AirAsia India:

Next 3 Years
Presented By: Apoorva Kulshreshtha (1003) Vipul Aurange (1005) Bhaswati Chakraborty (1007) Vishal Dhangar (1010) Paul Anto (1027)

Indian Aviation Industry overview

India is currently the 9th largest aviation market Handling 121 million domestic and 41 million international passengers More than 85 international airlines operate to India and 5 Indian carriers connect over 40 countries.

Market Size
Domestic passengers in January and May 2013 were 25.998 million, registering a growth of 0.74 %. India has attracted foreign direct investment (FDI) worth US$ 456.84 million from April 2000 to July 2013 Indian aviation market is poised to become the third largest across the globe by 2020.
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Market Share

About AirAsia India

Indian-Malaysian low cost carrier Announced on 19 February 2013, The airline would be operated as a joint venture between AirAsia holding 49% , Tata Sons holding 30% and Amit Bhatia taking up the remaining 21% in the airline.

Objectives
To study what is actually bringing AirAsia to Indian markets and why it can sustain. To formulate strategies; which will help AirAsia (i) to get an edge over other Indian low cost airlines like Indigo, SpiceJet etc. and (ii) serve un-catered market segment. To assess what challenges are gleaning at AirAsia and what missteps can make the airliner a thing of the past.
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Methodology
The methodology used for this study is Descriptive/Qualitative . Using this methodology specific points pertaining to the objective will be discerned with the help of observations, document reviews and interviews.

Sales & Marketing

Promotion
Challenges:
Spreading awareness in untapped market. Reaching to first time fliers and educating them.

Strategy:
Initially costly advertising Following competitors. Strategies to educate and attract first fliers.

Execution:
Movies & Music, football, tourism Billboards near railway and bus stations Tie ups with banks & hotels, social networking , mails & SMS

Branding
Challenges:
Low cost already boasted by airlines like Indigo, SpiceJet. Hence creating a POD is necessary as well as difficult. Failing to keep promise will harm the brand image. Targeting untapped market would require educating the customer and hence cost escalating. Segmentation:
Demographic & Geographic

 Targeting:
Income groups of 150000 to 600000 Small & medium businessmen, migratory workforce, tourists South India Needful of traveling and not so cautious about extra services price oriented and safety conscious

Positioning:
Positioning only on low cost will not be sufficient. On-time and service: hygiene factors Pricing and Connectivity: differentiator or motivational factors
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Sales
Challenges:
Higher sales, higher occupancy rate. To gain more first time fliers per year. To gain more market share to be the market leader. To choose cost effective yet profitable channels to sell. Contracts with travel agents Tie ups with tourism agencies Contracts with organizations Price reduction by 25% to 30% than competitors

Strategies:

Execution:
Distribution of sales targets Sales focus on tier II cities Separate targets to various channels according
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Finance
Financial Problems with Air Asia 1.Fuel hedging 2. Working capital cycle 3. Rupee depreciation 4. Price tiffs

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Financial perspective
Revenue per mile Available seat per mile Load factor

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Human development
Provide stock option Provide dividend Provide to the employees provident fund

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Operations Challenges
Low operating cost Fuel hedging policy Airbus A320 equipped with Sharklets The hub-and-spoke network model Less turnaround time No-frills

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Operations challenges
Courteous, but limited passenger service (e.g. no free meals)

Reach distribution network ,target on tier2 cities

Hub & Spoke Model often to secondary airports

Competitive advantage with the LOW cost

High aircraft utilization

Frequent, reliable schedules

Standardized fleet of aircraft

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HR Perspective : Challenges and Solutions

Maintaining Lean Structure To remain non unionized in India too Attraction of right talent in right time To push staff to work more and improve productivity

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Contd
To keep employees motivated To foster a culture that promotes trust between management and employees Training Vs. cost

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