8/18/2019 Indian Aviation Sector: Looking Beyond Profits!

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INDIAN AVIATION SECTOR: LOOKING BEYONDPROFITS!

India is one of the fastest growing aviation markets in the world. With the relaxation of FDI

norms, many of the foreign players have entered the market in the past one decade. As of now,

for the year 2015 private carriers accounted for around 81.6% share of the domestic aviation

market. There has been a significant increase in domestic air traffic (growth of 20.34 % over the

previous year). This increase has been due to many factors such as, increase in the purchasing 

power of the customers (emergence of large middle class proportion), increase in urbanization,

increase in working population, emergence of low-cost carriers, increase in service quality and

offerings like frequent flyer programmes and modernization of airports. Despite the demand-

pull factors existing in this sector, airlines are still experiencing losses consistently for the pastcouple of years. Hence, there exists an urgent need to introspect performance measures beyond

the financial statements. This caselet attempts to provide analysis of productivity measures

relevant to the airline industry and helps in establishing a founding stone for subsequent study 

on the remedial measures to be undertaken by the airlines industry.

Pedagogical Objectives

To appreciate different productivity measures, in addition to financial statements

• To gain a different perspective of performance measurement in the context of the aviationsector

• To understand the dynamic behavior of the aviation sector

Case Positioning and Setting 

The case can be used as an introductory exercise for Operations Management or General

Management/Strategy course for the MBA program

 ABSTRACT

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