INDUSTRY ANALYSIS

The players in aviation industry can be categorized in three groups:

➢ Public players : Indian Airlines

➢ Private players : Jet Airways, Kingfisher Airlines, Spice Jet, Air Deccan

➢ Start up players: Omega Air, Magic Air, Premier Star Air & MDLR Airlines.
MARKET VIS-A-VIS LAST YEAR

BREAKUP STATISTICS:
Top 3 Players

KINGFISHER AIRLINES

STRENGHTS:

 Strong Brand value & Reputation in the minds of

 Customers.

 Quality of the service.

 First airline to have new fleet of airbuses.

WEAKNESSESS:

 High Ticket prices.

OPPORTUNITIES:

 The expanding tourism Industry.

 Untapped Air cargo market

 Under penetrated Domestic Market

THREATS:

 Competitors.

 Fuel Price Hike.

 Economic Slowdown/Recessions.

MARKETING STRATEGY

 Kingfisher Airlines is the first carrier in the country to offer live

in-flight entertainment.

 Kingfisher Airlines Ltd & Dish TV have joined hands to provide live
in-flight entertainment on Kingfisher aircraft .

 The service would enable airline’s customers to book air travel

ticket after securing ‘ngpay’ application on their GPRS-enabled
mobile handsets.

 On the promotional front, Kingfisher has signed up the latest diva

of Bollywood Ms.Deepika Padukone as the Brand Ambassador

JET AIRWAYS
  Jet Airways is an airline based in Mumbai. It is India's third largest
airline after Air India and Kingfisher Airlines. It operates over 400
daily flights to 64 destinations worldwide. Jet Airways is widely
regarded as India's biggest and best airline. It's a privately
owned, full service airline that commenced operating in mid 1993.
It's now captured almost 23% of the market, and has bases in
Delhi, Mumbai, Pune, Kolkata, Hyderabad, Chennai, and
Bangalore.

 Jet Airways has won many awards for quality service. In

particular, the airline is known for its outstanding in-flight
service, food, punctuality, and baggage handling. Staff are
extremely efficient and courteous, and will go out of their way to
ensure that you're comfortable and well looked after.

 Jet Airways operates on a code share basis with Kingfisher

Airlines.

Jet Airways- Marketing Strategies

 Jet Airways has partnered withUTV to launch the online contest

'Cannes Calling', wherein winners will get a chance to attendthe
Cannes Film Festival 2009 along with a companion.

 Jet is trying to highlight its product superiority.

AIR INDIA

• Air India is state-owned, and administered as part of the National Aviation

Company of India Limited - which was created in 2007 to facilitate Air
India's merger with Indian Airlines. Air India is the 16th largest airline in
Asia,[4] serving 25 destinations worldwide, and, with its affiliated carriers,
serves over 100 cities.

• Around 2006-07, the airlines began showing signs of financial distress. The
combined losses for Air India and Indian Airlines in 2006-07 was Rs 771
crores. After the merger of the airlines, this went up to Rs 7200 crores by
March 2009.[20] This was followed by restructuring plans which are still in
progress.[21]. In July 2009, SBI Capital Markets Ltd was appointed to
prepare a road map for the recovery of the airline.[22] The carrier cancelled
the purchase of six Boeing 777-300ER in July 2009 [23] and sold three
Airbus A300 and one Boeing 747-300M in March 2009 for $ 18.75 million
to survive the financial crunch[24].

• Strengths

• 1. Strong brand name

• 2. Oldest Airline

• 3. Monopoly in certain international routes

 • 4. Government backup

• 5. Rights to travel 96 destinations.

• 6. Established infrastructure

• 7. It has prime parking space/slots.

Weaknesses.

 Poor HR Strategies

 High Competition, Loss of market share

 High cost , poor cost control

 Inefficient usage of resources

 Bad Reputation, Poor Services

 Poor Aircraft maintenance

 Highest manpower ratio to aircraft

 Low feet size

 Poor reservation services

 Corruption in company

Macro Fundamentals that will drive Aviation Growth

Market Size: India has a population of 1.1 billion with an estimated middle class
of 300 million.

Demographics: 50% of the population is <25 years old. Therefore, the size of
the economically active segment will continue to grow for a number of decades
(unlike the developed countries and even China).

Economic Growth: Average GDP growth of 6% p.a. sustained since 1991 and
accelerating thereon. The first quarter of FY06/07 registered 9% growth, and the
last Budget has established a target of 10%.

Trade & Investment: India has an increasingly open economy, with strong growth
in international trade, healthy foreign exchange reserves and increasing foreign
direct investment.

Rise of Middle class: A socio-economic revolution is underway as the consumer

profile becomes increasingly middle class
New government initiatives to develop India’s potential as the world’s
fastest growing aviation market……

Changing regulation policies: The government is planning to raise the foreign

direct investment (FDI) limit to 74% for non-scheduled airline operations,
helicopter services and regional airlines using small aircraft. The current FDI
ceiling for airline services is 49%.

Increased privatization of airports: In 1997 the Government of India

published a policy document to open up existing airports to domestic and foreign
private investors in order to meet the significant costs involved in developing
India’s airports to keep pace with the growth in air traffic. In Sep 2003, Govt
leased out Delhi and Mumbai airports to the private sector as part of its
extensive modernisation and growth plan for the sector.

Growing Infrastructure developments:

• Mumbai Airport - Planned investment of US$1.6 billion by 2020, of which

US$1.3 bn will take place by 2014
• Delhi Airport - Planned investment of US$764 million by 2014 and USD$.7
billion by 2020
• Kolkata Airport - Modernisation will be led by the Airports Authority of
India. Total project cost is estimated at US$360 million.
• Hyderabad & Bengaluru Airports - Total investment of US$1.1 billion
dollars. Both airports have commenced commercial operations in April
2008.
• 35Non-Metro Airports - Development of 35 non-metro airports will proceed
at an estimated cost of US $ 1.2 billion. City side development will require
 a further US$350 million, with the modernisation process to be completed
by 2009.
• North East Region - Development of following airports : Pakyong Airport,
Gangtok, Sikkim Cheithu Airport, Kohima, Nagaland Itanagar
• Other Greenfield Airports –

➢ Mopa, Goa
➢ Navi Mumbai. Planning Commission discussing 3rd Mumbai Airport.
➢ Chakan/Rajguru, Pune, Maharashtra; Halwara, Punjab
➢ Kannur, Kerala.
➢ Hassan & Gulbaraga, Karnataka.

INDUSRTY LOOKING FORWARD TO GOVERNMENT FOR FOLLOWING

RELAXATIONS

Lowering taxes on aviation turbine fuel (ATF) which is 35% of the operating cost
of airlines. As per international standards, it is 10-15% of the operating cost.

Reduction in landing charges – In India low cost carriers (LCC) pay the same as
full service airlines. As per international standards, it is lower for LCCs.

Extending exemption of withdrawal tax on lease rentals of aircraft

Relaxing fringe benefit tax (FBT)

Removing service taxes on first and business-class travellers