Domestic Airlines

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A PROJECT REPORT ON

DOMESTIC AIRLINES

SUBMITTED TO

UNIVERSITY OF MUMBAI

BY

NIKUNJ DEENANATH KEDIAT. Y. B.M.S.

YEAR 2005-2006

THROUGH

TOLANI COLLEGE OF COMMERCEANDHERI (EAST), MUMBAI 400 093


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CERTIFICATE

I, Mrs. Vijaya Krishnan, hereby certify that Mr. Nikunj Kedia of

Tolani College of Commerce, T.Y. B.M.S. (Semester V) has completed

his project titled DOMESTIC AIRLINES in the academic year 2005-

2006. The information submitted herein is true and original to the best of

my knowledge.

Mrs. Vijaya Krishnan Dr. A. Rashid Dr. Sheela Purohit

(Project Guide) (BMS Co-ordinator) (Principal)


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DECLARATION

I, Nikunj Kedia, of Tolani College of Commerce, T.Y. B.M.S. (Semester

V) hereby declare that I have completed my project titled DOMESTIC

AIRLINES in the academic year 2005-2006. The information submitted

herein is true and original to the best of my knowledge.

Place: MUMBAI Nikunj Kedia

Date:


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Table of Contents

Topic

No.

TOPICS Page No.

SECTION I1. Executive Summary 7 - 8

2. Introduction to service marketing 9 - 10

3. Service marketing mix 11 12

SECTION II1. Airline overview 14

2. What an airline does? 15

3. Unique service characteristics 16 194. Segmentation 20 23

5. Marketing mix of airlines 24 39

SECTION III1. Development of airlines in India 41

2. Overview of an Indian civil aviation 42 43

3. Domestic airlines in India 44

4. Indian Airlines 45 46

5.

Jet Airways47 48

6. Sahara Airlines 49

7. Top 10 Flight Paths 50

SECTION IV

1. Case study: Air Sahara 52 67

SECTION V

1. Comparative analysis of Airlines 69 73

2. Suggestions and improvements 74

3.

Conclusion75

4. Bibliography 76


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Objective

1.The airline service was expensive and the industry didnot undertake marketing efforts, but today this is one of

the services, which requires innovative marketing efforts. So, the objective of this project is to understand these

marketing efforts.

2.To know about the airline industry.3.To know the use of marketing mix in airline industry.4.To understand the marketing strategies of foreign

airlines which can be adopted by domestic airlines.

5.To make the reader aware of domestic airline industry bygiving comparative analysis.

6.To give suggestions for the improvement of airlines inIndia.


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Section I


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Executive summaryThe principles of marketing apply to the airlines industry also as much as any

other product/service. Airlines marketers also have to cater to the needs of

customers. The following definition developed by the British institute of

management holds good for airlines: Marketing is simply customer-orientation,

looking at your business from customers point of view.An airlines executive put

it differently, In airlines business we need three thing: - service, more service,

and even more services.

While marketing principles undoubtedly apply to airlines, there is an important

difference. Airlines marketing can never brook any delay. It is a highly

perishable- if it is not used, it perishes. So, a quick and creative marketing

response is called for. Another difference is that, the product has to be bought

unseen. The customer has to come to the airlines to consume it. It is an

expensive product, and is bought on trust.

In a de-regulated competitive environment, the customer has many choices- he

can easily shift to another airline if the first airline does not measure up to his or

her standards of service. Keeping these parameters in view, we have to do the

normal marketing drill of locating our markets, segmenting them and identifying

the right target segments. The basic questions are- Where do customers live?

What kind of income they should have to afford the luxury of a holiday by air?

Where do they want to go? What do they want to see? We need answers to all

these queries. After identifying our markets, we communicate with potential

customers, through media advertising and other methods.

The new ingredients of extra 3 Ps- people, process & physical evidence isenforced, without which, the dish of services marketing mix become tasteless.

People sell the invisible stuff, which passes on, to the consumer through a

process, and physical evidence also contributes a bit to the overall satisfaction of

the consumer.


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This is exactly what this project contains. It gives an insight into 7 Ps, how they

differ for airline industry, major domestic airline players. Such players form

strategies in terms of marketing mix to give a purposeful impact and provide air

travelers with satisfies services.

These concepts are elaborated with the help of a case study. The first being Air

Sahara. The reason for selecting this company is that, it has a faster speed of

success to its credit because of different & innovative strategies helping it to gain

more market share within short period of time. It has shrunk the entire domestic

airline industry by providing full value for money forcing for the competitors to

provide services at discounted rates.

This project also gives a comparative analysis of various domestic players in

terms of strategies, promotional effort, old and new fares.


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Introduction to service marketing

Ours is a service economy and it has been one for some time

By, Karl Albrecht and Ron zemka

As consumers, we use services everyday. Business and other organisation also

use a wide array of services, usually purchasing on a much larger scale than do

individuals or households. Turning on a light, listening to a radio, talking on the

telephone, riding a bus, having pizza delivered, mailing a letter, getting a haircut,

refueling a car, writing a check, renting a video or sending clothes to the cleaners

are all examples of service consumption at the individual level.

Definition:

A service is an act or performance offered by one party to another, although the

process may be tied to a physical product, the performance is essentially intangible

and does not normally result in ownership of the factor of product.

The services are termed as human efforts provided to needy people. It may be a

food to a hungry person, water to thirsty person, medical services to an ailing

person, loan to a farmer, education to a student, transportation to a consumer

and consumer aid. In short in services, the well functioning of people is

important and cannot be ignored. Services can be personalized or consumer

services. Personalized services are doctors, lawyers etc and consumer services

are banking, insurance, railways, telephone etc.

Marketing service is marketing something intangible; it is a marketing of

promise. Selling a promise complicate the marketers task.


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Unique characteristics: -

1. Intangibility2. Inseperability3. Variability4. Perishability5. Customer relationship


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Service marketing mix

Jerome McCarthy an American professor in marketing poularized the

marketing mix in terms of 4 Ps product, price, place and promotion.

Assembling and managing the marketing variables is the major part of the

marketing task after considering the environmental variables. The marketing

manager consciously mixes the marketing variables to suit the environment

variables, develops a marketing programme that is appropriate to suit his target

consumers.

The crux of the marketing task is to blend the 4 elements in different

combination in order to have greater market impact and also be cost effective.

This blend must be continuously reviewed and monitored to the changing

requirements of the environment and consumer needs.

The marketing concept that we have discussed is valid for both products and

services. The marketing mix is one of the most important universal concepts,

which has been developed marketing. It is appropriate to consider that the

traditional marketing mix is needed for services, while some have expanded the

traditional 4Ps of the marketing mix to make it more appropriate recognizing

the diversity of service marketing.

The strategies for 4Ps require some modification when applied to services due to

the special features of the services. The challenges encountered by the service

marketer like heterogeneity the requirements of customers, interaction with

customers while delivering services and perishability or absence of inventory,

intangibility of offer and absence of patent protection etc., necessitate the people,

process and physical evidence.


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The additional prescribed Ps by Bernard H. Booms and Mary J. Bitner refers to the

activities that are essential to meet the challenges posed by three unique

characteristics of services:

1) People: All people directly or indirectly involved in the consumption of a service are an

important part of the extended marketing mix. Knowledge Workers, Employees,

Management and other Consumers often add significant value to the total product or service

offering.

2) Process: Procedure, mechanisms and flow of activities by which services are consumed

(customer management processes) are an essential element of the marketing strategy.

3) Physical Evidence: The ability and environment in which the service is delivered, both

tangible goods that help to communicate and perform the service and intangible experience of

existing customers and the ability of the business to relay that customer satisfaction to potential

customers.


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Section II


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Airline overview

An airline is an organisation that operates aircraft to carry passengers and cargo

through the air. We can buy an airline ticket for a flight or send mail, packages

or freight by airline to almost any place in the world.

Kinds of airline: -

1. Scheduled airlinesThese types of airlines fly their airplanes to a timetable.

E.g. Scheduled airlines planes will fly from London to Paris daily at fixed

times.

2. Chartered airlinesThese types of airlines operate nonscheduled services, such as services to

holiday resorts. The schedules for these flights are arranged by the

airlines and the companys that hire them. This type of flight is not

commonly used in India.

3. Commuters airlines or feeder airlinesThese types of airlines are smaller airlines that carry passenger and cargo

between small towns or from small town to large city airports within the

same countries. At city airports, the passenger and cargo are transferred

to larger airlines.


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What an airline does?Carrying passenger provide airlines with about 85 % of their income. Regular

passenger service is provided along the airlines routes according to a published

timetable. The ticket price on regular service flights varies, depending on the

amount of space and service provided for each passenger. First class service

includes large seats, ample legroom, wide aisles and deluxe in flight meals for

the passengers. Tourist or economy service costs less than first class service

because there is less room for each passenger and fewer deluxe in flight

services.

In flight entertainment in the form of films television and recorded music is

provided on many airlines as many as 14 flights attendants may be on board a

large jet airliner to serve meals, sell duty free goods, and look after the passenger

on long distance flights. In flights services on charter flights are similar to those

on scheduled flights.

Carrying cargo: -

The remaining of an airlines income comes from carrying cargo air mail, air

parcel post, air expenses and air freight. The principle kinds of goods carried byair include machine parts and equipments, cut flowers, fresh fruits and

vegetables, electronic equipments, aircraft parts, clothing, vehicle parts and

printed matter and medicine and many other things.

Many airlines operate cargo liners also called freighters that carry only freight

on regular schedules. The largest jet cargo liners can carry 115 metric tones.

Large passenger airlines can carry 67 metric tones of freight on addition to

passenger and baggage.


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Unique Service Characteristics

INTANGIBILITY

Services are intangible in nature. Unlike goods, which are tangible and can be

seen and touched, services can only be experienced. It means that services are

high in credence qualities whereas goods are high in search qualities. A company

can differentiate its service from its competitors by providing tangible clues.

A company can provide tangibility to its services by

1. Association with physical goods or items2. Association with the physical environment3.

Performance and involving customers

As we know that services are intangible, a service marketer has to face many

problems. In the airline industry transportation is the core product. Since it is

intangible in nature a service company can distinguish itself from its competitors

by providing several tangible clues like

1. Food / Beverages2. Newspapers3. Movies4. Music5. Staff uniforms6. Logos7. Color and design8. Seats and cushions9. Assistance with work10.Audio / Video facilities for work or pleasure11.Fax, laptops, etc.12.Baggage retrieval13.Flight bookings


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A service marketer can overcome the difficulties of intangibility of services

through:

1. Reducing service complexity2. Stressing on tangible clues3. Facilitating word of - mouth recommendations4. Focusing on service quality

Here are a few examples of leading airline companies that provide tangibility to

its services through various tangible elements

1. Indian Airlines The Maharaja Logo, also they describe themselves asThe Peoples Carrier The National Carrier.

2. Jet Airways the airline for businessmen, easy booking facilities, easycustom clearances and baggage retrieval, good in-flight services.

3. Southwest friendly, no frills, low fare airline.

4. Air Canada provides laptop connections and helps in sending faxmessages favorite with North American business travelers.


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INSEPARABILITY

Another characteristic of services is customer involvement in production i.e.

inseparability. The inseparability of services leads to

1. Customer being co-producer2. Often customer being co-consumers with other customers and3. Customer traveling to the point of service production

All the above three problems are face by the service marketer in the airline

industry. So the service marketer has to think of ways in which he can satisfy hisconsumers in an efficient manner. Customers are separated on the basis of price

i.e. business and economy class.

Also airline are trying to overcome inseparability by providing facilities such as

1. Games for kids Air Canada2. On-line Booking Sahara, Jet Airways, Spice Jet, etc.

INCONSISTENCY

Inconsistency refers to the variability in the service. Service variability leads to

difficulty in projecting a consistent image and developing a strong brand. As it is

difficult to standardize to blueprint the service process there is inconsistency in

service quality. Also services rely on human inputs there is a high amount of

variability.

This can be overcome by providing personalized services and focusing on

employee training. Upto an extent, automation and mechanization also can help

to reduce inconsistency.

E.g.: most airlines include online booking resulting in a standardized procedure &

fewer mistakes due to human errors.


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Another way of reducing inconsistency in airlines is the standardization of in-

flight procedures for example the security instructions given at the beginning of

the flight.

INVENTORY

It is not possible to store services. Also the service capacity cannot be increased,

as it can be limited. Services also face irregular demand patterns. Again the

service can be short-lived.

The inventory for airline industry is mainly the food and the aircrafts spares and

parts. Airlines face the problem of inventory mainly due to irregular demand

patterns.

E.g .: The Boeing Company and British Airways announced today that the airline

will be the first customer for the Global Airline Inventory Network(SM) , an

innovative new service in which Boeing will manage British Airways' supply chain

for expendable airframe spare parts used in its fleet of Boeing airplanes. This

includes parts from Boeing as well as other suppliers.

An expendable part is one that is typically replaced rather than repaired after

use. This ranges from fasteners and brackets to floor panels and airplane skins.

The Global Airline Inventory Network(SM)

is designed to attack costly inventory

inefficiencies in the airline industry, where both airlines and suppliers incur

extra costs because of duplicated distribution channels and unnecessary

inventory levels.

Congestion occurs during peak periods like vacations and festivals and at other

times there is unused capacity. Thus special discounts & offers are offeredduring these periods to boost seat capacity (called the PLF -- passenger load

factor).


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SegmentationMost airlines use a very traditional segmentation strategy, dividing passengers

into business travelers and economy travelers (mostly leisure travelers). The

common strategy is to squeeze as much profit as possible from business class

passengers who are attracted by superior services and corresponding high prices

and, at the same time, to try and fill the rest of the seats and ensure growth by

attracting economy class passengers with lower fares.

Business passengers

They are crucial for airlines' profitability. With less spare time and more cash in

their pockets, they agree to pay a premium price for a premium service.

Today business passengers account for approximately 48% of passengers and

these 48% contribute 66% of airlines' revenue. The premium prices they pay for

wider and more comfortable seats, better choice of meals and seats, luxurious

lounges.

Airlines can choose from a multitude of premium services to offer to business

travelers. Some of these extras range from seats equipped with faxes and

telephones; massage services and suit ironing services in the recently introduced

arrival lounges.

Business passengers believe it is worth extra money if they can save time and

arrive looking fresh for an important meeting. Business passengers will avoid

transit flights even if a longer flight could save them money. But amongst other

perks, flexible reservation services are probably the most important to them.

Reservations for business trips are often made just a couple of days in advance.

A no penalty cancellation policy is also very important to business passengers.


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The best way to reach business travelers is through printed advertising. Business

news media, such as "The Economic Times" and Business Today are some of

the best publications through which airlines can reach business travelers. Many

airlines design special promotional programs that target corporate bookers and

meeting planners, who are responsible for business trips reservations. Frequent

flyer programs are an added bonus for business passengers.

Leisure Travellers

They represent a totally different market. The most important consideration for

most of them is the price. The lower the airfare, the more people will fly the

respective airline.

By and large, with the exception of wealthy travellers, this segment will not pay

extra for premium services and will agree to change several planes during their

trip if this option costs less than a direct flight.

Despite lower margins provided by this segment, leisure travellers are very

important to an airline's bottom line. Part of the reason is that technological

progress in the area of tele-conferencing and increased use of the internet for

business communications is expected to reduce the number of business travelers.

Thus, airlines are counting on the leisure segment to provide further growth.

How can airlines benefit from the growth opportunities in the leisure segment

without losing immediate profit opportunities in the business segment? This is a

tough issue in airline marketing management. By improving services and

reducing prices for economy class passengers, airlines risk that some business

passengers will switch to economy class.


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This has already happened with Japan Airlines, for example, which was forced

to eliminate business class seats on some of its flights. On the other hand, if an

airline focuses on business class passengers, it risks losing its economy class

passengers to another airline.

Since business class passengers are not many, a company relying mostly on

business travelers will often end up flying half-empty planes, losing the potential

revenue generated by lower priced economy seats.

On the other hand, few airlines catering solely to economy class passengers can

be successful because a low fare carrier must fill the entire plane if it is to

generate revenue from its low-margin operations.

The allocation of business and economy class seats on a plane is determined

through a process called yield management. A good yield manager knows the

approximate proportion of business and leisure travelers for each flight in

advance, based on sophisticated statistical models.

Thus he/she tries to sell early, the economy seats at a cheaper price, while

keeping enough seats reserved for business travelers, who usually book at the

last minute. Keeping just the right amount of business seats reserved is

important: selling too few economy seats in advance may result in a less-than-full

plane while selling too many economy seats may result in a full plane, but with

insufficient revenue to gain a profit.

This kind of segmentation serves airlines well enough when implemented within

one company. It would be very difficult for any single airline to target just one of

these two segments - business or leisure - successfully.

There are exceptions - small regional that serve destinations where the majors do

not fly, for example, are in a better position to implement a low price policy.

They can even get business travelers to fly them despite the lack of premium

services because no other airline would get them there. Air Deccan is a classic

example, proving that low cost carriers can thrive.


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Major international carriers, however, need to target both the business and the

leisure segments they may also target different ethnic and geographical segments

differently, depending on the markets from which they draw the majority of

their customers.

For example , even though Japan Airlines advertise extensively to the American

public, their message -"Your needs. Your Airline," seems to work best for the

traditional Japanese audience.

Inside one country, two national carriers may also focus on different

destinations, which is the case with Jet Airways and Air Sahara. Passengers'

tastes determine airlines' strategies. While Jet Airways focuses on comfort and

luxury, valued by Indian passengers, Air Sahara equips its business class seats

with plugs for laptops and telephones, appreciated by business travelers.

Overall, airlines seem to achieve best results when they subscribe to the

segmentation theory, supported by yield management techniques and a careful

monitoring of the economic changes in their geographical markets.


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The 7 PS of Airline marketing


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Marketing Mix of Airlines

PRODUCT MIX

The French researchers, Eiglier & Langeard suggested a core & peripheral

services model in which the core service is surrounded by a circle containing a

series of peripheral services that are specific to that particular product.

The core service of an airline is the service of transport. The supplementary

services are classified into seven clusters & each one is analyzed with respect to

the airline industry:

1. Information Upto date information regarding flight schedules, ticket fares,

information about promotion schemes etc available to customers.

Customers can avail of this information literally at their fingertips

today with every airline starting its own website which gives complete

details to the customer & also entertains queries.

Providing information to employees regarding new policies affecting theairline & equipping them with enough information, which the

customers might demand. For example keeping the e in-flight

stewardesses up to date about flight schedules, distance between routes,

type of cuisine, ingredients of a particular dish.

Extensive training is provided to in-flight attendants regarding handlingcustomer queries, knowledge about the airplane itself, knowledge about

cuisine etc.


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2. Consultation Airlines are moving more actively into the role of consultants

today. They are doing away with the travel agents & designing &

selling packaged tours to consumers directly. In this aspect they

often act as consultants to the customer, by giving him advice &

suggestions regarding the type of plan he can choose.

Another aspect to consultation at airlines is when the customerapproaches the airline regarding traveling to particular

destination, the airline gives him a variety of choices of routes that

he can take.

In some cases airline may also design special menus & benefits inconsultation with its frequent fliers by keeping in constant touch

with them & asking them for suggestion as to what they want in

their airline which will make their experience more comfortable.

3. Order Taking The order taking procedure is essentially the booking procedure of

the airlines. The important aspect to be noted here is that the

procedure is smooth, easily understood & fast.

Most airlines use the telephone, fax, and email methods of booking.The emphasis here is on fast booking & at the same time getting

the required information form the customer. This is done by

establishing a standard reservation procedure & format thus

reducing the risk of inconsistent service delivery.

The online booking system also facilitates better order taking &processing.


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The scheduling aspect assumes importance, as reservations on thewrong flight to the wrong place are likely to be unpopular.

4. Hospitality & Caretaking With the increased competition today in the airline industry & the

increasing similarity of services offered by each airline, hospitality

has emerged as a key-differentiating factor between one airline &

the other.

The hospitality aspect of an airline is tested right form the time ofthe reservation (courtesy of the booking official) to the airlines

desk at the airport to the actual in-flight travel (the attitude of the

flight attendants) to the post flight help extended.

At every point the customer evaluates the airline depending on thefriendliness, the trust that the airline manages to build in him.

Another aspect of primary importance in an airline today is thesecurity aspect. After 9/11 incidents security has been beefed up

considerably at all airlines. However some are considered moresecure than others due to the technological improvements made in

safety & security issues.

5. Safekeeping In airlines the safekeeping issue is that of safeguarding the

customers baggage. The customers entrust his baggage to the

airline & it is the airlines responsibility to keep it in a propercondition.


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6. Exceptions Special requests airline very often receive special requests form

customers with regards to meal preferences, special amenities for

elderly people or children, medical needs etc. these needs have to

considered & acceded to wherever possible.

Handling of customer suggestions / complaints every airlinetoday has a customer service center which entertains customer

suggestions & complaints. On the flight, customers are often asked

for their opinion regarding service equality. Many corporate

frequent travelers are consulted when the airline decides to make

any new change.

Some airlines keep track of the preferences of customers whofrequently use their services and provide customized services to

them, such as providing them with the food, magazines and movies

that they usually prefer.

7. Billing & Payment The billing procedure in airlines is simple. The options available to

the customer are plenty including credit card & travelers cheques.

Airlines use the open account system with their corporate clients.

Frequent fliers are also given special payment privileges.


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PRICE MIX

Pricing decisions play a decisive role in managing the business of air transport

organizations. The increasing operational costs, the mounting competition, the

falling occupancy ratio, the imbalances in demand & supply, the increasing

pressure of inflation are some of the most important factors influencing the

strategic factors influencing the strategic decisions for setting fare rates in the

transport business.

For the domestic flights, the ministry of civil aviation plays a decisive role in

making the pricing decision. The operational expenses are found to be increasing

fast in order to improve the quality of services or follow the safety norms. Thesefactors make pricing difficult.

It is more judicious to adopt the Long Run marginal cost principle of pricing for

domestic air services. Subsidization of air services in regions other than the

northeast & inaccessible areas is not desirable. The main problem is to make the

pricing decisions competitive.

The recent recession after 9/11 has sparked off a whole host of competitive

pricing strategies in the domestic aviation sector.


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Some of the prominent price strategies in the recent past have been

1.Air Sahara: -It started an online auction of tickets scheme, which has been picking up.

As of July, bookings were seen ranging from 100 175 a day when earlier

they were only 40 in a day.

Sixer & Super Sixer Schemes:

The sixer scheme allows economy class passengers to buy tickets for a

rock bottom 25000 to business class passengers at Rs 36000 under the

super sixer scheme for six passengers. As a result of this offer business

class travel will become cheaper by 30 to 60%.

Sahara India through these rock bottom fares is trying to create an

entirely new segment for the airline industry i.e. the train travelers.

2.Indian Airlines: -Indian airlines have been like Jet airways forced to take heavy price cuts

due to the step up in the competition by Sahara India. The apex fare

scheme launched by jet airways was also adopted by Indian airlines. As

per this scheme, customers get heavy discounts if tickets are booked 21

days in advance.

3.Jet airways: -In response to the stiff competition form both Indian airlines & Sahara,

jet slashed economy fares on 43 routes by between 12 % & a staggering

64 %. The motive here is the same: to attract the train segment.

All these developments have tipped the scales for the first time in favor of

the consumer. The low fare regime can be sustained by airlines as long as

they manage the capacity made available for the carriage of traffic at

these fares carefully these fares generate significant additional travel, so

that the marginal decline in yield us more than offset by volume increases.


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PLACE MIX

The place mix of airlines consists of mainly the distribution channels. The

number of destinations that an airline flies to can also contribute to its place mix.

Distribution channels:

There are two principal methods of booking seats on an airline.

The first is the group of traditional method such as the phone, fax, andemail. Corporates or vacationers generally approach travel agents who

book the tickets form the airline & take the commission from them.

Tickets can also be booked directly at the airport from the airlines desk. The second & increasingly popular method of reservation is the online

booking method. Here the customer fills in his details online & he receives

an instant booking of his ticket. His payment is generally through credit

card. Although not as popular in India, this booking system has achieved

much success in the developed countries that travel agents are losing their

jobs.

A case in point:

United Airlines (UAL) of the friendly skies, the worlds largest airline, signed

an agreement in February 2001 that is not so friendly and creates a major

conflict in the traditional distribution channel for air travel. It could cloud the

skies for middlemen like the IATA-accredited travel agents (TAs) who have sold

airline products for years.

It is a strategic alliance with DESPAGAR.COM, the travel industrys first online

trilingual B2B corporate travel management tool that will provide direct booking

service to UALs Business Travel (BT) clients in Latin America and US Hispanic

markets with value-added and cost-effective solutions.


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Through this new partnership, BT client companies will be able to get the most

of UALs corporate volume agreements by researching itineraries, checking

flight availability, comparing prices and booking airline, hotel and car rental

reservations: online, 24 hours a day, in English, Spanish and Portuguese.

The airlines have no intention of sparing the TAs in their drive towards the end

mission of direct customer reach and to be their top choice. This is a culmination

of the process, which began, post-deregulation, in the early 1980s, when the BT

was identified as a high-yield business segment so vital to the profitability of the

airlines. It brought about a major shift in their distribution strategy, relegating

the role of the TA to handling the incremental, high volume leisure and VFR

traffic and the airlines directly dealed with the corporate houses to sew up the

BT segments of the air travel market. E-travel has just hastened and intensifiedthis quest.


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PROMOTION

The formulation of an ideal promotion mix is essential to inform sense and

persuade the users. In the Indian perspective, we need more creative efforts

because the potential users in a majority of the cases dont prefer to use air

services. The business magnets, executives, politicians, actors, high spending

tourists etc are some of the users of the air services. The users appear to be more

conscious, aware of their rights and in a majority of the cases are found to be

sophisticated and therefore the promotional efforts have to be creative. Many

airlines are facing financial crunch, it is pertinent that they make optimum use of

different components of promotions.

1.Advertising:Airlines need creative advertisements to promote their business. In the

view of rising cost of inputs and the increasing impact of worldwide

economic depression on the airlines, advertisements should be budget

optimistic vis--vis optimal. The telecast media and print media are

important for promoting the air business.

The airlines have to make sure that whatever strategic decision they make

to promote the businesses are in a position to establish an edge over

competitors promotional measures. Also the airlines should keep in mind

the quality and the nature of the target markets and the level of

expectations.

This is essential to make advertisements proactive for the expansion of

business. They are also required to assign due weightage to the efforts

made for projection of positive image. We cant deny the fact that both

Indian airlines and Air India have been facing image problems. The ads

may be efficacious in transmitting the facts and removing the image

problem. It is also essential that while advertising airlines it should also

keep in mind the image of our country, the scenic beauty, tourist

attractions, rich cultural heritages or which would attract number of


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tourists. While advertising it is impact generating that one should select

an opportune moment of flight are attractive scenes of take off, and so on.

Airlines can also use broadcast media. The domestic flights should use

radios because due to increasing access to FM.

2.Publicity:Publicity is an important component of promotion mix. It is a process of

persuasive communication. It is very instrumental in sensitizing the

persuasion process provided the media people, public relations officers

provide their help. Strengthening the PR activities is essential to promote

airlines business. The PRO, Receptionist, Travel agents, Media people are

very important people in publicizing the business. The marketing

professionals can seek the cooperation of media people by organizing

dinners, meetings, get together, press conference etc, also giving them

small gifts and motivating them to publish news items which are in favour

of airlines.

3. Sales promotion:The sales promotion measures are meant for both the related sources

channelising and using the business, such as the travel agents, touroperators and all of them who process the services and the passengers and

business houses who use the services.

The incentives to the personnel instrumental in processing the services

need due attention of the professionals so that the positive contributions

of providers is used as a base for determining the incentives to be offered.

The travel agents contribute a lot to the promotion of airlines business

and therefore the need to think of them in their favour on their priority

basis. In addition the tour operators, the frontline staff also must be given

priority. Hence they should be offer some incentives this will motivate

them to promote the product. The user also deserves incentives.


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Some of the users are habitual who frequently use the services of airlines

whereas some users are occasional users. It is judicious to take

promotional decisions on the basis of the frequency the user travels. The

incentives may be in the form of concessional services, a small gift etc.

Recently Indian airlines decide to do away with the bank guarantee againstissuance of tickets, which will give travel agents full liberty to sell to the

maximum of their potential without restrictions. The domestic carrier took out

instead an insurance policy against possible defaulters.

The move is expected to boost sales of Indian airlines as it removes therestriction of maximum number of tickets & over trading levels above the

bank guarantee.

4. Word of mouthThis happens to be an important constituent of the promotion mix in

which the promoters act as a hidden sales force. The satisfied group of

users, opinion leaders narrates outstanding merits or salient features of

services used by them.

We find narration to relatives, friends, and therefore the rate of

sensitivity is found high. The constituent focuses on the quality of services

offered by the service generating organizations. The airlines also depend

on this component of promotion if they feel that the quality of services

offered by them is world class.

If you travel by Indian Airlines and are satisfied with the services offered

by them then it is natural that you will share your experiences with your

friends relatives, they trust in you and therefore the stimulation process

is on. The moment your friends and relatives get an opportunity to travel

they find Indian Airlines their first choice. Ads may be ineffective,

publicity may also be ineffective but word of mouth can never be

ineffective.


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PEOPLE MIX

The people aspect is one of the most crucial aspects of the airline industry. The

people relate to employees & intermediaries like travel agents. Ultimately it is

the quality of people that helps airline professionals in shaping the perception of

quality & bridging the gap between services promised & services offered.

It is obvious that professionally sound, personally committed, value based

employees can be proved to be high performers. This calls for innovating

recruitment methods, developing an intensive training program, assigning due

weightage to the behavioral studies while designing the syllabi & making the

employees aware of the recent developments in the aviation field by promoting

individual exposure. There must be correlation built between performance

orientation & employee orientation. Incentives need to be linked with efficiency.

Case in Point:-

PEOPLE IN JET AIRWAYS

Jet airways focus first and foremost on the employees, the communication

processes within the airline and satisfying the factors that consumer have rated

as important. Some of the most important factors that Jet airways pay special

attention to be are:

Fares Baggage handling Customer service Airplane age Accident rate Frequent Flier plan

What is unique about Jet airways and how does it relate to Customer service?The answer is simple. It provides reliable transportation without frills.

Delivery, however, is based on the concept of Happy Employees, which is very


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revolutionary. It is revolutionary because many companies preach it, but very

few, if any, practice it.

The foundation of customer service for Jet airways is based on the following

areas:

Job descriptions are written very loosely to allow workers to move easilyfrom task to task. Empowerment to work in all levels.

Flight delays are analysed with a very simplified coding system. If there isa problem, Jet airways do not spend a lot of time finding someone to

blame. It is entire teams fault and the entire team's responsibilities to

make sure it does not happen again.

Workers from different departments, like baggage handlers and the ticketagents, are encouraged to talk about and solve problems. Team building

meetings are called, often without supervisors or union representatives,

when things get out of hands.

The airline encourages teamwork by the way it selects and trains the workers.

Jet airways do not place high priority like hiring people with prior airlines

experience. It likes young people just completed their graduation.


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PROCESS

The process of airline service lays emphasis on the involvement of channels, front

line staff, travel agency offices, offices of the tour operators or so form where the

services flow & reach to the ultimate users.

The process begins at the time of reservation goes on to the confirmation of seats.

It also includes cancellation if any. Then the experience or the actual service

process continues when the customer arrives at the airport & checks in at the

airlines desk. Then he goes through his security check, & waits in the waiting

area before he boards the plane. He boards the plane & has a variety of

experiences during his journey. Then comes the destination. The plane lands &he follows a similar process as he did while boarding. The customer collects his

baggage & leaves.

At every point of this cycle, the service provider airline is producing its service &

selling it to the customers. At every point in the process the airline must be

conscious of the impact it has on the customer & the evaluation that the

customer is making of it.

For example at the point of the passenger sitting in the plane, in the middle if the

journey, the attitude & courtesy & helpfulness of the flight attendants plays a

major role in improving service quality. If the passenger is planning to change

aircrafts & the duration of the stay is long, he would be happy if the airline

makes available the hotel accommodation to him.

What this means is that passengers expect the airlines to make a number of

services available to them & airlines have to make sure these services reach them

without any distortion. This requires professional excellence.


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PHYSICAL EVIDENCE

Airlines being a service do not find it feasible to build brand images on the basis

of intangible service parameters itself. They find that tangible aspects like the

interior look of the airline, the food, the lighting, the ambience, the seating

arrangement all play an important role in creating a separate brand identity in

the minds of the consumer.

The Jet logo prominently displayed on each of its aircrafts, is used a cue to

trigger of a reminder of the customers experience at Jet & also of all the values

that Jet Airways stands for.

The physical evidence would also include the other facilities in the aircraft. Some

of the bigger aircrafts have more than the usual facilities on board. These sort of

tangible clues act as identification marks for the airline & help the customer to

evaluate on airline from another.


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Section III


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Development of airlines in IndiaNeville Vincent, a former RAF (Royal Air Force) pilot came to India from

Britain in 1929, on a brainstorming tour to survey a number of possible routes. It

was through providence that he met JRD Tata, the first Indian to secure an A-

license within the shortest number of hours. Vincent worked out a scheme,

secures JRDs approval and together they presented it to Mr. Peterson, the

director of Tata sons and also corporations, viz. Indian Airlines Corporation and

Air India.

Internationally it was established and the assets of all then existing airline

companies were transferred to the two new corporations. The operation of

scheduled air transport services was under the monopoly of these two

corporations and the act prohibited any person other than the corporations or

their associates to operate any scheduled air transport services from, to, or

across India.

However, after 40 years, the wheel had turned a full circle as the air corporation

act, 1953 was repealed with effect from 1st march 1994. That ended the monopoly

of the corporations on scheduled air transport services. Air transport in India is

now open to any carrier who fulfills the statutory requirements for operations of

scheduled services.


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Overview of an Indian Civil

Aviation

After the Second World War, there was an airline boom and as many 21 airlines

started operations in India with America war surplus Dakotas brought as scrap.

In 1945 after Tata airline was renamed as Air India, the airlines started non-stop

services from Mumbai to Delhi, Delhi to Calcutta and Mumbai to Chennai.

In 1953, the government of India passed the Air India corporation act and

decided to nationalize all existing airlines. They were merged to form twonational carriers, Air India for international routes and Indian Airlines for

domestic air services. The two national airlines started operation in 1953 and it

had earned itself an excellent name and even graded as one of the worlds top

airlines.

Indian airlines and Air India have contributed to the national economy in terms

of financial performances. They earned a considerable amount of foreign

exchange every year by the flying foreign tourists.

The airline industry in general is into a low phase. Due to the problems related to

the revenues and expenditure and due to the negative growth, disinvestments

have been taking place with privatization of the airline industry it has become

imperative for the national carriers to be more efficient and competitive. Air

India is now getting bids from various companies like Tata. The government is

yet to go through the bidding prospect to get the highest price from the sale of

equity. Foreign airlines can stake up to 26 % and 14 % have to be held by

domestic institutional investors. Alliances have been formed between various

airlines to improve their services and strengthen their fleet for.

E.g.

Delta airlines have formed an alliance with Air France to improve its service to

serve a larger segment of the market.


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The Indian civil aviation industry can be broadly classified into two main

segments civil and cargo. Infact, the birth of civil aviation is attributed to air

cargo and mail. In the beginning, mail and air cargo were the important

elements of air carrier services than passengers. The major players in the Indian

context are Air India in the international segment and Indian Airlines, Jet

Airways and Sahara in the domestic segment.

The Indian aviation sector till recently was highly regulated by the government.

As recently as the eighties saw the introduction of some new initiatives like the

air taxi scheme, whose main objective was to boost tourism?

Domestic and international passenger traffic in India is projected to growannually at 12.5 % and 7 % per year respectively over the next decade. At the

same time, domestic and international cargo traffic is expected to grow at 4.5 %

and 12 % per year respectively. By the year 2008, Indian airports are likely to

handle 90mn international passengers and 3,00,000 tons of domestic and 1.6mn

tons of international cargo.

Till recently, Indian airlines had a monopoly in the sector. However, in 1993 the

skies were opened for private participation and 8 airlines got the nod to

commence operation. Of these, only two have survived Jet Airways and Sahara

Airlines.

The market share if Indian airlines Vis a Vis private players is given below:

Airlines market share Aircraft owned

Indian airlines 47 % 55 %

Private airlines * 53 % 35 %

* Represent all private airlines operating in the country, like Jet, Sahara, and

Kingfisher Airlines etc.


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Domestic airlines in India

Private players: -

1. Jet airlines2. Air Sahara

3. Kingfisher airlines

4. Spice Jet

5. Air Deccan

Public players

1. India airlines2. Alliance air


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INDIAN AIRLINES

Fly Smart Fly Indian Airlines

Indian skies are mainly served by three domestic airline services namely, Indian

airlines, Jet airways and Sahara Airlines. Together they make all the major cities

and tourist places accessible.

Indian Airlines

In 1953, a new dream took shape to air link the vast south Asian subcontinent

by a single, modern and efficient airline. The airline was Indian Airlines. Today

Indian Airlines, together with its fully owned subsidiary Alliance Air, is one of

the largest regional airline systems in Asia with a fleet of 56 aircraft, 11 wide

bodied Airbus A300s, 30 fly by- wire A320s, 11 Boeing 737s and 3 Dornier D

228 aircrafts.An Indian Airline is presently fully owned by the government of India and has

total staff strength of around 22000 employees. Its annual turn over, together

with that of its subsidiary Alliance Air, is well over Rs. 4000 crores.

Indian airlines have been setting the standards for civil aviation in India since its

inception in 1953. It has many firsts to its credit, including introduction of the

wide - bodied A300 aircraft on the domestic network, the fly by wire A320,

domestic shuttle service and walks- in flights. Its unique orange and white logo

emblazoned on the tails of all its aircrafts is perhaps the most widely recognized

Indian brands symbol that has over the years become synonymous with service,

efficiency and reliability.

Not just connecting India, the airlines network spans from Kuwait in the west to

Singapore in the east and covers 75 destinations 59 within India and 16 abroad.

The Indian Airlines international network covers Kuwait, Oman, UAE, Qatar

and Bahrain in the west, Thailand, Singapore, Yangon and Malaysia in south


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east and Pakistan, Nepal, Bangladesh, Myanmar, Sri Lanka and Maldives in the

south Asian sub continent infrastructure.

The airlines aircraft maintenance facilities are of the highest international

standards. It has developed state of art facilities for all aspects of

maintenance, including engine overhaul. These facilities are used not only by

Indian airlines but also by other airlines from time to time. Their training

facilities for pilots are integrated at Hyderabad where commanders and captains

are trained in all types of aircraft in the Indian Airlines fleet. States of - art full

flight stimulators are available for A300, A320, and B737. Several airlines

continuous technology upgradation also extends to other areas such as

reservations, passenger handling systems and customer service.

Indian airlines flight operations center on its four main hubs the main Metro

cities of Delhi, Mumbai, Chennai, and Kolkata. Together with its subsidiary

Alliance Air, Indian Airlines carry a total of over 7.5 million passengers

annually.


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JET AIRWAYS

We dont fly aircraft, we fly people

This is the motto of this private owned airline. They have chosen the yellow rose

as their motto as it symbolizes friendship, warmth and caring, Jet Airways was

set up with the objective of providing high quality and reliable air travel in

India. Since a very high percentages of the Indian domestic air traffic comprised

of business travelers, their focus from the very beginning was to emerge as the

businessmans preferred airline. This led to a product and service design that

aimed at world-class norms in professional service and efficiency, beginning with

the choice of aircraft itself.

Their operations commenced with a fleet of flour modern generation Boeing 737

300 aircraft. These aircraft were the first to fly the Indian skies. For training

and conversion of their pilots and engineers, they utilized the training facilities of

Ansett (Australia). For world-class norms in service, they were aided by speed

wing (a British airways subsidiary) to conduct a programme on customer service

excellence for staff across functions at all levels.

To ensure accurate and efficient reservation system, they tied up with and are co

hosted with SABRE one of the worlds best reservation systems. Within three

months of operation, they also become an associate member of IATA; a party to

the IATA multilateral interlines agreement and a member of the IATA

clearinghouse. Since their commencement, they also have achieved the status of

the largest private domestic airline in India. The figures speak themselves as

below:


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1. From 4 aircrafts in 1993 94 to 34 aircraft in 20052. From 12 destinations in 1993 94 to 40 destinations in 20053. From 24 daily flights in 1993 94 to over 195 daily flights in

2005

In the process they have market share of 36 %. Their emphasis on technology is

one of the key factors of their success. They fly only modern and next generation

aircraft and maintain a young aircraft fleet, making them one of the youngest

fleet in the world.


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AIR SAHARA

Emotionally Yours

The people at Sahara believe in delivering the best to all their customers. It is

this belief that is reflected in all their services.

They have a fleet of

1. 1 Boeing 7372. 5 Boeing 737 2003. 4 Boeing 737 400

They are among first to offer tele check in facility to all their passengers. To

ensure smooth baggage handling. Exclusive valet service is provided at all

Sahara airlines airport counters. There in flight services are built around totalcustomer care and customer satisfaction. Increased leg space to ensure grater

legroom on both Sahara Royal and Sahara Special classes provide total seating

comfort on board. Sahara Royal passengers can also avail the pleasures of their

entire in flight reading library. Sahara special passengers are also provided with

a personalized reading kit, which include at least three major dailies. It is their

firm belief to uphold the highest standards of traditional Indian hospitality,

culture and courtesy. Their highly trained personnel ensure that your trip is not

only comfortable but also a memorable one right from the time of check in.


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Top 10 flight paths

Sector Seats / weekDelhi to Kolkata 18,410

Delhi to Bangalore 17,934

Mumbai to Delhi 50,386

Mumbai to Bangalore 25,480

Mumbai to Hyderabad 18,228

Mumbai to Chennai 17,724

Mumbai to Kolkata 17,318

Mumbai to Goa 17,036

Mumbai to Ahmedabad 14,014

Chennai to Bangalore 11,284

* On IA, JET, ALLIANCE & SAHARA


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Section IV


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Air Sahara

Emotionally Yours

One of Indias fastest growing airlines. Air Sahara is a part of the Sahara Indian

group which has business interest in Para banking, mass communication,

housing & infrastructure, international trading domestic marketing of consumer

products and television.

The first flight . Air Sahara was born and gained freedom of the Indian skies

with the launch of the open sky policy by the government of India in 1990s. The

first flight took off from Delhi to Mumbai on 3rd

December 1993 in a Boeing 737

aircraft. Now, it has a fleet of two 737 400s, two 737 200s, one 737 7and

four twin engine euro copters.

Now, Air Sahara with 12th successful year in commercial operations has become

Indias premier domestic airline, covering 13 destinations with 28 flights daily

offeringseat capacity of 1.2 million per annum with a current fleet strength of 9latest generations Boeing aircraft.

The airlines have two main hubs at Delhi and Mumbai. It employs 1,700 highly

qualified, experienced and dedicated staff including 91 pilots, 105 flight crew

who has received intensive training at British Caledonian.


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Major routes:

Mumbai to Delhi Bangalore Lucknow Patna Calcutta Dibrugarh Guwahati Goa

Bangalore to Mumbai Lucknow Goa - Patna Chennai to Delhi Delhi to Chennai Dibrugarh Guwahati Goa Lucknow Patna

Kolkata - Mumbai

Goa to Delhi Mumbai Bangalore Kolkata to Patna Lucknow Mumbai

Marketing mix of Air Sahara

1. On ground services. Tele check in service

Sahara is the first domestic airline to offer Tele-check in facility

for both Economy & business class passengers. We now have

dedicated lines on which you can access information on flights,

timings, Frequent Flyer Programme and even ask for a seat of

your choice. All this is to ensure that you can access us at Sahara

anytime, everytime and at your convenience.

Fastest Baggage RetrievalBaggage retrieval is the fastest among domestic airlines at Sahara.

First baggage trolley reaches the conveyor belt before the first

passenger reaches the arrival hall. We believe that the baggageshould wait for the passenger not the other way around.


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Automated Flight Arrival/ Departure InformationSahara provides this facility round the clock. The passengers can

avail this facility and get the flight update immediately.

Advanced Seat ReservationsThis facility is provided to both business and economy class

passengers. The passenger can select and book his seat before he

reaches the check in counter at the airport.

SAL is also the first domestic airline to have a 24-hours toll-free service at Delhi

and Mumbai.

2.In-flight serviceIn-flight services are built around total customer delight. Air Sahara has

firm belief to uphold the highest standards of traditional Indian

hospitality, culture and courtesy. They have highly trained personnel

ensure that trip is not only comfortable but also a memorable one. Sahara

believes in delivering the best to all our customers. It is this belief that is

reflected in all our services. Value additions in flight services are:

In-flight personalized reading kit

Passengers are provided with a personalized reading

kit, which includes at least 3 dailies and 2 magazines

of general interest.


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Increased leg space

Increased leg space to ensure greater legroom on both

Sahara Royal and Sahara Special classes provide total

seating comfort on board.

Trolley Services

Sahara provides trolley services to business class

passengers. Entire food is laid on the table as Buffet

and rolled in front of the passenger. This allows the

passenger to choose from a wide variety of quality

food.


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SAHARA'S BUSINESS CLASS WINS INTERNATIONAL

AWARD

Sahara Airlines, India's premier domestic airline,

has won the 'Presentation IFSA President's Award

for Innovation in the First and Business Class'

service. The award was presented during the 34th

Annual international Food Service Association

Conference in San Antonio, USA.

This award recognises outstanding achievement in airline food service. The

judges of this award programme include Kurt Lackner, director, dining & cabin

service for US Air and Bon Arnold, executive director of CA Services Inc.

All the members of IFSA were invited by the president of the association in the

President Award Programme'. All the major international airlines, including

British Airways, Delta Airlines, United Airlines and Continental Airlines,

participated to receive this honour.

Sahara Airlines launched 'Cuisine on Demand' service for the Business Class

passengers in October 1998. Passengers can choose their dining preference by

booking over the telephone. A choice of Italian, Continental, Thai, Mexican and

Chinese is provided this service.

Business Class passengers have a choice of over a 100 menus including an option

of health and salad meals on board.

Sahara Royale is India's premier Business Class product; Sahara's constant

innovations have helped it to achieve the preferred airline status in the domestic

network.

Sahara's other services include tele check in advanced seat reservation, city

check-in, the unique valet service and on-board executives to make flying Sahara

an experience.


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Sahara Airline's induction of B737-700 series aircraft will help the airline to

further upgrade its Business Class Service.

Sahara has designated 2-cabin crew for 16 business class passengers. This

ensures that every passenger is served with great speed and warmth.


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3.Cargo and chartered services

A new high in the domestic cargo arena. Air Sahara meet all needs for

transportation of cargo. They take care of all transport requirements from

normal cargo to perishable and even pet animals.

Air Sahara will be introducing BAR-CODED stickers for all its consignments to

ensure the smooth handling and tracking of cargo. It is the first private airline in

India to install X-ray Machine in Delhi & Mumbai to screen the consignments to

avoid opening the consignments physically, thus ensuring the shipments are

delivered intact. Customer satisfaction of our Agent/Clients is the key to their

success.

Many new systems and swift movement of cargo was introduced by Air Sahara

thus making a revolutionary change in the Cargo Industry and thus became the

Trend Setter in many fields. Each and every consignment thoroughly travels

through professional hands and maximum precautions are taken to deliver

the consignment safely to their clients.


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INTERNATIONAL RECOGNITION

Sahara Airlines won the World Travel Market 1997 Global Award for its quality

of service. The award was presented to Mr. UK Bose, CEO of SAL, at the

opening ceremony of the World Travel Market at Earl's Court on 17 November,

1997 by Christos Poputsis, senior member of the European Commission. This

recognition reinforces the high quality of the airline's services.

The Pacific Area Travel Writer's Award for the 'Best Domestic Airline for

Business Travel in 1997' was also presented to Sahara Airlines on 10 March,

1998 at the International Tourisms Bourse (ITB) at Berlin.

ACHIEVEMENT

Sahara Airlines has achieved very high percentage reliability in our schedule.

The performance since 15 February, 1999 is as follows:

Dispatch reliability 99.80% On-time performance 97.60% Customer satisfaction 94.02%


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Promotion mix

It is an innovative concept by Sahara airlines. The following are it features:

1. Bid and Win attractive products on board.

2. Wide range of branded products in the range of Rs. 500/- to Rs. 3000/-which are changed periodically

3. Bid begins at Rs. 50/- with one bid per passenger.

4. Proceeds from bids collection go to charity. All products availableinstantly on arrival.


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Price mix

Smart deal: -

Air Sahara in association with ICICI Bank provides an offer called smart dealthrough which you can purchase Air tickets on ICICI Bank Credit Cards. You

can pay for your tickets over 12 equated monthly installments and that too at no

interest. All you need to do is to make your payments using your ICICI Bank

Credit Card.

The ICICI Bank - Air Sahara 'Smart Deal'

1. Total applicable fare is divided into 12 EMIs (equated monthlyinstallments).

2. Down Payment equivalent to 4 EMIs will be charged to your currentbilling cycle.

3. The balance 8 EMIs will be charged to you in 8 monthly billing cycles,starting with your current cycle.

4. Tickets can be booked either at Air Sahara website or at any Air Saharacounter at the Airport or City office.


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This is how 'Smart Deal' works:

Sector Mumbai - Delhi - MumbaiCurrent Ticket Cost 13450/-

Class Y

Down Payment Rs. 4483/- (04 EMIs @ Rs. 1121/-)

Monthly EMI Rs. 1121 per month (for 08 months

Easy pay: -

Fly now. Pay later. * At 0% Interest.


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The flyers now have the option to pay for their tickets over Equated monthly

installments and that too at no interest. All they need to do is to make payments

using Citibank Credit Card.

1. The scheme is available to all Citibank Credit Card holders.2. The total cost of the tickets is spread over interest free EMIs. (Equated

Monthly Installments).

3. The customers gets to choose from two lucrative plans:

12 EMI option pay 5 EMIs as down payment in your currentbilling cycle and the remaining over your next 7 billing cycles.

6 EMI option - pay 1 EMI as down payment in your current billingcycle and the remaining over your next 5 billing cycles.


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Place mix

1. Lounge FacilitiesThis facility is provided to business class passengers. Air Sahara takes

immense pride in our tradition of care and service. The lounge comfort

and convenience at the airport while on wait. Air Sahara is offering

business lounge facility to its passengers at Delhi, Mumbai, Kolkata,

Lucknow and Goa.

2. Passengers with Restricted mobilityPassengers with restricted mobility are given extra assistance. In case of a

senior citizen customer service staff escorts him. If a passenger requires a

wheel chair he/she is provided with that facility as well.

3. 24 hour ReservationAir Sahara has 24-hour reservation offices at Mumbai/ Delhi.

4. Airport TransfersSahara offers free airport transfers from domestic to international

airport and vice-a-versa for interline passengers at Delhi and Mumbai.


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People mix

Civil Aviation Industry in India has made a significant progress during the last

two decades. The passenger traffic growth in the Asia Pacific region and

particularly the countries in South East Asia are expected to be the fastest

followed closely by the South Asian region, especially India.

With the implementation of liberalization policies of the Government of India in

the recent years, there has been a tremendous growth in the economy on all

fronts including aviation. There has been a general shortage of trained and

qualified personnel for the airlines and to meet this growing need Sahara India

Aviation Academy has been set up at Mahipalpur on National Highway No.8,

near Palam Airport, New Delhi.

A certain number of trainees from each batch will be considered for induction

into Air Sahara and also to other airlines depending upon the requirement.

Sahara India Aviation Academy was inaugurated by Hon'ble Managing Worker

and Chairman on 22nd Jan '97. Main objective of the Academy is to provide

high quality training facilities for the Aviators.

The Academy was duly approved by the Directorate General of Civil Aviation

(DGCA) on 13th Mar '97 for providing training to Pilots, Engineers, In-flight

Services Crew, Flight Dispatchers, Commercial Staff (Load & Trim) and

Technicians.


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Current Activities

Category Induction Refresher

Pilots - YesEngineers Yes Yes

Cabin Crews Yes Yes

Flight Despatch - Yes

Technicians Yes Yes

Ground Staff Yes Yes

Load & Trim Yes Yes


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Process mix

Air Sahara had always made a constant effort to provide fast and convenient

services to their passengers. At Air Sahara, they believe in delivering the best to

all the customers, which can be seen from the following reasons.

1. 5 more ways to check in: -In addition to airport check in air Sahara offers 5 more convenient and

time saving check in options.

SMS check in Online check in Cities check in Tele check in Return check in

2. Air mobile: -

The convenience of SMS on screen menu display of flight information.

Extremely affordable with a maximum cost of Rs. 2 per message. Check

in option available through SMS. Automatic flight status updates. Oneglobal number to access the airline.

This is available at select metros location. This service introduced by Air

Sahara to reduce the tie gap between the services provided and service

received.


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Comparative analysis of Jet, Sahara and Indian

Airlines

Airline No of aircraft No of seats daily

offeredSAHARA 10 7500

Indian airlines 56 34000

Jet Airways 38 29500

Hows this is for a marketing stunt? Air Sahara wants to fill its planes and is

considering sending marketing teams to places like New Delhi railway stations.

Newspaper sold at the station will be filled with flyers listening Saharas super

cheap fares and passengers will be able to read the fares and ponder whether

their next journey would be by air.

Saharas stopping at nothing and its relentless drive to take new passengers on

board has thrown the Indian aviation industry into turmoil. Pushed into a corner

by Saharas new fare scheme and the dwindling numbers of air travelers, Indian

Airlines and Jet Airways have been forced to respond with fare cuts of their own.

The results have brought a revolution. For the first time ever its cheaper to fly

from Delhi to Chennai than to travel by 2nd

class Ac in railways.

For almost a decade since it started flying, jet airways has studiously resisted

getting into price war with Indian Airlines. But now it has plunged into the battle

with gusto. Making it plain it wasnt about to be upstaged by tiny Sahara, Jet has

slashed economy fares on 43 routes.

When Jet Airways swooped out of the sun, its attack triggered an instant fight

back from Indian Airlines, which slashed fares on over 50 routes to nearly the

same levels as jet.


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Is this the new era of cheap tickets in Indian aviation? Or is it a spot of

temporary turbulence that will end instantly when the lean season between

august and October ends? This is always a period when the market is at its

lowest ebb and this year its worse than ever because foreign tourists are staying

away from India.

For the first time in half century, the scales may have triggered in favour of the

passengers. The cozy duopoly in the air has become triangular contest. Also,

Sahara has shown that it is going to make its rivals life even tougher by

announcing that it is also slashing business class fares. The airline has extended

its sixer scheme allowing economy class passengers to buy six tickets for a rock

bottom Rs. 25,000 that first triggered the air wars to business class passengers.

As a result of the new offer, business class travel will become cheaper 30 to 60

percent. Earlier, it also took the market by surprise when it introduced an

auction scheme on various routes under which passengers could bid for tickets at

rock bottom prices. And this offer is valid throughout the year.

Uttam Kumar, CEO; Air Sahara is unrepentant about his aggressive, quick fire

cut price, when we started the auction scheme every one blamed us for starting a

fare war. Now everyone is following suit.

Sectors IA Jet SaharaDelhi Mumbai 3920 3920 5405

Delhi Kolkata 2860 2860 6400

Delhi Chennai 3295 3292 NA

Delhi - Bangalore 5055 5053 7750Delhi Lucknow 2445 2443 3210

Delhi Guwahiti 4110 4110 6980

Delhi Indore 2560 2558 NA


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But it isnt only bases marketing moves that have brought dark clouds on the

horizon for the bigger airlines. The numbers in the aviation game, for the fist

time, have been turning against the airlines and the culprit is capacity. A year

ago, Sahara had some 5000 seats to sell daily. Today Sahara has brought four

new planes and now offers 7500 seats daily.

Its the same story at Jet Airways that have been expanding furiously over the

last few years. The airline now has 38 planes and offers 29500 seats daily.

The new planes couldnt have come at a worse time for the both airlines. The

number of air passengers has fallen due to a variety of reasons during the past

year. As a result, the passengers load factor (PLF) the most critical number for

any airline has been falling to below breakeven levels. The PLF is the

percentage of paid seats that are filled on every fight. According to preliminary

statistics for June, for instance, the industrys average PLF fell to 53 % in May.

And the number of passengers fell by over 1.4 lakh during the same period. Most

airline executive reckons a PLF of around 58 % to 60 % is needed to break even.

Even Indian Airlines is working on a PLF of around 50 % to 54 %, which means

that out of the 34000 seats it offers every day; only 17,000 to 18000 are sold.

Worse even when during peak season the PLF on Indian airlines has been

around 3 % to 5 % lower than its peak range of 70 %.

How much difference can the cheap tickets make? Can volumes make up for

price cuts? Have the airlines done their homework carefully before introducing

the new fares? Indian airlines believe it will be able to boost the numbers of

flyers by around 5 % in the lean season. The optimism is based on the fact that

there are 14 million passengers who travel by AC 2 tier and AC first class

annually. Even if a fraction moves into skies, it could make all the difference for

the airline industry.


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Travel agents, who keep their finger firmly on the industrys pulse, however, are

skeptical and believe the situation is more dire than the airlines would like to

admit. Avinash Anand, MD, trade wins says, air travel has fallen by over 20 %

that because foreign travelers arent coming to India and also because fewer

Indians are traveling.

Jet Airways have been especially hard hit by the events of the last few months.

Jet depends substantially on foreign travelers and the number of foreigners

traveling to India has fallen by about 6 % to 7. Dollar fares usually account for

about 28 % of jets revenues and that has fallen to about 22 %.

Some industry experts say, The airlines have been at this fork in the skies before.

In 2000, both Indian airlines and Jet cut fares temporarily in a bid to win morepassengers. It did not attract one extra passenger,says an airline executive. The

arrival of Air Sahara has also taken a new toll. One year it was a new kid on the

block with an insignificant market share. Now its savvy pricing schemes have

succeeded in wresting market share in a stagnant and decline market. The

airline claims it already has around 10 %. But Sahara has certainly queers the

pitch for the other airlines. Both its auction scheme and the astonishing Rs.

25000 offer in the economy class without any strings, like advanced booking,

attached cant be matched by the bigger airlines without asking their financial

health.

Analyst says that it has already wooed a chunk of corporate travelers by offering

a 5 % discount on bulk deals for companies that spend around Rs. 75 lakh

annually. Competitors have s similar offer but it ranges from Rs. 2 crores to 3

crores says B Mayal. President, new airways travel: both the sixer and the bulk

deals are getting a lot of queries because they do not have any conditions attached.

It should of course, be said that by international standards there is nothing

earthshaking or innovative about what Jet and Indian Airlines are doing. Indian

Airlines fares are amongst the most expensive in the world. Thats because

Indian Airlines has always refused to sell its seats at a discount and Jet also

followed the same practice. As a result, until the new fares came into existence, it


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was a cheaper to fly fro Delhi to Singapore or Malaysia than to fly to a

destination in Kerala.

Bose believes that countrys two giants have been operating on wrong principles,

seats are perishable commodity. So when seats are going empty it makes sense to

fill then even at lower fares. If you dont you lose that revenue for ever. European

and American airlines have been discounting for decades and they have angled

tickets to ensure that business flyers pay full price but leisure tourists pay far

less. A two way ticket from London to Cologne, for instance cost around 280 on a

weekend but can be pound 80 if the traveler stays over on a Saturday night.

But the travel agents arent impressed by the new schemes or offers. They say

that the steep cancellation charges and the rule by which cheap tickets must be

bought 21 days in advance are a major disincentive.

Have the airlines made a wrong move? They have certainly managed to make

everyone sit up and take notice. And if cheap prices are here to stay it could be a

new mid air dawn for Indian Airlines.


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Suggestions for improvements

1. First and foremost remove fear of traveling by air from the minds of thepeople by increasing the security in the lounge, at the checking counter

and inside the aircraft.

2. Create an atmosphere of homeliness in the aircraft by better and friendlyservice.

3. Encourage passengers to fill up data sheets on what they like most on theaircraft, etc.

4. Provide laptops connections to be used by the business class people.5. See to it group packages and discounts are offered as well as competitively

priced so as to attract large number of the joint families in India to travel.

6. Have maximum amount of promotions and discounts during the time ofholidays.

7. Enter into an alliance with an institution which takes groups to performin different places for e.g. dance groups, singing groups, etc.

8. Enter into an alliance with corporate that send their executives frequentlyon official tours.


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Conclusion

Not only today but there has been a vast difference between the services offered

by domestic airline in India and those offered by international airline for a longtime. The difference is due to the lack of promotional effort and innovative ideas

in domestic airlines. As a result the fares of the Indian airlines are costlier in the

world. At the same time, the Easy jet airline in Europe has the cheapest fares in

the world.

The case study of air Sahara shows that domestic airlines can provide satisfying

and competitive services at a lowest price, if they perform their marketing

function effectively. Air Sahara is small compared to Jet and Indian Airlines, but

it always comes up with innovative ideas along with professional management.

The 9/11 attack, had also affected the domestic airline industry. As a result there

was a fall of 15 % in demand. Now slowly it is improving through cost cutting

and various promotion schemes by Sahara, Jet and others.

At last, Air travel in India has always been terribly expensive. But as competition

heats up between domestic airlines, the travelers is suddenly become the king.

Today there are more offers in the Indian skies than ever before.


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BibliographyService Marketing S. M. Jha

Service Marketing Christopher Lovelock

Service marketing Ravi Shankar

Service marketing Andrian Payne

Articles

Economic times 2nd, 7th, 18th July and 28th August

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