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competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
competition in airline industry
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competition in airline industry

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this ppt is gives details about indian airlines industry and the market structure

this ppt is gives details about indian airlines industry and the market structure

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  • Presented by Swati
  • Presented by swati
  • Presented by swati
  • Presented by: saket
  • Presented by saket
  • Presented by shruti
  • Presented by sneha raja
  • Presented by sneha raja
  • Presented by amarnadh
  • Presented by amarnadh
  • Presented by shika
  • Presented by shika
  • Presented by shika
  • Presented by shika
  • Presented by SEEMAB
  • Presented by SEEMAB
  • Presented by Seemab
  • VINOD
  • VINOD
  • VINOD
  • Presented by SAANCHI
  • Presented by saanchi
  • Presented by SANCHI
  • Presentedsaanchi
  • YOGESH
  • Presented by tanya
  • Presented by tanya
  • Presented by tanya
  • Presented by yogesh
  • Presented by yogesh
  • Presented by tatty
  • Presented by tatty
  • Transcript

    • 1. Indian Aviation Industry
      Framework Size:
      75 million passengers
      5.6 billion dollars
      Growth:
      Around 15 % in last 10 years
      Growth in current year ( 2009) O.7%
      Vision: 280 million customers by 2020
    • 2. PHASE 1
      • In 1932 JD TATA founded TATA AIRLINE
      • 3. Air India International Company-Joint Sector-Govt. Of India- June 8, 1948 IN 1953
      • 4. Air line sector not opened for Private players
    • Types of Air Services
      • Scheduled Air Transport Service
      • 5. Non-Scheduled Operation
      • 6. An air cargo service
    • Factors affecting Aviation Industry
    • Political
      • Deregulations in different spheres
      Open Sky Policy
      • FDI limits :
      49 % for airlines
      100% for airports
    • 11. Demographic and Natural
      • Changing pattern of consumers
      • 12. Highest percentage people of group 20-25
      • 13. Educational environment
      • 14. High energy cost
    • DETERMINANTS OF PRICING
      ATF
      ATF refers to air turbine fuel which is used by airlines in its operations.
      ATF contributes to the 40 % of operation cost
      It includes freight charges from gulf to India ,
      Customs Duty, Domestic Transportation and various taxes.
      India usually Pay higher ATF charges as compared to other countries.
    • 15. Lease Rental
      Private operators except Air India have leased aircraft from USA and Europe.
      They pay on average $375000 to $500000 per month depending on the aircraft
      They contribute almost 33 % of operational cost.
      They generally have to pay their rents in dollar terms.
    • 16. Airport Charges
      It is the basic fees that is charged by airports from airlines
      This include parking fees, landing fees , stop paging fees and aero bridge expenses
      New airport charges more than established one to cover up all the cost incurred.
    • 17. Other factors
      Advertising and Promotional Expenses
      Technology employed by the airlines
      Current Financial position
      Prices set by other airlines competing in the present environment.
      Pilot fees
      Government regulation.
    • 18. Phase II (1986-2003)
      • Granting scheduled status to six private airlines
      • 19. Till 1998
      • 20. ONLY TWO AIRLINES (i. E jet airways and air Sahara) SURVIVED WHILE OTHERS SHUT BUSINESS
      • 21. RESULTING A DUOPLY OF PRIVATE AIRLINES
    • AirFare
      WAR
    • 22. INDIAN AIRLINES
      • Indian Airlines came up with a new apex fare slab for purchase of tickets in eight sectors, 28 days in advance — two days less than
      those offered by Air Sahara and Jet Airways.
      • The D-28 fares would be available for sale on one way or round trips as against round trip fares offered by Air Sahara.
    • JET AIRWAYS
      • Frequent Flyer Scheme
      • 23. APEX pricing Scheme
      • 24. Cash Back Offer
      • 25. Jet Privilege Scheme : Extended its points partnerships to Accor Hotels and Langham Hotels International.
      • 26. Internet Auction
    • What is Apex?
      Apex IS ADVANCE PURCHASE EXCURSION FARE. It is a non-cancellable return fare offered at a heavy discount on the conditions:
      • Tickets are purchased at least 21 days in advance
      • 27. Minimum gap between departures range from one to six weeks.
      • 28. Maximum gap between departures is 12 to 24 weeks.
      • 29. There are no stopovers.
    • Effects of APEX
      • Led to increase in the number of customers.
      • 30. Loss of airline companies minimized as with the increase of passengers the aircraft ran to their full capacity.
      • 31. It brought a veritable boom in tourism sector.
      • 32. It was able to lure the middle class people who preferred to travel by trains.
    • AIRSAHARA
      • First Airlines to start innovative Pricing model rather than APEX Model.
      • 33. Sixer and Super Sixer Schemes in 2002 – Six refers to the six zones for 25k.These schemes offered more to the customers than their competitors.
      • 34. Square Drive Scheme – ( Family Pack) 4k-2.5k
      • 35. “Steal a Seat” - Bidding process started from Base price – Re 1/-
    • Defining relevant market
      Business travelers
      Time sensitive
      Opportunity cost of time is high
      Leisure travelers
      Price elasticity of demand very high
      Responsive to price changes
    • 36. Change in travel preferences will continue to drive growth……
      CAPA Indian Domestic Market Forecast:
      Business vs Leisure/VFR
    • 37.
    • 38.
    • 39. PHASE INTRODUCTION OF LCC (a shift to Monopolistic Competition)
      AIR DECCAN introduced Low Cost Airlines in India in Sept-2003.
      • Carved a niche for passengers travelling in train
      • 40. Fares down by 17%
      • 41. Initially started with 20,000 seats per day
      • 42. Planned to increase 800 seats per day every month
      • 43. Fleet strength initially of 35
      • 44. Plans to take it to 112 by 2012
    • The trend then followed by…..
      May 2005
      May 2005
      Oct 2005
      Oct 2005
      Aug 2006
    • 45. Key characteristics of low cost airlines
      High seating density and load factors
      Uniform aircraft types (usually the 737-300)
      Direct booking (internet/call centre - no sales commissions)
      No frills such as “free” food/drinks, lounges or ‘air miles’
      Simple systems of yield management (pricing)
      Use of secondary airports to cut charges and turnaround times
    • 46.
    • 47. Increase in passenger traffic
    • 48. Phase 4: Merger & Acqusition
      On 20 th April , 2007 Jet acquired 100% stake in Air Sahara for INR 14.5 billion
      Re brand Sahara as “Jetlite” which would operate as a value carrier
    • 49. KINGFISHER AIRLINES AND AIR DECCAN
      On 31st May 2007 Kingfisher Airlines bought a 26% stake for Rs.550 crores in Air Deccan
      Post merger Combined Market Share : 30%
    • 50. AIR INDIA AND INDIAN AIRLINES
      The two state run carriers entered into a merger in April, 2007 in a bid to consolidate and optimize the use of the assets of the two public sector airlines.
      The will help the two airlines to synergize their operations.
    • 51. Major Players (Market Share)
    • 52.
    • 53. SWOT ANALYSIS
      Strengths
      Liberal environment
      Modern Fleet
      High Quality
      Signs of economic growth
      Political Stability
    • 54. Weakness
      Airport infrastructure
      Airways Infrastructure
      High Cost Structure
      Skilled Resources
    • 55. Opportunities
      Market Growth
      Geographic Location
      Lower costs, higher Quality
    • 56. Threats
      Aggressive approach of Railways
      Slowdown in the economy affecting the tourism
    • 57. CONCLUSION
      The price cutting schemes will be feasible as long as external factors for pricing are under control
      Government should encourage private participation

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