AIR INDIA Soaring towards profits

Understanding the Aviation

Market

Indian domestic market statistics

International market statistics

Market Share Distribution Chart

Domestic Carrier Shares

International Carrier
Shares

Aviation Fuel trends

Seasonal Nature of Air Travel

Industry attractiveness for commercial aviation

industry
Potential
Entrants

Suppliers

Industry Rivalry

Substitutes

Verdict - The industry isnt

attractive.

Buyers

Understanding Air India

The Urgency for change

Problems facing Air India

Falling market share existing market

share being lost out on.

Low market share compared to

competitors.

High costs

Declining market share and high costs

leading to Losses

Existing organizational systems and

structure Inhibiting a turn around.

Financial Constraints Stake holder

(Government) funding likely to be
decreased or withdrawn.

Air India EFE Matrix

S. No.

Key External Factors

Weight*

Rating**

Score

Industrys Opportunities
1

Customer preference for lower fares

0.1

0.3

Global alliances, Mergers, Acquisitions

0.1

0.3

Foreign investment

0.05

0.1

Unemployed laid-off airline workers

0.05

0.05

Bankruptcy protection

0.05

0.15

Success of efficient low-cost airlines

0.05

0.1

Profitable Foreign Routes

0.1

0.2

Non-ticket Incomes

0.05

0.05

Industrys Threats
1

Intense rivalry in industry

0.1

0.2

Severe price cutting in the industry

0.06

0.18

Takeovers

0.05

0.05

High debt

0.05

0.15

Low cost carriers

0.1

0.2

Customer Sensitivities

0.05

0.10

Global geopolitical hostilities

0.02

0.04

Terrorism

0.02

0.02

Total

1.00

2.19

Air India IFE Matrix

S. No.

Key Internal Factors

Weight*

Rating**

Score

Required Strengths

Appropriate fleet size

0.05

0.10

Adequate trained technical staff

0.07

0.21

Profitable routes

0.08

0.16

Adequate cash flow

0.05

0.10

Satisfactory customer service

0.07

0.14

Brand preference

0.03

0.03

Appropriate strategy

0.10

0.20

Employee motivation

0.06

0.06

Good leadership

0.05

0.05

Problematic Weaknesses

Obsolete business model

0.07

0.14

Operational inefficiency

0.10

0.20

Losses

0.05

0.05

Poor growth of assets

0.07

0.14

Poor image

0.03

0.06

Lack of funds

0.05

0.05

Poor management capabilities

0.07

0.14

Total

1.00

1.83

Matrix for Strategic Decision (Current

state)

Factors impacting Air Indias Success

Raise Revenues

Grow Market Share to become a Market Leader

Control Costs

Effective Management of Work Force

Try and attract and retain more Equity investors

Expand and capitalize on the market rapidly

Solution Offering for Air India

SWOT Matrix for Air India

International travel

Global Business travel spending by

country

Indian Business Travel Spending

Indias Business Travel spending accounts for 32% of all

travel, and represents a lucrative market for the
commercial passenger aviation industry. A 1,56,000
crore market awaits ($26 billion)

What should Air India do?

Refocusing industry to International Business Travelers
Focus on Brand Building, focusing mainly on International Business
Travelers.
Focus on travel routes based FROM and TO countries with high business
travel expenditure.
Maintain leadership in Differentiation
Enter into partnerships with online retailers for ticket sales.
Create corporate offers through tie ups with Giant corporate houses.

India: The Next Big Thing?

https://www.gbta.org/PressReleases/Pages/rls_072615.aspx

Air Indias Generic strategy after

Revamp
Competitive Advantage

Broad
Narrow

Market Scope

Low Cost

Differentiation

Cost
leadership

Differentiation

Focus
(Low Cost)

Focus
(Differentiation
)

Thank You