Airline Price in India

Kusum
Khushbu
Safaat
Ashish
Contents
•
•
•
•
•
•

Objective
History
Literature review
Data
Findings
conclusion
Objective
• To discuss airline pricing in India between the
top players of the industry and evaluate its
strategies.
• Ana...
History
• There have been major changes in aviation
industry in the past few years.
• Until 1986
• 1986-2003
• 2003-2006
•...
Literature Review
• Indian aviation, spreading its wings : Evolution of
the industry, its classification, challenges and t...
Continued...
• History of aviation industry in India: major
changes in the industry in the past few years
• Indian aviatio...
Commercial aviation
•
•
•
•
•

Related to GDP
Global business and tourism
Liberalisation
Expansion
Challenges

11/24/13
General Aviation
•
•
•
•
•
•

GA Market
Industry downtown
Opportunities
Challenges
Current project pipeline
Investment gap...
Data

Source: Company Filings,Bloomberg, ICRA Research
11/24/13
State-wise representation of % of total flights vs.
% of the total population

11/24/13
Findings :Key Pricing Concepts
• Dilution – Difference between how much
customers are willing to pay and what they
actuall...
Evaluate Competitive Pricing actions
• Know your Markets
• Know your Products
• Know your Competitors
Know your Markets
• High Market Share/ High yield – Maintain
market strength
• High Market Share / Low yield – Leverage
ma...
Know your Products
•
•
•
•

Schedule
Load factor
Loyalty
Airport/ in flight service

11/24/13
Know your Competitors
• Price Behaviour
• Low Price Strategy
• New Services

11/24/13
Pricing Strategies

11/24/13
Price Discrimination vs. Product
differentiation
• Price Discrimination – The practice of charging
different prices for sa...
Challenges

11/24/13
Policy recommendations
•
•
•
•

New business models in regional airports
Alternate development models
Incentive to airline...
Types of Fare Restriction
•
•
•
•
•

Advance Purchase requirements
Round Trip Travel
Minimum Stay requirements
Non stop tr...
Conclusion
•
•
•
•
•

Tremendous opportunities
Remodeling required
Huge investment needed
Changes in policies required
Fut...
Thank you....
11/24/13
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Airline price in India

  1. 1. Airline Price in India Kusum Khushbu Safaat Ashish
  2. 2. Contents • • • • • • Objective History Literature review Data Findings conclusion
  3. 3. Objective • To discuss airline pricing in India between the top players of the industry and evaluate its strategies. • Analysis and evaluation of present scenario as well as the future development.
  4. 4. History • There have been major changes in aviation industry in the past few years. • Until 1986 • 1986-2003 • 2003-2006 • 2006 onwards 11/24/13
  5. 5. Literature Review • Indian aviation, spreading its wings : Evolution of the industry, its classification, challenges and tax and regulatory framework • Fair is Fair in deregulation: Market Segmentation & comparison between the customer who pay higher or less for the same product and Types of restrictions • Airline Pricing - By thomas bertram: Three pricing concepts - Dilution , Customer segmentation , Elasticity 11/24/13
  6. 6. Continued... • History of aviation industry in India: major changes in the industry in the past few years • Indian aviation industry has been going a turbulent phase over the past years high oil prices and limited pricing power 11/24/13
  7. 7. Commercial aviation • • • • • Related to GDP Global business and tourism Liberalisation Expansion Challenges 11/24/13
  8. 8. General Aviation • • • • • • GA Market Industry downtown Opportunities Challenges Current project pipeline Investment gap 11/24/13
  9. 9. Data Source: Company Filings,Bloomberg, ICRA Research 11/24/13
  10. 10. State-wise representation of % of total flights vs. % of the total population 11/24/13
  11. 11. Findings :Key Pricing Concepts • Dilution – Difference between how much customers are willing to pay and what they actually pay • Customer Segmentation – People travelling for business for vacation and visiting friends and relatives • Elasticity – Measure the sensitivity between change in price and quantity of demand
  12. 12. Evaluate Competitive Pricing actions • Know your Markets • Know your Products • Know your Competitors
  13. 13. Know your Markets • High Market Share/ High yield – Maintain market strength • High Market Share / Low yield – Leverage market presence to improve yield • Low Market share / High yield – Segment fare products to avoid dilution from higher fares • Low Market share / Low yield – Opportunistic pricing develops more demand 11/24/13
  14. 14. Know your Products • • • • Schedule Load factor Loyalty Airport/ in flight service 11/24/13
  15. 15. Know your Competitors • Price Behaviour • Low Price Strategy • New Services 11/24/13
  16. 16. Pricing Strategies 11/24/13
  17. 17. Price Discrimination vs. Product differentiation • Price Discrimination – The practice of charging different prices for same product with same cost of production • Product Differentiation – Charging different prices for products with different
  18. 18. Challenges 11/24/13
  19. 19. Policy recommendations • • • • New business models in regional airports Alternate development models Incentive to airline operators Review of route dispersal guidelines 11/24/13
  20. 20. Types of Fare Restriction • • • • • Advance Purchase requirements Round Trip Travel Minimum Stay requirements Non stop travel / One stop Travel Day of week / time of day
  21. 21. Conclusion • • • • • Tremendous opportunities Remodeling required Huge investment needed Changes in policies required Future outlook 11/24/13
  22. 22. Thank you.... 11/24/13
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