HISTORY OF AVIATION INDUSTRY

The history of the civil aviation industry in India can be traced back to the year 1912 when the first air flight between Karachi and Delhi was started by the Indian State Air Services in collaboration with the UK based Imperial Airways The Aviation industry in India began with the birth of Tata Airlines, through the business relationship between Mr. Nevill Vintcent, a Royal Air Force pilot and Mr. JRD Tata, the first Indian to get an Alicense. Tata Airlines became Air India in August 1946. In 1953, the Air Corporation Act nationalized all existing airline assets and established the Indian Airline Corporation and Air India International for domestic and international air services respectively. The Indian aviation sector was also characterised by a high degree of Government control prior to 1990. The Government of India nationalised the airline industry in 1953 through the enactment of the Air Corporations Act. Pursuant to this Act, there were only two players left in the Indian aviation sector, both of which were owned and controlled by the Indian government. These two companies enjoyed monopoly power in the industry until 1991, when private airlines were given permission to operate charter and non scheduled services under the Air Taxi scheme to boost tourism As a result, a number of private players including Jet Airways, Air Sahara, Modiluft, Damania Airways, NEPC airlines and East West Airlines commenced domestic operations In 1994, following the repeal of the Air Corporation Act, private players were permitted to operate scheduled services. Ultimately the carriers with more efficient operations and strategies survived and by 1997, only Jet Airways and Air Sahara made the cut from the original group. The next big change in the industry came in late 2003 with the emergence of Indias first no-frill airlines, Air Deccan. It revolutionized the industry, offering fares as low as INR 500 (USD 10 roughly), compared with Full Service fares offered by the incumbents, averaging about INR 3000 or more. Since then, Spice Jet (restructured Royal Airways and Modiluft), Go Airways and Kingfisher Air have also entered the industry. Paramount Airways is another player, though it is positioned on the other end of the spectrum, as an all business class airline. With the further advent of online ticket sales through companies such as makemytrip.com, prices have crashed and tickets are available for as little as INR 0.99. In fact, now many airline tickets can be bought for a price comparable to an upper class railway ticket for the same route In December 2004, Indian scheduled carriers with a minimum of 5 years of continuous operations and a minimum fleet size of 20 aircraft, were permitted to operate scheduled services to internationals destinations. On January 11, 2005 the government designated four scheduled Indian carriers (Air India, Indian Airlines, Jet Airways and Air Sahara) to operate international services to and form Singapore, Malaysia, Thailand, Hong Kong, the UK and the USA.

FACTORS AFFECTING THE AVAITION INDUSTRY

Micro Variables: The companys micro variables consists of elements that directly affect the company such as suppliers, workers, competitors. The different micro variables are explained as below Suppliers: The suppliers of the airlines are affecting the industry. Generally the planes and its part are imported from the foreign countries which directly affect the industry. Workers: The workers directly affect the industry. If the workers are working fine and providing the proper facilities to customers, the company will do the best. Regulating Agencies: In every country, there are some rules and regulations which are created by regulating agencies. For example, .In India the ministry of civil aviation of India regulates players in industry. Competition: There is lot of competition in industry of aviation which directly affect the country .In India, Jet airways ,Air India ,Air Deccan, Kingfisher, Spice jet and MDLR are there. More the company is providing the best facilities to customers, more it will do better. Macro Variables: The macro variables consists of broader, economical, political, social, legal and technological setting within which company and individual are placed .The different macro variables are explained as Political Factors - Excise Duty and Sales Tax on Aviation Turbine Fuel: There is a excise duty and sales tax on aviation turbine fuel in India which is being regulated by ministry of civil aviation of India. - Modernization of Airports: In order to get new infrastructure for airports and providing the world class facilities, the modernization is required - Interface form Other Agencies: There is interface from the other agencies are also there - Entry Barriers for New Players: In order to start new air services, there are some rules and regulations are there so there are entry barriers for new players. Economic Factors - Contribution to Economy: The aviation industry has a good contribution to Economy of countries like India - Rising Fuel Costs: There is effect of rising of cost of fuel which directly affect the economic condition of aviation industry.

- Investments in the Sector: A lot amount of investment is entering in aviation sector. Social Factors - Developments in Airport Cities: In order to get world class infrastructure and facilities ,the development in airports is necessary. - Employment Opportunities: This industry provides opportunities to lot of persons and provide them with good salaries. - Ensuring a Level Playing Field: This industry ensures a level playing field for so many companies like Air Sahara, Jet Airways etc. - Safety Regulation: In this industry, the safety regulation are required. This safety regulations are applied for every person and passengers of all the religions and class Technological Factors - Growth of Electronic Ticketing:: The growth of electronic ticketing is very necessary in this industry. You can take example in countries like U.S it is fully online and they are highly successful - Satellite based Navigation Systems: The satellite based navigation systems is very necessary in aviation. This means which provide autonomous geo-spatial positioning with global coverage which is necessary for the industry.

JET AIRWAYS
Jet Airways (India) Ltd. is an airline based in Mumbai, operating domestic and international services. It operates over 340 daily flights to 44 destinations across the country and 6 overseas. Its main base is Chattarpati Sivaji International Airport,Mumbai. The Founder and chairman of Jet Airways is Naresh Goyal who owns 99.99% of the shares in the company.. Jet airways provides one of the best services in this industry. This service was started in India in May 5,1993.This airline provides a lot of facilities to customers at the reasonable fares and it is providing the online tickets and easy booking tickets. Also it provides the 24 hours helpdesk facility for customers. It is providing the facilities like In flight better meals, entertainment, convenience ,e-magazines inside the flights. Also it provides facilities like special Infant and Child Care, Wheel chair assistance, Medical emergencies and safety to customers. The main competitors of Jet airways are Air India, Air Deccan, Spice Jet and Kingfisher.

New Events of Company

1. As part of comprehensive plans to prepare for the airlines major thrust into International markets Jet Airways released full details of its new First Class product that will grace the cabins of the new Boeing 777-300ER aircraft. Jet Airways have created the first airline suite in the sky offering its customers the ultimate in privacy and luxury. Each First Class suite providing over 26sq ft of usable space, features dual sliding doors that create complete privacy for every passenger choosing to fly Jet Airways First Class. Each of the eight First Class suites on the Boeing 777 aircraft will feature the worlds longest First Class bed at 83 inches, massive 23 inch flat screen monitors and carefully designed storage areas that include a personal hanging wardrobe, dual credenza and under ottoman stowage. 2.Jet airways acquired Air Sahara for 1450 crores which is big deal for company. 3. Jet Airways begins flights to Kuala Lumpur and other foreign countries.

Current Status of Jet Airways

Leading Indian private airline, Jet Airways plans for a $400 million rights share issue. Jet Airways will use the funds generated from the rights issue for expansion purposes and for starting a dedicated cargo service by the end of this year. This $400 million rights issue is expected to be completed successfully within the next four months. Jet Airways market share is a little over 30% at present. Air Sahara, which Jet Airways had acquired recently has a market share of about 8%. Jet Airways is now the market leader with a combined market share of a little less than 40% According to the latest available figures, its share of India's domestic aviation market has increased to over 43% (up from less than 27% a few months ago), and this is still greater than any other Indian domestic operator's market share.[ The company has made a profit after tax of Rs. 1.63 billion viz. 4.5% of its revenues for the fiscal 2004. It has turned a profit in the last three out of five years. The main expenditure for the company is the cost of fuel, which comprises 20.8% of its revenues in the current year, and Operating Charges, which comprise 25.42% of its Revenues for fiscal 2004. It derives 80% of its revenues from the business class and the remaining is split between economy, excess baggage and cargo. Cargo forms a very small part of its revenues at around 4.5% however this segment has grown significantly in the recent years at about 32.6%.