Market Research Report : Domestic Aviation Market in India 2011


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The aviation market is growing steadily. The passenger air traffic segment is expected to grow at a CAGR of 15%. Growth in this sector is being propelled by increasing income levels and favourable economic conditions.

The report begins with an introduction of the aviation industry. This is followed by the market overview section which discusses the market size in terms of passenger air traffic and growth as well as the market segmentation. The following section highlights the major opportunities in the market by analyzing the growth rates in traffic witnessed in the Indian metro cities and Indian non-metro cities in north, south, east and west between 2006 and 2010.

An analysis of the drivers influencing the industry growth includes increasing spending power, lowering of fares, favorable economic condition, growth in tourism, investment in aircraft, Demand - Supply gap and low penetration. The key challenges identified include delays and cancellations, volatility in aviation turbine fuel prices, strict FDI regulations, high rate of service tax. The report discusses the current market trends as players expand international operation, airlines offering holiday packages, value added services are offered by the airlines.

The competition section provides brief profiles of the major domestic players which incorporates their financials, business highlights and operational performance including their traffic statistics.

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Market Research Report : Domestic Aviation Market in India 2011

  1. 1. Domestic Aviation Market – India Domestic Aviation Market IndiaJuly 2011
  2. 2. Executive Summary Indian aviation market ranks Xth among the aviation markets across the globe Global aviation industry is poised to grow at a healthy a% CAGR over the next P years Market Indian airline industry has grown by ~r% in the last six and a half years Indian airline industry has grown by  r% in the last six and a half years Drivers:  Challenges: Increasing spending power  Delays and cancellations Lowering of fares Lowering of fares Volatility in aviation turbine fuel  Volatility in aviation turbine fuel Drivers &  Favorable economic condition prices Challenges Strict FDI regulations Growth in tourism Investment in aircraft  High rate of service tax Demand‐Supply gap and low penetration Airlines expand international operations Trends  Airlines offering holiday packages Value added services are offered by the airlines Aviation market is highly organized with the presence of domestic and international Competition p players Domestic players include Player 1, Player 2, Player 3 and Player 4 DOMESTIC AVIATION MARKET IN INDIA 2011.PPT 2
  3. 3. •Introduction•Market Overview•Passenger Traffic – by  g y geographical zones•Drivers & Challenges g•Trends•Competition DOMESTIC AVIATION MARKET IN INDIA 2011.PPT 3
  4. 4. Aviation Industry – Market Structure Aviation Industry Airlines Support Services Aerospace Design and  Passenger Cargo MRO Manufacture Ground  Training Catering Handling Focus Area of ReportSource: DOMESTIC AVIATION MARKET IN INDIA 2011.PPT 4
  5. 5. Indian aviation industry is witnessing steady growth and is  expected to continue to grow Overview  Market Size: Passenger Traffic • Indian aviation market ranks ath among the aviation  markets across the globe e 600 • Global aviation industry is poised to grow at a  healthy f% CAGR over the next g years 400 • Civil airline industry has grown by ~h% since 20‐‐ +b% 200 c d • Domestic air traffic rose from i mn in 20‐‐ to j mn in  20‐‐ d i t 20 and international air traffic grew from l mn in 20‐ ti l i t ffi f l i 20 0 ‐ to m mn in 20‐‐ 20‐‐ 20‐‐ 20‐‐e Market Segmentation – 20‐‐ Service wise segmentation (20‐‐)  Service 1 p% Service 2 m% n% Segment 1 Segment 2 q%Source: DOMESTIC AVIATION MARKET IN INDIA 2011.PPT 5
  6. 6. Non‐metro cities city 1, city 2 show strong potential while  city 4 leads in the metro city category High Growth Areas – Airport Traffic SAMPLE  SAMPLE City 20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐ Growth Metro Cities M Ci i Among the  City 1 ab ac ad ae af ag% metro cities,  city 4 leads in  City 2 ah ai aj al am an% terms of  growth  City 3 ao ap aq ar as at% between 20‐‐ and 20‐‐ City 4 au av aw ax ay az% Non‐Metro Cities N M t Citi North In the North,  city 1registered  City 5 a b c d e f% a high double  digit growth  digit growth showing strong  City 6 g h i j k l% potential Northwest City 7 City 7 m n o p q r%Source: DOMESTIC AVIATION MARKET IN INDIA 2011.PPT 6
  7. 7. Drivers and Challenges – Summary  Drivers Challenges Increasing spending power Delays and cancellations Lowering of fares Lowering of fares Volatility in aviation turbine fuel prices Favorable economic condition Strict FDI regulations Growth in tourism G th i t i High rate of service tax Investment in aircraft  Demand ‐ S D d Supply gap and low  l dl penetration DOMESTIC AVIATION MARKET IN INDIA 2011.PPT 7
  8. 8. Trends – Summary Airlines expand  international operation international operation Key  Trends d Value added services are  Airlines offering holiday  offered by the airlines ff d b h i li packages k DOMESTIC AVIATION MARKET IN INDIA 2011.PPT 8
  9. 9. Player 1 dominates the market while the aviation fleet is  dominated by Player 2 Competition – Overview  Share of Aviation Fleet – 20‐‐ • The aviation market is a highly organized sector with the  12% Player 1 presence of domestic and international airline operators Player 2 • In the domestic segment, Player 3 along with Player 4 is  38% Player 3 the major contributor followed by Player 1 and Player 5 22% Player 4  The international segment is dominated by Player 5 followed  by Player 6 and Player 7 • Low cost carriers also has a prominent share in the Low cost carriers also has a prominent share in the  market 28% Market Share of Airlines – 20‐‐ Market Share of Airlines (Q1FY‐‐) 5% Player 1 Player 2 5% Player 1 Player 2 7% 2% 21% 7% 2% 21% Player 3 Player 4 Player 3 Player 4 Player 5 Player 6 Player 5 Player 6 13% 13% Player 7 Player 8 Player 7 Player 8 19% 19% 15% 15% 18% 18%Source: DOMESTIC AVIATION MARKET IN INDIA 2011.PPT 9
  10. 10. Company Snapshot: Company 1 Company Snapshot: Company 1 Corporate Information Business Highlights Headquarters Location 1 • The airline is a domestic Class R carrier which  Founded 20‐‐ operates a fleet of U which is expected to rise to  Employees XX more than V by Dec 20‐‐ Parent Company  A • The company plans to offer international flight  Subsidiaries  S b idi i N.A. NA services mainly to the Region T and Region Y  services mainly to the Region T and Region Y Key People Person 1 ‐ Post 1  It will begin daily flights from City 1 to City 5, City 6and City  7 by Sep ‐‐  City 3 will be connected to City 7 and City 8 from Oct’  ‐‐  It is looking to add  L more planes to its current fleet of  Domestic Operations (2010) Company E aircraft Fleet Size N.A. Destinations N.A. Hubs • Primary – City 1 • Secondary – City 2 and City 3 Service Class Service Class Class R Class RSource: 10
  11. 11. Company Snapshot: Company 1Traffic Statistics 2006‐07 2007‐08 2008‐09 2009‐10Fleet Size FS1 FS2 FS3 FS4Passengers carried (thou no) PC1 PC2 PC3 PC4Passenger – Kilometres performed (mn no) PK 1 PK 2 PK 3 PK 4Average Passenger Load Factor PK 5 PK 6 PK 7 PK 8Seat Kilometers Available (mn no) SK 1 SK2 SK3 SK4Average Weight Load Factor g g AW1 AW2 AW3 AW4Operational Performance 2006‐07 2007‐08 2008‐09No. of Employees per aircraft E1 E2 E3Operating Revenue per Employee ( INR mn) OR 1 OR 2 OR 3Operating Expenses per Employee ( INR mn) EE1 EE2 EE3Operating Revenue per Passenger carried (INR.) RP1 RP2 RP3Operating Expenses per Passenger carried ( INR)Operating Expenses per Passenger carried ( INR) EP1 EP2 EP3Operating Revenue per RPKM (INR) R1 R2 R3Operating Expenses per RPKM ( INR) E1 E2 E3 SAMPLE  SAMPLE 11
  12. 12. Thank you for the attentionThe Domestic Aviation Market – India report is a part of Research on India’s Aviation Industry Series. For more detailed information or customized research requirements please contact:Gaurav KumarPhone: +91 33 4064 6214E‐Mail: gaurav.kumar@netscribes.comResearch on India is a product of Netscribes (India) Pvt. Ltd. Research on India is dedicated to disseminating information and providing quick Research on India is a product of Netscribes (India) Pvt Ltd Research on India is dedicated to disseminating information and providing quickinsights on “hot” industries in India and other emerging markets. Track our new releases and major updates in these industries onAbout NetscribesNetscribes is a knowledge‐consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment &  g g f g p y p p fbusiness research, business & corporate intelligence, content‐management services, and knowledge‐software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one‐stop shop designed to fulfil clients’ profitability and growth objectives.Disclaimer: This report is published for general information only. Although high standards have been used the preparation, Research on India, Disclaimer: This report is published for general information only Although high standards have been used the preparation Research on IndiaNetscribes (India) Pvt. Ltd. or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes (India) Pvt. Ltd. and prior permission is required for guidelines on reproduction. DOMESTIC AVIATION MARKET IN INDIA 2011.PPT 12