Indian Airline

Industry
STM Group Project
SECTION E:
GROUP
Megha Saraogi | Nachiketa 5 Pallabi Pattnaik| Pooja
Panda|
Nanda| Sambit Sahu
INDUSTRY OVERVIEW
 Nature and Size of the
Industry
Aviation is an important part of the economy which enables global business and tourism. The demand or air
transport has increased steadily over the last 50 years.

Since 1990, global passenger numbers have grown by 4.7 per cent each year.

India is the 9th largest aviation market in the world. According to the Ministry of Civil Aviation, around
29.8 million passengers travelled to/from India during 2008, an increase of 30 per cent on previous year. It
is predicted that international passengers will grow up to 50 million by 2015.

Further, due to enhanced opportunities and international connectivity, 69 foreign airlines from 49 countries
are flying into India.

Robust technical and engineering capabilities backed by top-notch scientific and technical institutes are
other positive offerings on the table.

India is rapidly building capabilities to emerge as a preferred destination for manufacturing of aerospace
components.

The trend will continue with world air traffic expected to double in the next 15 years and passenger aircraft
2 numbers to increase 106 per cent by 2034.
The airlines with their Profit and Loss
Margins
 Segmentation of Airline
Industry
Passenger traffic

The total passenger throughput for FY 2015-16 till January 2016 stands at
around 184 million,which is an impressive growth of 17.1% over the same
period last year.
Domestic through put has grown at a higher pace of 20.6% CAGR as compared
to international throughput, which grew at 7.6% CAGR.
Passenger throughput is expected to reach around 370 million by 2020, with
domestic traffic constituting around 80% of the total.

Cargo traffic

Total cargo throughput has increased by more than 50% over the last five
years.
While the domestic cargo throughput has increased by 12.1 % CAGR,
international cargo throughput has grown by 10.3%.
International cargo tonnage is almost 64% of the total cargo handled.
The international cargo is projected to reach around 3.5 million metric tonnes
per annum (mmtpa) and domestic cargo to around 2.4 mmtpa by FY 2020.
 Passengers carried by Indian airports in past and future forecast

Air cargo handled by Indian airports in past and its future forecast
 Stages of Indian Airline
Industry
Introductory Stage

1910: The first Indian, or maybe even Asian, to have an airplane is the young
Maharaja of Patiala, Bhupinder Singh. Commercial aviation came in the year 1911.
JRD Tata launches Indias first scheduled airline in 1932. Tata Airlines flies 160,000
miles, carries 155 passengers and 10.71 tons of mail.
1946: Tata Airlines changes its name to Air India.

Growth Phase

Legislation comes into force to nationalize the entire airline industry in India in 1953.
East West Airlines becomes the first national level private airline to operate in the
country after 37 years in 1990. Domestic Passenger Traffic Compound Annual Growth
Rate (CAGR) 10.1% (FY 2006-16).
International Passenger traffic CAGR 8.8% (FY 2006-16).
Total freight compared to International air freight traffic CAGR in Domestic Sector
7.6% (FY 2006-16) and in International Sector 4.8% (FY 2006-16)
India has more than 86 scheduled international airlines constituted of 5 Indian
carriers and 81 Foreign carriers. Currently India has air connectivity with 55 countries
through more than 300 routes.
Passenger traffic is growing at 20% per annum in the last 2 years.
 Industry Cycle- Indian Airlines

Identifiers of Stage Observa`tion

Currently the Indian Airline

industry is in growth stage
with new airlines coming
into the market and large
alliance between Singapore
Airlines and TATA group
leading to formation of
VISTARA Airlines.
KEY GROWTH DRIVERS
Key Growth Drivers for the
Airline Industry
Increase in disposable incomes, living standards
and value of time have raised the demand for air
travel for both business and tourism
The world today is truly a global village, with an
increased propensity to travel to far-off locations for
business deals and tourism
Most leading countries have deregulated the air
transport sector and have gone for open skies
agreements with other leading countries.
Air travel costs have remained nearly stable due to
competition and technological advancements, and
are now falling due to the dramatic fall in ATF
prices.
CRITICAL SUCCESS
FACTORS
Critical Success Factors
(CSF)
Critical Factors that influence the Indian Airline industry are listed below with their
respective rationales:

Market Share: Its an essential component to see how the particular Company is doing w.r.t to
the entire industry. A larger market share suggests increasing market penetration by the industry.

Cost and Pricing: In Indias market, due to intense competition Price has become the
differentiating factor for Indian Consumers.

Number of Aircrafts/Fleet Size: This determines the leverage the company has in expanding
its business across multiple cities and establish a stronger network with higher frequency of
services.

Frequency of Flights: This encapsulates the customer demands and meets their needs thereby
increasing customer loyalty towards the brand.

Service and Staff Orientation: Hospitality of staff members and crew cabin members
influences a consumers choice occasionally in choosing the flight.

Technology Prowess: Technology has become an inseparable element in giving the airline
company an edge over its competitors. Starting from intuitive and friendly websites for ticket
booking to yield management system to ensure last minute price changes according to demand
fluctuations has enabled companies leverage operational efficiencies.
 Analysis: Critical Success Factors (CSF)
Critical
Success
Factors Indigo Jet Airways Air India Spice Jet Go Air
Factors/Airlin Rank Scor Rank Scor Rank Scor Rank Scor Rank Scor
es Weights s e s e s e s e s e
0.0 0.1 0.2
Market Share 0.05 1 5 2 0.1 3 5 4 0.2 5 5
0.2 1.2 0.7
Cost/Pricing
of Fares 0.25 1 5 2 0.5 5 5 4 1 3 5
No of
0.1 0.4 0.7
Aircrafts(und
er the belt) 0.15 1 5 3 5 2 0.3 4 0.6 5 5
Frequency
between
Major Cities 0.3 2 0.6 1 0.3 3 0.9 5 1.5 4 1.2
Service and 0.1 0.7 0.4
Staff
Orientation 0.15 2 0.3 1 5 5 5 4 0.6 3 5
Technology
Prowess 0.1 1 0.1 2 0.2 5 0.5 3 0.3 4 0.4
1.4 3.8
1 5 1.7 5 4.2 3.8
FINAL
Lowest MEASU RANK= RANK= RANK= RANK= RANK=
In our analysis we found out that Indigo has competitive advantage over
Is Best 1 nearest competitor
all its competitor and its
RE 2 4is Jet Airways.
5 Indigo3has
efficient price management system which makes its most preferable
among Indian Customers. Among the Market Share also it has about
DATA ANALYSIS AND
FINDINGS
Intro: Key Performance Parameters
Data Analysis and
Findings
After selecting the parameters to get the
best results from the study, the required
data on TKA, ASK, RPK and TCC are collected
for five years from DGCA yearly aircraft
statistics published. Further, annual reports
and balance sheets of these airlines are also
referred to collect data on the number of
employees, fleet, TOC& TOR.
Correlation Matrix: Table
Correlation Matrix:
Inferences
The results of the correlation coefficient
matrix show a significantly positive
relationship between inputs and outputs.
The data set satisfies the assumption of
isotonicity wherein, increasing the value of
any input while keeping other factors
constant should not decrease any output but
should instead lead to an increase in the
value of at least one output.
Ranking of Airlines
Ranking on Basis of Production Efficiency

Ranking on Basis of Marketing Efficiency

ANALYSIS OF THE
INDUSTRY
 PESTEL ANALYSIS
POLITICAL ANALYSIS
1) Open sky policy
2) FDI limits: 100% for Greenfield airports
3)74% for the existing airports
4)100% through special permission
5)49% for airlines

ECONOMIC ANALYSIS
1) Contribution to the Indian economy-since the industry is operating in
Indian economy ,the revenue generated by the company adds to economy
2) Rising cost of fuel-the fuel price is rising because the subsidies
government is providing are being taken off.
3) Investment in the sector of aviation
4) The growth of the middle income group family affects the aviation
5)Sector-in todays world with increasing income of middle class, people
prefer to go by air because it saves time at is all new a different experience.
 PESTEL ANALYSIS Contd.
SOCIAL FACTORS
1) Development of cities leads to better services and airports-metro cities first
had airports but with development of the country new airports are being built
up.
2) Employment opportunities-the aviation sector provided a lot of employment
opportunities because the industry is so vast that a lot of people can be
employed
3) Safety regulations.
4) The status symbol attached to a plane travel

TECHNOLOGICAL FACTORS
1) The growth of e-commerce and e-ticketing is now adopt the airline
companies for the facilities and services to the customers.
2) Satellite based navigation system is the most advanced technological
factor.
3) Modernization and privatization of the airports.
4) Developing green field airports with private sector for example in Bangalore
the airport corporation limited.
 PESTEL ANALYSIS Contd.
ENVIRONMENTAL FACTORS
1)The increase in the global warming due to increase in the number
of airplanes flying in the air. This makes bad effect on our
atmosphere.
2) The sudden and unexpected behavior of the atmosphere and the
dependency on whether.
3) Shortage of the infrastructural capacity
4) Tourism saturation.

LEGAL FACTORS
1) FDI limits
2) Bilateral treaties
3) Airlines acquisitions and the leasing cost.
 PORTERS FIVE FORCES
MODEL
THREAT OF NEW ENTRANTS BARGAINING POWER OF
Low product differentiation in basic SUPPLIERS
services. Duopoly in aircraft market-Low
Low switch cost for customers , bargaining power of airlines.
high switch cost for airlines. Switch cost to other suppliers is
Open sky policy allows Foreign high.
entrants. Shortage of commercial pilots in
High set up costs, increasing fuel India.
prices. Limited suppliers for ATF in India.
COMPETITIVE RIVALRY BARGAINING
Scope POWER
for suppliers OF
to forward
Very little product differentiation in integrate.BUYERS
services. High number of buyers
Mature industry-Only scope for fragmented-lowers their power.
growth by gaining other players Switch costs are minimal for
market share. buyers.
No sense for brand loyalty With higher number of buyers,
amongst customers and can easily growth opportunities are also high.
switch to other airlines. No scope for backward integration.
AVAILABILITY OF SUBSTITUTES
Indirect substitute are Railways.
Travel by airlines-A status symbol.
However direct substitutes are
other LCC-Since switch costs in
airlines are low , hence threat of
substitutes is high.
COMPANY OVERVIEW
IndiGo
Indias largest passenger airline.
Set up in early 2006 by Rakesh Gangwal and Rahul Bhatia of
InterGlobe Enterprises.
Market share as of January 2017 is 39.8%.
Primarily operate in Indias domestic air travel market as a low
cost carrier.
Focus on offering low fares, being on time and delivering a
courteous and hassle free experience.
One of the most reliable airlines in the world.
Currently operate flights connecting to 44 destinations 38
domestic and 6 international.
Training facility is considered to be one of the best aviation
training facilities in India.
Chosen as AON Best Employer India 2016 and one of Indias
Best Company to Work for 8 years in a row.
Currently owns a fleet of 129 aircrafts.
Jet Airways
Jet Airways is an Indian airline based in Mumbai.

It was incorporated in April 1992 as a limited liability company,

founded by Naresh Goyal.
It began full fledged operations in 1995 with international
flights being added in 2004.
The airline went public in 2005 and in 2007 it acquired Air
Sahara.
It went on to become the largest carrier in the country by
2010.
It operates over 300 flights daily to 68 destinations worldwide.

In 2016, it was the second largest airline, after Indigo, with a

KEY MILESTONES
ACHIEVED
IndiGo
December 2010
Replaces Air India to September 2011
Founded in 2006 as be the 3rdrd largest Launched
a private company airline in India with a International
market share of Services
17.3%

March 2012 Most

profitable airline in
January 2013 August 2012
India & second
Second fastest Largest airline in
largest airline in
growing low cost India in terms of
India in terms of
carrier in Asia. market share.
passenger market
share.

March 2014 October 2016

Second longest low October 2015 Largest airline in
cost carrier in Asia. Announced a India.
( Terms of seats Rs.3200 crore IPO.
flown)
Jet Airways

April 1992 December 2004

March 2004
Incorporated as a Launched its first The company was April 2007
limited liability listed and thus Acquired Air Sahara
international flight
company became public

October 2008 2008 Forced to

May 2009 October 2008 Laid
launched another Formed alliance with off 1900 employees
discontinue
Kingfisher for international routes
low cost brand Jet who were later re-
frequent flyer due to global
Konnect instated
program economic turndown

2010 Largest February 2013

2013 Entered into February 2016 -
airline in India with fare war with low
market value
Second largest
a market share of dropped by Rs.484
cost airlines airline in India
22.6% crore
VISION & MISSION
IndiGo

Mission

To provide quality & reliable air travel facilities to the

young, price conscious, first time travelers.

Vision

To be Indias largest & fastest growing airline

through
Affordable fares
On time performance
Hassle free travel experience
Jet Airways

Mission

To be amongst the most innovative and admired brands, renowned for service
excellence.

Vision

To be renowned for reaching out to all the guests with a heart warming Indian
hospitality.

Delight guests with genuine care and personalized quality service, along with
consistent, reliable and efficient operations.
Innovate & deliver service excellence, setting standards for competition to
emulate.
To be the most sought after place to work.
To achieve the above objectives while simultaneously ensuring sustainable
profitability for all stakeholders.
SERVICE PORTFOLIO
Service Portfolio
IndiGo Jet Airways
Premire Services & Economy Class
Economy Class Bus & Coach services
JetKids, a program for kids aged 2-
Cargo Services 12
Jetmobile, JetEscapes
Charter Airways Cargo Services
Car Rentals & Retail Services
Leisure Travel
By partnering with various companies
like Air France, American Airlines, Citi,
Hello 6E In-flight HDFC Bank, ICICI Bank, HSBC, Hyatt,
Hilton Hotels, The Leela, Marriott,
Oberoi Hotels & Resorts, The Park,
magazine Ferns n Petals, matrix, are amongst
others.
CORE COMPETENCIES
IndiGo

Low cost structure

Uses one type of airplane brand Airbus A320s

Low turnaround time of 30 minutes

It spends 11 to 12 hours in sky which is above industry standard of 8 to

10 hrs

High employee efficiency with one of industrys leanest workforce

High emphasis on On time performance

Low flight cancellation rate

Low customer complaints

High frequency of flights

Centralized operation centre and hence has operational efficiency

Jet Airways

Low price tickets

Low operating costs

Good customer service

High frequency service

Productive pilots and ground crew

Only private airline with wide international operation

Largest fleet size

Customer relationship and punctuality

Business Model Of Indigo

Value
Customer Customer
Key Partners Key Activities Propositi
on Relationship Segment

Website, Sales
Single class, Point
Office, Call
to point route, No
Centre
frills Budget
Airbus, Channels
conscious
Travelport, Key Resources Low Cost traveler
Secondary Carrier Website, Sales
airports Single type of
Office, Call
aircraft
Centre
, Air Crew, Online
Sales, Lean
distribution system
Cost Structure Revenue Streams
Aircraft costs, Airport fees,
Lower airfare, Additional Service fee, Extra
Maintenance charges, Aircrew Fee,
baggage charges, Meal charges
Cockpit training
SWOT ANALYSIS OF INDIGO

STRENGTHS 1. Strong backing Promoters and is one of the largest low cost
carriers in India
2. Only LCC to make consistent profits
3. It has one of the major airlines in India in terms of market share
4. LCC which has entered international markets has boosted its
brand value
5. Good advertising and marketing strategies have increased its
brand recall

WEAKNESSE 1.Not on too many routes as compared to competitors

2. Still has to establish itself on international destinations
S
OPPORTUNI 1. Opening up of International routes
2. Largest Market share among LCCs in Indian Market
TIES 3. Middle Class taking to the skies
THREATS 1. Plenty of new LCCs to compete with
2. Rising Labor costs and changing govt policies
3. Rising Fuel Costs
SWOT ANALYSIS OF JET AIRWAYS
STRENGTHS 1. Has created a good image among the Indian fliers
2. Trusted Airline by the Corporates
3. One of the biggest Indian airline companies with over 13,000
employees
4. Operations in over 75 Indian cities and over 400 daily flights
5. Top of the mind brand due to excellent operations and marketing
6. It also has international destinations in nearly 20 countries

WEAKNESSE 1. Competition from the LCCs and other competitors means market
share growth is tough
S 2. Presence of other airlines on international routes making it difficult
to have significant market share

OPPORTUNI 1. Strongly positioned in the International routes

2. Has presence in every segment
TIES 3. Increasing number of people opting to travel by airlines

THREATS 1. LCCs eating up the market share

2. Rising Fuel Costs andLabor Costs
3. Unfavorable Govt policies and aviation regulations
COMPETITOR ANALYSIS
INDIGO
Fleet Size : 129
On time Performance :
61.6%
Personnel : 2520
Revenue : 166 billion
Competitors : Jet airways,
jetLite,Vistara,GoAir,
SpiceJet, Air India.
JET
AIRWAYS
Fleet Size : 103
On time Performance :
64.3%
Personnel : 2176
Revenue : 229.1 billion
Competitors : Indigo,
GoAir, SpiceJet, Air
India,Vistara
Segmentation, Targeting and Positioning
of Indigo

Benefit segmentation strategy is used by Indigo Airlines to

cater to the changing needs of developed & developing
nations. It mainly targets people by offering the benefits of
low pricing as Air travel is perceived as an expensive
travelling option.
By targeting different markets judiciously considering
Demandsupply constraints, Indigo within the span of 10
years since its inception has emerged as the best player in
the industry by using differentiated targeting strategy.
As far asbrandimage is concerned, it has positioned itself
as value based carrier providing hassle free experience of
traveling.
Segmentation, Targeting and Positioning
of Jet Airways

Jet airways has positioned itself as apremium brand

airline that would compete with the best in theworld.
It has positioned itself as a full service carrier airline
with strong domestic & international operations with
unparalleled & unique inflight entertainment options.
With its international operations, JetAirways has
tapped thelarge non-resident Indians (NRIs) segment
thatresides inthe USAand Europe.
The companys advantage of being anearly entrant
has helped it in tapping this segment.
3rd Generation Balanced Scorecard
FINANCIAL ANALYSIS
Based on Financial
Indicators
Higher Inventory Turn over ratio than industry average-
Higher inventory due to high demand leading to more sales.
Higher current ratio-The higher the current ratio, the more
capable the company is of paying its obligations.
Higher quick ratio- better liquidity position
Higher net profit margin- company doing better than
competitors.
Higher Dividend payout- Indigo is providing dividend
payout thus keeping shareholders happy.
PEG, EV and other share price related shares have a
higher value than the industry average - shares of Indigo are
overpriced.
FUTURE PROSPECTS OF INDIGO AND JET
AIRWAYS

INDIGO
IndiGo took under a decade to have a fleet of 100 aircraft and has now decided to expand its capacity by
33% of the current size in just a year.
The low-cost carrier (LCC) will induct about 35 planes a mix of Airbus A 320s and the plane's new
engine option (Neo) version by the end of fiscal 2016-17, at a rate of almost three planes every month.
This is the fastest fleet augmentation in such a timeframe by an Indian carrier.
JET AIRWAYS
Jet has had to give a lot of their planes to other airlines, including Etihad over a period of time. However,
as Etihad continues to get their own planes, and Jet Airways starts to get into profit zones (they just
declared profits for FY16), they are now planning a return to more international flights, as well as up
gauging some domestic flights to wide bodies.
It is also expected that Jet Airways current flights on the A333s to Europe may be converted to B77Ws in
the coming days.
Many different routes which were dysfunctional for quite sometime due to profitability issues, have been
planned to put into force.
Jet Airways is looking to enter the domestic aircraft maintenance, repair and overhaul (MRO) market,
estimated to be $800 million in size.
Future Growth Strategy of
the Organization
Boston Consulting Group (BCG) Matrix model give airlines
benefit to think about their products and helps to make decision
because from BCG matrix they will know the product market
share, how it would be and how good the product is for further
action. airlines can play smart in business with BCG matrix.

Question marks need to be analyzed carefully to determine if they are

worth the investment required to grow market share.
The Star product is the product which has high market growth with
high market share. The Star product generates greater cash and also
bigger cash consumption to maintain the market share with the high
market growth.
Cash Cow product is where the product gives a big amount of cash for
airlines and had sustained its good market share but the market growth
not growing rapidly as before. However the Cash Cow product can be a
Dog product if it not being maintained. To avoid the route from being a
Dog product, airlines has to put a bit investment to inject and boost up
the market growth thus it will sustain its market share and profits.
Dog products are those which in the low share market and totally low
market growth. Either it is a loss route or very low yield for airlines. It is
Future Growth Strategy of the Organization
BCG matrix of Indigo

No-frill segment with no meal and no

entertainment options are stars in
BCG matrix as due to affordable &
low-cost option it has high demand in
the market. But because of the options
available, competition is high as well.

Its premium services like Indigo

CarGo, Indigo Experience etc., are
question mark because customers find
MNC carriers with international
presence services more attractive and
it is value for money for them.
Product market investment strategy
Product-
The core product of Indigo airlines is of
course Air travel. For the past few years,
Indigo has managed to create profit whereas
its competition has been making losses. They
increased capacity and efficiency by
introducing new flights
Another strategy that Indigo applied is deft
route planning such that it increased the
number of aircrafts per route instead of only
increasing the number of routes.
Promotion-
No airline has worked harder at capturing
the local market better than IndiGo
Airlines. The airline relies on its cost and
availability to promote itsbrand across
the market. This investments in
advertisements are low because it affects
the cost. However, Indigo did come out
with a few TVCs of its own as well as
does good advertising online. Other
promotion methods used by Indigo
aircraft include media vehicles like
Place-
Customers who want to book their tickets
can do so online or through various
agencies throughout the country. The
airline is trying to reduce the headache
one has to go through to get a ticket and
that is why it has availed the online tickets.
The core strategies include keeping the
airline the most affordable airline in
India and keeping flying a pleasant
experience.
Price-
As already mentioned, price is one of the
major factors in the marketing mix of
Indigo airlines. It is because of price and
maintaining costs that the airlines has
received so much success. IndiGo Airlines
is one of the cheapest, if not the cheapest
airline in India. In fact, that happens to be
its competitive advantage when travelers
are comparing prices. This makes it one of
the most sought airline services in India
because of its quality services as well.
Indigo is changing its
business mantra
..How ???
Strategic Roadmap
Strategic Roadmap
Strategic Roadmap
With the fresh order of 250 Airbus 320Neos, IndiGo has changed the
game for all other airlines operating in India.Bombarding the Indian
market with capacity is a game IndiGo has long been adept at. The airline
has a total of 422 planes on order. After the tweak, 402 of them will be
A320s and the rest A321s. The A321s will start coming in from 2019.
This A321 has a stretched fuselage with an overall length of 44.51
metres, along with an extended operating range of up to 3,000 nautical
miles (5,556 kilometers) while carrying a maximum passenger payload,
according to the Airbus website. The A321LR will be able to do 4,000
nautical miles (7,408 kilometers).
India's biggest airline by market share has tweaked part of its
aircraft order, converting 20 Airbus A320Neo planes to A321Neos
IndiGo has 97 operational aircraft, 180 more already ordered for which
deliveries begin later this year and then these 250 aircraft which start
coming in by 2018. Till 2026 or roughly in the next decade, some of the
total 530 odd aircraft would be used as replacements.
It is claimed that within the next 10 years, IndiGo's fleet alone may well
be the size of the combined fleet size of all airlines operating in India at
present.
Strategic Roadmap

Why IndiGo is so confident of the Indian market

potential ??

The airline has already announced its intention to mop up

close to Rs 2,500 crore through a maiden public offering
later this year.
IndiGo certainly needs the money - it says some will be
deployed in buying out about five aircraft which are
currently on lease and remaining funds will be used for
getting some ground handling equipment etc.
Whatever be IndiGo's reasons for announcing the aircraft
order now, it seems confident enough of not only being
able to service this $26.55 billion purchase through various
financing options but also of its ability to outclass rivals.
Concluding the roadmap
It is already a market leader by a comfortable margin
with its fleet of 97 operational aircraft and accounts
for 40 percent of the domestic market in terms of
passengers.

Indigo's stuck to its low-cost, single class model

unlike rivals
Selling and leasing back planes helps its
balance sheet
Quality and detail key to good service
It's all about customer focus (low fares, regular on-
time performance and minimal flight cancellations)
Using technology smartly (digital link system)
Reimagining the Airline Travel

It would seem that the aviation sector in India is doing well. Air
traffic has grown at 14% over the last 10 years and India is
expected to become the third largest aviation market in the
world by 2020.
However, a closer look reveals that this growth has remained
concentrated in a few big cities with the top 10 cities
contributing 80% of the air traffic while having only 7% of
the population and 8% of the GDP.
Airlines are also in poor health. In spite of the fall in fuel prices,
FY15 also saw airlines rack up a combined loss of $1.2 billion
On the airports side, only seven out of 75 operational airports
are profitable, of which two are Airports Authority of India
(AAI) operated. Clearly, structural challenges need to be
addressed to ensure sustainable growth in this sector.
 The concentration of the market in a few large cities. Airlines prefer
metro routes because smaller routes arent currently profitable
although there is future growth potential. One way to tackle this is as
currently envisagedmandate airlines to deploy a percentage of
their capacity on certain routes. An incentive-based approach
would be a better alternative. One such has been proposed
in the new aviation policythe domestic flight credit system
where airlines earn higher credits by flying smaller routes.
Building airports in smaller cities- A low-cost airport needs nothing
more than an industrial building with basic facilities attached to an
airstrip. There may be no need for boarding bridges, baggage
carousels or even air conditioning for that matter. Each component
needs to be critically examined to cut away anything which isnt
absolutely necessary.
WiFi in the sky emerging to be new cash for domestic
airlines. Installing WiFi services on board is set to increase
the revenue
The transition we need to make is from viewing
air travel as a luxury to looking at it as a
means of mass transportationthe way we
think of the railways. This impacts a variety of
things from airport construction, airline
business models to regulations and taxation
and all these need to be addressed if the
Indian aviation sector is to fulfil its promise of
becoming an efficient mode of public
transportation rather than the luxury good
that it is today.
Thank You.