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Transcript of Airlines
Airline Industry
Javeed budhwani
Airline Industry in India
454 airports and airstrips
(includes Operational, Non Operational, Abandoned and Disused Airports)
127 are owned & operated by AAI
16 - international, 7 custom airports, 28 civil enclaves
Scheduled domestic air services - available from 82 airports
May 2007- May 2008
25.5 million domestic & 22.4 million international passengers
20% growth – highest in the world
Growth Rate Projections (for next 5 yrs)
15% p.a (Passenger Traffic)
11.4% p.a (Cargo Traffic)
History• 1911 first commercial flight airmails from allahabad to nani (10 km)• 1932 the aviation department of tata sons ltd . Established • 1938 tata airlines (successor to aviation sivision of tata son )• 1946 Tata Air Lines converted into a public Company and
renamed Air India Limited• 1948 Air India International incorporated• 1953 Nationalization of Aircraft Industry Air India (serving the international sectors)
Indian Airlines (serving domestic sectors)
Deccan Airways, Airways India, Bharat Airways,
Himalayan Aviation, Kalinga Airlines, Indian National
Airways and Air Services of India
History1986 Private Sector Players permitted as Air taxi operators
Players including Jet, Air Sahara, NEPC, East West,
Modiluft, etc started service
1990 Open sky policy
1994 Private Carriers permitted to operate scheduled services
2003 Entry of low-cost carriers
2007 Merger of Indian Airlines into Air India
Acquisition of Air Sahara by Jet Airways
2008 Kingfisher acquired 49% stake in Deccan Aviation
Regulatory Authorities• Ministry of Civil Aviation
Responsible for the formulation of policy, development and regulation of Civil Aviation. Its functions also extend to overseeing airport facilities, air traffic services and carriage of passengers and goods by air
• Other Attached/Autonomous Organizations:
Directorate General of Civil Aviation (DGCA)
Promote safe and efficient Air Transportation through regulation and proactive safety oversight system
• Bureau of Civil Aviation Security (BCAS)
Regulatory authority for civil aviation security in India• Airport Authority of India (AAI)
Accelerate the integrated development, expansion and modernization of the operational, terminal and cargo facilities at the airports
PoliciesOpen Sky Policy
FDI
Airports
100% for green field operations
74% for existing airports - 100% with special permissions
100% tax exemptions for 10 yrs.
Airlines
49% in domestic airlines - 100% for NRI’s
74% in cargo & non-scheduled airlines
Competitive Pressure
Ser
vice
Price
Low cost Carriers changing the game
Indigo
Jet Airways 35%
Indian Airlines24%
Air Deccan 15%
Jet Lite10%
Kingf isher8%
Spice Jet6%
Others2%
Airlines Market Share
Jet Airwyas
Indian Airlines
Air Deccan
Air Sahara
Kingfisher
Spice Jet
Others
MARKET SHARE
The Kingfisher AIRLINESThe king of good times
Kingfisher airlines• Dr Vijay Mallya is the Chairman and CEO of Kingfisher
Airlines• Kingfisher Airlines Limited launched scheduled airline
services on May 9, 2005 with 4 daily flights between BOM & BLR and one A-320 aircraft.
• There are tools for mood lighting such as web chat, inseat plugins for music, liveTV with 16 channels on each seat
• 100 percent E ticket airline
VISION
• The Kingfisher Airlines family will consistently deliver a safe, value-based and enjoyable travel experience to all our guests
STP
•Geographic Region•Density•Social Classes•Income Level
Segmentation
•Kingfisher First•company executives •Kingfisher Class•lower middle, upper middle, lower upper segment
Targeting
•Lifestyle•Benefits•Quality
Positioning
SWOT Analysis• Strengths
First airline with full new fleet of aircraft
Quality hospitality provided to customers
Route rationalization
Already have training academy• Weaknesses
Service delivery to metros and other big cities
Yet not in profit
High ticket pricing
High attrition in top brass
Opportunities
Under penetrated domestic market
International market
Untapped air cargo market
Expanding tourism industry
Threats
Existing Operators
Infrastructure issue
Fuel price hike
Economic slowdown
PESTEL ANALYSIS
POLITICAL FACTORS
1) Open sky policy
2) FDI limits: 100% for Greenfield airports
74% for the existing airports
100% through special permission
49% for airlines.
ECONOMICAL FACTORS
1) Contribution to the Indian economy.
2) Rising cost of fuel.
3) Investment in the sector of aviation.
4) The growth of the middle income group family affects the aviation sector.
SOCIAL FACTORS
1) Development of cities leads to better services and airports.
2)Employment opportunities.
3)Safety regulations.
4) The status symbol attached to a plane travel
TECHNOLOGICAL FACTORS
1) The growth of e-commerce and e-ticketing.
2) Satellite based navigation system.
3) Modernisation and privatisation of the airports.
4) Developing green field airports with private sector for example in Bangalore the airport corporation limited.
ENVIRONMENTAL FACTORS
1)The increase in the global warming.
2)The sudden and unexpected behavior of the atmosphere and the dependency on whether.
3)Shortage of the infrastructural capacity
4)Tourism saturation.
LEGAL FACTORS
1) FDI limits
2) Bilateral treaties
3) Airlines acquisitions and the leasing cost.
7 P’s
Product•Fleet Size•Aircrafts•International Foray
Promotions•Advertisements•Magazine and Newspaper ads•Exposure at non-corporate event•Participation in International Airshows •Endorsing celebrities like Katrina Kaif and Yana Gupta
Process •Booking the ticket - online booking or tele-booking or from any of the kingfisher outlet
Physical Evidence•Personal valets •Exclusive lounge space •Hi! Blitz•Gourmet cuisine •world class cabin crew •5 trendy video- Fun TV; 10 music stations -Kingfisher Radio
Price•Dynamic pricing model - Multiple fare levels•Uniform rules •No hidden restrictions.•Pricing model - 8 different levels•Discounts provided from time to time
People•Backbone of the brand•Extensive trainings•Hospitality industry and consider their customer as guests•Interpersonal skills, aptitude, and service knowledge
Place•Online Booking - www.flykingfisher.com •Online Booking - Yatra.com, MakeMyTrip.com, ezeego1.com•Credit Cards & Debit Cards Payment•SMS / Call •Outlets in every major city and at every airport across the country
PORTERS FIVE FORCE
MODLE
Jet Airways Indian airlines
LCC
Virgin Atlantic Quantas Airways
Economic & demographic changesIncreasing awareness
Exposer to globle brand
Other models of transport
Fuel supplier
KINGFISHER AIRLINES Performance
• Kingfisher Airlines has posted a net loss of Rs 577 crore in the financial year ended March 2007, the balance sheet of UB Holdings, which owns the airline, shows.
Jet AirwaysFounded in 1993, Chairman - Mr.Naresh Goyal
HQ in Mumbai
Country’s second largest international airline
Largest domestic airline - 31%
Primary base - Mumbai's Chaatrapathi ShivajiAirport
Secondary hubs - Bangalore, Brussels, Chennai, Delhi,
Hyderabad, Kolkata and Pune.
April,2007 - Acquired Air Sahara - JetLite
Now JetLite integrated into Jet Airways
Mission Statement
Jet Airways will be the most preferred domestic airline in India. It will be the automatic first choice carrier for the travelling public and set standards, which other competing airlines will seek to match.
Jet Airways will achieve this pre-eminent position by offering a high quality of service and reliable, comfortable and efficient operations.
Jet Airways will be an airline which is going to upgrade the concept of domestic airline travel - be a world class domestic airline.
Jet Airways will achieve these objectives whilst simultaneously ensuring consistent profitability, achieving healthy, long-term returns for the investors and providing its employees with an environment for excellence and growth
STPPrimary Segments (Geographic) - Domestic & International
Customer Segments
First class, Premiere(Business) class & Economy class
Target Segments
Premiere(Business) class
Business travelers, contribute 48% of passengers & 66% of revenues,
ready to pay higher prices, last time booking, don’t like transit
Economy class
Leisure travelers, prefer low cost airlines, ready for transit if there is cost
advantage, large % of passengers
Seat Allocation – Yield Management Technique
Positioning – High value for High price
Unique Selling Price – Customer relationship and Punctuality
SWOT AnalysisStrengths
Market driver
Experience exceeding 14 year
Only private airline with international operation
Market leader
Largest fleet size
Weaknesses
Loosing domestic market share
Old fleet with average age around 4.79 years
Scope for improvement in in-flight service
Weak brand promotion
Opportunities
Untapped air cargo market
Scope in international service and tourism
Threats
Strong competitors
Fuel price hike
Overseas market competition
PEST AnalysisPolitical Issue
License issue for international
operation
Infrastructural constraint
ATF price policy
Economic Effects
Rising income level
Reduced fare but yet not enough
Social Effects
Sound Pollution
Plane hijacking
9/11 Incident
Technology Effects
Modernization of aircrafts
Modern technology like CAT3
and ILS
7P’sPrice
Economy & Club Premiere Fare
Discounted fare for senior citizens & defense personnel
Advance Passenger Excursion/ APEX Fares
One Fare
Night Saver Fares
Check Fares
US Dollar Fares & Visit India Fares
Place
Place of Service - Aircraft
Various Destinations
Promotion
Offers
Companion Free Offer, One Fare, Concessional fares, JetPrivilege Offers,
Jet Airways Citibank Credit Cards, Corporate Deal Offers, International
Specials, Camp Rock contest, Festival specials, Student specials, Surprises etc.
Advertising and Branding
Hoardings
Brand Ambassadors
Sponsorships
Event Organization
ProcessPeople Processing People physically enter the service system to receive the service. Aircraft is theservice factory where service is delivered.Possession Processing Cargo Luggage & CourierPhysical EvidenceServicescape Servicescape usage - Interpersonal Complexity of Servicescape - ElaborateFlightOffices - Org. & Ticket Booking AgentsVirtual Servicescape
Jet Airways - Performance
Annual Revenues - Rs.9481.5 crores (2007-08)
Rs.7401 crores (2006-07)
Profit(Loss) After Tax - Rs.253 crores loss (2007-08)
Rs.27 crores profit (2006-07)
- All Other Domestic Players showed loss(2006-07)
Kingfisher•Kingfisher is one of the latest Airlines in INDIA.•Overall growth in year 2006-07 is 37%.•Kingfisher acquired 46% share in Air Deccan.•Domestic airlines poised to go international flights
Jet Airways
•Jet Airways is the experienced airline in INDIA.•Overall growth in year 2006-07 is 16%.•Jet airways acquired Air Sahara in 2006.•Jet Airways already has domestic as well as international flights.
Kingfisher•In a short span of 2 years its market share has become 28% including Air Deccan.•Personal in-flight entertainment in every seat. •It was awarded the ‘Best New Airline Of the Year’ award.•Already have training academy
Jet Airwayss
•Jet Airways has its market share 31% including Air Sahara.•Average entertainment services.•Jet Airways won Double Honour Travel Trade Gazette Travel award.•They are plan to start training academy.
THANK YOU