SWOT ANALYSIS OF THE INDIAN AVIATION INDUSTRY SWOT means the strengths, weakness, threats and opportunities.

This is one of the essential requirements of any organization and the foundation for understanding the industry of that particular organization. The continuous volatile environment of the aviation industry has been analysed with respect the extended marketing mix ( product, price, place, promotion, process, people and physical evidence). While individual airlines each analyze and make decisions based on their own situations, there are over all industry similarities that all airlines face, with each endeavoring to maximize strengths and opportunities while minimizing weaknesses and threats. STRENGTHS A major strength of any airline is the product itself (air travel). Despite downturns, over time air travel continues to grow, not only due to population growth, but also due to an increased propensity to fly. The entry of low-cost carriers pioneered by Air Deccan helped greatly reduce the costs involved in flying. This helped attract consumers for whom air travel was only a dream. Now a number of low-cost airlines are operating in India, namely Go Airways, Spice Jet, and Kingfisher Air, and they have a major share of the Indian aviation industry. Indian labour costs are an advantage, at $30-35 per man-hour. This compares with $55-60 in South-East Asia and Middle East and even higher in the USA and Europe. The change in lifestyle of people and growth in the disposable income has resulted in an in creasein leisure travelers for the past few years; 5 years back 85% were business travelers. WEAKNESS All the major players in the aviation industry focus on particular regions rather than focusing on India as a country. For example Air Deccan focuses exclusively on south Indian market while Go Air focuses on southern and western India. The unplanned location of airport and the lack of proper infrastructure facilities at the airport.Though the government has tied up with private companies such as GMR and has upgraded airports such Delhi and Banglore but still there is a long way to go. Airlines have a high "spoilage" rate compared to most other industries. Once a flight leaves the gate, an empty seat is lost and non-revenue producing. OPPORTUNITIES Government allows 100% FDI via the automatic route for the green field airports. Also, foreign investment up to 74% is permissible through direct approvals while special permissions are required for 100% investment. Private investors are allowed to establish general airports and captive airstrips while keeping a distance of 150 km from the existing ones. About 49% FDI is allowed for investment in domestic airlines via the automatic route. However, this option is nota vailable for foreign airline corporations. Complete equity ownership is granted to NRIs (Non Resident Indians). Foreign direct investment up to 74% is allowed for non-scheduled and cargo airlines. Thus, all these policies promote foreign investment in this industry. Investment opportunities of US$ 110 billion are being envisaged up to 2020 with US$ 80 billion towards new aircraft and US$ 30 billion towards the development of airport infrastructure, According to the Investment Commission of India. Technology advances can result in cost savings, from more fuel efficient aircraft to more automated processes on the ground. Technology can also result in increased revenue due to customer-friendly service enhancements like in-flight Internet access and other value-added products for which a customer will pay extra. THREATS One of the basic weaknesses in the aviation industry is the fuel costs which are 70% higher than International standards. The fuel bill is 40% of operating cost. Aviation Turbine Fuel (ATF) prices in India is around Rs. 37,800 per kilo litre against Rs.21,800 in the Average International Markets. Also 20% of the Operational Budget is spent on training pilots. Furthermore, landing and parking charges are 78% higher than the international average. There is a shortage of skilled manpower which includes pilots, cabin crew and ground staff. Alsothere is high attrition rate among the skilled manpower within the aviation industry.