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STUDY OF INDIAN AVIATION INDUSTRY

PROJECT REPORT

In

Research Methodology in Business

Post-Graduate Diploma in Business Management

Submitted to: Submitted by:

Dr. S.R.Dash Kalimul Haque (BM 010194)

Prof. Sanjay Mangla Ramkrishna Das (BM 010201)

Shubhra Singh (BM 010205)

Viraj Goyal (BM 010209)

INSTITUTE OF MANAGEMENT STUDIESLAL QUAN, GHAZIABAD 201009

Acknowledgements

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First of all, I would like to thank the Almighty for providing me with the strength to

complete this project.

I am highly obliged to have support of my faculties Dr. S.R.Dash and Prof. Sanjay

Mangla without which it was not possible to take up this activity.

An undertaking of work life, this is never an outcome of a single person; rather it bears

the imprints of a number of people who directly or indirectly helped us in completing the

present study. We would have failed in our duties if we dont say a word of thanks to all

those who made our report a grand success.

My sincere thanks also goes to our friends, peers and colleagues for supporting at every

juncture which helped us complete this project work in time and without which we would

not have been able to unravel several mysteries of the Aviation Industry.

DECLARATION CERTIFICATE

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Here by we declare that, we students of 1st year of Post Graduate Diploma Of

Management, have prepared a Research Methodology In Business project entitled asA

PROJECT REPORT ON AVIATION INDUSTRY IN INDIA.

By own efforts and research.

Kalimul Haque (BM 010194)

Ramkrishna Das (BM 010201)

Shubhra Singh (BM 010205)

Viraj Goyal (BM 010209)

CERTIFICATE FROM THE PROJECT SUPERVISOR

This is to cer tify that KALIMUL HAQUE (BM-010194) RAMKRISHNA DAS (BM-

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010201) ,SHUBHRA SINGH(BM-010205) , VIRAJ GOYAL(BM-010209) students of

1st year of Post Graduate Diploma Of Management, have prepared a Research

Methodology In Business project entitled asA PROJECT REPORT ON AVIATION

INDUSTRY IN INDIA, as a part of partial fulfillment of requirement of post

graduate diploma of management by INSTITUTE OF MANAGEMENT

STUDIES, GHAZIABAD.

Dr. S.R.Dash

Prof. Sanjay Mangla

(Faculties of Research methodology in

business)

TABLE OF CONTENTS

(i) Declaration Certificate 3

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(ii) Certificate From The Project Supervisor 4

(iii) Acknowledgement...2

(iv) Introduction 7

(v) Objective 9

(vi) Present Indian Scenario 11(vii) Boom And Bust in Indian Aviation Industry After LCC 13

(viii) Impact Of Rising Fuel Prices on the Industry.13

(ix) Research methodology 10

(x) Airlines Under Study 16

(1) Kingfisher Airlines .16

(2) Jagson Airlines 17

(3) Jet Airways .........17

(4) Singapore Airlines ..18

(5) Spicejet 18

(6) Emirates ..20

(7) British airways .21

(xi) Recommendations 30

(xii) Conclusion 31

(xiii) Refrences .32

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List of Tablesand Graphs

Table (1)14

Table (2)15

Table (3)22

Table (4)24

Table (5)26

Table (6)27

Table (7)29

Table (8)31

Table (9)33 Graph (1) 14

Graph (2) 15

Graph (3) 23

Graph (4) 25

Graph (5) 26

Graph (6) 28

Graph (7)..30

Graph (8)..32

Graph (9) ...34

INTRODUCTION6

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Air India was set up by J.R.D. Tata, who ran it successfully until it was nationalized in

1953. In the 1960s the Maharaja, as the national flag-carrier was affectionately known,

was flying to 32 destinations (it now flies to 46 destinations) and making profits. For

many years in India air travel was perceived to be an elitist activity. This view arose from

the Maharajah syndrome where, due to the prohibitive cost of air travel, the only people

who could afford it were the rich and powerful. In recent years, however, this image of

Civil Aviation has undergone a change and aviation is now viewed in a different light - as

an essential link not only for international travel and trade but also for providing

connectivity to different parts of the country. Aviation is, by its very nature, a critical part

of the infrastructure of the country and has important ramifications for the development

of tourism and trade, the opening up of inaccessible areas of the country and for

providing stimulus to business activity and economic growth. Until less than a decade

ago, all aspects of aviation were firmly controlled by the Government.

In the early fifties, all airlines operating in the country were merged into either Indian

Airlines or Air India and, by virtue of the Air Corporations Act, 1953 this monopoly was

perpetuated for the next forty years. The Directorate General of Civil Aviation controlled

every aspect of flying including granting flying licenses, pilots, certifying aircrafts for

flight and issuing all rules and procedures governing Indian airports and airspace. Finally,the Airports Authority of India was entrusted with the responsibility of managing all

national and international airports and administering every aspect of air transport

operation through the Air traffic Control.

With the opening up of the Indian economy in the early Nineties, aviation saw some

important changes. Most importantly, the Air Corporation Act was repealed to end the

monopoly of the public sector and private airlines were reintroduced. Domestic

liberalization took off in 1986, with the launch of scheduled services by new start-up

carriers from 1992. A number of foreign investors took an interest. Modiluft closed after

failing to meet financial obligations to lassoers and its technical partner, Lufthansa. In

1996-1998, Tata and SIA tried to launch a domestic carrier, but the civil aviation minister

had publicly stated his opposition on numerous occasions (Airline Business 1998).

The Indian government introduced the open sky policy for domestic players in 1991 and

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partial open sky policy for international players only in November 2004. Increasing

liberalization and deregulation has led to an increase in the number of players. The

industry comprises three types of players full cost carriers, low cost carriers (LCC) and

many start-up airlines that are making/planning an entry.

OBJECTIVE

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1- Study of Indian Aviation Industry as a whole.

2- Study of following Airlines in Indian Aviation Industry in terms

of expenditure, profits and passengers.

Kingfisher Airlines.

Jagson Airlines.

Jet Airways.

Singapore Airlines.

Spicejet.

Emirates.

British Airways.

RESEARCH METHODOLOGY

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The research is mainly based on the secondary data collected from various sources. One

of these sources is the internet.

Some for the tools being used in this research is MS Excel and SPSS.

Basic formulas that are being used are as follows:-

TREND ANALYSIS:-

Y = a + bx

=> y = N*a + b x ..(i)

=> (xy) = a x + b x^2 .(ii)

CORRELATION:-

Present Indian Scenario

India is one of the fastest growing aviation markets in the world. The Airport Authority

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of intense price competition with the incumbent full service carriers (Jet, Indian, Air

Sahara) disk-counting up to 60-70% for certain routes to match the new entrants ticket

prices. This, coupled with costs pressures (a key cost element, ATF price, went up

approximately 35% in recent months, while staff costs are also rising on the back of

shortage of trained personnel), is exerting bottom-line pressure.

The growth in supply is overshadowed by the extremely strong demand growth, led

primarily by the conversion of train/bus passengers to air travel, as well as by the fact that

low fares have allowed passengers to fly more frequently. There has, therefore, been an

increase in both the width and depth of consumption. However, the regulatory

environment, infrastructure and tax policy have not kept pace with the industrys growth.

Enactment of the open sky policy between India and SAARC countries, increase in

bilateral entitlements with the EU and the US, and aggressive promotion of India as an

attractive tourism spot helped India attract 3.2 million tourists in 2004-05. This market is

growing at 15% per annum and India is expected to attract 6 million tourists by 2010.

Also, increasing per capita income has led to an increase in disposable incomes, leading

to greater spend on leisure and holidays and business travel has risen sharply with

increasing MNC presence. Smaller cities are also well connected now. Passenger traffic

has increased and over 21 million seats have been sold, resulting in a growth of over

50%. The Indian travel market is expected to triple to $51 billion by 2011 from $16.3billion in 2005-06.

BOOM AND BUST IN INDIAN AVIATION INDUSTRY AFTER LCC

Air India and Indian Airlines retained a monopoly over civil aviation in India till 1992.

The deregulation of the Indian economy that started in the mid-1980s, and proceeded

more aggressively after the New Economic Policy in 1991, led to calls for opening up of

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the airline sector. Over the following years, several new airlines including Damania, East

West, Jet, Sahara, Modiluft and NEPC started operations. However, high fuel costs, poor

infrastructure, and a regulation that required them to fly on routes to distant parts of the

country as well as on non-trunk routes threatened their financial viability.

By 1997, Damania, Modiluft, East West and NEPC were forced to suspend services. Jet

and Sahara were thus the only survivors of the first phase of liberalization of the Indian

domestic airline industry. In 2003, Jet, Sahara, and Indian Airlines shared the market

between themselves with market shares of 46%, 9% and 40% respectively in the year-

ending March 31, 2003.

Impact of Rising Fuel Prices on the Industry:

The high price of fuel is killing the profitability. In two years the industry fuel bill more

than doubled to nearly US$100 billion23% of operating costs. And there is no relief in

sight. So what are airlines to do? Improve efficiency is the answer. Progress to date has

been dramatic. The break-even price of fuel rose from US$22 per barrel in 2003 to nearly

US$50 in 2005. Unfortunately, fuel prices are above that. Airlines will not return to

profitability until 2007 when we expect a break-even fuel price of US$55. Even then the

projected profit is only US$6 billion. Asia will remain profitable in 2006 posting US$2

billion in profit. That is still less than a 2% net margin.

ESTIMATION OF SALES:

TABLE-1

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GRAPH-1

INTERPRETATION:

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YEAR SALES

(CRORES)

2003 13281.06

2004 15303.39

2005 18632.05

2006 24061.09

2007 29096.25

2008 24320.28

2009 30982.76

2010 33897.15

2011 36811.54

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The forecasted sales for the year 2011 is estimated to be Rs. 36811.54

ESTIMATION OF NET PROFIT:

TABLE-2

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YEAR NET PROFIT (CRORES)

2003 -379.22

2004 356.97

2005 532.73

2006 -99.18

2007 -2191.98

2008 -2120.91

2009 -8336.81

2010 -5498.78

2011 -2659.87

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GRAPH-2

INTERPRETATION: The forecasted net profit for the year 2011 is estimated to be

Rs. -2659.8

AIRLINES UNDER STUDY

KINGFISHER AIRLINES:

Kingfisher Airline is a private airline based in Bangalore, India. The airline is owned by

Vijay Mallya of United Beverages Group. Kingfisher Airlines started its operations on

May 9, 2005 with a fleet of 4 Airbus A320 aircrafts. The airline currently operates on

domestic routes. The destinations covered by Kingfisher Airlines are Bangalore,

Mumbai, Delhi, Goa, Chennai, Hyderabad,Ahmedabad, Cochin, Guwahati, Kolkata,

Pune, agartala, Dibrugarh, Mangalore and Jaipur.In a short span of time Kingfisher

Airline has carved a niche for itself. The airline offers several unique services to its

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customers.

These include: Personal valet at the airport to assist in baggage handling and boarding,

exclusive lounges with private space, accompanied with refreshments and music at the

airport, audio and video on-demand, with extra-wide personalized screens in the aircraft,

sleeperette seats with extendable footrests, and three courses Gourmet cuisine.

Kingfisher Airlines currently operates with a brand new fleet of 8 Airbus A320 aircraft, 3

Airbus A319-100 aircraft and 4 ATR-72 aircraft. It was the first airline in India to operate

with all new aircrafts. Kingfisher Airlines is also the first Indian airline to order the

Airbus A380. It placed orders for 5 A380s, 5A350-800 aircrafts and 5 Airbus A330-200

aircrafts in a deal valued at over $3billion on June 15, 2005. Delivery of the A330s is due

to start in late 2007, followed by the A380s in 2010 and the A350s in 2012.

JAGSON AIRLINES

Jagson Airlines is an airline based in Delhi, India. It operates scheduled and charter

services within India and to Bhutanand Nepal. The airline was established and started

operations in November 1991. It began charter operations with two 18-seat Dornier 228-

201 aircraft and later operated regular services from Delhi. It is wholly owned by Jagson

International. In 2006 they announced plans to expand their services to 9 cities, using

leased Airbus A321-200 aircraft. Jagson have withdrawn plans to launch a nationwide

scheduled low-cost airline by mid-2006 and plan to continue as a regional airline.

Jagson has recently taken deliveries of RJ 80s / BAe 146-200s Avro Regional Jets. They

will be starting operations to all their previous routes shortly. Efforts are on to merge the

earstwhile MDLR, which operated the same type of aircraft , and form a 5 aircraft airline.

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http://en.wikipedia.org/wiki/Airlinehttp://en.wikipedia.org/wiki/Airlinehttp://en.wikipedia.org/wiki/Delhihttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Bhutanhttp://en.wikipedia.org/wiki/Bhutanhttp://en.wikipedia.org/wiki/Nepalhttp://en.wikipedia.org/wiki/Dornier_Do_228http://en.wikipedia.org/wiki/Dornier_Do_228http://en.wikipedia.org/wiki/Airbus_A320http://en.wikipedia.org/wiki/Delhihttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Bhutanhttp://en.wikipedia.org/wiki/Nepalhttp://en.wikipedia.org/wiki/Dornier_Do_228http://en.wikipedia.org/wiki/Dornier_Do_228http://en.wikipedia.org/wiki/Airbus_A320http://en.wikipedia.org/wiki/Airline

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JET AIRWAYS

Jet Airways is Indias premier private airlines. Naresh Goyal is currently the chairman of

Jet Airways. Jet Airways operates over 320 flights daily to 43 destinations in India and

currently controls about 40% of Indias aviation market. Jet Airways was the first privateairline of India to fly to international destinations. It operates daily international flights to

Colombo, Katmandu,Singapore, Kuala Lumpur and London (Heathrow). Jet Airways has

won a number of awards in recognition of standards of its service and has also received

the ISO 9001:2000 certification for its In-flight Services. Jet Airways was established on

3 May 1991 with a fleet of 4 Boeing 737-300 aircraft, with 24 daily flights serving 12

destinations. Jet Airways presently operates 55 aircrafts and is now a public limited

company. Its fleet of 55 aircrafts include 3 Airbus 340-300E, 4 Boeing 737-800, 1 Airbus

330-200, 1 Boeing 737-700, 18 Boeing 737-800, 8 ATR 72-500, 2 Boeing 737-900, 12

Boeing737-700, and 6 Boeing 737-400. Jet Airways was recently involved in a

controversy. On January 19, 2006 Jet Airways announced its decision to buy fellow

airlines Air Sahara for 500million in an all-cash deal. The deal was touted as the biggest

in Indias aviation history. But the deal fell midway and now the two parties are involved

in a fierce court battle.

SINGAPORE AIRLINES

Singapore Airlines was the launch customer of Airbus A380 Superjumbo. SIA has

diversified airline-related businesses, such as aircraft handling and engineering. Its

wholly-owned subsidiary, SilkAir, manages regional flights to secondary cities with

smaller capacity requirements. Subsidiary Singapore Airlines Cargo operates SIA's

dedicated freighter fleet, and manages the cargo-hold capacity in SIA's passenger aircraft.

SIA has a 49% shareholding in Virgin Atlanticand engages the low-cost carriersector

through its stake in Tiger Airways. It ranks amongst the top 15 carriers worldwide in

terms ofrevenuepassenger kilometres, and 10th in the world for international passengers

carried. On December 15, 2010, Singapore Airlines was announced by the International

Air Transport Association as the world's second largest airline in the world by market

capitalisation with a worth of 14 billion dollars.

Singapore Airlines is the "world's most admired airline" and ranked 27th on Fortune

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http://en.wikipedia.org/wiki/Airbus_A380http://en.wikipedia.org/wiki/Airbus_A380http://en.wikipedia.org/wiki/Airbus_A380http://en.wikipedia.org/wiki/SilkAirhttp://en.wikipedia.org/wiki/SilkAirhttp://en.wikipedia.org/wiki/Singapore_Airlines_Cargohttp://en.wikipedia.org/wiki/Virgin_Atlantichttp://en.wikipedia.org/wiki/Virgin_Atlantichttp://en.wikipedia.org/wiki/Low-cost_carrierhttp://en.wikipedia.org/wiki/Tiger_Airwayshttp://en.wikipedia.org/wiki/Tiger_Airwayshttp://en.wikipedia.org/wiki/Revenuehttp://en.wikipedia.org/wiki/Revenuehttp://en.wikipedia.org/wiki/International_Air_Transport_Associationhttp://en.wikipedia.org/wiki/International_Air_Transport_Associationhttp://en.wikipedia.org/wiki/Fortune_(magazine)http://en.wikipedia.org/wiki/Airbus_A380http://en.wikipedia.org/wiki/SilkAirhttp://en.wikipedia.org/wiki/Singapore_Airlines_Cargohttp://en.wikipedia.org/wiki/Virgin_Atlantichttp://en.wikipedia.org/wiki/Low-cost_carrierhttp://en.wikipedia.org/wiki/Tiger_Airwayshttp://en.wikipedia.org/wiki/Revenuehttp://en.wikipedia.org/wiki/International_Air_Transport_Associationhttp://en.wikipedia.org/wiki/International_Air_Transport_Associationhttp://en.wikipedia.org/wiki/Fortune_(magazine)

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World's Most Admired Companies rankings in 2010. It has a strong brandname and is a

trendsetter in the aviation industry, particularly in terms of innovation, safety and service

excellence, coupled with consistent profitability. It has won numerous awards, and is an

industrybellwetherfor aircraft purchases. SIA is one of the seven airlines to be ranked as

a 5-star airline by the independent research consultancy firmSkytrax.

SPICEJET

SpiceJet, Indias leading low cost airline, is a reincarnation of ModiLuft. It is promoted

by Ajay Singh and the Kansagra family. SpiceJet marked its entry in the Indian skies with

99 fares for the first 99 days, with 9,000 seats available at this rate.

This deal was followed it up with a 999 promotional scheme on select routes. Their

marketing theme offering low everyday spicy fares and great guest services to price

conscious travelers. Their aim is to compete with the Indian Railways passengers

19rivatiza in air conditioned coaches.

On 15 July 2008 Billionaire Wilbur Ross suggested he would invest 345 crore

(US$74.86 million) in the low cost airline. The board of directors of SpiceJet accepted an

offer in-principle from the US-based PE firm that would make available about 345 crore

(US$74.86 million) to SpiceJet, a joint statement issued by SpiceJet and WL Ross & Co.

Indian media baron Kalanidhi Maran acquired a major stake (37.7%) in this airline on

June 2010. On December 9, 2010, SpiceJet made a firm order for 15 Bombardier Dash 8

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http://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Bellwetherhttp://en.wikipedia.org/wiki/Bellwetherhttp://en.wikipedia.org/wiki/Skytraxhttp://en.wikipedia.org/wiki/Skytraxhttp://en.wikipedia.org/wiki/ModiLufthttp://en.wikipedia.org/wiki/Indian_Railwayshttp://en.wikipedia.org/wiki/Indian_Railwayshttp://en.wikipedia.org/wiki/Wilbur_Rosshttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/Kalanidhi_Maranhttp://en.wikipedia.org/wiki/Bombardier_Dash_8#Series_400http://en.wikipedia.org/wiki/Indian_rupeehttp://en.wikipedia.org/wiki/Indian_rupeehttp://en.wikipedia.org/wiki/Indian_rupee_signhttp://en.wikipedia.org/wiki/Indian_rupee_signhttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Bellwetherhttp://en.wikipedia.org/wiki/Skytraxhttp://en.wikipedia.org/wiki/ModiLufthttp://en.wikipedia.org/wiki/Indian_Railwayshttp://en.wikipedia.org/wiki/Wilbur_Rosshttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/Kalanidhi_Maranhttp://en.wikipedia.org/wiki/Bombardier_Dash_8#Series_400

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Q400 and options for another 15.

EMIRATES

Emirates is thenational airline ofDubai,United Arab Emirates. It is the largestairline in

the Middle East, operating over 2,400 passenger flights per week, from its hub at Dubai

International Airport Terminal 3, to 105 cities in 62 countries across six continents. The

company also operates three of the ten world's longestnon-stop commercial flights from

Dubai to Los Angeles, San Francisco and Houston. Emirates is a subsidiary of The

Emirates Group, which has over 50,000 employees, and is wholly-owned by the

Government of Dubai directly under the Investment Corporation of Dubai. Cargo

activities are undertaken by the Emirates Group's Emirates SkyCargo division.

During the mid-1980s, Gulf Air began to cut back its services to Dubai. As a result

Emirates was conceived in March 1985 with backing from Dubai's royal family, whose

Dubai Royal Air Wing provided two of the airline's first aircraft. It was required to

operate independent of government subsidies, apart from $10 million in start-up capital.

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http://en.wikipedia.org/wiki/Bombardier_Dash_8#Series_400http://en.wikipedia.org/wiki/National_airlinehttp://en.wikipedia.org/wiki/National_airlinehttp://en.wikipedia.org/wiki/Dubaihttp://en.wikipedia.org/wiki/Dubaihttp://en.wikipedia.org/wiki/United_Arab_Emirateshttp://en.wikipedia.org/wiki/United_Arab_Emirateshttp://en.wikipedia.org/wiki/Airlinehttp://en.wikipedia.org/wiki/Airlinehttp://en.wikipedia.org/wiki/Middle_Easthttp://en.wikipedia.org/wiki/Dubai_International_Airporthttp://en.wikipedia.org/wiki/Dubai_International_Airporthttp://en.wikipedia.org/wiki/Emirates_destinationshttp://en.wikipedia.org/wiki/Non-stop_flighthttp://en.wikipedia.org/wiki/Non-stop_flighthttp://en.wikipedia.org/wiki/Los_Angeleshttp://en.wikipedia.org/wiki/San_Franciscohttp://en.wikipedia.org/wiki/San_Franciscohttp://en.wikipedia.org/wiki/Houstonhttp://en.wikipedia.org/wiki/Houstonhttp://en.wikipedia.org/wiki/The_Emirates_Grouphttp://en.wikipedia.org/wiki/The_Emirates_Grouphttp://en.wikipedia.org/wiki/Politics_of_the_United_Arab_Emirateshttp://en.wikipedia.org/wiki/Investment_Corporation_of_Dubaihttp://en.wikipedia.org/wiki/Investment_Corporation_of_Dubaihttp://en.wikipedia.org/wiki/Emirates_SkyCargohttp://en.wikipedia.org/wiki/Gulf_Airhttp://en.wikipedia.org/wiki/Al_Maktoumhttp://en.wikipedia.org/wiki/Al_Maktoumhttp://en.wikipedia.org/wiki/Dubai_Royal_Air_Winghttp://en.wikipedia.org/wiki/Financial_capitalhttp://en.wikipedia.org/wiki/Bombardier_Dash_8#Series_400http://en.wikipedia.org/wiki/National_airlinehttp://en.wikipedia.org/wiki/Dubaihttp://en.wikipedia.org/wiki/United_Arab_Emirateshttp://en.wikipedia.org/wiki/Airlinehttp://en.wikipedia.org/wiki/Middle_Easthttp://en.wikipedia.org/wiki/Dubai_International_Airporthttp://en.wikipedia.org/wiki/Dubai_International_Airporthttp://en.wikipedia.org/wiki/Emirates_destinationshttp://en.wikipedia.org/wiki/Non-stop_flighthttp://en.wikipedia.org/wiki/Los_Angeleshttp://en.wikipedia.org/wiki/San_Franciscohttp://en.wikipedia.org/wiki/Houstonhttp://en.wikipedia.org/wiki/The_Emirates_Grouphttp://en.wikipedia.org/wiki/The_Emirates_Grouphttp://en.wikipedia.org/wiki/Politics_of_the_United_Arab_Emirateshttp://en.wikipedia.org/wiki/Investment_Corporation_of_Dubaihttp://en.wikipedia.org/wiki/Emirates_SkyCargohttp://en.wikipedia.org/wiki/Gulf_Airhttp://en.wikipedia.org/wiki/Al_Maktoumhttp://en.wikipedia.org/wiki/Dubai_Royal_Air_Winghttp://en.wikipedia.org/wiki/Financial_capital

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The airline became headed by Ahmed bin Saeed Al Maktoum, the airline's present

chairman. In the years following its founding, the airline expanded both its fleet and its

destinations. In October 2008, Emirates moved all operations at Dubai International

Airport to Terminal 3, a new terminal exclusively dedicated to Emirates to sustain its

rapid expansion and growth plans.

Emirates operates a mixed fleet ofAirbus and Boeingwide-body aircraft and is one of

only nine airlines to operate an all-wide-body aircraft fleet, whose centrepiece is the

Boeing 777. Emirates also has orders for 90 Airbus A380s with 15 of them already in

service and became the second operator of the Airbus A380-800 afterSingapore Airlines

when their first aircraft was delivered on 28 July 2008. Emirates has won numerous

awards and is an industry bellwetherfor aircraft purchases, purchasing over 130 aircraft

in 2007 alone.

BRITISH AIRWAYS

British Airways plc (BA) is the flag carrierairline of the United Kingdom which is

based and headquartered in Waterside, near its main hub at London Heathrow

Airport. British Airways operates a second hub at Gatwick Airport and a third hub,

served through its fully owned subsidiary, BA CityFlyer, atLondon City Airport.

British Airways is the largest airline in the UK based on fleet size, international

flights and international destinations. BAs UK passengers originating at non-

London airports must connect via London after British Airways discontinued all

direct overseas flights from UK airports outside London following the sale of BAConnect to British regional carrier Flybe in 2007. The British Airways Board was

established in 1971 to control the two 21rivatizatio airline corporations, BOAC and BEA,

and two much smaller regional airlines, Cambrian Airways from Cardiffand Northeast

Airlines from Newcastle upon Tyne. On 31 March 1974 all four companies were

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http://en.wikipedia.org/wiki/Ahmed_bin_Saeed_Al_Maktoumhttp://en.wikipedia.org/wiki/Dubai_International_Airport#Terminal_3http://en.wikipedia.org/wiki/Airbushttp://en.wikipedia.org/wiki/Boeinghttp://en.wikipedia.org/wiki/Wide-body_aircrafthttp://en.wikipedia.org/wiki/Boeing_777http://en.wikipedia.org/wiki/Airbus_A380http://en.wikipedia.org/wiki/Singapore_Airlineshttp://en.wikipedia.org/wiki/Bellwetherhttp://en.wikipedia.org/wiki/Flag_carrierhttp://en.wikipedia.org/wiki/Airlinehttp://en.wikipedia.org/wiki/Waterside_(building)http://en.wikipedia.org/wiki/Airline_hubhttp://en.wikipedia.org/wiki/London_Heathrow_Airporthttp://en.wikipedia.org/wiki/London_Heathrow_Airporthttp://en.wikipedia.org/wiki/London_Heathrow_Airporthttp://en.wikipedia.org/wiki/Gatwick_Airporthttp://en.wikipedia.org/wiki/BA_CityFlyerhttp://en.wikipedia.org/wiki/London_City_Airporthttp://en.wikipedia.org/wiki/London_City_Airporthttp://en.wikipedia.org/wiki/BA_Connecthttp://en.wikipedia.org/wiki/BA_Connecthttp://en.wikipedia.org/wiki/Flybehttp://en.wikipedia.org/wiki/British_Overseas_Airways_Corporationhttp://en.wikipedia.org/wiki/British_European_Airwayshttp://en.wikipedia.org/wiki/Cambrian_Airwayshttp://en.wikipedia.org/wiki/Cambrian_Airwayshttp://en.wikipedia.org/wiki/Cardiffhttp://en.wikipedia.org/wiki/Northeast_Airlines_(UK)http://en.wikipedia.org/wiki/Northeast_Airlines_(UK)http://en.wikipedia.org/wiki/Newcastle_upon_Tynehttp://en.wikipedia.org/wiki/Newcastle_upon_Tynehttp://en.wikipedia.org/wiki/Ahmed_bin_Saeed_Al_Maktoumhttp://en.wikipedia.org/wiki/Dubai_International_Airport#Terminal_3http://en.wikipedia.org/wiki/Airbushttp://en.wikipedia.org/wiki/Boeinghttp://en.wikipedia.org/wiki/Wide-body_aircrafthttp://en.wikipedia.org/wiki/Boeing_777http://en.wikipedia.org/wiki/Airbus_A380http://en.wikipedia.org/wiki/Singapore_Airlineshttp://en.wikipedia.org/wiki/Bellwetherhttp://en.wikipedia.org/wiki/Flag_carrierhttp://en.wikipedia.org/wiki/Airlinehttp://en.wikipedia.org/wiki/Waterside_(building)http://en.wikipedia.org/wiki/Airline_hubhttp://en.wikipedia.org/wiki/London_Heathrow_Airporthttp://en.wikipedia.org/wiki/London_Heathrow_Airporthttp://en.wikipedia.org/wiki/Gatwick_Airporthttp://en.wikipedia.org/wiki/BA_CityFlyerhttp://en.wikipedia.org/wiki/London_City_Airporthttp://en.wikipedia.org/wiki/BA_Connecthttp://en.wikipedia.org/wiki/BA_Connecthttp://en.wikipedia.org/wiki/Flybehttp://en.wikipedia.org/wiki/British_Overseas_Airways_Corporationhttp://en.wikipedia.org/wiki/British_European_Airwayshttp://en.wikipedia.org/wiki/Cambrian_Airwayshttp://en.wikipedia.org/wiki/Cardiffhttp://en.wikipedia.org/wiki/Northeast_Airlines_(UK)http://en.wikipedia.org/wiki/Northeast_Airlines_(UK)http://en.wikipedia.org/wiki/Newcastle_upon_Tyne

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dissolved to form British Airways (BA). After almost 13 years as a 22rivatizatio

company, British Airways was 22rivatizat in February 1987 as part of the 22rivatization

plan by the Conservative Government of the time. The carrier soon expanded with the

acquisition ofBritish Caledonian (BCAL) in 1987 and Gatwick-based carrierDan-Airin

1992.

ANALYSIS OF AIRLINES UNDER STUDY

KINGFISHER AIRLINES:

TABLE-3

YEAR 2006 2007 2008 2009 2010

EXPENDITURE

(Rs. CRORES) 1,398.86 2,062.61 1,781.46 5,822.37 4,818.20

INCOME

(Rs. CRORES) 1,345.06 2,142.31 1,569.90 5,868.07 4,734.62

PROFIT

(Rs. CRORES) -113.44 -262.4 -325.18 -553.2 249.72

Analysis:

In the case of Kingfisher Airlines , in the year 2006 expenditure , income and loss was

1398.86 (Rs. Cr) , 1345.06 (Rs. Cr ) and 113.44(Rs. Cr) . In the year 2007 , expenditure

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http://en.wikipedia.org/wiki/British_Caledonianhttp://en.wikipedia.org/wiki/Dan-Airhttp://en.wikipedia.org/wiki/British_Caledonianhttp://en.wikipedia.org/wiki/Dan-Air

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was 2062.61 (Rs. Cr ) and income was 2142.31 (Rs. Cr) where Kingfisher faced loss of

Rs. 262.4 (Cr) . In 2008 , expenditure , income and loss was 1781.46 (Rs. Cr) ,1569.90

(Rs .Cr ) and 325.18 (Rs . Cr) . In 2009 , expenditure , income and loss was 5822.37

(Rs. Cr) ,5868.07 (Rs .Cr ) and 553.2 (Rs . Cr) . But in 2010 , kingfisher Airlines posted

profit of 294.72 (Rs .Cr) .

Correlation is0.99855917

GRAPH-3

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JAGSON AIRLINES:

TABLE-4

YEAR 2006 2007 2008 2009 2010

EXPENDITURE

(Rs. CRORES) 397.91 667.77 1,291.80 1,741.41 1,751.35

INCOME

(Rs. CRORES) 451.97 729.62 1,438.58 1,786.48 2,242.09

PROFIT

(Rs. CRORES) 21.74 -27.33 3.19 -51.96 429.73

Analysis:

In the case of Jagson Airlines , in the year 2006 expenditure , income and profit was

397.91 (Rs. Cr) , 451.97 (Rs. Cr ) and 21.74(Rs. Cr) respectively . In the year 2007 ,

expenditure was 667.77 (Rs. Cr ) and income was 729.62 (Rs. Cr) where Jagson faced

loss of Rs. 27.33 (Cr) . In 2008 , expenditure , income and profit was 1291.80 (Rs. Cr) ,

1438.58 (Rs .Cr ) and 3.19 (Rs . Cr) . In 2009 , expenditure , income and loss was

1741.41 (Rs. Cr) , 1786.48 (Rs .Cr ) and 51.96 (Rs . Cr) . But in 2010 , this airlines

posted profit of 429.73 (Rs .Cr) .

Correlation is 0.97642931

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GRAPH-4

JET AIRWAYS:

TABLE-5

YEAR 2006 2007 2008 2009 2010

EXPENDITURE

(Rs. CRORES) 4,262.09 6,020.66 8,056.00 10,969.32 8,329.85

INCOME

(Rs. CRORES) 6,060.47 7,373.39 9,448.34 12,014.90 10,688.39

PROFIT(Rs. CRORES) 1,431.64 1,037.12 755.1 601.83 2,108.72

Analysis:

In the case of Jet Airways , in the year 2006 expenditure , income and profit was

4262.09 (Rs. Cr) , 606.47 (Rs. Cr ) and 1431.64 (Rs. Cr) respectively . In the year 2007 ,

expenditure was 6020.66 (Rs. Cr ) and income was 7373.39 (Rs. Cr) where Jet airways

profited of Rs. 27.33 (Cr) . In 2008, expenditure , income and profit was 8056(Rs. Cr) ,

9448.34 (Rs .Cr ) and 755.1 (Rs . Cr) . In 2009 , expenditure , income and profit was

10969.32 (Rs. Cr) , 12014.90 (Rs .Cr ) and 601.83 (Rs . Cr) . In 2010 , this airlines

profited of 2108.72 (Rs.Cr) .


GRAPH-5

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SINGAPORE AIRLINES:

TABLE-6

YEAR 2006 2007 2008 2009 2010

EXPENDITURE

(Rs. CRORES) 9,081.50 10,657.40 12,127.80 13,180.00 13,148.00

INCOME

(Rs. CRORES) 9,761.90 12,012.90 13,341.10 14,494.40 15,972.50

PROFIT

(Rs. CRORES) 680.4 1355.5 1213.3 1314.4 2124.5

Analysis:

In the case of Singapore Airlines, in the year 2006 expenditure, income and profit was


expenditure was 10657.40 (Rs. Cr ) and income was 12012.90 (Rs. Cr) where

Singapore Airlines profited of Rs. 1355.5 (Cr) . In 2008, expenditure, income and profit

was 12127.80(Rs. Cr) , 13341.10 (Rs .Cr ) and 1213.3 (Rs . Cr) . In 2009 , expenditure ,

income and profit was 13180.00 (Rs. Cr) , 14494.40 (Rs .Cr ) and 1314.4 (Rs . Cr) . In

2010 , this airlines profited of 2124.5 (Rs .Cr) .


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SPICEJET:

TABLE-7

YEAR 2006 2007 2008 2009 2010

EXPENDITURE

(Rs. CRORES) 397.91 667.77 1,291.80 1,741.41 1,751.35

INCOME

(Rs. CRORES) 451.97 729.62 1,438.58 1,786.48 2,242.09

PROFIT

(Rs. CRORES) 21.74 -27.33 3.19 -51.96 429.73

Analysis:

In the case of Spicejet Airlines, in the year 2006 expenditure, income and profit was


expenditure was 667.77 (Rs. Cr ) and income was 729.62 (Rs. Cr) where Spicejet

Airlines faced loss of Rs. 27.33 (Cr) . In 2008, expenditure, income and profit was 1291.8

(Rs. Cr) , 1438.58 (Rs .Cr ) and 3.19 (Rs . Cr) . In 2009 , expenditure , income and loss

was 1741.41 (Rs. Cr) , 1786.48 (Rs .Cr ) and 51.96(Rs . Cr) . In 2010 , this airlinesprofited of 429.73 (Rs .Cr) .


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GRAPH-7

EMIRATES:

TABLE-8

Analysis:

In the case of Emirates Airlines, in the year 2006 expenditure, income and profit was

11602094 (Rs. Cr) , 13286331 (Rs. Cr ) and 2618789 (Rs. Cr) respectively . In the year

2007 , expenditure was 15,628,282.00 (Rs. Cr ) and income was 18130998 (Rs. Cr)

where Emirates Airlines profited of Rs. 2652291 (Cr) . In 2008, expenditure, income and

profit was 20,489,601.00 (Rs. Cr) , 23,050,927.00 (Rs .Cr ) and 2652291 (Rs . Cr) . In

2009 , expenditure , income and profit was 26,675,891.00 (Rs. Cr) , 29,839,618.00

(Rs .Cr ) and 3338873 (Rs . Cr) . In 2010 , this airlines profited of 5180171Rs .Cr) .


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YEAR 2006 2007 2008 2009 2010

EXPENDITURE

(Rs. CRORES) 11,602,094.00 15,628,282.00 20,489,601.00 26,675,891.00 34,392,500.00

INCOME

(Rs. CRORES) 13,286,331.00 18,130,998.00 23,050,927.00 29,839,618.00 39,467,427.00

PROFIT

(Rs. CRORES) 2618789 2652291 2652291 3338873 5180171

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GRAPH-8

BRITISH AIRWAYS:

TABLE-9

YEAR 2006 2007 2008 2009 2010

EXPENDITURE

(Rs. CRORES) 7,870.00 7,881.00 7,597.00 7,895.00 7,259.00

INCOME

(Rs. CRORES) 8,753.00 8,492.00 8,213.00 8,515.00 7,772.00

PROFIT

(Rs. CRORES) 883 611 616 620 513

Analysis: In the case of British Airways, in the year 2006 expenditure, income and

profit was 7870 (Rs. Cr) , 8753 (Rs. Cr ) and 883 (Rs. Cr) respectively . In the year

2007 , expenditure was 7881(Rs. Cr ) and income was 8492(Rs. Cr) where British

Airways profited of Rs. 611(Cr) . In 2008, expenditure, income and profit was 7597(Rs.

Cr) , 8213 (Rs .Cr ) and 616 (Rs . Cr) . In 2009 , expenditure , income and profit was

7895 (Rs. Cr) , 8515 (Rs .Cr ) and 620 (Rs . Cr) . In 2010 , this airlines profited of513Rs.Cr).


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GRAPH-9

Recommendations

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Conclusion

If we consider all the airlines in Indian aviation industry kingfisher and emirates have avery close relationship between there expenditure and income. They have 99%relationship among all other airlines. Jagson airlines have 97% relationship between exp.and income, whereas Singapore airlines are at 96%, jet airways at 98%, Spice at 97% andBritish airways at 95%.

So, what we observe is that British airways is having the lowest percentage relationshipbetween expenditure and income i.e. exp made by the Co. is not giving equal amount ofincome.

Considering aviation industry as a whole the forecasted sales for the year 2011 isestimated to be Rs. 36811.54. The forecasted net profit for the year 2011 is estimated tobe Rs. -2659.8.

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References

Draft : The Civil Aviation Act, 2000 (Draft)

Survey :

Economic Survey

Articles : Articles (Alliance Library)

4 Ps Marketing November 2008 Edition

Business Line/India Today

Report :

IIM B Report-Blue Sky/Prabhudas Liladhar Report

Investments Bodie Keane Marcus

Investment Analysis & Portfolio Management Prasanna Chandra

Website :

http://www.grida.no/climate/ipcc/aviation/index.htm

http://ec.europa.eu/environment/climat/pdf/aviation_et_study.pdf

http://civilaviation.nic.in/

http://www.iata.org/whatwedo/environment/sustainability.htm

http://en.wikipedia.org/wiki/Aviation

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http://www.grida.no/climate/ipcc/aviation/index.htmhttp://ec.europa.eu/environment/climat/pdf/aviation_et_study.pdfhttp://civilaviation.nic.in/http://www.iata.org/whatwedo/environment/sustainability.htmhttp://en.wikipedia.org/wiki/Aviationhttp://www.grida.no/climate/ipcc/aviation/index.htmhttp://ec.europa.eu/environment/climat/pdf/aviation_et_study.pdfhttp://civilaviation.nic.in/http://www.iata.org/whatwedo/environment/sustainability.htmhttp://en.wikipedia.org/wiki/Aviation

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http://en.wikipedia.org/wiki/Aviation_and_the_environment

http://www.jetstar.com/au/travel-info/carbon-offset/aviation-impact.html

http://www.aai.aero/about_us/aai_today.jsp

http://in.reuters.com/article/businessNews/idINIndia-32200020080228
http://en.wikipedia.org/wiki/Aviation_and_the_environmenthttp://www.jetstar.com/au/travel-info/carbon-offset/aviation-impact.htmlhttp://www.aai.aero/about_us/aai_today.jsphttp://en.wikipedia.org/wiki/Aviation_and_the_environmenthttp://www.jetstar.com/au/travel-info/carbon-offset/aviation-impact.htmlhttp://www.aai.aero/about_us/aai_today.jsp

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