History of Airline Industry in India 1948: Air India
International came into being between Indian Govt. and AIR India
(TATA Airline) 1986: Private Sector Players permitted as Air taxi
operators Players including Jet, Air Sahara, Sky liner, East West,
Modiluft 1994: Private Carriers permitted to operate scheduled
services Six operators granted license however only Jet and Air
Sahara able to servive
Slide 4
Cont In 2003, Four carriers Air India, Indian Airlines, Jet
Airways and Air Sahara Today, 11 different brands. Air India + Air
India Express Jet Airways + Jet Konnect + JetLite Kingfisher
Airlines + Kingfisher Red IndiGo SpiceJet Go Air
Slide 5
Why a LCC is needed? The worlds largest democracy, India has a
population of 1.1 billion. With a middle class estimated at 300
million in 2005 and projected to hit 400 million in 2010. 15
Million People Travel by Train Daily, 700,000 people a day travel
by Air Condition. If just 5 % of this segment Switches to Air
travel, it will result in 40,000 seats a day being added.
Slide 6
Total LCC working in India There are total 6 LCCs 1. Air India
Express 2. GoAir 3. IndiGo 4. SpiceJet 5. Kingfisher Red 6.
Jetlite
Slide 7
Cont On May 1993, Jet Airways had started its operation. In
2000, Sahara come, later it was re-launched as JetLite by Jet
Airways on 2007. In Aug 2003, Air Deccan started its services. In
May 2005, Kingfisher Airlines & Spice Jet began their
operation. In Aug 2005, IndiGo launched. In Oct 2008, Air Deccan
had merged with Kingfisher Airlines to form Kingfisher RED.
Slide 8
Domestic Market Share
Slide 9
Slide 10
Air India Express Air India Express is a low-cost airline
subsidiary of Air India, HQ in Kochi, operating from Kerala.
Operates to the Middle East and Southeast Asia.
Slide 11
Cont A/L belongs to Air India Charters Limited, subsidiary of
Air India Limited. Today Air India Express operates nearly 100
flights per week, mainly from southern states of Tamil Nadu and
Kerala in India.
Slide 12
Go Air Go Airlines (India) Ltd. is owned by Wadia Group. Main
base is Chhatrapati Shivaji Int Airport, Mumbai. Operates domestic
passenger services to 22 cities with 92 daily flights and approx
638 weekly flights.
Slide 13
IndiGo IndiGo, is based in Gurgaon, Haryana India. Largest LCC
in India by market share as of August 2012. IndiGo was setup in
2006. Has 17.3% of the market share, behind Kingfisher Airlines and
Jet Airways. Always affordable, no gimmicks, hassle free
Slide 14
Spice Jet SpiceJet Has HQ in Chennai, India. Began service in
May 2005 By 2012, it was India's third largest airline in terms of
market share ahead of Air India, Kingfisher Airlines and
GoAir.
Slide 15
Kingfisher Airlines Kingfisher Airlines Limited has HQ in
Andheri (East), Mumbai. Until December 2011, Kingfisher Airlines
had the second largest share in India's domestic air travel market.
Airline facing financial issues for many years. Has lowest market
share since April 2012
Slide 16
Merger of Airlines Kingfisher Airlines, through its parent
company United Breweries Group, has a 50% stake in low-cost carrier
Kingfisher Red. Kingfisher Airlines merger with Air Deccan in 2008,
to create Kingfisher Red but it helped to stem some of the
irrational pricing behavior in the domestic market.
Slide 17
Jetlite Jetlite, formerly Air Sahara, is based in Mumbai,
India. Operate scheduled services connecting metropolitan centers
in India. Jetlite ended service on 25 March 2012 after merger with
Jet Konnect, a division of Jet Airways.
Slide 18
Slide 19
Fleet As of 2010, average age of Air-India Express Fleet is 2.9
yrs Air-India Express Fleet AircraftIn Service Passengers (Economy)
Boeing 737-800 17186 4189 Total21
Slide 20
Tail Art Each Air-India Express aircraft features a different
tail design that reflects a facet of Indian culture, history and
tradition.
Slide 21
Destinations Operates flights from Kerala, Punjab and
Mangalore. Also in Dubai, Abu Dhabi, Al Ain, Muscat and Salalah in
the Middle East and Singapore in the east.
Slide 22
Fleet Go Air's fleet consists of Airbus A320-200s, a medium
range airliner with capacity of 180 passengers.
Slide 23
Cont Go Air Fleet AircraftIn ServiceOrders Passengers (Economy)
Notes Airbus A320-200137180 one owned 12 dry leased Airbus
A320neo72TBA Deliveries begin 2015 Total1373
Slide 24
Destinations 21 destinations in India, with 156 daily flights
and approx 1092 weekly flights Jammu & Kashmir Delhi Goa
Gujarat Assam Bihar Chandigarh Jharkhand Rajasthan Uttar Pradesh
Karnataka Kerala Maharashtra Tamil Nadu West Bengal Port Blair
Slide 25
Fleet Operates only Airbus A320 family. IndiGo operates 60 such
aircraft and the average fleet age is 2.3 years.
Slide 26
Cont IndiGo Fleet AircraftIn ServiceOrders Passengers (Economy)
Airbus A320-20065 180 Airbus A320neo150180 Total65215
Slide 27
Destinations IndiGo operates 33 destinations in India and
abroad with 373 flights each day. IndiGo uses a hub and spoke model
used by FSC where the airline flights to different destinations are
routed through its hub.
Slide 28
IndiGo Route Map
Slide 29
Fleet SpiceJet owns 40 aircraft with an average age of 4.6
years.
Slide 30
Cont SpiceJet fleet AircraftIn ServiceOrders Passengers
(Economy) Notes Boeing 7378003020189 5 dry leased, 22 owned New
deliveries since December 2010 Boeing 737-900ER6212 Bombardier Dash
8 Q400 121878New deliveries since August 2011 Total4838
Fleet Has fleet of Airbus A-320 and ATR-72 aircraft that were
inherited from Air Deccan Due to the financial problems of
Kingfisher Airlines, the fleet was drastically reduced from 63 to
16.
Slide 34
Cont Kingfisher Airlines Fleet AircraftIn FleetTotal Passengers
Airbus A319-1331VIP Airbus A320-2326134 ATR 72-500466 Boeing
727-0441VIP Total12
Slide 35
Destinations As of 10 April 2012, Kingfisher Airlines served 25
domestic destinations within India. It had suspended all
international operations from 10 April 2012 with the final flight
between London Heathrow and Delhi. All routes are now operated with
the Airbus A320 family, ATR 42s and ATR 72 aircraft.
Slide 36
Fleet Jetlite fleet consisted of the following aircraft as of
25 March 2012 Jetlite Fleet AircraftIn ServicePassengers Boeing
737-7009 144 149 Boeing 737-8008186 Boeing 737-900ER2202
Total19
Slide 37
Destinations Delhi Punjab Goa Gujarat Assam Bihar Jammu and
Kashmir Andaman Andhra Pradesh Chhattisgarh West Bengal Uttar
Pradesh Karnataka Kerala Madhya Pradesh Manipur Orissa Rajasthan
Tamil Nadu Jharkhand
Slide 38
Jetlite Destination Map
Slide 39
Future Plan Planning to add many more destinations to the
already impressive list. Plans to cover destinations in North
America and Europe. They order 10 ATR 72-500, 19 Boeing 737-800, 5
Boeing 777-300ER and 10 Boeing 787-8.
Slide 40
Slide 41
In-Flight Service Offers a complimentary pre-set snack box or
light meal to its passengers with veg and non veg options. Limited
entertainment facilities are available for passengers.
Slide 42
In-Flight Service Does not offer a complimentary meal service
to its passengers. Offer a buy-on-board in-flight meal program. Caf
Coffee Day Snacks, sandwiches, parathas, cookies, nuts, soft
drinks, Mineral water and other beverages are available on
board.
Slide 43
In-Flight Service Offer buy-on board meal program offering
vegetarian & non- vegetarian wraps, malabar parathas,
sandwiches, flavored cashew nuts, cakes, potato sticks and samosas.
Complimentary drinking water is offered. No in-flight entertainment
systems are made available.
Slide 44
In-Flight Service No in-flight entertainment systems. Spice Jet
operates aircraft configured with a single passenger class.
Slide 45
In-Flight Service Passengers received full length blankets,
full size pillows and meals. Passengers are served meals on most
flights. Before take-off, passengers are served bottled
lemonade.
Slide 46
In-Flight Service Jetlite offered a buy on board service called
Jet Caf, offering food for purchase.
Slide 47
Awards and Achievements Go Air, has been ranked by Airbus as
the "Best Performing Airline" in the Airbus A320 category operator
in Asia Pacific / Middle East/ Africa. Go Air has also been
registered with IATA Operational Safety Audit (IOSA) program. Go
Air has bagged the coveted award for 'Best Domestic Airline For
Excellence in Quality and Efficient Service' during the global
tourism event, ITB, at Berlin.
Slide 48
Cont This is the second consecutive year that GoAir has been
awarded the prestigious award, in a very stiff competition among
airlines of the Asia Pacific Region. According to the Centre for
Asia Pacific Aviation (CAPA), GoAir achieved the highest gross
fares in the market (Rs 5,100-5,200) amongst low-cost carriers, in
part because it seeks to fly more on routes with limited
competition.
Slide 49
Awards and Achievements IndiGo has won the following awards for
its excellent service across the Indian airspace. Best LCC by the
Airline Passengers Association of India (2007) Best LCC at the
Galileo Express Travel Awards (2008) Skytrax Central Asia's best
low-cost airline award (2009) CNBC Awaaz's Travel Award for best
low cost airline (2009)
Slide 50
Cont Safety Excellence Award by Rajiv Gandhi International
Airport (2009) Most Admired Travel Product of the Year 2009 by
SATTE (2010) Skytrax Central Asia's best low-cost airline award
(2010) Best Domestic Low Cost Service Airline for the Year 2010 by
Travel Agents Association of India (TAAI) (2010) Safety Excellence
Award by BIAL (2010) Skytrax Central Asia's best low-cost airline
award (2011)
Slide 51
Awards and Achievements SpiceJet has won the following awards
for its excellent service across the Indian airspace. Smart Travel
Asias Top 5 Best Budget Airlines in Asia (Aug 2010) and in Top 10
list for 2 consecutive years (Aug 2008 & Sept 2009, Hong Kong)
Outlook Travelers Best Low Cost Airline (Feb 2008 & Feb 2010)
Award for Best Website at World Low Cost Airlines Asia Pacific
Conference (January 2010, Singapore)
Slide 52
Cont Indias best low-fare airline in a survey conducted by MaRs
on behalf of Hindustan Times (December 2009) World Travel Market
Award for multi-channel approach in distribution (November 2009,
London) National Award (ICWAI) for excellence in Cost Management
(March 2009) CIO 100 Award for IT efforts for customer satisfaction
and business growth (2007, 2008, 2009 & 2011)
Slide 53
Slide 54
Pricing Policy Go Air has a premium service known as Go
Business in which the passengers, at a higher fare, get seats in
the first two rows of the aircraft. Perks include more space with
the middle seat remaining empty, abesides free meals and an
increased luggage allowance. Go Air also offers a frequent flyer
program knows as Go Club.
Slide 55
Pricing Policy IndiGo offers a premium service called IndiGo
Plus,where the passengers, at a higher fare, can avail additional
benefits like a pre-assigned seat and a complementary meal on
board. Also offers service called IndiGo Corporate Program for
corporate travelers.
Slide 56
Pricing Policy 10% of the seats on any flight are offered at
the lowest price, and are the first to sell. Fares increase as the
plane fills up. A/C operate with a minimum set of optional
equipment, further reducing costs of acquisition and maintenance.
SpiceJet often offers simpler fare scheme, such as charging one-way
tickets.
Slide 57
Cont No refunds or No transfers to later flights in the event
of missed flights Flies to smaller, less congested secondary
airports/off-peak hours to avoid air traffic delays and taking
advantage of lower landing fees. SpiceJet have short turn around
time, allowing maximum utilization of aircraft.
Slide 58
Pricing Policy First airline to have in-flight entertainment
systems on every seat even on domestic flights. All passengers were
given a "welcome kit" consisting of pen, facial tissue and
headphones for IFE system. Frequent-flyer program of Kingfisher
Airlines is called King Club
Slide 59
Pricing Policy Strict luggage restrictions are imposed on bags
carried inside the cabin. Jetlite is a common man airline focussing
on middle class. Made every effort to keep Jetlite airline tickets
as little as possible.
Slide 60
Go Air - S.W.O.T Analysis 2% Strengths LCC promoted by The
Wadia Group GoAir Free Fares Weaknesses Small network : flights in
southern & western India with the first nine A320s Small Fleet
Structure Small Load Efficiency compared to Air Deccan & Spice
Jet Opportunities Future Fleet expansion will increase its Market
Share.
Slide 61
Cont Flight network extension Attractive fares and up to date
quality service will generate a huge customer base comprising
Frequent Flyers. The Threat of New Entrants into (LCC) segment esp.
GoAir, Indigo and Jagson Airlines
Slide 62
Spice Jet S.W.O.T Analysis 6% Strengths Entered with Rs. 99
fares for first 99 days Aim: Compete with Indian Railways AC
segment Weaknesses Small fleet structure. Concentrating at only
North-West-South. Opportunities Future Fleet expansion will
increase its Market Share. Attractive fares and up to date quality
service. The Threat of New Entrants into (LCC) segment esp. GoAir,
Indigo and Jetlite.
Slide 63
Air Deccan S.W.O.T Analysis 21.2% Strengths Highest load
efficiency. First to target the Middle Class Weaknesses Focuses
almost exclusive on south Indian markets. Image plagued by frequent
breakdowns and near misses Very limited advertising Already reached
the threshold of cost efficiency
Slide 64
Cont Opportunities Extensive network to exploit the booming Air
cargo business. Plenty of scope for expansion of operations Could
start Contractual Employment Strengthen its position in the
Chartered Flight segment. The Threat of New Entrants into (LCC)
segment especially Go Air, Spice Jet, Indigo and Jagson
Airlines
Slide 65
Slide 66
Current Trends: Kingfisher-Air Deccan Deal Kingfisher buys out
26 % stake for Rs.550 Crore. They have combined Market share of 33%
They are second biggest player after Jet Sahara deal Jet airways
and Air Sahara merger Air Sahara name changed to JetLite
Slide 67
Future Trends The projection for Indian Aviation for 2020 is
estimated at: 400 million passengers Including 180 million domestic
passengers 1,000 aircraft in the civil aviation sector Likely to
follow the footholds of International Low Price Carriers e.g. Air
Arabia, Southwest Airlines etc. More emphasis will be on Arabian
and South-East Asian circuits.
Slide 68
Passengers In Millions Future Trends Passenger Forecast
Slide 69
Future Trends Proposed Addition
Slide 70
S.W.O.T Analysis of the Industry Expecting investments - US $30
billion by 2012 and about US $50 billion by 2015. Expected Market
Size to be about 50 million by 2010. Crippling Oil Shock Acute
shortage of trained Pilots, severely limiting growth prospects.
Pilot license applications have tripled.
Slide 71
Unplanned location of Airports. Absence to Institutionalized
Funding & Infrastructure Constraints. Shortage of 1. Airport
Facilities 2. Parking Bays 3. Air Traffic Control Facilities 4.
Takeoff and Landing Slots Continued growth might be hampered
Relatively Limited Reach Cont
Slide 72
Future Information IndiGo and SpiceJet are changing the market
dynamics by opening up new international routes to low-cost
competition. The Ministry of Civil Aviation grants private carriers
additional access. Air India and Kingfisher Airlines, have cut back
their respective international networks. SpiceJet, IndiGo and Jet
Airways are planning to expand as a result of being granted
additional international seat allocations.
Slide 73
Only 454 airports with less than 100 airports having more than
one daily service Airline Industry in India High Growth in
Passenger and Air Cargo Traffic Trends 2010 (Projection ) : 3,360
thousand tones 2010 (Projection ) : 105-115 million (69 million
domestic & 40 million international) Medium Term Growth
Forecast over next 10 years Airline Industry in India: GDP: 9.6%
Domestic Air Travel: 20% - 25% Travel & Tourism: 8.8% Cont
Slide 74
Recommendations Allow all Indian Careers, Public or Private-to
operate International roots. Lower the cost of aviation turbine
fuel. Strengthen and promote short haul tourism for business
development, trade and tourism. Training more Pilots and Air
Traffic Controllers. Raising retirement age of pilots to 65 from
61.
Slide 75
Cont Encourage of Proactive involvement of overseas investors
and technical managers in the privatization of airports. Encourage
commercial activities within airports such as hotel, restaurants
etc. Ensure a healthy growth in traffic to the private airports.
Lower the Landing and airport charges.