booming tourism industry driven by higher disposable incomes and favorable demographics. Also, the robust policy regime created by the Indian Government acts as the blood-line of this industry. While the last five years have witnessed significant investments by large and small domestic companies, indigenous aerospace and defense industry has been evolving in a big way.

1912 1932 First flight Karachi to Delhi Tata Airline

1953 1991 1994 2003 2012

Introduction of Air India

Nationalization of Airline Industry Introduction of Air taxi Scheme Bringing up scheduled Air services Introduction of Budget Flying planes Changes in FDI policy

Players in the Indian aviation

Air India Jet Airways Spice jet Indigo Go Air

On 2011

ON 2013


Low pricing. Economic pricing on the basis of busyness of the air routes. Fall of kingfisher Airlines. Heavy investment on promotion like advertisement. Improved facilities.

- HNI People .& others

-VPs,CEOs -Bollywood Stars -Politicians -Foreign Tourists -industrialists -regular -Oil exploring companies

POSITIONING Chartered air service Statement -



Product or Service is the core thing which every enterprise tries to deliver. The airline service includes: 1. on the ground services, 2. In-flight services.



Pricing decisions play a crucial role in managing the business. The Ministry of Tourism and Civil Aviation, the Indian Airlines Corporation, the National Airports Authority, the International Airports Authority of India, the Air India Corporation are the bodies directly or indirectly influencing the process of making the pricing decisions. of air transportation.

1. 2. 3. 4. Demand based pricing. Season based pricing. Competition based pricing. Pricing strategy when customer means value is low price. 5. Pricing Strategies when the customer means Value is everything I want in a service.




Physical evidence - Aircrafts, Helicopters. People - Pilots, Engineers & other supporting staff. - Giving convenience in travelling through air.

Productivity /process


Metros & capitals.

S Strengths W Weaknesses O Opportunities T Threats


Open Economics Efficient Marketing Networking Modern Fleet

Weaknesses Threat of New Entrants Power of Suppliers Power of Buyers (The service providers) Availability of Substitutes Competitive Rivalry


Emerging Technologies Government Initiatives Resourcing and Investments F.D.I in aviation

Poaching Inefficient Planning Government Interference


Pest Analysis
Political Factors Trade relations, Licensing. Economic factors Recession, prosperity phase. Social Factors Income factor, Religions and castes. Technological Factors Usage of internet.


The Reserve Bank of India (RBI) announced that foreign institutional investors might have shareholdings more than the limited 49% in the domestic sector. Airports Foreign equity up to 100% is allowed by the means of automatic approvals pertaining to establishment of Greenfield airports Foreign equity up to 74% is allowed by the means of automatic approvals pertaining to the existing airports Foreign equity up to 100% is allowed by the means of special permission from Foreign Investment Promotion Board, Ministry of Finance, pertaining to the existing airports 100 per cent tax exemption for airport projects for a period of 10 years. Air Transport Services Up to 49% of foreign equity is allowed by the means of automatic approvals pertaining to the domestic air transport services Up to 100% of NRI investment is allowed by the means of automatic approvals pertaining to the domestic air transport services 74 per cent FDI is permissible in cargo and non-scheduled airlines.


Pros of FDI in Aviation

New airlines may come up in India. Increased competition will be a boon for customers as their will be cheaper airfares, better facilities & latest technology . FDI will infuse cash flow into the bleeding Indian airline industry. Government will gradually reduce its equity in PSUs in the sector. Better International Connectivity . Foreign direct investment will improve the current account deficit situation of the airline sector.

Cons of FDI in Aviation

Fear of a takeover of Indian airlines by the Global giants. Security is a major issue. Government will have to keep an eye on dubious investors entering India through this route. less control of government.


Jet Airways has ventured with Centrum Direct , to offer Foreign Exchange Services to guests travelling abroad. Singapore's Changi Airport and Switzerland's Zurich International Airport have expressed interest to carry out the operations and maintenance of the modernized terminal of the Netaji Subhas Chandra Bose International Airport, Kolkata. The Rs 2,300-crore (US$ 423.37 million) new integrated terminal has an annual capacity to handle 20 million passengers. Hong Kong-based full service airline Cathay Pacific has unveiled its plan to add more direct flights from Mumbai to Hong Kong starting April 2013. The airline will also launch its new product line of the premium economy cabin on this route. Cathay that has India route among the top 10 revenue earners, along with its sister airline Dragonair, flies 46 weekly flights from six ports in India. It recently added Hyderabad in its network with four weekly flights.

Drivers and Challenges


Gaps in Infrastructure

Airline obsession Kingfishers Crisis

Almost everyone knows the ongoing financial crisis in Kingfisher airlines, the airlines which is touted to be the second biggest private carrier in India. Successive days of flights cancellation, debt of Rs 7,500 crore and rising, a JulySeptember,2012 loss of Rs 469 crore, delayed salaries, pilots quitting, and reports of Chairman Vijay Mallya in negotiations with domestic investors.



1. Problem associated with the Aviation sector. 2. Faulty business modal of Kingfisher Airlines. 3. Improper handling of Financials by the company's management. 4. Acquisition of Air Deccan by Kingfisher. 5. Vijay Mallya's over enthusiasm killed Kingfisher Airlines.


A large & growing potential market Developing alternative revenue streams
Air cargo operations

Airframe, engine & component overhaul

Ground handling Training Leveraging the internet

Access to new markets

Air Cargo
Freight carriage in India currently around 4200 tons per day CAGR of 15% over the past 2 years Fuelled by a fast growing economy, supported by a strong industrial base Forecast to grow at 11.4% p.a. till 2011-12

Ground Handling
Ground handling business in India estimated at Rs. 1074 crores Expected to grow at 15% CAGR till 2011-12

Opportunity lies in 3rd party handling as well as entering into service

contracts with private airports / AAI to offer comprehensive ground handling solutions, e.g. AI CIAL at Cochin

Airlines in India will need training for pilots, engineers, cabin crew, load & trim, etc.
Projected requirement for 3600 additional pilots in the short to medium term Cabin crew, engineers, technicians will also be required to support aircraft being inducted

Opportunity for simulator training establishments

IA already has a Central Training Establishment at Hyderabad, with facilities for most categories / types of trainings on A320

Leveraging the internet

Increasing numbers are booking directly from the airlines websites
Traditional sales channels with paper tickets cost airlines ~10% of ticket price

Comparatively, e-ticket sales from own website cost an airline only ~3% of
ticket price For every direct booking from their website, airlines save an estimated US$ 4 plus 5% agency commission

Airlines can also turn their websites into one stop shops for all travel related services, generating additional revenue

Access to new markets

As airlines complete 5 years of domestic operations, those with 20+ aircraft will get international access
Access to new revenue streams Help even out the seasonality factor of domestic operations Spread the risk of downturn in a single market

The opportunity for some will be a challenge for the existing international players The risk cycle of increased competition, low yields, and growth transferred to the international arena

Current scenario of Indian aviation industry

The Indian aviation industry Is one of the fastest growing aviation industries in the % share of the world. India has 454 airports and airstrips; of these,16 are designated international airports. With the liberalization of the Indian aviation sector, aviation industry in India has undergone

a rapid transforamtion.priavate airline account for around 75% share of the domestic
aviation market Being primarily a govt-ownwed industry ,the Indian aviation industry is now dominanated by privately owned full service airlines and low cost carriers.

Domestic and international traffic is up 45% and 15.1 %,respectively. Over 135 aircraft have been added in the past two year alone. Center for Asia pacific aviation (CAPA) estimates domestic traffic to grow 25-30 % annually and international traffic 15%untill 2012.

Indian Aviation has seen high growth on account of sustained Indian socio economic growth and

liberalized Government initiatives

Airport Infrastructure needs to improve significantly to meet the current and future demand of the Indian Aviation Sector Authorities have initiated various steps to implement modernization, reconstruction and

development of airport infrastructure to implement infrastructure development plan Provides a huge opportunity for private players operating in Aerospace and allied industries Significant opportunity for foreign companies as Indian companies not technologically equipped to cater to requirements


Airport Authority of India Limited www.aai.aero www.aircharterguide.com www.airindia.com www.aviindia.blogspot.com www.bbc.co.uk www.business.gov.in www.civilaviation.nic.in www.dgca.nic.in