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Indian Aviation Industry


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  • 1. Submitted by : Shrikant Gupta FATP Nov 19th BatchSubmitted To: RVM FInishing School & Consultancy
  • 2. AGENDA Introduction. Industry Evolution. Major players. Factors affecting to industry. SWOT analysis. Future prospects. Submitted To: RVM FInishing School & Consultancy
  • 3. INTRODUCTION Aviation sector contributes INR 330 billion (0.5%) to Indian GDP. It creates 1.7 million jobs in India, and it acts as a catalyst for tourism Industry and creates 7.1 million more jobs. Aviation sector pays over INR 87.5 billion in Tax. Submitted To: RVM FInishing School & Consultancy Source-DGCA government of india
  • 4. INDUSTRY EVOLUTION Year Major milestones 1912 First airline route started by Indian state air service in collaboration with Imperial airways of UK. 1912 Country’s first air mail service started by Tata Airlines, which later renamed as Air India. 1953 Nine airline existed Including Indian airline and Air India. 1953 Nationalization of all private airlines through air corporation act. 1986 Private players are permitted to operate as a taxi operator. 1997 4 out of 6 operators shut down with capital loss of approx INR 10 billion. Jet and Sahara airline survive. Submitted To: RVM FInishing School & Consultancy
  • 5. INDUSTRY EVOLUTION Year Major milestones 2001 Aviation turbine fuel (ATF) price decontrolled. 2007 Industry consolidates, Jet acquired Sahara & Kingfisher acquired Air Deccan. 2012 Government allows direct ATF imports, 2012 Government allowed FDI up to 49%. Submitted To: RVM FInishing School & Consultancy
  • 6. Market share of scheduled domestic airlines Go air, 7.6 Kingfisher, 3.5 IndiGo IndiGo, 27.2 Jet airway+ jet lite Spicejet, 18.5 Air india Spicejet Jet airway+ jet Go air Air india , 19.3 lite, 23.8 Kingfisher Source-DGCA government of india Submitted To: RVM FInishing School & Consultancy
  • 7. FACTORS AFFECTING AVIATION INDUSTRY Weather. ATF prices. Manpower. Foreign Exchange rate. Government policies. Submitted To: RVM FInishing School & Consultancy
  • 8. ATF price trend Delhi, Rs/K liters price800007000060000500004000030000 price2000010000 0 Submitted To: RVM FInishing School & Consultancy Source.-Indian oil corporation
  • 9. ATF Tax structure Particulars Tax rates Excise duty 8% Average sales tax levied by state 23-24% Margin of oil marketing companies 15-18% Submitted To: RVM FInishing School & Source- ICRA Consultancy
  • 10. Exchange rate fluctuation INR/USD5655545352 51504948 USD47464544 Oct-10 Oct-11 Apr-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-12 Feb-10 Jun-10 Aug-10 Dec-10 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Dec-12 Submitted To: RVM FInishing School & Consultancy SOURCE- RBI,GOVERNMENT OF INDIA
  • 11. SWOT ANALYSIS STRENGTHS WEAKNESS•Fastest transportation service •High maintenance cost.•Highly trained staff. • 45% of operating costs depends on ATF while•Ticket pricing is on the hand of players. it is 33% world wide.•No substitute for international travelers as •Labor intensive industryefficient as airlines. •Directly dependent on some other industry•Concentration on customer satisfaction. like tourism and corporate travelers.•High entry barriers to new player. • High wages paid to the staff. OPPURTUNITES THREATS•Percentage of people travelling in airlines is •Raising fuel costs.increasing gradually. •Exchange rate fluctuations.•Increase in per capita income will generate •Taxes imposed by the government.more passengers to airlines. •High competitive industry because of large•Air lines can be used for cargo . number of players.•Large Untapped Indian market . To: RVM FInishing School & Submitted•FDI’s in Indian airline industry. Consultancy
  • 12. FUTURE PROSPECTS & RECOMMENDATIONS Aviation industry in India is not profitable space as of now and need strong reforms in government policies. Reduction in Tax and airport fees may help the industry to break even. Entry of foreign players may increase efficiency of industry. Submitted To: RVM FInishing School & Consultancy
  • 13. THANK YOUSubmitted To: RVM FInishing School &Consultancy