SPICEJET INDUSTRY

ANALYSIS

SPICEJET
Parent company : spice jet
Category : Indian domestic
sector
Sector : airlines
Tagline/slogan: flying for
everyone
Usp: lowest price
Segment: cost conscious
passengers
Target: lower middle class/
middle class
Positioning : low cost no frills

INTRODUCTION
Spice jet is a low-cost airline based in New Delhi.
It began service in 23 May 2005.
Spice Jet was earlier known as Royal Airway
The director of this airlines is Mr. Ajay Singh.
This airline has more than 2500 employees working
with them currently.
SpiceJet names all its aircraft after various spices
and herbs like Cinnamon, Thyme, Oregano.

Swot analysis
STRENGTH
Entered with RS 99 fares for
the first 99 days
Strong backing by the
promoters
Having more than 35
destinations in India
Good presence in the market
due to its branding and
advertising

SWOT
WEAKNESS

OPPORTUNITIES

Low market share due

to presence of
significant
competition
no international
destinations
Dependency on
leased assets
Small load deficiency
compared with
competitors

Growing population for

demographics
growing interest on
tourism
Growing aviation market
International tie ups would
boost brand image
Tax holiday on aircraft
leasing The Union Budget
Government of India
announced 5year tax
holiday on aircraft leasing.

THREATS :

RISING FUEL COST

STRONG COMPETITION

CHANGING GOVERNMENT POLICIES

SWOT
ANALYSIS
STRENGTH
One of the largest low
cost carrier
Only LCC to make
consistent profit
Has entered
international markets
and boosted its brand
value
Increased brand recall
due to goodmarketing
and advertising

WEAKNESS
Not on too many
routes compared to
competitors
Still has to
establish itself on
international
destinations
Concentrate only on
middle class society
Customers are not
happy with Inflight
services

OPPORTUNITITES
Attracted loyal
customers and
converted them into
indigo flyers
Opportunity to go
abroad markets
Rapid expansion by
buying new airbuses
International tie-ups
would boost the
image of indigo

THREATS
Strong competition
in the LCC segment
Rising fuel cost
Changing
government policies
Companies are
cutting air travels
due to economic
crises

STRENGTH

WEAKNESS

1. Has created a good image

among Indian fliers
2. Strong backing from promoters
3. Awarded as one of the most
premium domestic airlines in
India
4. More than 1 million passengers
catered in a year
5. Exclusive and premium
advertising and sponsorship give
it a high brand recall
6. It has flights to 25 Indian
destinations and international
flights as well

1. Financial issues
due to Heavy Debt
2. Laying off
employees caused a
bad image

OPPORTUNITIES
1. Reputation of
providing the best
amenities in Indian
skies
2. Financial stability
can improve
operations
3. More domestic
and international
destinations

THREATS
1. LCCs eating up the
market share
2. Rising Fuel Costs
3. Pressure from
aviation
committees and
govt policies

strength
Strong backing by
the promoters
Nearly 1000 flights
per week
Covers almost all
major cities
Good branding and
marketing in India

weakness

market share is
very less
It entered Indian
market very late
Not too many
destinations
compared with its
competitor

OPPORTUNITIES
More destinations
yet to be covered
Global operations
can also be a value
addition

THREATS
Plenty of new LCCs to
compete with who already
have taken the lead
Rising labour costs
Rising fuel costs

Airline Industry market analysis

EXTERNAL ANALYSIS
OF SPICEJET

CUSTOMER ANALYSIS
SEGMENTATION
Geographic
:
Target
:

Psychographic
Segmentation

tier I and tier II cities

premium class of train travellers
business people
corporate employees
aiming for higher life style

UNMET NEEDS
More international destinations
Need for technological advancement
Need for trained cabin crews

COMPETITOR ANALYSIS

COMPETITOR ANALYSIS

Quality
Reputation
Customer security
Product performance
Product features
Price
Geo coverage
Add effects

ENVIRONMENTAL ANALYSIS
PEST

POLITICAL FACTORS :
Bureaucracy
No clear policies for state carriers
ECONOMIC FACTORS:
increasing tax and tariff
Price depends upon individual firms
behaviour
International fuel price

PEST .. (CONT)
SOCIAL FACTORS :
Lack of skilled manpower ( in flight staffs)
Customers services
Safety concerns (9/11)
TECHNOLOGICAL FACTORS :
Night landing facilities
Operation during winter
Capital intensive technology

MARKET AND SUBMARKET ANALYSIS

MARKET : aviation industry

SUB MARKET : low cost carriers
( LCCS)
SIZE AND GROWTH : 14 % of market
share
MARKET ATTRACTIVENESS : fast
transportation

MARKET TRENDS ( EMERGING

MARKET)
Indias fastest growing tourism destination
(majordemand driver)
economic growth
growth in business travels
Low cost carriers ( Lccs)
Resulted in middle income people people and
self employed shifting from premium class
travel in trains to air travel
Domestic air passengers grew at a 38.5% from
25 %
CAPA predicts that domestic traffic would
increase from 25% to 30%

CUSTOMER PROFITABILITY
Focusing towards enhancing the customer
experience
Complimentary supervision of unaccompanied
minors
Hot beverage and combo meals available for
sale
Waiver on additional charges on sport kits
Reaching out to business travellers :
1. business travellers can collect their
boarding passes on the same day return flight.
2. introduction of corporate travel programs
3. free two piece baggage

Key success factors

Low cost carrier

Point to point services
Cheaper product design
Sales via internet
Word of mouth marketing

CUSTOMER SERVICES

personal wallet at airport

Personal and exclusive baggies
Refreshment and music
Three course meal
Baggage assistance

Promotional tools

Word of mouth marketing

Print ads in newspapers
TV commercials
Internet media initiatives
Hoardings in railways, platforms,
airports and shopping malls

COST AND VALUE DRIVERS

(COMPETATIVE ADVANTAGE)

HIGH SEAT DENSITY :

Single class 189 seats per flight
Focus on maximum space utilization for
generating more revenue per flight

DIRECT DISTRIBUTION OF TICKETS :

Sells its ticket via internet or call centres

HIGH CRAFT UTILIZATION:

consistently reporting high aircraft
utilization

Strategic uncertainty
Uncertainty in forecasting the
future
Market fluctuations
Rapidly changing clients
How to over come ?
Government should develop and
promote policies

SCENARIO ANALYSIS

control of emission level

Risk of high-jacks
Increasing fuel price
Decreasing rupee value

How to overcome ?
Increase security level
Fuel hedging

Thank you for flying with us . .