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THE INDIAN AVIATION INDUSTRY
GROUP 6
Deepali Lavangare 09020541031M.E. Kailash 09020541032Mamta Singh 09020541033Maruti Nandan Tripathi 09020541034Mithilesh Pamnani 09020541035Nagalakshmi.S 09020541036
Introduction CAGR of 18 per cent per annum, worth US$ 5.6 billion in 2008.
The market growth rate is16% for international and 20% for domestic (base year 2006) , which is one of the highest in the world.
Rapid transformation Post liberalization
Private airlines account for 75% market share
India has jumped to 9th position in world's aviation market from 12th in 2006.
The scheduled domestic air services are now available from 82 airports as against 75 in 2006.
…contd
The Airport Authority of India (AAI) manages a total of 127 airports in the country
which include 13 international airports, 7 custom airports, 80 domestic airports and 28 civil enclaves.
Indian carriers currently have a fleet size of 310 aircrafts, but have 480 aircrafts on order, scheduled for delivery by 2012.
The Transformation
1953- Air corporation Act-Air India and Indian airlines monopolized the market.
1990- ‘open sky policy’ adopted by the government
Jet Airways, Air Sahara, NEPC sky liner, East west Airlines started services
1994-Air corporation law was abolished to end the monopoly of IA-AI and to allow private players into the aviation sector under the new Air corporation law
2003: Entry of Low Cost Carriers. - Air Deccan, Go Air, Spice Jet, Indigo, Paramount
Airways2006-the private carriers accounted for around
75% share of the domestic aviation market
The airlines in India are into three basic SBU’s
Passenger flightsCargoMRO
The passenger flights are of three typesFull cost carriers Low cost carriers (LCC) Other start-up airlines
Regulating bodiesRegulating Bodies in the Aviation Sector in
India are :
Directorate General of Civil Aviation (DGCA)
Airports authority of India (AAI)International Civil Aviation Organization
(ICAO)
Common terms used in aviation
Load/Seat factor: Measures the percentage of available seats that are filled during a specific period
ATF: Aviation Turbine Fuel
CODE SHARING
Jet Airways Jet Airways is India’s premier private airline.second largest airline in India, next to Kingfisher, with
84,000 passengers.
Fact file
April 1, 1992,established as an air taxi operator. May 5, 1993- The commercial airline operations started January 1995-received its scheduled airline March 2004, started international operations with a
flight to Srilanka April 2007, took over Air Sahara, which was later on
renamed as JetLite.
Domestic passenger traffic(for Jul 09)
Jet Airways-JetLite combine - 26.3%*Kingfisher Airlines - 23 %NACIL - 16.2%
Low-cost carriersIndigo - 14%Spicejet - 12.5%
*SOURCE: CMIE
Marketing Segmentation-jet
Demographic segmentation Jet has two economy class subsidiaries, namely Jet Lite and
Jet Airways Konnect
Psychographic segmentation Golden Jet Escapes Jetkids which is a special program for children aged 2 to 12 Jet mall in partnership with ELVY-premier and domestic
Behavioral segmentation Jet Privilege- for frequent flyers Jet Mobile
Marketing Segmentation-Air India
Demographic - Business and economy class
Psychographic - national carrier as a household name.
Behavioural - still preferred airline for the govt staff and
old clientele.
Air India- a. Attribute positioning
The Maharaja mascot exists since 1948 -positioning using years of existence
Strategies Adopted-Jet Airways
Refilling ATF in hubs in north east for its flights where people switch connecting flights
Reason- ATF prices low
Code sharing and alliance
Opened a new hub in Brussels, the first of its kind
Planning to build a five star hotel near Brussels airport at a sprawling 15 acres
Only airline which has exclusive fleets Amritsar-London-Toronto
S.B.U
Market Share
(Jet Airways
Jet lite)%
Market Share
(Largest Competitor)
Kingfisher
Relative
Market
Share
Market Growth Rate %
Quadrant in which the SBU lies
Passenger
Traffic
23.7(as on 30th June
09)
25.3(as on 30th June 09)
0.936-3.062
(FY08-09)
Question
Mark
BCG TABLE
Overall Average Market Growth of passenger flights = -6.8% (Fiscal Yr. 08-09)Average Market Growth of passenger flights of JET AIRWAYS= -3.08% (Fiscal Yr. 08-09)
MARKET ATTRACTIVENESSFACTORS WEIGHTAGE GRADE TOTAL
MARKET GROWTH RATE
0.25 3 0.75
MARKET SIZE 0.25 2 0.5
COMPETITIVE ENVIRONMENT
0.20 3 0.6
PROFITABILITY 0.20 2 0.4
DEMAND PATERN 0.10 2 0.4
TOTAL 1.0 12/25 2.65
SBU’S STRENGTHFACTORS WEIGHTAGE GRADE TOTAL
MARKET SHARE 0.25 4 1
BRAND SRENGTH 0.20 4 0.8
RELATIVE PRICE 0.20 3 0.6
QUALITY 0.15 3 0.45
MANAGEMENT STRENGTH
0.20 3 0.6
TOTAL 1.0 14/25 3.45
3.67 2.33 15
3.67
2.33
SBU STRENGTHM
ARKE
T AT
TRAC
TIVE
NES
S
GE MATRIX
PASSENGER FLIGHTSJET AIRWAYS (Combined)23.7%
1
LOW
MEDIUM
HIG
H
STRONG
MED
IUM
WEAK
(3.45 , 2.65)
Product
Market
Present New
Present Market Penetration Product Development
New Market Development Diversification
Jet Airways
Market Penetration
Jet Airways JP Miles for frequent flyers Jet Cargo Services Advertisements Jet Lite Service
Market Penetration
International Star-Alliance membership
Targeting potential customers travelling in AC by rail
Market Development
Product Development
• Jet Konnect—a new service 15% cheaper than Jet airways launched in domestic and very soon in international routes.
• Jet Escapes travel package
SWOT ANALYSISSTRENGTHS•Financial restructuring•Access to financial resources•Product , Price, Place
WEAKNESSES•3 billion $ debt due to expansion•Massive fleet expansion•Acquisition of loss making Air Sahara 1450 crores it became a big liabilty.•Low capacity utilization.(low seat factor)
OPPORTUNITIES•New expansion to middle east routes•Increase FDI stake can raise foreign capital•Untapped air cargo markets
THREATS•High and rising ATF prices.•Economic recession•Competition •Advancement in telecom technology for example teleconferencing, telepresence
HELPFUL(in achieving the objective) HARMFUL(in achieving the objective)
INTE
RNAL
ORI
GIN
(att
ribut
es o
f the
or
gani
satio
n)
EXTE
RNAL
ORI
GIN
( att
ribut
es o
f the
en
viro
nmen
t)
OBJECTIVE• TO UNDERSTAND THE CONSUMER BEHAVIOR
OF INDIANS TRAVELLING BY AIR.• TO DETERMINE THE CURRENT SCENARIO IN
AVIATION INDUSTRY.
1. How do you choose an airline to travel ?
27%
20%40%
6%5% 3%
SERVICECOMFORTDISCOUNTSWORD OF MOUTHSECURITYOTHERS
3. Reasons for last air travel?
14%
21%
19%
46%LEISURE/SIGHTSEEINGOFFICIALSTUDYVISITING FRIENDS/RELAT-IVES
5. How do u rate services offered by following airlines?
JET AIRWAYS
KINGFISHER
NACIL
INDIGO
SPICEJET
0 10 20 30 40 50 60 70
VERY GOODGOODPOORVERY POOR
6. What do you think about no frill/low cost airlines?
52%
10%
33%
2%3%
I THINK THEY ARE GREAT IDEAI DON'T FULLY UNDER-STAND HOW THEY ARE DIFF FROM OTHER AIRLINESI THINK HOSPITALITY SERVICES ARE POOR IN LCCTHE AIRPORTS THEY USED ARE LESS CONVENIENT TO REACHOTHERS
7. how do you perceive Jet as a brand?
15%
47%
34%
5%
LUXURYCOMFORT COMES AT A COSTCATERING TO ALL CLASSES OF PEOPLECATERING MAINLY TO ELITE CLASSES OF PEOPLE
8. What factors do you consider before buying a airline ticket ?
17%
17%
17%17%
17%
17%
AVBLTY OF TCKTSAIRPORT LOCATIONPRICE OF THE TCKTSSAFETY & RELIABILITYQUALITY & SERVICESTRAVEL WITH A NATIONAL AIRLINE
9. What do you think about the following economy classes of Jet?
VERY GOOD SERVICE
NOT VERY IMPRESSIVE
NO IDEA ABOUT THE SERVICES OFFERED
0 10 20 30 40 50 60
JET LITEJET KONNECT
10. Which discount is attractive?
25%
25%25%
25%
10% OFF ON ONE TCKT50% OFF ON THE SECOND TCKTCHILD TRAVELS FOR FREE WITH PARENTSDISCOUNTS IF NUMBER OF BOOKINGS GRT THAN 4
CONCLUSION
• Thus we see in our survey that there is a sustained demand for low-cost carriers triggered by the economic downturn. Jet’s low cost carriers Jet Konnect & Jet Lite will enable Jet to survive in this environment.
• Once the economy bounces back to its bullish levels Jet can expect a huge growth in revenues from its full service carrier and until then low cost services will rule the day.
Suggestions People welcome economy class flights.
Low cost airlines need to advertise more to position themselves in the minds of people
Jet is perceived as a comfort brand
People look for discounts more than any other factor when choosing an airline to fly with.
Questionnaire
Who is the chairman of Jet?
What is the code of Jet Airways?
Name the recently introduced low cost carrier of Jet?
Questionnaire
Which airline was taken over by Kingfisher?
Name the brand ambassador, a famous personality who had recently quit from the Board of Directors of Jet Airways ?
Who is the owner of Go-Air?