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Hi, This is Ganesh, from ITM Business School,Navi Mumbai. This file is all about lauching of an AIRLINES in India, Details analysis of industry including STDP, Promotion, SWOT, market analyis, consumer analysis, enviornment analysis, competitors analyis have been done. A fully useful for those who want to launch airline business in India or students who have project to launch AIRLINE in India. This has been done as a part of our MBA academic at ITM Business School, Navi Mumbai. for details you may contact on [email protected] Or [email protected]. Thank You
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29/08/220729/08/2207 Ganesh KumarGanesh Kumar 11
DEPARTUREDEPARTURE
AVIATIONAVIATION
DEPARTURE-29AUGUST2006
ITM Business School
Global Leadership Centre
Masters In International Business
Navi Mumbai
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Pilot Crew Pilot Crew
Air one “Empower Every Indian To Fly” Air one “Empower Every Indian To Fly”
Mr. Ganesh Kumar (9)
Mr. Gyanesh Thakur (46)
Ms. Pushpinder Kaur Bhullar(38)
Mr. Shishir Paliwal(51)
Mr. Saurabh Sharma (28)
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Table of contents Table of contents IntroductionIntroduction Global overviewGlobal overview Current/future statusCurrent/future status India aviation industryIndia aviation industry Company descriptionCompany description Strategy, Target, PositioningStrategy, Target, Positioning ProductProduct SWOTSWOT Market analysisMarket analysis CompetitorsCompetitors Environment analysisEnvironment analysis Consumer behaviourConsumer behaviour organizationorganization
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AVIATION CONSISTS?AVIATION CONSISTS?The aviation industry can be The aviation industry can be
broadly classified into broadly classified into military military aviationaviation and and civil aviationcivil aviation. .
The term The term 'civil aviation'civil aviation' covers all ' covers all aviation related activities except aviation related activities except for those undertaken by the for those undertaken by the military and the government.military and the government.
The airlines segment can be The airlines segment can be broadly classified into international broadly classified into international airlines and domestic airlines. airlines and domestic airlines.
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Cont.Cont.An airline with one or both terminals An airline with one or both terminals
in the territory of a country, other in the territory of a country, other than the country in which it is than the country in which it is registered, is classified as an registered, is classified as an International airlineInternational airline..
Domestic airlinesDomestic airlines refers to those refers to those airlines whose flights fly only within airlines whose flights fly only within the domestic boundaries of a the domestic boundaries of a particular country. particular country.
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Mr Giovanni BisignaniMr Giovanni BisignaniDirector General & CEO - Director General & CEO - IATAIATAIATA Global Press BriefingIATA Global Press Briefing
THERE ARE 36 BILLION REASONS FOR CHANGE IN THIS THERE ARE 36 BILLION REASONS FOR CHANGE IN THIS
INDUSTRY.INDUSTRY.
AIRLINES HAVE CHANGED AIRLINES HAVE CHANGED RADICALLYRADICALLY..
WE ARE MAKING SOME PROGRESS WITH STAKEHOLDERS. WE ARE MAKING SOME PROGRESS WITH STAKEHOLDERS.
CHANGE REMAINS CHANGE REMAINS CRITICALCRITICAL..
GREATER EFFICIENCY AND THE FREEDOM TO DO BUSINESS GREATER EFFICIENCY AND THE FREEDOM TO DO BUSINESS
ON A LEVEL PLAYING FIELD ARE ON A LEVEL PLAYING FIELD ARE ESSENTIALESSENTIAL..
THERE ARE 36 BILLION REASONS FOR CHANGE IN THIS THERE ARE 36 BILLION REASONS FOR CHANGE IN THIS
INDUSTRY.INDUSTRY.
AIRLINES HAVE CHANGED AIRLINES HAVE CHANGED RADICALLYRADICALLY..
WE ARE MAKING SOME PROGRESS WITH STAKEHOLDERS. WE ARE MAKING SOME PROGRESS WITH STAKEHOLDERS.
CHANGE REMAINS CHANGE REMAINS CRITICALCRITICAL..
GREATER EFFICIENCY AND THE FREEDOM TO DO BUSINESS GREATER EFFICIENCY AND THE FREEDOM TO DO BUSINESS
ON A LEVEL PLAYING FIELD ARE ON A LEVEL PLAYING FIELD ARE ESSENTIALESSENTIAL..
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Current State of IndustryCurrent State of Industry In 2005, the air transport industry marked its fourth In 2005, the air transport industry marked its fourth
consecutive year of financial aggregate loss, bringing consecutive year of financial aggregate loss, bringing
total post-9/11 industry losses to over US$36 billion total post-9/11 industry losses to over US$36 billion
since 2001. since 2001.
The principal cause of the loss in 2005 was the The principal cause of the loss in 2005 was the
industry's US$61 billion fuel bill, US$17 billion more industry's US$61 billion fuel bill, US$17 billion more
than in 2004. than in 2004.
And the situation is getting worse. And the situation is getting worse.
This overwhelmed the success of considerable cost-This overwhelmed the success of considerable cost-
cutting initiatives in other areas.cutting initiatives in other areas.
CURRENT STATE OF INDUSTRY
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Outlook 2005 +Outlook 2005 +ASIA AND CENTRAL EUROPE ~ GREATEST ASIA AND CENTRAL EUROPE ~ GREATEST
REVENUE POTENTIALREVENUE POTENTIAL
International scheduled passenger traffic International scheduled passenger traffic in 2005 increased 15.3% over 2004 in 2005 increased 15.3% over 2004 levels, and cargo traffic rose 13.4%levels, and cargo traffic rose 13.4%
Traffic growth in 2004 was exceptional for Traffic growth in 2004 was exceptional for
two reasons:two reasons:one-off rebound from the adverse one-off rebound from the adverse
affects in 2003 of the SARS epidemic affects in 2003 of the SARS epidemic and the war in Iraq on air traffic levels. and the war in Iraq on air traffic levels.
OUTLOOK 2005+
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Cont.Cont.2004 ~ strongest world economic 2004 ~ strongest world economic
growth in 3 decades.growth in 3 decades.Economic environment less favorable in Economic environment less favorable in
next 2 years. next 2 years. Strongest potential lies where Strongest potential lies where
liberalization is taking place liberalization is taking place Economic liberalization continue to Economic liberalization continue to
boost growth in Chinaboost growth in ChinaIncreasing trade integration of central Increasing trade integration of central
European countries within the EU will European countries within the EU will lead to expansion in central Europe.lead to expansion in central Europe.
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NEED OF THE HOUR- CUT COSTSNEED OF THE HOUR- CUT COSTS
6% annually Industry growth for 2004-2008 period.6% annually Industry growth for 2004-2008 period.
Regulatory burdens + high price of oil to contend Regulatory burdens + high price of oil to contend with. with.
Significant improvement their non-fuel unit cost Significant improvement their non-fuel unit cost performances - down 3% in 2004 and 2.5% in 2003.performances - down 3% in 2004 and 2.5% in 2003.
It is therefore more critical than ever that air transport It is therefore more critical than ever that air transport becomes a low-cost industry.becomes a low-cost industry.
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Deregulating India’s Civil Deregulating India’s Civil AviationAviation
Prior to 1991, aviation, much like other major sectors of the Indian Prior to 1991, aviation, much like other major sectors of the Indian
economy, was nationalized and heavily regulatedeconomy, was nationalized and heavily regulated
In 1953, the In 1953, the Air Corporation Act, 1953Air Corporation Act, 1953, changed the landscape of , changed the landscape of
the airline industry in India.the airline industry in India.
It was in 1994 that the Air Corporation Act was repealed It was in 1994 that the Air Corporation Act was repealed
and thus this allowed private and thus this allowed private
operators to operate in the operators to operate in the
domestic airline and aviation industrydomestic airline and aviation industry
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ABOUT AIR ONEABOUT AIR ONE
• The AIR ONE airline is a low cost airline with The AIR ONE airline is a low cost airline with four Boeing 737 planes at an investment of four Boeing 737 planes at an investment of $300million.$300million.
• AIR ONE believes in dedication to the highest AIR ONE believes in dedication to the highest quality of Customer Service delivered with a quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, sense of warmth, friendliness, individual pride, and Company Spirit with returns to the and Company Spirit with returns to the shareholders. shareholders.
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AIR ONE PRINCIPLESAIR ONE PRINCIPLES
Simple productSimple product — which means no free meals, — which means no free meals, economy seating, online reservations, no economy seating, online reservations, no frequent flier programmesfrequent flier programmes
PPositioningositioning — targeting business and price- — targeting business and price-conscious passengersconscious passengers
Low operating costsLow operating costs. .
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AIR ONE MISSIONAIR ONE MISSION The mission of Air one is dedication to the highest quality of The mission of Air one is dedication to the highest quality of
Customer Service delivered with a sense of warmth, friendliness, Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit with returns to the individual pride, and Company Spirit with returns to the shareholders. shareholders.
To Our EmployeesTo Our Employees We are committed to provide our Employees a stable work We are committed to provide our Employees a stable work
environment with equal opportunity for learning and personal environment with equal opportunity for learning and personal growth. Creativity and innovation are encouraged for growth. Creativity and innovation are encouraged for improving the effectiveness of Air one. Above all, Employees improving the effectiveness of Air one. Above all, Employees will be provided the same concern, respect, and caring attitude will be provided the same concern, respect, and caring attitude within the organization that they are expected to share within the organization that they are expected to share externally with every Air one Customer.externally with every Air one Customer.
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AIR ONE GOALSAIR ONE GOALS
Financial goalsFinancial goals
To have a public stock offering by the year To have a public stock offering by the year 20102010
To obtain a return on equity at least between To obtain a return on equity at least between 15-20%15-20%
To be among the top three aviation companies To be among the top three aviation companies in market revenue in nearly four yearsin market revenue in nearly four years
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AIR ONE GOALSAIR ONE GOALS
Non financial goalsNon financial goals
Customer satisfaction to the maximumCustomer satisfaction to the maximum To come up with new services from time to To come up with new services from time to
timetime To be among the top three domestic airline To be among the top three domestic airline
company in market share by 2011company in market share by 2011
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AIR ONE PLANEAIR ONE PLANE
Boeing 737. To fly only one airplane model. Thus, pilots and Boeing 737. To fly only one airplane model. Thus, pilots and mechanics need to be trained on only one kind of airplane. mechanics need to be trained on only one kind of airplane. Having a single airplane model in a fleet also lowers Having a single airplane model in a fleet also lowers inventory, record keeping and maintenance costs, and it inventory, record keeping and maintenance costs, and it minimizes the number of technical manuals, tools and spare minimizes the number of technical manuals, tools and spare parts. Also, fleet management is greatly simplified.parts. Also, fleet management is greatly simplified.
Weigh less than the A320 and therefore require lower engine Weigh less than the A320 and therefore require lower engine thrust, less fuel, have lower engine maintenance costs, lower thrust, less fuel, have lower engine maintenance costs, lower navigation and landing fees.navigation and landing fees.
29/08/220729/08/2207 Ganesh KumarGanesh Kumar 2020
AIR ONE PLANEAIR ONE PLANE
Ease of maintenance, the airplane sits low to the Ease of maintenance, the airplane sits low to the ground, allowing maintenance crews to easily ground, allowing maintenance crews to easily perform routine maintenance on the engines.perform routine maintenance on the engines.
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AIR ONE PLANEAIR ONE PLANE Good reliabilityGood reliability, because the airplane can be turned around at , because the airplane can be turned around at
the gate so quickly, airline can get back on schedule if it falls the gate so quickly, airline can get back on schedule if it falls behind for any myriad of reasons. This allows our airline to deliver behind for any myriad of reasons. This allows our airline to deliver passenger satisfaction as defined by the customers passenger satisfaction as defined by the customers themselves: getting them where they want to go, when themselves: getting them where they want to go, when they want to go, at a good value.they want to go, at a good value. Giving passengers more Giving passengers more departure time choices and airline the opportunities for more departure time choices and airline the opportunities for more revenue.revenue.
Good flexibilityGood flexibility, the 737 comes in four different sizes in the , the 737 comes in four different sizes in the 100- to 200-seat market. The interiors are flexible, too. Optional 100- to 200-seat market. The interiors are flexible, too. Optional flex seating, capability of changing a row of seats from five-flex seating, capability of changing a row of seats from five-abreast business-class seating to six-abreast tourist-class seating abreast business-class seating to six-abreast tourist-class seating in less than one minute. A moveable cabin divider also allows in less than one minute. A moveable cabin divider also allows configuration changes between flights.configuration changes between flights.
On a typical route, On a typical route, 737 cash operating costs are nearly 4 737 cash operating costs are nearly 4 percent less than its closest competitor, the A320 seriespercent less than its closest competitor, the A320 series, , in part due to its superior structural efficiency.in part due to its superior structural efficiency.
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AIR ONE STRATEGIESAIR ONE STRATEGIES A single passenger class. A single passenger class. Targeting Targeting business business
and price-conscious passengers.and price-conscious passengers.
Shorthaul Shorthaul and point-to-point approachand point-to-point approach
No assigned seats, pay the crews best in No assigned seats, pay the crews best in industry, and use of less congested airports industry, and use of less congested airports
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AIR ONE STRATEGIESAIR ONE STRATEGIES Employees working in multiple roles, for instance flight Employees working in multiple roles, for instance flight
attendants also cleaning the aircraft or working as gate agents attendants also cleaning the aircraft or working as gate agents (limiting personnel costs) (limiting personnel costs)
Removing seat-back pockets to reduce weight and cleaning Removing seat-back pockets to reduce weight and cleaning expenseexpense
Charging passengers for practically every amenity they might Charging passengers for practically every amenity they might consume. There are no free peanuts or beverages consume. There are no free peanuts or beverages
Using that traffic as a marketing tool for related services; each Using that traffic as a marketing tool for related services; each time a passenger books a rental car or a hotel room, our airline time a passenger books a rental car or a hotel room, our airline will earn a percentage of the sale.will earn a percentage of the sale.
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AIR ONE STRATEGIESAIR ONE STRATEGIES
Promotion StrategyPromotion Strategy Promotion will be through outdoor advertising, radio Promotion will be through outdoor advertising, radio
and print media.and print media. Employing public relation firm for both consumer Employing public relation firm for both consumer
and financial purposes.and financial purposes. Combined amount budgeted for advertising and Combined amount budgeted for advertising and
public relations will be held under 15% of sales.public relations will be held under 15% of sales. Tie up with Creamoza Coffee.Tie up with Creamoza Coffee.
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AIR ONE STRATEGIESAIR ONE STRATEGIES
Distribution StrategyDistribution Strategy
Developing our own website containing the Developing our own website containing the information about the company along with facilities information about the company along with facilities of online reservation and payment.of online reservation and payment.
Hotels and Restaurants.Hotels and Restaurants. Agencies giving cars on rent.Agencies giving cars on rent. Travel insurance agencies.Travel insurance agencies. Tie up with Creamoza Coffee.Tie up with Creamoza Coffee.
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Breakdown of cost saving Breakdown of cost saving
0 5 10 15 20 25
Other operating costs
Flight crew
Cabin crew
Aircraft fuel and oil
Airport and ANS charges
Sales and reservations costs
Advertising and promotions costs
Station costs
Commission
Aircraft related costs
Passenger services costs
Cost (Rs)
Full cost short haul airline
Low cost airline
Turning our planes into media and entertainment Turning our planes into media and entertainment
plays, offering advertisers the opportunity to repaint the exteriors plays, offering advertisers the opportunity to repaint the exteriors
of our planes, effectively turning them into giant billboards.of our planes, effectively turning them into giant billboards.
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SWOT ANALYSISSWOT ANALYSISFactorsFactors StrenghtsStrenghts WeaknessWeakness
ManagementManagement ExperienceExperience Small sizeSmall size
MarketingMarketing Operating in MetroOperating in Metro No national distributionNo national distribution
OfferingOffering Unique, high quality, low priceUnique, high quality, low price Cost coveringCost covering
HRHR Small, good workforceSmall, good workforce AttritionAttrition
R&DR&D Continuing effort to ensure Continuing effort to ensure qualityquality
Fund scarcityFund scarcity
EconomicEconomic Consumer income is growingConsumer income is growing Brand imageBrand image
CompetitvenesCompetitvenesss
Distinctive service and featuresDistinctive service and features New to the industryNew to the industry
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SWOT ANALYSISSWOT ANALYSIS
OpportunitiesOpportunities
Huge potential to capture marketHuge potential to capture market Growth rate of the industry is the highestGrowth rate of the industry is the highest FDI which will in turn can help us in growing rapidlyFDI which will in turn can help us in growing rapidly Changing Consumer PreferencesChanging Consumer Preferences Mergers and acquisitionsMergers and acquisitions
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SWOT ANALYSISSWOT ANALYSIS
ThreatsThreats
Existing competitorsExisting competitors Unstable Government PoliciesUnstable Government Policies Changing dynamics of the industryChanging dynamics of the industry Upcoming new airlinesUpcoming new airlines Further rise in oil prices in the international marketFurther rise in oil prices in the international market International terroristInternational terrorist
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MARKET ANALYSISMARKET ANALYSIS
Market share of passenger traffic in major citiesMarket share of passenger traffic in major cities
1. Mumbai 26%1. Mumbai 26% 2. Delhi 17%2. Delhi 17% 3. Chennai 7.5%3. Chennai 7.5% 4. Kolkata 8%4. Kolkata 8% 5. Bangalore 8%5. Bangalore 8% ……………… ……………….. 66.5%66.5%
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DIRECT COMPETITORSDIRECT COMPETITORS
Air Deccan Air Deccan Go airGo airSpice jetSpice jetAlliance airAlliance air(add some more name)(add some more name)
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INDIRECT COMPETITORSINDIRECT COMPETITORS
Railways Railways Road transportRoad transportShip transport Ship transport
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ENVIORNMENTAL ANALYSISENVIORNMENTAL ANALYSIS
Government policiesGovernment policies Technological Environment Technological Environment Economic factorsEconomic factors Competitive EnvironmentCompetitive Environment Social culturalSocial cultural
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CONSUMER BEHAVIOURCONSUMER BEHAVIOUR
Reaction- Will need sometime for winning Reaction- Will need sometime for winning the trust of the potential costumersthe trust of the potential costumers
Expectations- Deliver what we have Expectations- Deliver what we have promised forpromised for
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ORGANIZATIONORGANIZATION
Board of DirectorsBoard of Directors
President and CEOPresident and CEO
Dire. Operator, V.C (Marketing.), Dire. Operator, V.C (Marketing.),
Dire. Finance & admin.,Dire. Finance & admin.,
Director saleDirector sale
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DifferentiationDifferentiationMaintaining costumer data base.Maintaining costumer data base.
Tie up with Creamoza Coffee.Tie up with Creamoza Coffee.
Boeing specialized engineers forBoeing specialized engineers for
maintenance so that security is upgraded.maintenance so that security is upgraded.
Direct plight at Non-Metro airport. Direct plight at Non-Metro airport.
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“ As deregulation and privatization of the Indian Civil
Aviation and Airline Industry occurs, Air One is
prepared to meet the demands of the consumer and
deliver their expectations
while sustaining growth? ”
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THANK YOUTHANK YOU