A Grand Project On THE AIRLINE INDUSTRY

In fulfillment of the GRAND PROJECT in two year full time MBA programme of Gujarat University.

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EXECUTIVE SUMMARY

In this project, the 1st step was to have a knowledge about the airline industry and also the airlines Jet Airways and King isher Airlines! "e wanted to have the e#act idea o the e#isting scenario! $o to have the e#act idea we proceeded by %eeting the travel agents! &hey helped us by giving us proper guidance and giving us in or%ation about the current situation! $o keeping in %ind that in or%ation we designed a 'uestionnaire! A study o the airline industry was done! (ere a sa%ple si)e o 1*+ was taken, where 7* people answered in conte#t to the Jet Airways and the re%aining 7* answered on behal o King isher Airlines! (ere a direct co%parison was not %ade between the two airlines! ,ut in general 'uestions were asked relating to the in- light services, ticketing, light personnel, waiting ti%e, areas o dissatis action i any, purpose o the light etc! &he answers gave an idea about the services o both the airlines! &he other idea o the study was to point out the li%itations o the airlines and also to highlight the positive points! A ter pointing out the li%itations, a ew suggestions are given by us! King isher and Jet Airways are both highly priced! King isher justi ies the prices by giving *star services to the passengers! It gives a co%pletely personali)ed touch! It has also been ranked as the 1st do%estic airline that has been given the * star by the $kytra#! Jet Airways justi ies the prices by giving consistency in all its services since a long ti%e! It provides both 'uick and e#cellent services to the passengers! King isher has a niche %arket! It has lights to places like .anchi, Kandla, Jaipur, Kolkata etc! It has targeted that class o passengers to need to %ake business trips to such places and where reaching in a short ti%e and that to lu#uriously is di icult! It is

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basically not or people who look or a high re'uency in the light nu%bers and also at regular intervals! It has li%ited lights to the %etros like /u%bai, 0elhi! &his is e#actly where Jet Airways di ers! It has a high re'uency o lights which ly at regular intervals! It is highly convenient to passengers who are intending to ly at odd ti%es or also who intend to return the sa%e day! &hus the basic di erence in both the airlines is the target %arket even though both are highly priced!

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TABLE OF CONTENTS
Preface Acknowledge en! E"ec#!$%e S# ar& I II III

Ta'le of Con!en!( C)a*!er + Re*or! $n!rod#c!$on 1bjective o the .esearch .esearch %ethodology 28 28

C)a*!er , A$rl$ne $nd#(!r& O%er%$ew Introduction 4urrent Airline scenario in India Airline industry in or%ation about King isher and Jet Airways 67$& analysis o the Airline Industry 7 68s o the airline industry C)a*!er - SURVEY CON.UCTE. +3 11 57 2+ 27

C)a*!er / 0RAP1IC PRESENTATION AN. INTERPRETATION *+

C)a*!er 2 FIN.IN0S

7+

C)a*!er 3 SU00ESTIONS AN. RECOMMEN.ATIONS

71

C)a*!er 4 LIMITATIONS C)a*!er 5 FURT1ER SCOPE OF STU.Y C)a*!er 6 B$'l$ogra*)& Anne"#re 78

75 79 72

6ricing and service 'uality are the key variables that decide the brand e'uity o each player in the airline industry! 7#isting literature suggests that %easure%ent and %anage%ent o service 'uality is the key or survival o airline co%panies! &he process o travelling on a do%estic airline was divided into pre- light, in- light and post- light e#periences! A survey was conducted to ind out the service 'uality o re'uent liers on each o the two airlines across a series o service per or%ance variables

INTRO.UCTION

India at present has twelve co%peting airlines in the do%estic %arket as against a single govern%ent owned airline in 1331! According to /cKinsey :uarterly;5++*< the Indian aircra t %arket is the world8s second largest co%%ercial aircra t %arket! 1n-ti%e per or%ance and service levels have risen dra%atically and ares have dropped! 6assenger tra ic is e#pected to grow by 5+ percent annually over the ne#t ive years! 1nly a s%all percentage o India8s population travels by air partly due to the high costs o do%estic lying! According to the 4enter or Asia 6aci ic Aviation;4A6A< consultancy, new players will help do%estic passenger nu%bers! &he players in the current airline %arket include airlines like Air 0eccan with lowcost, low- are and no rills along with airlines like King isher, which o ers so%e rills, and pre%iu% airline like Jet Airways! 4o%petition has brought in so%e price advantages to travellers and has converted %any railway passengers to airline travellers! &his article e#a%ines custo%er satis action a%ong travellers o our %ajor do%estic airlines in India! ,ecause o proli erated nu%ber o players in the airline industry, airlines %ay enjoy new business opportunities along with high co%petitive threats! &he objective o this study is to understand the custo%er satis action levels o the two %ajor airlines vi)! Jet Airways, and King isher! A co%parison o custo%er satis action based on service 'uality was done a%ong the two %ajor airlines based on responses ro% re'uent liers! A lying e#perience was

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divided into three stages- na%ely, pre- light, in- light and post- light e#perience! A 'uestionnaire was designed in such a way that the sa%e sets o variables were %easured a%ong the custo%ers o the two airlines under study! =liers who had lown any o the two airlines could answer the 'uestions pertaining to those airlines! &he objective o this study was to understand the satis action levels o the airline custo%ers!

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T)e Ind$an A%$a!$on Ind#(!r&

In!rod#c!$on
Air India was set up by J!.!0! &ata, who ran it success ully until it was nationali)ed in 13*9! In the 13>+s the ?/aharaja@, as the national lag-carrier was a ectionately known, was lying to 95 destinations ;it now lies to 2> destinations< and %aking pro its! =or %any years in India air travel was perceived to be an elitist activity! &his view arose ro% the ?/aharajah@ syndro%e where, due to the prohibitive cost o air travel, the only people who could a ord it were the rich and power ul! In recent years, however, this i%age o 4ivil Aviation has undergone a change and aviation is now viewed in a di erent light - as an essential link not only or international travel and trade but also or providing connectivity to di erent parts o the country! Aviation is, by its very nature, a critical part o the in rastructure o the country and has i%portant ra%i ications or the develop%ent o touris% and trade, the opening up o inaccessible areas o the country and or providing sti%ulus to business activity and econo%ic growth! Antil less than a decade ago, all aspects o aviation were ir%ly controlled by the Bovern%ent! In the early i ties, all airlines operating in the country were %erged into either Indian Airlines or Air India and, by virtue o the Air 4orporations Act, 13*9 this %onopoly was perpetuated or the ne#t orty years! &he 0irectorate Beneral o 4ivil Aviation controlled every aspect o lying including granting lying licenses, pilots, certi ying aircra ts or light and issuing all rules and procedures governing Indian airports and airspace! =inally, the Airports Authority o India was entrusted with the responsibility o %anaging all national and international airports and ad%inistering every aspect o air transport operation through the Air tra ic 4ontrol! "ith the opening up o the Indian econo%y in the early Cineties, aviation saw so%e i%portant changes! /ost i%portantly, the Air 4orporation Act was repealed to end the %onopoly o the public sector and private airlines were reintroduced! 0o%estic liberali)ation took o in 138>, with the launch o scheduled services by new start-up carriers ro% 1335! A nu%ber o oreign investors took an interest! /odilu t closed a ter ailing to %eet inancial obligations to lessors and its technical partner,

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Du thansa! In 133>-1338, &ata and $IA tried to launch a do%estic carrier, but the civil aviation %inister had publicly stated his opposition on nu%erous occasions ;Airline ,usiness 1338<! &he Indian govern%ent introduced the open sky policy or do%estic players in 1331 and partial open sky policy or international players only in Cove%ber 5++2! Increasing liberalisation and deregulation has led to an increase in the nu%ber o players! &he industry co%prises three types o players ull cost carriers, low cost carriers ;D44< and %any start-up airlines that are %akingEplanning an entry!

Pre(en! Ind$an Scenar$o

It is a phase o rapid growth in the industry due to huge build-up o capacity in the D44 space, with capacity growing at appro#i%ately 2*F annually! &his has induced a phase o intense price co%petition with the incu%bent ull service carriers ;Jet, Indian, Air $ahara< dis- counting up to >+-7+F or certain routes to %atch the new entrants ticket prices! &his, coupled with costs pressures ;a key cost ele%ent, A&= price, went up appro#i%ately 9*F in recent %onths, while sta costs are also rising on the back o shortage o trained personnel<, is e#erting botto%-line pressure! &he growth in supply is overshadowed by the e#tre%ely strong de%and growth, led pri%arily by the conversion o trainEbus passengers to air travel, as well as by the act that low ares have allowed passengers to ly %ore re'uently! &here has, there ore, been an increase in both the width and depth o consu%ption! (owever, the regulatory environ%ent, in rastructure and ta# policy have not kept pace with the industry8s growth! 7nact%ent o the open sky policy between India and $aarc countries, increase in bilateral entitle%ents with the 7A and the A$, and aggressive pro%otion o India as an attractive touris% spot helped India attract 9!5 %illion tourists in 5++2-+*! &his %arket is growing at 1*F per annu% and India is e#pected to attract > %illion tourists by 5+1+! Also, increasing per capita inco%e has led to an increase in disposable inco%es, leading to greater spend on leisure and holidays and business travel has risen sharply with increasing /C4 presence! $%aller cities are also well connected now! 6assenger tra ic has increased and over 51 %illion seats have been sold, resulting in a

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growth o over *+F! &he Indian travel %arket is e#pected to triple to G*1 billion by 5+11 ro% G1>!9 billion in 5++*-+>!

7e& Pla&er( $n Ind$an Ind#(!r&

A$rl$ne( on In!erna!$onal Ro#!e(

A$r Ind$a is the national lag carrier airline o India with a network o passenger and cargo services worldwide! It is one o the two state-owned airlines in the country, the other being Indian Airlines! Air India has 22 world-wide destinations! &he airline has been pro itable in %ost years since its inception! In the inancial year ending /arch 91, 5++>, Air India has %ade a net pro it o .s!37 %illionH earned a revenue o .s!87,28+ %illion - representing a growth o al%ost 1* per cent over the previous year! A$r Sa)ara is a privately owned airline operating scheduled services connecting all %etropolitan centres in India! &he airline was established on 5+ $epte%ber 1331 and began operations on 9 0ece%ber 1339 with two ,oeing 797-5++ aircra t as $ahara Airlines! &he uncertainty over the airlineIs are has caused its share o the do%estic Indian air transport %arket, ro% appro#i%ately 11F in January 5++> to a reported 8!*F in April! $ahara Airlines was rebranded as Air $ahara on 5 1ctober 5+++! Ind$an is IndiaIs state owned pri%arily do%estic airline, under the ederal Anion /inistry o 4ivil Aviation &he 4o%pany was or%erly known as Indian Airlines! 1n 0ece%ber 7, 5++* the co%pany was rebranded as Indian as a part o a progra% to reva%p the co%pany i%age in preparation or an I61! Indian 4ivil Aviation /inister, 6ra ul 6atel, announced Bovern%ent o IndiaIs plan to %erge Air India and Indian 78

into one giant airline consisting o 19+-12+ aircra t! &his could take place anyti%e ro% the end o 5++> to the %iddle o 5++7! I these airlines %erge then they will be in direct co%petition with other air giants like Br$!$() A$rwa&(8 A$r France8 A$r Canada8 L#f!)an(a8 7LM8 9AL8 A er$can A$rl$ne(8 and :ANTAS 9e! A$rwa&( a ?regular@ airline which o ers nor%al econo%y and business class seats! Jet Airways, along with Air $ahara, is the only airline which survived the dis%al period o 133+s when %any private airlines in India were orced to close down! Jet Airways is an a$rl$ne based in Ind$a serving do%estic and international routes! &he airline operates over 9++ lights to 29 destinations across the! It currently controls about 95F o IndiaIs aviation %arket

A$rl$ne( on .o e(!$c Ro#!e(

S*$ce9e! is a low-cost airline! &heir %arketing the%e Jo ering low Ieveryday spicey aresI and great guest services to price conscious travelersJ! &heir ai% is to co%pete with the Indian .ailways passengers travelling in A4 coaches! A$r .eccan is an airline based in ,angalore, India! It was IndiaIs irst low-cost carrier, and as o /ay 5++>, connects ** cities within India! Air 0eccan has grown rapidly since it irst started air operations in 5++9, and despite its al%ost disastrous %aiden inaugural light ;which caught ire<, it continued to grow! &he growing Indian econo%y and the increasing nu%ber o %iddle-class people in India has greatly helped its growth! 0oA$r &he 6eople8s Airline, a low cost carrier pro%oted by &he "adia Broup is a do%estic budget airline based in /u%bai, India established in June 5++2! It8s a relatively s%all player as co%pared to other low cost airlines! 7$ngf$()er A$rl$ne( is an airline based in ,angalore, India! $ervices started on 3 /ay 5++*, ollowing the lease o 2 Airbus A95+ aircra t! It initially operates only on do%estic routes! &he airline pro%ises to suit the needs o air travellers and to provide

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reasonable air ares! King isher are pushing or an a%end%ent o the present Indian govern%ent rule which re'uires an airline to ly a %ini%u% o ive years on do%estic routes be ore it can start lying overseas! Ind$0o A$rl$ne( is a new and a private do%estic airline based in India! IndiBo placed an order or 1++ Airbus A95+ aircra t during the 5++* 6aris Air $how! &he total order was worth A$ G> billionH one o the highest by any do%estic carrier during the show! &he new low- are carrier has started operations ro% August 2, 5++>!

0LOBAL SCENARIO
At the %acro-econo%ic level Asia 6aci ic growth is i%pressive! India and 4hina are growing between 8 and 1+F each year! 4hina is now the worldIs 2th largest econo%y! 7#cluding Japan, Asian econo%ic growth was 7FKdoubles the world average o 9!*F! Blobal airline tra ic is e#pected to rise steadily until 5++8 in line with an anticipated good per or%ance by the world econo%y, according to the Anited CationsI;AC< aviation agency! &he AC International 4ivil Aviation 1rgani)ation ound in its %ediu%-ter% orecast that airline tra ic would grow >!1 per cent in 5++>, *!8 per cent in 5++7, and *!> per cent in 5++8. And strong econo%ic growth will continue! ,ut growth %eans nothing i the botto% line is red! Blobally airlines lost A$G> billion in 5++*! A$ carriers lost A$G1+ billion! 7uropean carriers %ade about A$G1!9 billion! Asian carriers led pro itability with A$G1!* billion! 7ven within Asia it is a %i#ed picture! $o%e carriers are a%ong the %ost pro itable! 1thers however are struggling! In the region operating %argins averaged less than 5F, still the best per or%ance in the world! /ost are below the 7 to 8F needed to cover the cost o capital and give investors an acceptable return!

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I *ac! of R$($ng F#el Pr$ce( on !)e Ind#(!r&

&he high price o

uel is killing the pro itability! In two years the industry uel bill

%ore than doubled to nearly A$G1++ billionK59F o operating costs! And there is no relie in sight! $o what are airlines to doL I%prove e iciency is the answer! 6rogress to date has been dra%atic! &he break-even price o uel rose ro% A$G55 per barrel in 5++9 to nearly A$G*+ in 5++*! An ortunately, uel prices are above that! Airlines will not return to pro itability until 5++7 when we e#pect a break-even uel price o A$G**! 7ven then the projected pro it is only A$G> billion! Asia will re%ain pro itable in 5++> posting A$G5 billion in pro it! ,ut do not start opening the 4ha%pagne! &hat is still less than a 5F net %argin!

0lo'al I *ac! of LCC(

Dow cost carrier co%petition is new to this region! Asian network carriers are better prepared than %any o their A$ or 7uropean counterparts! &heir operating costs are > A$ cents per A&K on route lengths o 1*++k%! ,ut the co%petition will also be tough! Air AsiaIs costs are the lowest in the worldK5!* A$ cents per A&K! Dabour costs in Asia are the lowest in worldK13F o operating cost! &his is a signi icant advantage against A$ and 7uropean carriers with an average cost o above 9+F! I we co%pare Asian network carriers to their low cost rivals, the story changes! Average labour costs can be up to 7 ti%es lower at low-cost startups! &here is no inish line in the race to reduce costs and i%prove e iciency! $o%e analysts are o the view that 4ountries in the Asia-6aci ic region, which entered the industry %uch later, have e%erged as i%portant players in the past decade! In co%parison, the Indian civil aviation industry which is %uch older still operates ro% a s%all base even though its do%estic %arket potential and skilled %an power should have given it intrinsic advantages to e%erge as a globally i%portant player in the civil aviation industry by now!

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Pa!) Forward for Ind$a

&he escalating uel bill would eventually translate into costlier air tickets or the Indian travellers, who have or the irst ti%e sa%pled air travel at ares that %atch irst-class railway tickets! Even as some airlines hiked fares by ten per cent

and others toyed with the idea to offset their ballooning fuel bill, the government dealt them another blow by withdrawing the withholding tax exemption on aircraft lease agreements. In the absence of this tax exemption, aircraft leasing cost is expected to shoot up between 20 to 6 per cent ! a move that could deter new entrants and existing players from leasing more aircraft. Although poor airport in rastructure re%ains a
concern, we need to %aintain a positive outlook on the sector as the govern%ent allows private participation and =0Is in construction and %aintenance o air-tra ic in rastructure! &his also hints at the huge opportunity in ter%s o in rastructure develop%ent and %aintenance in the aviation sector or oreign construction and engineering co%panies! =or now, as %ore and %ore Indians take to the skies, the country is set to e%erge as the astest growing aviation %arket!

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O%er%$ew
&he history o civil aviation in India began in 0ece%ber 1315! &his was with the opening o the irst do%estic air route between Karachi and 0elhi by the Indian state Air services in collaboration with the i%perial Airways, AK, though it was a %ere e#tension o Dondon-Karachi light o the latter airline! &hree years later, the irst Indian airline, &ata $ons Dtd!, started a regular air%ail service between Karachi and /adras without any patronage ro% the govern%ent! At the ti%e o independence, the nu%ber o air transport co%panies, which were operating within and beyond the rontiers o the co%pany, carrying both air cargo and passengers, was nine! It was reduced to eight, with 1rient Airways shi ting to 6akistan! &hese airlines wereM &ata Airlines, Indian Cational Airways, Air service o India, 0eccan Airways, A%bica Airways, ,harat Airways and /istry Airways!

In early 1328, a joint sector co%pany, Air India International Dtd!, was established by the Bovern%ent o India and Air India ;earlier &ata Airline< with a capital o .s 5 crore and a leet o three Dockheed constellation aircra t! Its irst light took o on June 8, 1328 on the /u%bai ;,o%bay<Dondon air route! At the ti%e o its nationali)ation in 13*9, it was operating our weekly services between /u%bai-Dondon and two weekly services between /u%bai and Cairobi! &he joint venture was headed by J!.!0! &ata, a visionary who had ounded the irst India airline in 1395 and had hi%sel piloted its inaugural light!

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S$gn$f$cance of A$r Tran(*or!

Air transport is the %ost %odern, the 'uickest and the latest addition to the %odes o transport! ,ecause o speed with which aero planes can ly, travel by air is beco%ing increasingly popular! As ar as the world trade is concerned it is still do%inated by sea transport because air transport is very e#pensive and is also unsuitable or carrying heavy, bulky goods! (owever, transportation o high value light goods and perishable goods is increasingly being done by air transport

Na!$onal$;a!$on of A$rl$ne(
&he soaring prices o aviation uel, %ounting salary bills and disproportionately large leets took a heavy toll o the then airlines! &he inancial health o co%panies declined despite liberal Bovern%ent patronage, particularly ro% 1323, and an upward trend in air cargo and passenger tra ic! &he trend, however, was not in keeping with the e#pectations o these airlines which had gone on an e#pansion spree during the post-"orld "ar II period, ac'uiring aircra t ad spares! &he Bovern%ent set up the Air &ra ic 7n'uiry 4o%%ittee in 13*+ to look into the proble%s o the airline! &hough the 4o%%ittee ound no justi ication or nationali)ation o airlines, it avored their voluntary %erger! $uch a %erger, however, was not welco%ed by the airlines!

Fore$gn A$rl$ne(
=oreign airlines carrying international passenger tra ic to and ro% India e#isted long be ore Independence! &heir operations are governed by bilateral agree%ents signed ro% ti%e to ti%e between the Bovern%ent o India and the govern%ents o respective countries! In 138+-81, the nu%ber o such

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airlines

was

9*!

It

rose

to

23

in

133>-37!

&he share o

oreign airlines in IndiaIs scheduled international tra ic has

increased! In 1371, their share was **!*8 per cent which went up to >* per cent and declined to *8 per cent during 1375-7*! It ell to **!75 per cent in 137> and urther to **!+5 per cent in 1377! ,etween 1378 and 133+ it gradually increased and rose to 7*!39 per cent! In 133>, the share was nearly 75 per cent!

O*en<Sk& Pol$c&
&he 1pen-sky policy ca%e in April 133+! &he policy allowed air ta#ioperators to operate lights ro% any airport, both on a charter and a non charter basis and to decide their own light schedules, cargo and passenger ares! &he operators were, however, re'uired to use aircra t with a %ini%u% o 1* seats and con or% to the prescribed rules! In 133+, the private air ta#ioperators carried 1*,+++ passengers! &his nu%ber increased to 2!1 lakh in 1335, 53!5 lakh in 1339, 9> lakh in 1332 and 28!3 lakh in 133*! &he 133>, private air ta#i operators carried 23!+8 lakh passengers which a%ounted to a 21!12 per cent share in the do%estic air passenger tra ic! $even operators vi) C764 Airlines, $kyline C764, Jet Air, Archana Airways, $ahara India Airlines, /odilu t and 7ast "est Airlines have since ac'uired the status o scheduled airlines! ,esides this there were 55 nonscheduled private operators and 92 private operators holding no-objection certi icate in 133>! &he nu%ber o plus 15+ category aircra t in the private sector was 92 and the total leet strength was 7* in June, 133>! &wo out o seven scheduled air ta#i operators suspended their operations in 133> because o the non-availability o aircra t!

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Infra(!r#c!#re and Rela!ed Fac$l$!$e(

A$r*or! A#!)or$!& of Ind$a= set up on April 1,133* by a%alga%ating the international Airport Authority o India and the Cational Airport Authority o India, the Airport Authority o India was to handle all %atters relating to in rastructure or civil air tra ic and transport at the international and the do%estic airports and enclaves in the country! Ind$ra 0and)$ Ra()!r$&a Uran Akade $= It was set up at =ursatganj to standardi)e and i%prove the lying training acilities in the country! &ill January 1337 it had trained 583 pilots on i#ed wing aircra t and 5+ pilots on rotary wing aircra t! Fl&$ng>gl$d$ng !ra$n$ng cl#'(= 1n 0ece%ber 91,133>, besides the above Akade%i, 21 lying clubsEinstitutes and their branches including nine private institutes were i%parting lying training! =ive gliding clubs, seven gliding wings o lying clubs and a govern%ent Bliding 4entre, 6une, were i%parting training in gliding!

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.e%elo* en! of C$%$l A%$a!$on

&he repeal o the Air 4orporation Act ro% 1 /arch 1332 enabled private operators to provide air transport services! $i# operators were given the status o scheduled operators on 1=ebruary133*! 4urrently there are ive international airports and 87 do%estic airport in the country with 58 civilian enclaves or de ence purposes! &he Airport Authority o India plans to invest .s 9*,+++ %illion or the construction and up gradation o airports! ,udgetary support o .s 28*!*+ %illion was allocated to AAI in 133>-37! In august 133>, in a %ajor policy decision, the govern%ent allowed the private sector to set up air cargo co%ple#es in a bid to ensure s%ooth %ove%ent o e#port cargo! 0o%estic and oreign investors including C.Is have been invited to participate in the develop%ent o in rastructure support at select airports! "ith a %arket share o 29F Indian airlines is the biggest player in aviation! .s 52,71+ %illion have been %arked or develop%ent o the civil aviation sector in the annual plan or 1337-38!

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T)e Ind$an A$r Cargo Marke!

&he growth o air cargo in India has also been %ani old though it %ight not have kept pace with the progress %ade all over the world! &able 1 shows how both international and do%estic air cargo tra ic has increased, re lecting an overall year on year growth!

&able 1M &rends in cargo tra ic at ive international airports in India! ;=igures in I+++ tonnes< Per$od 1375-79 1385-89 1335-39 1333-5+++ In!erna!$onal Cargo .o e(!$c Cargo To!al Percen!age Increa(e 27!2 99!> 81 1>*!2 82!> 5*+ 5+3F 9++!* 3+!3 931!2 *>!*>F 232!5 189!+ >77!5 79F

;$ource - &ransport India 5+++<

F#!#re O#!look Of T)e Ind#(!r&

=uture projections re lect that the air cargo industry both in the do%estic sector and the international sector will continue in its upward trend o growth! =ig!1 re lects that the do%estic air cargo will continue at a so%ewhat steady rate o growth whereas the international air cargo %ove%ent as illustrated in =ig!5 shows a steeper rate o growth indicating that

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international air cargo trade will lourish at a higher rate o growth! ,oth 0o%estic cargo and International cargo are poised to grow according to the projections! &he %ajor reasons, which can be attributed to this increase, are Increase in overseas trade Indian econo%ic policies 4usto%er service orientation Inventory concerns 7-co%%erce develop%ent

An a$rl$ne provides air transport services or passengers or reight, generally with a recogni)ed operating certi icate or license! Airlines lease or own their aircra t with which to supply these services and %ay or% partnerships or alliances with other airlines or %utual bene it! A$rl$ne( vary ro% those with a single airplane carrying %ail or cargo, through ullservice international airlines operating %any hundreds o airplanes! Airline services can be categori)ed as being intercontinental, intracontinental, or do%estic and %ay be operated as scheduled services or chartered planes!

A($a
$o%e o the irst countries in Asia to e%brace air transport were India, (ong Kong, Indonesia, /alaysia and the 6hilipinnes! !Another airline co%pany to begin early operations was Air India, which had its beginning as &ata Airlines in1395, a division o &ata $ons Dtd! ;now &ata Broup< by

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IndiaIs leading industrialist J.0 &ata! 1n 1ctober 1*, 1395, J! .! 0! &ata hi%sel lew a single engined 0e (avilland 6uss /oth carrying air %ail ;postal %ail o I%perial Airways< ro% Karachi to ,o%bay via Ah%ebabad! &he aircra t continued to 4hennai via ,ellary piloted by .oyal Air =orce pilot Cevill Nincent! =ollowing the end o "orld "ar II, regular co%%ercial service was restored in India and &ata Airlines beca%e a public li%ited co%pany on 53 July132> under the na%e Air India! A ter the Independence o India, 23F o the airline was ac'uired by the Bovern%ent o India! In return, the airline was granted status to operate international services ro% India as the designated lag carrier under the na%e Air India International! &he Bovern%ent 1 India is the %ajority stake-holder in Air India and Indian Airlines! /any countries have national airlines that the govern%ent owns and operates! =ully private airlines are subject to a great deal o govern%ent regulation or econo%ic, political, and sa ety concerns! =or instance, the govern%ent o ten intervenes to halt airline labor actions in order to protect the ree low o people, co%%unications, and goods between di erent regions without co%pro%ising sa ety!

T$cke! Re%en#e
Airlines assign prices to their services in an atte%pt to %a#i%i)e pro itability! &he pricing o airline tickets has beco%e increasingly co%plicated over the years and is now largely deter%ined by co%puteri)ed yield %anage%ent syste%s! ,ecause o the co%plications in scheduling lights and %aintaining pro itability, airlines have %any loopholes that can be used by the knowledgeable traveler! /any o

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these air are secrets are beco%ing %ore and %ore known to the general public, so airlines are orced to %ake constant adjust%ents! /ost airlines use di erentiated pricing, a or% o price discri%ination, in order to sell air services at varying prices si%ultaneously to di erent seg%ents! =actors in luencing the price include the days re%aining until departure, the booked load actor, the orecast o total de%and by price point, co%petitive pricing in orce, and variations by day o week o departure and by ti%e o day! 4arriers o ten acco%plish this by dividing each cabin o the aircra t ; irst, business and econo%y< into a nu%ber o travel classes or pricing purposes!

O*era!$ng Co(!
=ull-service airlines have a high level o i#ed and operating costs in order to establish and %aintain air servicesM labor, uel, airplanes, engines, spares and parts, I& services and networks, airport e'uip%ent, airport handling services, sales distribution, catering, training, aviation insurance and other costs! &hus all but a s%all percentage o the inco%e ro% ticket sales is paid out to a wide variety o e#ternal providers or internal cost centers! /oreover, the industry is structured so that airlines o ten act as ta# collectors! Airline uel is unta#ed, however, due to a series o treaties e#isting between countries! &icket prices include a nu%ber o ees, ta#es, and surcharges they have little or no control over, and these are passed through to various providers! Airlines are also responsible or en orcing govern%ent regulations! I airlines carry passengers without proper docu%entation on an international light, they are responsible or returning the% back to the originating country!

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A$rl$ne *er(onnel
&he various types o airline personnel includeM

=light 4rews, responsible or the operation o the aircra t! =light crew 6ilots;4aptain and =irst 1 icer< so%e older aircra t also re'uire a =light Attendants In- light security personnel on so%e airlines Bround crew, responsible or operations at airports! Bround crew %e%bers Aerospace and avionics engineers responsible or certi ying the aircra t Aerospace engineers, responsible or air ra%e, power plant and Avionics engineers responsible or avionics and instru%ents Air ra%e and power plants technicians 7lectric $yste%s technicians, responsible or %aintenance o electrical Avionics, technicians, responsible or %aintenance o avionics =light 0ispatchers ,aggage (andlers .a%pers Bate Agents &icket Agents

%e%bers includeM
o

=light 7ngineer
o

includeM
o

or light and %anage%ent o aircra t %aintenance

electrical syste%s %aintenance

%aintenance
o o

syste%s
o o o o o o

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6assenger $ervice Agents ;such as airline lounge e%ployees<

.eservation Agents usually ;but not always< at acilities outside the airport!

Airlines ollow a corporate structure where each broad area o operations ;such as %aintenance, light operations, and passenger service< is supervised by a vice president! Darger airlines o ten appoint vice presidents to oversee each o the airlineIs hubs as well! Airlines e%ploys lawyers to deal with regulatory procedures and other ad%inistrative tasks! &he head'uarters o Air India are in /u%bai, India!

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In!rod#c!$on !o UB gro#*
A, group based in ,angalore, is a conglo%erate o di erent co%panies with a %ajor ocus on the brewery;beer< and alcoholic beverages industry! &he co%pany %arkets %ost o its beer under the King isher brand! &he group is headed by 0r!Nijay /allya! &he A, Broup was ounded by a $cots%an, &ho%as Deish%an in 18*7! King isher, the BroupIs %ost visible and pro itable brand, %ade a %odest entry in the si#ties! 0uring the 13*+Is and >+Is, the co%pany e#panded greatly by ac'uiring other breweries! =irst was the addition o /c0owell as one o the Broup subsidiaries, a %ove which helped Anited ,reweries to e#tend its port olio to wines and spirits business! $trategically, the Broup %oved into agro-based industries and %edicines when /allya ac'uired Kissan products and or%ed a long-ter% relationship with (oechst AB o Ber%any to create the Indian phar%aceutical co%pany now known as Aventis 6har%a , the Indian subsidiary o the global phar%a %ajor $ano i-Aventis!

The logo
&he Pega(#(, which is the sy%bol o the Anited ,reweries, irst ound its place as the Broup logo in +6/?! &he A, Broup8s ,rewing 7ntity - called Anited ,reweries Di%ited ;A,D< - has also assu%ed undisputed %arket leadership with a national %arket share in e#cess o *+F! &hrough a process o aggressive ac'uisition and %arket penetration, &he A, Broup today controls >+F o the total %anu acturing capacity or ,eer in India!

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78

An In!rod#c!$on !o 7$ngf$()er A$rl$ne(

King isher Airline is a private airline based in ,angalore, India! &he airline is owned by Nijay /allya o Anited ,everages Broup! King isher Airlines started its operations on /ay 3, 5++* with a leet o 2 Airbus A95+ aircra ts! &he airline currently operates on do%estic routes! &he destinations covered by King isher Airlines are ,angalore, /u%bai, 0elhi, Boa, 4hennai, (yderabad, Ah%edabad, 4ochin, Buwahati, Kolkata, 6une, Agartala, 0ibrugarh, /angalore and Jaipur! In a short span o ti%e King isher Airline has carved a niche or itsel ! &he airline o ers several uni'ue services to its custo%ers! &hese includeM personal valet at the airport to assist in baggage handling and boarding, e#clusive lounges with private space, acco%panied with re resh%ents and %usic at the airport, audio and video onde%and, with e#tra-wide personali)ed screens in the aircra t, sleeperette seats with e#tendable ootrests, and three-course gour%et cuisine!

V$($onM &he King isher Airlines a%ily will consistently deliver a sa e, value-based and enjoyable travel e#perience to all our guests!@

Safe!&= &his is an overriding value! In this line o business, there is no co%pro%ise!

Ser%$ce= In hospitality business custo%er satis action is very i%portant and building trust, goodwill and loyalty o custo%ers is at pri%e ocus!

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1a**$ne((M King isher seeks to build an organi)ation with people who choose to be happy, and will endeavor to in luence their guests and co-workers to be happy too!

Tea workM King isher believes "e will succeed or ail as a tea%! 7ach one o us %ust respect our colleagues regardless o their rank, and we %ust work together to ensure our %utual success! Acco#n!a'$l$!&M 7very e%ployee in king isher will be held accountable or the success ul e#ecution o their duties, co%%it%ents and obligations, and they will strive to lead by an e#a%ple!

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Prod#c!= Pre $#

cla(( (ea!(

1! $leeperette seats with e#tendable ootrests! 28J seat pitch and a 15*O recline! =ully-adjustable headrests! 5! Daptop and %obile phone chargers in each seat! 9! 4o% ortable pillows and snug blankets!

Pr$ce=
Initially King isher airlines didn8t di erentiate between business class and econo%y class! ,ut eventually they decreased the prices o business class and called that seats as pre%iu% seats! =ares were very average as it had to target %iddle class as well as pre%iu% class people! Place= King isher airlines connects 59 cities like Ah%edabad, Boa, 0elhi, Kolkata, (yderabad, Buwahati, Jaipur, Adaipur, etc!

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Pro o !$on=
Narious pro%otional strategies has been adopted by King isher airlines like o &he @Power Fl&er@ a consu%er incentive o er targeted at the corporate traveler o 6assengers are o ered in light entertain%ent options and contests like A7$ngf$()er fl&$ng face of !)e o branded %erchandise! o 1 er $n<fl$g)! ($len! a#c!$on( for l$fe(!&le *rod#c!( and $n<fl$g)! (ale( of dr& *ackaged food and 'e%erage( o &he %arketing depart%ent showcased the airlines as BT)e new fl&$ng e"*er$enceCD ! o KICB=I$(7. Airlines has announced special ares or all personnel serving in the Indian Ar%ed =orces, the Anion Bovern%ent, $tate govern%ents, and e%ployees o all public sector units in the country! &he i%%ediate a%ilies o these personnel! o &he co%pany has just launched King isher =irst, which is a print ca%paign to pro%ote its irst class service! It is a personali)ed ca%paign, which has Nijay /allya, signing o %ysel ." by saying, JI have created a product which is better than what I would have created or on!)@ and a!!rac!$%e d$(co#n!(

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King isher Airlines Di%ited is an airline based in ,angalore, India! It is a %ajor Indian airline operating 518 lights a day and has an e#tensive network to 97 destinations, with plans or regional and long-haul international services! Its %ain bases are ,angalore International Airport, ,angalore, 4hhatrapati $hivaji International Airport, /u%bai and Indira Bandhi International Airport, 0elhi! King isher Airlines, through one o its holding co%panies Anited ,reweries Broup, has ac'uired 5>F stake in the budget airline Air 0eccan and has option to buy urther o 5+F stake ro% the secondary %arket! King isher is one o only > airlines in the world to have a * star rating ro% $kytra#, along with Asian Airlines, /alaysia Airlines, :atar Airways, $ingapore Airlines and 4athay 6aci ic Airways!

7$ngf$()er fl$e( !o !)e follow$ng de(!$na!$on( $n Ind$a=

Agartala ;Agartala Airport< Agatti ;Agatti Aerodro%e< Agra ;Kheria Airport< Ah%edabad ;$ardar Nallabhbhai 6atel International Airport< ,angalore ;(AD ,angalore International Airport< ,agdogra ;,agdogra Airport or 4ivil Aerodro%e ,agdogra< ,hopal ;,hopal Airport< ,hubaneswar ;,iju 6atnaik Airport< 4hennai ;4hennai International Airport< 4oi%batore ;6eela%edu International Airport< 0elhi ;Indira Bandhi International Airport< Buwahati ;Dokpriya Bopinath ,ordoloi International Airport< 78

Boa ;0aboli% Airport< (ubli ;(ubli Airport< (yderabad ;.ajiv Bandhi International Airport< I%phal ;I%phal Airport< Indore ;0evi Ahilyabai (olkar International Airport< Jabalpur ;Jabalpur Airport< Jaipur ;Jaipur Airport< Kochi ;4ochin International Airport< Kolkata ;Cetaji $ubhash 4handra ,ose International Airport< Ko)hikode ;4alicut International Airport< Ducknow ;A%ausi International Airport< /angalore ;/angalore International Airport< /u%bai ;4hhatrapati $hivaji International Airport< Cagpur ;0r! ,abasaheb A%bedkar International Airport< 6une ;6une Airport< .aipur ;.aipur Airport< 6uttaparthi ;$ri $athya $ai Airport< $iliguri ;,agdogra Airport< $urat ;$urat Airport< &iruchirappalli ;&iruchirappalli International Airport< &irupathi ;&irupati Airport< &hiruvananthapura% ;&rivandru% International Airport< Adaipur ;/aharana 6ratap Airport< Naranasi ;Naranasi Airport< Nijayawada ;Nijayawada Airport< Nisakhapatna% ;Nisakhapatna% Airport<

King isher Airlines, through one o its holding co%panies A, holdings Dtd, has ac'uired 5>F stake in the budget airline Air 0eccan and has option to buy urther o 5+F stake ro% the secondary %arket!

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FreE#en! Fl&er Progra

&he King isher Airlines =re'uent =lyer 6rogra% is called King Club in which each ti%e a passenger lies King isher Airlines, passenger will be eligible or King /iles! King /iles can be redee%ed King .ewards! &he King 4lub progra%%e has 9 .oyal tiers - King .ed tier, King $ilver tier and the King Bold tier! King isher Airlines recently announced a partnership with A$ based 4ontinental Airlines in order to provide better service to custo%ers traveling between India and the A$A! As a part o this partnership, beginning 1ctober 1, 5++7, passengers will be able to earn King /iles on all lights operated by 4ontinental Airlines as well as Air =rance, KD/ and Corthwest Airlines!

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In!rod#c!$on !o 9e! A$rwa&(

Jet Airways is India8s pre%ier private airlines! Caresh Boyal is currently the chair%an o Jet Airways! Jet Airways operates over 95+ lights daily to 29 destinations in India and currently controls about 2+F o IndiaIs aviation %arket! Jet Airways was the irst private airline o India to ly to international destinations! It operates daily international lights to 4olo%bo, Kath%andu, $ingapore, Kuala Du%pur and Dondon ;(eathrow<! Jet Airways has won a nu%ber o awards in recognition o standards o its service and has also received the I$1 3++1M5+++ certi ication or its In- light $ervices! Jet Airways was established on 9 /ay 1331 with a leet o 2 ,oeing 797-9++ aircra t, with 52 daily lights serving 15 destinations! Jet Airways presently operates ** aircra ts and is now a public li%ited co%pany! 9e! A$rwa&( FInd$aG L!dD is an airline based in /u%bai, India, operating do%estic and international services! It operates over 99+ daily lights to *+ destinations across the country and > overseas! Its %ain base is 4hhatrapati $hivaji International Airport, /u%bai, with hubs at Indira Bandhi International Airport, 0elhi, Anna International Airport, 4hennai, Cetaji $ubhash 4handra ,ose International Airport, Kolkata, ,angalore International Airport, ,angalore and ,russels Airport, ,russels! According to the latest available igures, its share o IndiaIs do%estic aviation %arket has increased to over 29F ;up ro% less than 57F a ew %onths ago<, and this is still greater than any other Indian do%estic operatorIs %arket share! Jet Airways was incorporated as an Jair ta#iJ operator on 1 April 1335! It started co%%ercial airline operations on * /ay 1339 with a leet o 2 ,oeing 797-9++ aircra t! In January 1332 a change in the law enabled Jet Airways to apply or

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scheduled airline status, which was granted on 2 January 133*! It began international operations to $ri Danka in /arch 5++2! 6lans to ac'uire rival Air $ahara, announced in January 5++>, a ter so%e rough patches deal got through! &he airline is owned by &ailwinds ;owned by Caresh Boyal< ;8+F< and public shares ;5+F< and has 1+,+17 e%ployees! 1n April 15, 5++7 9e! A$rwa&( agreed to buy out its s%aller rival Air $ahara or 12!* billion rupees ;G92+%<!Air $ahara would be rena%ed as Jet Dite herea ter and it has been placed between a low cost carrier and ull ledged airliner! It %ay be noted that Jet Airways with the ac'uisition o Air $ahara is all set to re urbish the leet and crew with new livery and uni or% and plans are in pipeline to start a reighter by the year end! &he deal will give the airline a co%bined do%estic %arket share o about 95F!

Jet Airways serves *5 destinations, including > cities outside India! Jet AirwaysI *5 destinations include %ost o the big cities in India! International destinations include Kath%andu, 4olo%bo, $ingapore, ,angkok, Kuala Du%pur, DondonIs (eathrow Airport, ,russels, Cewark and &oronto, 4anada! Jet Airways was the irst private airline in India to ly to international destinations! It started international operations in /arch 5++2 between 4hennai and 4olo%bo a ter it had been cleared by the Bovern%ent o India to operate scheduled services to international destinations!! Jet Airways sought to take %a#i%u% advantage o this ruling by adding new international scheduled routes to destinations within the co%%ercially viable lying range o its growing leet o JCe#t BenerationJ ,oeing 797-7++E8++ series narrow bodied jets, such as $ingapore and Kuala Du%pur! &his irst led to a decision to lease three Airbus A92+-9++7 wide-bodied ro% $outh A rican Airways to enable it to co%%ence non-stop lights to Dondon (eathrow in the AK and to subse'uently place a large order or a leet o brand-new Airbus A99+-5++ and ,oeing 777-9++7. wide-

78

bodied airliners to per%it urther e#pansion, especially to additional destinations in 7urope and Corth A%erica! In 5++> Jet Airways has international services to Kath%andu, 4olo%bo, $ingapore, Kuala Du%pur, Dondon (eathrow, operating ro% /u%bai, 0elhi, 4hennai and A%ritsar!

Jet Airways started three ti%es-a-week service ro% Ah%edabad to Dondon (eathrow on April 9, 5++7 to cater to the travel re'uire%ents o the ethnic Bujarati co%%unity in the AK! &he airline is using its recently delivered Airbus A99+-5++s on both the A%ritsar and Ah%edabad services while JCe#t BenerationJ ,oeing 797-8++s e'uipped with winglets are used on all ,angkok sectors! It also clai%ed that its international operations were pro itable, with the sole e#ception o its long-haul lights between India and Dondon-(eathrow!

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A$rl$ne Agree en!(

Jet Airways has co%%ercial agree%ents with the ollowing airlinesM

Air =rance A%erican Airlines Austrian ,ritish Airways ,russels Airlines Bul Air KD/ Du thansa Corthwest Airlines :antas $outh A rican Airways $wiss International Airlines &hai Airways International

Jet Airways is proud that we are one o the ew airlines in the world to receive the ISO 6??+ cer!$f$ca!$on or our in- light services!

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PEST Anal&($(= T)e Ind$an A$rl$ne Ind#(!r&

A 67$& analysis is an analysis o the e#ternal %acro-environ%ent that a ects all ir%s! 6!7!$!&! is an acrony% or the 6olitical, 7cono%ic, $ocial, and &echnological actors o the e#ternal %acro-environ%ent! $uch e#ternal actors usually are beyond the ir%Is control and so%eti%es present the%selves as threats! =or this reason, so%e say that JpestJ is an appropriate ter% or these actors! Det us look at the 67$& analysis o the Indian aviation sectorM

Pol$!$cal Fac!or(
In India, one can never over-look the political actors which in luence each and every industry e#isting in the country! Dike it or not, the political inter erence has to be present everywhere! Biven below are a ew o the political actors with respect to the airline industryM o &he airline industry is very susceptible to changes in the political environ%ent as it has a great bearing on the travel habits o its custo%ers! An unstable political environ%ent causes uncertainty in the %inds o the air travellers, regarding travelling to a particular country! o 1verall India8s recent political environ%ent has been largely unstable due to international events P continued tension with 6akistan! o &he Bujarat riots P the govern%ent8s inability to control the situation have also led to an increase in the instability o the political arena! o &he %ost signi icant political event however has been $epte%ber 11! &he events occurring on $epte%ber had special signi icance or the airline industry since airplanes were involved! &he i%%ediate results were a huge drop in air tra ic due to sa ety P security concerns o the people! o International airlines are greatly a ected by trade relations that their country has with others! Anless govern%ents o the two countries trade with each other, there

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could be restrictions o lying into particular area leading to a loss o potential air tra ic ;e!g! 6akistan P India< o Another aspect is that in countries with high corruption levels like India, bribes have to be paid or every per%it P license re'uired! &here ore constant liasoning with the %inister P other govern%ent o icial is necessary! &he state owned airlines su er the %a#i%u% ro% this proble%! &hese airlines have to %ake several special considerations with respect to selection o routes, ree seats to %inisters, etc which a privately owned airline need not do! &he state owned airlines also su ers ro% archaic laws applying only to the% such as the retire%ent age o the pursers P hostesses, the labour regulations which %ake the %anage%ent less le#ible in taking decision due to the presence o a strong union, P the heavy control Pinter erence o the govern%ent! &his a ects the 'uality o the service delivery P there ore these airlines shave to think o innovative service %arketing ideas to circu%vent their proble%s P co%pete with the private operators!

Econo $c Fac!or(
,usiness cycles have a wide reaching i%pact on the airline industry! 0uring recession, airline is considered a lu#ury P there ore spending on air travel is cut which leads to reduce prices! 0uring prosperity phase people indulge the%selves in travel P prices increase! A ter the $epte%ber 11 incidents, the world econo%y plunged into global recession due to the depressed senti%ent o consu%ers!. &he loss o inco%e or airlines led to higher operational costs not only due to low de%and but also due to higher insurance costs, which increased a ter the "&4 bo%bing! &his pro%pted the industry to lay o e%ployees, which urther uelled the recession as spending decreased due to the rise in une%ploy%ent! 7ven the Indian carriers like Air India was deeply a ected as %any lights were cancelled due to internal ;e%ployee relations< as well as e#ternal proble%s, which has been discussed later!

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Soc$al Fac!or(
&he changing travel habits o people have very wide i%plications or the airline industry! In a country like India, there are people ro% varied inco%e groups! &he airlines have to recogni)e these individuals and should serve the% accordingly! Air India needs to ocus on their clientele which are %ostly low inco%e clients P their habits in order to keep the% satis ied! &he destination, kind o ood etc all has to be chosen care ully in accordance with the tastes o their %ajor clientele! 7specially, since India is a land o e#tre%es there are people ro% various religions and castes and every individual travelling by the airline would e#pect custo%i)ation to the greatest possible e#tent! =or e!g! A Jain would be satis ied with the service only i he is served jain ood and it should be kept in %ind that the custo%ers ne#t to hi% are also jain or at least vegetarian! !

Tec)nolog$cal Fac!or(
&he increasing use o the Internet has provided %any opportunities to airlines! =or e!g! Air $ahara has introduced a service through the internet, wherein the unoccupied seats are auctioned one week prior to the departure! Air India also provides %any internet based services to its custo%er such as online ticket booking, updated light in or%ation P handling o custo%er co%plaints! A$&0A ;A$ trade P develop%ent association< is unding a easibility study and workshops or the Airports Authority o India as part o a long-ter% e ort to pro%ote Indian aviation in rastructure! &he Authority is developing %odern co%%unication, navigation, surveillance, and air tra ic %anage%ent syste%s or IndiaIs aviation sector that will help the country %eet the e#pected growth and de%and or air passenger and cargo service over the ne#t decade!

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A proposal or restructuring the e#isting airports at 0elhi, /u%bai, 4hennai and Kolkata through long-ter% lease to %ake the% world class is under consideration! &his will help in attracting invest%ents in i%proving the in rastructure and services at these airports! $etting up o new international airports at ,angalore, (yderabad and Boa with private sector participation is also envisaged! A good e#a%ple o the i%pact o technology would be that o AAI, wherein with the help o technology it has converted its obsolete and unused hangars into *rof$! cen!er(D AAI is now leasing these hangars to international airlines and is earning huge pro its out o it! AAI has also tried to utili)e space that was previously wasted installing a la%ination %achine to la%inate the luggage o travelers! &his activity earns AAI a lot o revenue! &hese technological changes in the environ%ent have an i%pact on Air India as well! ,etter airport in rastructure, %eans better handling o airplanes, which can help reduce %aintenance cost! It also acilitates %ore lights to such destinations!

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Seg en!a!$on= T)e A$rl$ne Ind#(!r&

/ost airlines use a very traditional seg%entation strategy, dividing passengers into business travelers and econo%y travelers ;%ostly leisure travelers<! &he co%%on strategy is to s'uee)e as %uch pro it as possible ro% business class passengers who are attracted by superior services and corresponding high prices and, at the sa%e ti%e, to try and ill the rest o the seats and ensure growth by attracting econo%y class passengers with lower ares!

B#($ne(( *a((enger(
&hey are crucial or airlinesI pro itability! "ith less spare ti%e and %ore cash in their pockets, they agree to pay a pre%iu% price or a pre%iu% service! &oday business passengers account or appro#i%ately 28F o passengers, and these 28F contribute >>F o airlinesI revenue! &he pre%iu% prices they pay provide wider and %ore co% ortable seats, better choice o %eals and seats, lu#urious lounges! Airlines can choose ro% a %ultitude o pre%iu% services to o er to business travelers! $o%e o these e#tras range ro% seats e'uipped with a#es and telephones, to ga%bling %achines, showers, %assage services and suit ironing services in the recently introduced arrival lounges! ,usiness passengers believe it is worth e#tra %oney i they can save ti%e and arrive looking resh or an i%portant %eeting! ,usiness passengers will avoid transit lights even i a longer light could save the% %oney! ,ut a%ongst other perks, le#ible reservation services are probably the %ost i%portant to the%! .eservations or business trips are o ten %ade just a couple o days in advance! A no penalty cancellation policy is also very i%portant to business passengers! &he best way to reach business travelers is through printed advertising /any airlines design special pro%otional progra%s that target corporate bookers and %eeting planners, who are responsible or business trips reservations! =re'uent lyer progra%s are an added bonus or business passengers!

Le$(#re Tra%eler(
78

&hey represent a totally di erent %arket! &he %ost i%portant consideration or %ost o the% is the price! &he lower the air are, the %ore people will ly the respective airline! ,y and large, with the e#ception o wealthy travelers, this seg%ent will not pay e#tra or pre%iu% services and will agree to change several planes during their trip i this option costs less than a direct light! 0espite lower %argins provided by this seg%ent, leisure travelers are very i%portant to an airlineIs botto% line! 6art o the reason is that technological progress in the area o tele-con erencing and increased use o the internet or business co%%unications is e#pected to reduce the nu%ber o business travelers! &hus, airlines are counting on the leisure seg%ent to provide urther growth! (ow can airlines bene it ro% the growth opportunities in the leisure seg%ent without losing i%%ediate pro it opportunities in the business seg%entL &his is a tough issue in airline %arketing %anage%ent! ,y i%proving services and reducing prices or econo%y class passengers, airlines risk that so%e business passengers will switch to econo%y class! $ince business class passengers are not %any, a co%pany relying %ostly on business travelers will o ten end up lying hal -e%pty planes, losing the potential revenue generated by lower priced econo%y seats! 1n the other hand, ew airlines catering solely to econo%y class passengers can be success ul because a low are carrier %ust ill the entire plane i it is to generate revenue ro% its low-%argin operations! &hus heEshe tries to sell early, the econo%y seats at a cheaper price, while keeping enough seats reserved or business travelers, who usually book at the last %inute! Keeping just the right a%ount o business seats reserved is i%portantM selling too ew econo%y seats in advance %ay result in a less-than- ull plane while selling too %any econo%y seats %ay result in a ull plane, but with insu icient revenue to gain a pro it! &his kind o seg%entation serves airlines well enough when i%ple%ented within one co%pany! It would be very di icult or any single airline to target just one o these two seg%ents - business or leisure - success ully! &here are e#ceptions - s%all regions that serve destinations where the %ajors do not ly, or e#a%ple, are in a better position to i%ple%ent a low price policy! &hey can even get business travelers to ly the% despite the lack o pre%iu% services because no other airline would get the% there! 78

4 PH( of 9e! A$rwa&( and 7$ngf$()er A$rl$ne(

Prod#c!
Q B#($ne(( Cla((8 Econo & cla((

Pr$ce
Q Pr$ce M$"8 .$(co#n! a( *er freE#en! fl&er *rogra

Place
Q I! $( connec!ed !o a"$ # c$!$e(

Pro o!$on
Q TV ad(8 1oard$ng(8 In!erne!8 Calendar(

Peo*le
Q Iell !ra$ned crew e 'er(

Proce((
Q On 0ro#nd8 ($ *ler *roce(( for Board$ng !)e Fl$g)!

P)&($cal E%$dence
Q 0ood (ea!(8 .$nn$ng fac$l$!$e(8 En!er!a$n en! fac$l$!$e(

78

RESEARC1 OB9ECTIVES

1! &o study the custo%er pre erence o service 'uality o each o the two airlines under study! 5! &o co%pare the service 'uality o the airlines under study! 9! &o ind out the dissatis action a%ong the passengers i any! 2! A ter inding out the areas o dissatis action, to give related suggestions to the Airlines co%pany!

RESEARC1 MET1O.OLO0Y

:#e(!$onna$re .e($gn
&he respondents were asked to evaluate the service 'uality o the service provided by the airline, which they have travelled! =or e#a%ple, the on-ti%e services o the airline was %easured through the 'uestion! $i%ilarly, other good ground service in- light service and post- light service were %easured! &he 'uestionnaire also had a 'uestion to check the response to the loyalty progra%s provided by the airlines to re'uent liers! 1ther 'uestions relating to the

78

&icket 4ounter, $ecurity 4heck, 7#press ,aggage, 0elay o thee =lights etc were asked! Also the re'uency and purpose o the lights was asked! Also the reason or travelling by that light were asked! A sa%ple si)e o 1*+ respondents was taken who have travelled by both, Jet Airways and King isher Airlines! =urther 7* 'uestionnaires were illed by people on behal o Jet Airways whereas 7* 'uestionnaires were illed by people on behal o King isher Airlines! A ter the survey, a thorough analysis was done! .espective tables and pie charts were or%ed accordingly! Narious percentage were also ound out! Analysis o each 'uestion was done! A ter that indings, and li%itations were given! Also the suggestions were given!

78

FIN.IN0S>ANALYSIS

1< =.7:A7C4R 1= =DIB(&$ 9e! A$rwa&( 5* 59 12 19 42 7$ngf$()er 17 2+ 1* 9 42 To!al 25 >9 53 1> +2?

7very week =ortnightly /onthly 0epends To!al

1ut o 7* responses or King isher, 2+ people had lights every ortnight! And out o 7* responses or Jet, 5* replied or every week which was highest in it and 59 in ortnightly!

5< $7.NI47$ ,R .7$7.NA&I1C AB7C& 9e! A$rwa&( 7$ngf$()er To!al

78

(ighly satis ied $atis ied Average 0issatis ied To!al

15 9> 18 3 42

13 53 17 1+ 42

91 >* 9* 13 +2?

1ut o 7* responses or King isher, %ajority o people, i!e! 53 were satis ied with the services o reservation agent! "hereas 9> people, ie! Al%ost *+F were satis ied with the services o reservation agent! &his shows that reservation services provided by Jet are %ore satis actory than that provided by King isher!

9< &I/7 41CN7CI7C47 Cot at all I%p $o%ewhat I%p Nery I%portant To!al

78

7$ngf$()er 9e! A$rwa&( To!al

29 1+ *9

15 1> 58

5+ 23 >3

42 42 +2?

1ut o 7* responses or King isher, 29 people responded that ti%e convenience was not at all i%portant or the% whereas %ajority in Jet, i!e! 23 people, su%%ing upto >*!99F said that ti%e convenience was very i%portant actor or the%! &hus it shows that to the people or who% &I/7 41CN7CI7C47 is an i%portant actor, pre erred Jet over King isher!

=.7:A7C& =DR7. 6.1B.A/ 7$ngf$()er 9e! A$rwa&( To!al Cot at all I%p *2 28 $o%ewhat I%p 13 51 Nery I%portant To!al 5 42 > 42 +2?

78

1ut o 7* responses, al%ost 75F, i!e! *2 people chose King isher irrespective o re'uent lyer progra%! Also, Jet responses show that re'uent lyer progra% is not %uch an i%portant actor in choosing this airline! &his throws light on the actor that both the airlines do not have the custo%ers because o re'uent lyer progra%!

IC=DIB(& $7.NI47$ Cot i%portant 7$ngf$()er 9e! A$rwa&( To!al 1+ 12 $o%ewhat i%portant 1> 59 Nery i%portant To!al 23 98 42 42 +2?

1ut o the 7* people surveyed or King isher, %ajority o the% i!e!23 people rated the In- light services as very i%portant!

78

"hereas out o the 7* people surveyed or Jet,98 people rated the In- light services as very i%portant! &hus In- light $ervices is also a %ajor actor or selecting the Airlines!

&.AN7D AB7C& .741//7C0A&I1C Cot i%portant 7$ngf$()er 9e! A$rwa&( To!al 5+ 1* $o%ewhat i%portant 51 5+ Nery i%portant To!al 92 2+ 42 42 +2?

1ut o the 7* people surveyed or King isher, %ajority i!e!92 lew with it as their travel agentE4o%pany had %ade reservations or it! "hereas out o the 7* people surveyed or Jet, %ajority i!e!2+ lew with it as their &ravel agentE4o%pany had %ade reservations or it!

78

2< "as price a %ajor actor in choosing the airlineL 7$ngf$()er >* 1+ 42 9e! >8 +8 42 To!al +2?

Co Res To!al

1ut o the 1*+ people surveyed, price was not a %ajor concern or %ost o the people! &hat is 199 people had gone or the airline irrespective o the prices! &hus price was not a %ajor actor!

78

*< "hat is your %ain purpose in taking this tripL 7$ngf$()er 21 92 42 9e! 98 97 42 To!al

,usiness 6urpose 6ersonalE6leasure 6urpose To!al

+2?

&he reasons or travelling by Jet and King isher were or business as well as personal and pleasure reasons! &here was not %uch di erence between the 5 reasons!

78

>< 6lease indicate the a%ount o ti%e you waited or the ollowing servicesL

A$rcraf! Board$ng * %inutes 1+ %inutes 11-5+ %inutes To!al 7$ngf$()er 9+ 9> +3 42 9e! 52 2+ 11 42 To!al

+2?

1ut o the 7* people surveyed or King isher, al%ost the sa%e a%ount o people waited or a period o * %inutes and 1+ %inutes! "hereas or Jet, %ajority o the people i!e! 2+ people had to wait or 1+ %inutes! ,ut in both the cases, very ew people had to wait or 11-5+ %inutes!

78

Board$ng * %inutes 1+ %inutes 11-5+ %inutes To!al 7$ngf$()er 1+ 98 57 42 9e! 11 9* 53 42 To!al

+2?

=or ,oarding in King isher, %ajority o the people had to wait or 1+ %inutes and 115+ %inutes! $a%e was the case with Jet! "hereas only 51 people had to wait or * %inutes!

78

Sec#r$!& C)eck * %inutes 1+ %inutes 11-5+ %inutes To!al 7$ngf$()er 93 58 +8 42 9e! 9> 53 1+ 42 To!al

+2?

=or $ecurity 4heck, both in Jet and King isher, %ajority o the people had to wait or a period o only * %inutes and 1+ %inutes! "hereas only 18 people had to wait or a period o 11-5+ %inutes!

78

41A.&7$R 1= &(7 $&A==

=or King isher, out o the 7* people surveyed, %a#i%u% people i!e! 28 people rated the courtesy o the sta as very good, whereas only 5 people rated it as bad!

78

=or Jet, out the 7* people surveyed, %a#i%u% people i!e!22 people rated the courtesy o the sta as very good! "hereas only > people rated it as bad!

$7D= A..ACB7/7C& 1= &I4K7&$

(ere we see that out o 7* people, only 28 people had %ade sel arrange%ents to ly whereas re%aining 1+5 people had done their reservations either through an agent or the co%pany they were working or!

78

In King isher, out o the 7* people only 98 people had done sel arrange%ents whereas 115 people had done their reservations through agents or the co%pany they were working or!

78

0I$A&I$=A4&I1C D7N7D

1ut o the 7* people surveyed or Jet, %a#i%u% people i!e! 39 people had co%plaints at the $ecurity 4heck, 55 people had co%plaints at the &icket 4ounter, 5+ people had co%plaints at the 7#press ,aggage!1* people had no co%plaints at all!

78

1ut o the 7* people surveyed or King isher, %a#i%u% people i!e! 7* people had co%plaints at the $ecurity 4heck, whereas 9> people had co%plaints at the 7#press ,aggage, 1> people had co%plaints at the &icket 4ounter!59 people had no co%plaints at all!

67.$1CC7D 41/6DAIC&$

.egarding 6ersonnel co%plaints, out o the 7* people surveyed or Jet, %a#i%u% people i!e! *2 people had co%plaints at the $ecurity 4heck personnel, whereas 28 people had personnel co%plaints at the &icket 4ounter, 57 people had co%plaints at the 7#press ,aggage whereas 51 people had no co%plaints at all!

78

=or King isher, out o the 7* people surveyed, %a#i%u% people i!e!2* and 29 had co%plaints at the $ecurity 4heck and &icket 4ounter! "hereas 98 people had no co%plaints at all!

78

67.$1CAD 07&AID$
11< "hat is your occupationL

7#ecutive Acade%ics 6ro essionals $ales%en $ecretary (o%e%aker $tudent $el -7%ployed .etired To!al

9e! 9* + 5+ + + +2 +8 +7 + 42

7$ngf$()er 5* + 59 + + +7 1+ 1* +1 42

To!al

+2?

78

=or Jet, out o 7* people, %a#i%u% people i!e! >+ people ell in the age group o 9>2*, whereas *1 people ell in the age group o 5>-9*! 1nly 17 people were in the age group o 18-5*!

=or King isher, out o 7* people, it was just vice-versa! /a#i%u% people i!e!>+ ell in the category o 5>-9*, whereas *1 ell in the category o 9>-2*! 1nly 18 ell in the category o 18-5*!

78

FIN.IN0S
1< /ore o ortnight lights were taken in King isher and al%ost e'ual in every week and ortnight in Jet! &he %a#i%u% nu%ber o people who lew every week or ortnightly were ,usiness%en, 7#ecutives, 6ro essional! "hereas people who lew %onthly lew or rare business trips or or pleasure purpose! 5< &he dissatis action with the reservation agent was %ostly due to the ailure in in or%ing about the delay o lights! 9< It shows that to the people or who% &I/7 41CN7CI7C47 is an i%portant actor, pre erred Jet over King isher! 2< ,oth the airlines do not have the custo%ers because o re'uent lyer progra%! *< In- light $ervices is a %ajor actor or selecting the Airlines! Al%ost all the respondents were highly satis ied with the in- light services o the airlines! >< 6rice was not a %ajor actor or selecting the airline as both the airlines are at par and are both highly priced! 7< "aiting ti%e was not a %ajor issue by al%ost all the respondents! &he average waiting ti%e did not e#ceeded 1+ %inutes in both o the airlines! 8< Nery ew o the respondents were discontent with the courtesy o the light attendants! 3< /a#i%u% respondents had dissatis action at the $ecurity 4heck-point level!

78

SU00ESTIONS

1! King isher should increase the re'uency o pre erred destinations ro% Ah%edabad!

lights to the %ost co%%only

5! King isher should ocus on the ti%ing o the lights and should introduce early %orning and late evening lights specially or the ,usiness &ravellers!

9! $ince Jet has its co%petitor as King isher, Jet should also ocus %ore on providing a personali)ed touch to the services!

78

LIMITATIONS

1! &he indings o this study are li%ited to the do%estic airline industry in India!

5! &his study has not considered industry %easures to %easure service 'uality!

9! "e have %easured only the custo%er pre erence o service 'uality in Ah%edabad!

2! &he survey could be done by taking the sa%ple si)e o just 1*+ people!

78

FURT1ER SCOPE OF STU.Y

1< &his project can also be used by Jet Airways and King isher Airlines or urther i%prove%ent!

5< &ravel Agencies can also use this project to know the e#isting scenario a%ong re'uent liers!

9< &he three di%ensions o the $7.:AAD i!e! &angibles, .eliability and Assurance are related here! ,ut the re%aining two di%ensions i!e! .esponsiveness and 7%pathy can also be related and studied!

2< &his study can be urther carried on to the International Airline Industry as well!

*< &his study can be urther e#tended to other airlines like Air 0eccan, $pice Jet, Indian Airlines, etc!

78

BIBLIO0RAP1Y
REFERENCE BOO7S

1< Seitha%l and ,itner ;133><, $ervices /arketing, &ata /cBraw (ill, Cew 0elhi Nenkatesh et al, $ervice :uality! 5< 6arasura%an, A!, Seitha%l, N! A!,P ,erry, D! D! ;138*<!A conceptual %odel o service 'uality and its i%plications or uture research! 9< 4unningha%, D! =!, Roung 4! 7!, P Dee, /! ;5++5<! 4ross-cultural perspectives o service 'uality and risk in air transportation! 2< /arketing /anage%ent, 11th edition ,y 6hilip Kotler!

NEISPAPERS

1< &he &i%es 1 India!;1*E+9E5++8< 5< Bujarat $a%achar!;1*E+9E*++8<

78

9< 0ivya ,haskar!;1>E+9E5++8<

IEBSITES
1! httpMEEwww!jetairways!co%E4ulturesEen-A$EIndiaE 5! httpMEEen!wikipedia!orgEwikiEAirlineTAirlineUpersonnel 9! httpMEEwww!indianchild!co%EindiaUcivilUaviation!ht% 2! httpMEEking isherblog!wordpress!co%E5++8E+9E17E ly-king isher-indias-only-*star-airlineE *! httpMEEen!wikipedia!orgEwikiEKing isherUF58beerF53 >! httpMEEwww!iloveindia!co%Eecono%y-o -indiaEaviation-industry!ht%l

78

0ear .espondent, &he in or%ation provided by you will be kept con idential and will only be used or acade%ic purpose! Ca%eM+G I)a! $( !)e freE#enc& of fl$g)!( !aken '& &o#J 7very week =ortnightly /onthly 0epends

,G Plea(e ra!e !)e (er%$ce( &o# rece$%ed fro arrange en!( for !)$( fl$g)!D (ighly satis ied $atis ied Average

!)e re(er%a!$on agen! w)en

ak$ng &o#r !ra%el

0issatis ied

9< Plea(e !ell #( )ow $ *or!an! eac) of !)e follow$ng wa( $n for !oda&@( fl$g)!! Cot at all I%portant $o%ewhat I%portant

ak$ng &o#r dec$($on !o c)oo(e

FA$rl$neG

Nery I%portant

;AirlineIs< departure and arrival ti%e was %ore convenient

;AirlineIs< re'uent lyer progra%Eloyalty

;AirlineIs< in- light services are better ;%eals, %ovies, light attendants, etc<

&ravel agentE4o%pany travel depart%ent reco%%endation o ;Airline<

78

2< An(wer Ye( or No! Ia( *r$ce !)e o(! $ *or!an! fac!or $n c)oo($ng !)e a$rl$neJ Res Co

2G I)a! $( &o#r ,usiness 6leasureE6ersonal

a$n *#r*o(e $n !ak$ng !)$( !r$*J

V >< Plea(e $nd$ca!e )ow long &o# wa$!ed $n l$ne8 and w)e!)er !)a! wa$! wa( acce*!a'le or no t! Acceptable "aitL Co "ait * %in! 1+ %in! 11-5+ %in! 5+W %in! Res Co Aircra t boarding

,oarding

$ecurity check point

7#press baggage check-in counter

&icket counter

4G O%erall8 )ow co#r!eo#( and )el*f#l were FA$rl$ne@(G *er(onnel a! !)e a$r*or! &o# K#(! de*ar!edJ

78

Nery good

Bood

Average

,ad

Nery bad

5G .$d &o# &o#r(elf call !o Res Co

ake !)e arrange en!( for !)$( fl$g)!J

6G If &o# were *ar!$c#larl& d$((a!$(f$ed w$!) an& of FA$rl$ne@(G *roced#re( a! !)e a$r*or! &o# K#(! de*ar!ed8 *lea(e $nd$ca!e w)$c) areaF(GD ;Airline< ticket counter 7#press baggage check-in counter $ecurity checkpoint ,oarding gate check-in counter Aircra t boarding

+?G If &o# were *ar!$c#larl& d$((a!$(f$ed w$!) an& of FA$rl$ne@(G *er(onnel a! !)e a$r*or! &o# K#(! de*ar!ed8 *lea(e $nd$ca!e w)$c) *er(onnelD $ky 4ap &icket counter agent 7#press baggage agent $ecurity checkpoint personnel .ed 4arpet .oo% receptionist ,oarding gate agent =light attendant

78

++G I)a! $( &o#r occ#*a!$onJ 7#ecutiveE/anager Acade%ics &echnical 6ro essional $ales%an $ecretaryE4lerkE1 ice worker (o%e%aker $tudent $el -7%ployed .etired

+,G Are &o#= /arried $ingle

+-G I)$c) age gro#* do &o# 'elong !oJ 18 5* 5> 9* 9> 2* 2> and above

78

78