Figure - SWOT Analysis of Low Cost Carriers

Air India
Strengths
Air India has been the largest air carrier in India in terms of traffic volume and
company assets.

It owns the most updated fleet and competent repairs and maintenance expertise.

Its information systems are advanced and compatible with its operation and service.

It has a good reputation in both international and domestic markets, quality service
and the age-old Goodwill that has still kept it alive in the interests of the rescue

operators.
Has financial backing of the Government

Weaknesses
Air India is operating across broad international and domestic markets competing
with world leading giant airlines as well as local small operators. This lack of
clarity on the strategic direction largely dilutes its capabilities and confuses its

brand within markets.

Low profitability and utilization of capacity.

Growing Competitor base and entry of Low-Cost Carriers (LCCs)

The airlines high-cost structure and the compulsions of being a public sector unit
are the reasons and it had been making a loss and shall continue to make losses for

some more quarters.

Opportunities
India airline industry is growing faster and will continue to grow as the GDP

increases, and the trend is predicted to continue once the slowdown recedes.
Worldwide deregulations make the skies more accessible; the route agreement is
easier to be achieved. The number of foreign visitors and investors to India is

increasing rapidly.
Complementary industry like tourism will increase demand for airline service. The
Civil Aviation Ministrys strong regulation and protection provides opportunities

for consolidation and optimization.

Customers are getting wealthier, tend to be less price-conscious and prefer to
choose quality service over cost.

Threats

Air India faces imminent aggressive competition from world leading airlines and
price wars triggered by domestic players.

The Indian Railway Ministry has dramatically improved speed and services in their
medium/long distant routes, attracting passengers away from air service, with

prices almost at par with the low cost carriers.[12]

SpiceJet
Strengths
Entered with Rs. 99 fares for first 99 days
Offering low everyday spicey fares
Aim: Compete with Indian Railways AC sgment
Fleet of 6 Boeing 737-800 with 189 seats
Weaknesses
Small fleet structure
Concentrating at only North-West-South Indian Sectors
Small Load Efficiency compared to Air Deccan
Opportunities
Future Fleet expansion will increase its Market Share
Attractive fares and up to date quality service will generate a huge customer base
comprising Frequent Flyers
Threats
High Attrition rate
The Threat of New Entrants into (LCC) segment especially GoAir, Indigo and

Jagson Airlines
High Risk Perception

GoAir
Strengths
Promoted by Wadia Group
GoAir free fares
Weaknesses
Small network : Only in Southern and Western India
Small fleet structure
Small Load Efficiency compared to Air Deccan & Spice Jet
Opportunities
Future Fleet expansion will increase its Market Share
Flight network extension
Attractive fares and up to date quality service will generate a huge customer base
comprising Frequent Flyers
Threats
High Attrition rate

The Threat of New Entrants into (LCC) segment especially GoAir, Indigo and
Jagson Airlines
High Risk Perception
Indigo
Strenghts
Strong backing Promoters and is one of the largest low cost carriers in India
Only LCC to make consistent profits

It has one of the major airlines in India in terms of market share.

LCC which has entered international markets has boosted its brand value

Good advertising and marketing strategies have increased its brand recall

Weaknesses

Not on too many routes as compared to competitors

Still has to establish itself on international destinations

Opportunities

Opening up of International routes

Largest Marketshare among LCCs in Indian Market

Middle Class taking to the skies

Threats

Plenty of new LCCs to compete with

Rising Labour costs and changing government policies

Rising Fuel Costs. [13]