THE INDIAN AVIATION INDUSTRY

GROUP 6

Deepali Lavangare 09020541031M.E. Kailash 09020541032Mamta Singh 09020541033Maruti Nandan Tripathi 09020541034Mithilesh Pamnani 09020541035Nagalakshmi.S 09020541036

THE INDIAN AVIATION SECTOR

Introduction CAGR of 18 per cent per annum, worth US$ 5.6 billion in 2008.

The market growth rate is16% for international and 20% for domestic (base year 2006) , which is one of the highest in the world.

Rapid transformation Post liberalization

Private airlines account for 75% market share

India has jumped to 9th position in world's aviation market from 12th in 2006.

The scheduled domestic air services are now available from 82 airports as against 75 in 2006.

…contd

The Airport Authority of India (AAI) manages a total of 127 airports in the country

which include 13 international airports, 7 custom airports, 80 domestic airports and 28 civil enclaves.

Indian carriers currently have a fleet size of 310 aircrafts, but have 480 aircrafts on order, scheduled for delivery by 2012.

The Transformation

1953- Air corporation Act-Air India and Indian airlines monopolized the market.

1990- ‘open sky policy’ adopted by the government

Jet Airways, Air Sahara, NEPC sky liner, East west Airlines started services

1994-Air corporation law was abolished to end the monopoly of IA-AI and to allow private players into the aviation sector under the new Air corporation law

2003: Entry of Low Cost Carriers. - Air Deccan, Go Air, Spice Jet, Indigo, Paramount

Airways2006-the private carriers accounted for around

75% share of the domestic aviation market

The airlines in India are into three basic SBU’s

Passenger flightsCargoMRO

The passenger flights are of three typesFull cost carriers Low cost carriers (LCC) Other start-up airlines

Regulating bodiesRegulating Bodies in the Aviation Sector in

India are :

Directorate General of Civil Aviation (DGCA)

Airports authority of India (AAI)International Civil Aviation Organization

(ICAO)

Common terms used in aviation

Load/Seat factor: Measures the percentage of available seats that are filled during a specific period

ATF: Aviation Turbine Fuel

CODE SHARING

Jet Airways Jet Airways is India’s premier private airline.second largest airline in India, next to Kingfisher, with

84,000 passengers.

Fact file

April 1, 1992,established as an air taxi operator. May 5, 1993- The commercial airline operations started January 1995-received its scheduled airline March 2004, started international operations with a

flight to Srilanka April 2007, took over Air Sahara, which was later on

renamed as JetLite.

Domestic passenger traffic(for Jul 09)

Jet Airways-JetLite combine - 26.3%*Kingfisher Airlines - 23 %NACIL - 16.2%

Low-cost carriersIndigo - 14%Spicejet - 12.5%

*SOURCE: CMIE

Marketing Segmentation-jet

Demographic segmentation Jet has two economy class subsidiaries, namely Jet Lite and

Jet Airways Konnect

Psychographic segmentation Golden Jet Escapes Jetkids which is a special program for children aged 2 to 12 Jet mall in partnership with ELVY-premier and domestic

Behavioral segmentation Jet Privilege- for frequent flyers Jet Mobile

Marketing Segmentation-Air India

Demographic - Business and economy class

Psychographic - national carrier as a household name.

Behavioural - still preferred airline for the govt staff and

old clientele.

Market Positioning-Jeta. User postioning

Three-dimensional billboards in Mumbai to hardsell the company’s message on more leg

room

b.Quality Positioning

c.Benefit postioning

Air India- a. Attribute positioning

The Maharaja mascot exists since 1948 -positioning using years of existence

b. User positioning

c. Benefit postioning

d. Price postioning

Strategies Adopted-Jet Airways

Refilling ATF in hubs in north east for its flights where people switch connecting flights

Reason- ATF prices low

Code sharing and alliance

Opened a new hub in Brussels, the first of its kind

Planning to build a five star hotel near Brussels airport at a sprawling 15 acres

Only airline which has exclusive fleets Amritsar-London-Toronto

BCG Matrix for Jet AirwaysSBU – Passenger Flights

S.B.U

Market Share

(Jet Airways

Jet lite)%

Market Share

(Largest Competitor)

Kingfisher

Relative

Market

Share

Market Growth Rate %

Quadrant in which the SBU lies

Passenger

Traffic

23.7(as on 30th June

09)

25.3(as on 30th June 09)

0.936-3.062

(FY08-09)

Question

Mark

BCG TABLE

Overall Average Market Growth of passenger flights = -6.8% (Fiscal Yr. 08-09)Average Market Growth of passenger flights of JET AIRWAYS= -3.08% (Fiscal Yr. 08-09)

Jet Airways (Combined)

1 0-13%

-6.5%

0%

MARKET GROWTH

RELATIVE MARKET SHARE

GE MATRIXJET AIRWAYS

(COMBINED WITH JET LITE , JET KONNECT)

MARKET ATTRACTIVENESSFACTORS WEIGHTAGE GRADE TOTAL

MARKET GROWTH RATE

0.25 3 0.75

MARKET SIZE 0.25 2 0.5

COMPETITIVE ENVIRONMENT

0.20 3 0.6

PROFITABILITY 0.20 2 0.4

DEMAND PATERN 0.10 2 0.4

TOTAL 1.0 12/25 2.65

SBU’S STRENGTHFACTORS WEIGHTAGE GRADE TOTAL

MARKET SHARE 0.25 4 1

BRAND SRENGTH 0.20 4 0.8

RELATIVE PRICE 0.20 3 0.6

QUALITY 0.15 3 0.45

MANAGEMENT STRENGTH

0.20 3 0.6

TOTAL 1.0 14/25 3.45

3.67 2.33 15

3.67

2.33

SBU STRENGTHM

ARKE

T AT

TRAC

TIVE

NES

S

GE MATRIX

PASSENGER FLIGHTSJET AIRWAYS (Combined)23.7%

1

LOW

MEDIUM

HIG

H

STRONG

MED

IUM

WEAK

(3.45 , 2.65)

Ansoff Matrix for Jet Airways

Product

Market

Present New

Present Market Penetration Product Development

New Market Development Diversification

Jet Airways

Market Penetration

Jet Airways JP Miles for frequent flyers Jet Cargo Services Advertisements Jet Lite Service

Market Penetration

International Star-Alliance membership

Targeting potential customers travelling in AC by rail

Market Development

Product Development

• Jet Konnect—a new service 15% cheaper than Jet airways launched in domestic and very soon in international routes.

• Jet Escapes travel package

Diversification

• Jet Mall for lifestyle products

SWOT ANALYSISSTRENGTHS•Financial restructuring•Access to financial resources•Product , Price, Place

WEAKNESSES•3 billion $ debt due to expansion•Massive fleet expansion•Acquisition of loss making Air Sahara 1450 crores it became a big liabilty.•Low capacity utilization.(low seat factor)

OPPORTUNITIES•New expansion to middle east routes•Increase FDI stake can raise foreign capital•Untapped air cargo markets

THREATS•High and rising ATF prices.•Economic recession•Competition •Advancement in telecom technology for example teleconferencing, telepresence

HELPFUL(in achieving the objective) HARMFUL(in achieving the objective)

INTE

RNAL

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GIN

(att

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f the

or

gani

satio

n)

EXTE

RNAL

ORI

GIN

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MARKET SURVEYON

AVIATION INDUSTRY

OBJECTIVE• TO UNDERSTAND THE CONSUMER BEHAVIOR

OF INDIANS TRAVELLING BY AIR.• TO DETERMINE THE CURRENT SCENARIO IN

AVIATION INDUSTRY.

1. How do you choose an airline to travel ?

27%

20%40%

6%5% 3%

SERVICECOMFORTDISCOUNTSWORD OF MOUTHSECURITYOTHERS

2. Number of times u have travelled by air in past three months?

78%

17%

5%

0--23--5>5

3. Reasons for last air travel?

14%

21%

19%

46%LEISURE/SIGHTSEEINGOFFICIALSTUDYVISITING FRIENDS/RELAT-IVES

4. In Which class do you normally fly?

4%

92%

4%

FIRST CLASSECONOMY CLASSBUSINESS CLASS

5. How do u rate services offered by following airlines?

JET AIRWAYS

KINGFISHER

NACIL

INDIGO

SPICEJET

0 10 20 30 40 50 60 70

VERY GOODGOODPOORVERY POOR

6. What do you think about no frill/low cost airlines?

52%

10%

33%

2%3%

I THINK THEY ARE GREAT IDEAI DON'T FULLY UNDER-STAND HOW THEY ARE DIFF FROM OTHER AIRLINESI THINK HOSPITALITY SERVICES ARE POOR IN LCCTHE AIRPORTS THEY USED ARE LESS CONVENIENT TO REACHOTHERS

7. how do you perceive Jet as a brand?

15%

47%

34%

5%

LUXURYCOMFORT COMES AT A COSTCATERING TO ALL CLASSES OF PEOPLECATERING MAINLY TO ELITE CLASSES OF PEOPLE

8. What factors do you consider before buying a airline ticket ?

17%

17%

17%17%

17%

17%

AVBLTY OF TCKTSAIRPORT LOCATIONPRICE OF THE TCKTSSAFETY & RELIABILITYQUALITY & SERVICESTRAVEL WITH A NATIONAL AIRLINE

9. What do you think about the following economy classes of Jet?

VERY GOOD SERVICE

NOT VERY IMPRESSIVE

NO IDEA ABOUT THE SERVICES OFFERED

0 10 20 30 40 50 60

JET LITEJET KONNECT

10. Which discount is attractive?

25%

25%25%

25%

10% OFF ON ONE TCKT50% OFF ON THE SECOND TCKTCHILD TRAVELS FOR FREE WITH PARENTSDISCOUNTS IF NUMBER OF BOOKINGS GRT THAN 4

CONCLUSION

• Thus we see in our survey that there is a sustained demand for low-cost carriers triggered by the economic downturn. Jet’s low cost carriers Jet Konnect & Jet Lite will enable Jet to survive in this environment.

• Once the economy bounces back to its bullish levels Jet can expect a huge growth in revenues from its full service carrier and until then low cost services will rule the day.

Suggestions People welcome economy class flights.

Low cost airlines need to advertise more to position themselves in the minds of people

Jet is perceived as a comfort brand

People look for discounts more than any other factor when choosing an airline to fly with.

Questionnaire

Who is the chairman of Jet?

What is the code of Jet Airways?

Name the recently introduced low cost carrier of Jet?

Questionnaire

Which airline was taken over by Kingfisher?

Name the brand ambassador, a famous personality who had recently quit from the Board of Directors of Jet Airways ?

Who is the owner of Go-Air?

Which is the biggest factor leading to decline in aviation sector?

Name the European hub of Jet Airways?

What is A.T.F.?

Name the two aircraft manufacturing companies supplying to the Indian airline industry?

Questionnaire