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aviation industry in India

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  • 1. The Aviation industry which hauls the Indian economy -Battle royal over Elephant’s sky- Feb / 2006 Border ZeroCopyright ©2007. Border Zero All rights reserved.
  • 2. In the Beginning We visited several countries in the world in order to grasp big flow from September 2005 to December 2005.(For more information, please refer our blog site, http://borderzero.jugem.jp/?cid=2.) *sorry, only available in Japanese. The degree of attention to aviation industry is by following two reasons. In Japan, opening of the Kobe airport and newly founded Star Flyer is scheduled to launch its maiden flight in March. In the world, competition between Airbus and Boeing has been more intensified. As for India which is picked up with this manuscript, as a part of BRICs and as ahead the out-sourcing which utilizes high IT technology, improvement of standard of living of the citizen have airliners has been born. On the basis of the official data and writers individual experience, the purpose of this manuscript is to understand rapid growing Indian aviation industry. If you want to learn further more, please access following URL; http://www.borderzero.com/indiaaviation.html. *sorry, only available in Japanese. *: Data are as of Feb 2006 and rate of exchange handles as Re1 ≒ US$0.022.Copyright ©2007. Border Zero All rights reserved. -1-
  • 3. The history of Indian aviation industry 《The history of Indian aviation industry》 The Aviation Department of Tata Sons Ltd. established in 1932 Tata Air Lines converted into a public Company and renamed Air India Limited in 1946 Two Corporations - Air India International Limited and Indian Airlines Corporation (IAC) came into formal existence in 1953 Air India becomes an all-jet carrier in 1962 The second aviation boom in 2005 The first aviation boom in 1993 Deregulation in 19911930 1940 1950 1960 1970 1980 1990 2000 2005 The second aviation boom has just begunSource:Websites of each airlinesCopyright ©2007. Border Zero All rights reserved. -2-
  • 4. Why the Indian aviation industry is so HOT? Yearly mean 25% industry growth is expected by 2010. High economic growth rate Maintains yearly mean 5% economic growth is expected by 2050 Increase of middle income group From 2002 extending through 2009, number of household whose annual income between Rs 100 thousands and Rs 500 thousands will increase from 121 million to 176 million. Increase of the number of aircraft users past 10 years. Doubled in 10 yearsCopyright ©2007. Border Zero All rights reserved. -3-
  • 5. Fundamental data of Indian airlines 《Fundamental data of Indian airlines》 Destinations Airlines founded fleet notes dome inter Air India 1932 12 27 42 The national carrier focusing international routes. Founded as Tata Air Lines. Air India has Air-India Express as affiliate airlines. Indian 1953 41 18 59 The national carrier focusing domestic routes. Some flies to neighboring Airlines countries. Indian Airlines has Alliance Air as affiliate airlines. Jet Airways 1993 43 5 50 The market leader of private airlines in India. Very positive to expand its route to foreign countries. Fares are not low. Air Sahara 1993 22 4 27 The original price warrior. Who is being forced to come with new strategy. It is affiliate of Sahara India Pariwar Group. Air Deccan 2002 56 0 22 Low, no frills. Only economy class. Mix of metro and cross-country destinations. Kingfisher 2005 15 0 9 Single Kingfisher class. All frills. Premium in-flight services. Only metro Airlines destinations. Affiliate of United Breweries. SpiceJet 2005 11 0 5 Low, variable fare, but not cheap quality service. Low frills, small complimentary snack. Paramount 2005 5 0 1 Low fare, all frills. Only business class at less than economy fares. Airways Mostly non-metros. Focus South India. GoAir 2005 14 0 3 Low cost, low frill. Mix of metro and small cities. Affiliate of Wadia GroupSource:Websites of each airlines and Airborne Indians Indian Today July 7, 2005Copyright ©2007. Border Zero All rights reserved. -4-
  • 6. The stance for the service 《Various attitude for service》 Air Deccan Air Sahara Kingfisher Airlines GoAir SpiceJet Jet Airways Paramount Airways Low Service circularity HighActualizing the low price by cost reduction Lower price than major but great serviceSource: Websites of each airlinesCopyright ©2007. Border Zero All rights reserved. -5-
  • 7. The case of Jet Airways; Veteran private airlines Introducing up-to-date fleet Acquiring the reliance from the passenger for safety Actualization of high fixed carving/moment takeoff ratio Actualization of cost reduction Reduction of fuel cost 《Best Airlines - SOUTH EAST ASIA 2004,2005》 rank 2004(Country) 2005(Country) 1 SriLankan Airlines(SriLanka) Jet Airways(India) 2 Jet Airways(India) SriLankan Airlines(SriLanka) 3 N/A Air Sahara(India)Source:Martin Roll “Asian Brand Strategy” and SKYTRAXCopyright ©2007. Border Zero All rights reserved. -6-
  • 8. The case of Kingfisher Airlines; Indian virgin atlantic The porter who wears the uniform of Kingfisher Airlines taking the initiative to carry baggage to the check-in counter. Standardizing all seat in Kingfisher class which has upper quality than economy class. The crimson, the corporate color, carpet is spread in the check-in counter. IFEs are equipped in all seat. The color of headphone is based on corporate brand color. The amenity goods are complete(Hand towel, teabags, pens, candies, headphones in a small poach). Packs of Tropicana are served in the flight. All flight attendant is only model experience person. To pick up the voice of the passenger the detailed questionnaires are prepared in the seat pocket. Several newspapers are inserted in the seat pocket before the embarking. Actualizing share 6% in opening 1st yearCopyright ©2007. Border Zero All rights reserved. -7-
  • 9. The case of Air Deccan; King of budget cost airlines 《Pricing》 Air Deccan Other Airlines Train Lowest fare Re 1 (≒US$0.022) Rs 8,155 (≒US$180) AC 1st Rs 2,953 (≒US$65) Last day fare Rs 7,200 (≒¥18,000) Rs 13,540 (≒US$300) AC 2nd Rs 1,559 (≒US$34) Time taken 1hr35min 23hrs In order to offer low fare… Using small aircraft and saving landing charge. Shortening in parking time; actualizing the parking charge reduction and turnover improvement. Abbreviation of in-flight service such as beverage and meal. Reduction of operational cost. Thoroughness of Internet ticketing. Business in only of economy class; reducing customer unit cost by increasing seat. Cutting unused space in aircraft.Source:Websites of Air DeccanCopyright ©2007. Border Zero All rights reserved. -8-
  • 10. To increase and keep passengers 《Number of new routes in 2005 by airlines founded before 2005》 Destinations domestic inter- total national Air India 0 5 5 Indian Airlines - - - Jet Airways 0 3 3 Air Sahara 0 1 1 Air Deccan 8 0 8 Exciting benefits of owning a Air Sahara Standard Chartered Gold Card Free ticket for your companion when passenger flies. Free tickets for passenger’s kids when passenger flies with his wife. Complimentary upgrades to business class. Cosmos miles even when passenger doesnt fly.Copyright ©2007. Border Zero All rights reserved. -9-
  • 11. Entry of aircraft manufacturer 《Increasing number of fleet》 《Number of fleet by aircraft manufacturer》 2(1%) 1(1%) (fleet) 170 7(3%) 162 160 27(12%) 150 94(43%) 140 138 130 87(40%) 132 120 119 118 110 100 Airbus Boeing ATR 1999- 2000- 2001- 2002- 2003- Bombardier Dornier Embraer Source:DGCA Source:Websites of aircraft manufacturers 《Number of orders in 2005 by aircraft manufacturer》 (fleet) 250 227 200 150 98 100 50 50 5 0 Airbus Boeing ATR Embraer Source:Websites of aircraft manufacturersCopyright ©2007. Border Zero All rights reserved. - 10 -
  • 12. The return of public owned aviation company The raising of funds with the execution of IPO. Reinforcement of fleet. Positive advance to foreign destinations. Image improvement. Establishment of cheap airliner. Air India(Air-India Express)、Indian Airlines(Alliance Air) Completeness of customer service. Completeness of lounges、Execution of various campaignsCopyright ©2007. Border Zero All rights reserved. - 11 -
  • 13. Industry reorganization The second aviation boom in India has begun in 2005 but… Jet Airways Air Sahara Announced acquisition of Air Sahara in Jan 2006 Opposing acquisition of two Air Deccan Kingfisher Airlines GoAir IndiGo Airlines Four airlines are seeking to cooperate one another And new airlines are scheduled to enter market…Copyright ©2007. Border Zero All rights reserved. - 12 -
  • 14. From Indian sky & to Indian Sky 《The new traffic route to India of the European-American airliners in 2005》Copyright ©2007. Border Zero All rights reserved. - 13 -
  • 15. Topics of Indian aviation Industry Topics of airports Non-service of infrastructure The number of runways which are insufficient by comparison with the number of arrivals and departures etc… The management which cannot utilize existing environment Other airport with similar environment can handle twice as much arrivals and departures as Indian airports etc… Topics of airlines Frequent delays Shortage of pilots and mechanics Lack of accountabilityCopyright ©2007. Border Zero All rights reserved. - 14 -
  • 16. For development of Indian aviation industry For development of 《Competitors of Indian airlines airlines》 Competitions among Indian airlines Taking in of first flier and repeaters etc… Foreign airlines Competitions with the domestic other means of transportation Airlines A My-car boom etc… Indian airlines Competitions with foreign airlines Highly appraised airlines of neighboring countries etc… Train Cars For development of airports Highly appraised airports of neighboring countries etc…Copyright ©2007. Border Zero All rights reserved. - 15 -
  • 17. Tail wing for aviation industry, Tourism 《Growing Indian tourism》 (1,000toursts) (US$1million) 3,000 4,000 3,500 2,500 3,000 2,000 2,500 1,500 2,000 1,500 1,000 1,000 500 500 0 0 1990年 1995年 2000年 2001年 2002年 2003年 Tourist Revenue Both tourists and revenue are increasing and 5million tourists are estimated to visit India in 2007. Business chance expands for Indian aviation industrySource:WTO World Overview & Tourism Topics: 2004 EditionCopyright ©2007. Border Zero All rights reserved. - 16 -
  • 18. Who is Border Zero? 《Contact》 【Services of Border Zero】 Border Zero Ltd Management: Masaya Fukumoto TEL:+81-3-3777-5805 URL:http://www.borderzero.com/index_e.html email:post@borderzero.comIf you want to learn further more, please access following URL;http://www.borderzero.com/indiaaviation.html.*sorry only available in Japanese.Copyright ©2007. Border Zero All rights reserved. - 17 -

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