Indian Aviation Industry

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Comparative analysis between major players of the Indian Domestic Carriers: Indigo Airlines, Spicejet & Jet Airways.
Secondary Research Data.

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Indian Aviation Industry

  1. 1. Aviation Industry: India DOMESTIC PASSENGER CARRIERS
  2. 2. Preview: Domestic Aviation Industry Compound Annual Growth Rate (CAGR): FY 2003-2013 Passenger Volume: 13% Air Cargo: 10% Source: Airport Authority of India Current Contribution to GDP: 0.05% [Service Sector: 66.1%] Opportunities: Estimated Passenger Volume of 450million by 2020 (Currently 150 million) Source: DGCA 32 unused/abandoned airports spread across India New Airport Projects being initiated for connecting Tier II and Tier III cities Threat of New Entrants (Moderate) Example: Air Asia, Air Costa, TATASIA, Air One Bargaining Power of Buyers (High) Bargaining Power of Suppliers (Very High) Example: Cost of ATF, Manpower, Skilled Pilots Threat of Substitution (Moderate) No Perfect Substitute Example: Railways, Roadways Competitive Rivalry (Extremely High) Porter’s Five Force Analysis
  3. 3. Players In The Market DGCA Private Listed SpiceJet Jet Airways Unlisted Indigo GoAir Air Costa Government Air India Indigo Airlines 32% Jet Airways 22% SpiceJet 18% Air India 18% Go Air 10% Air Costa 1% Market Share as on May-14 Source: www.livemint.in 31.6% 18.4% 21.8%17.9% 9.5% 0.8%
  4. 4. Company Overview Founded: 1993 (as ModiLuft) Hubs: Chennai, New Delhi, Hyderabad Secondary Hubs: Mumbai, Bangalore Parent company: Sun Group Headquarters: Gurgaon Fleet Size: 58 In Order: 57 History ModiLuft [1993-1996] • Joint Venture: SK Modi & Lufthansa • Started by leasing 4 aircrafts from Lufthansa • High Aircraft Utilization (more than 12hrs/day) • Disputes in 1996 between the stake holders • Ceased operations in 1996, returned aircrafts in 1997 Royal Airways [1999-2005] • Acquired ModiLuft in 1999 (58.7% stake) • Permission to relaunch in 2003 • Competitors: Indian Airlines, Jet Airways, Air Sahara, Air Deccan • Did Not operate: Rebranded in 2005 as Spicejet SpiceJet [2005-present] • May 2005 Rebranded as Spicejet, Low-Cost-Carrier • 37000 Seats sold on 1st day of booking (INR 99) • 2nd Largest in terms of market share in LCC • SUN Group bought 37.6% stake in 2010 • Management taken over by Sun Group
  5. 5. Company Overview Destinations: 57 (47 Domestic & 10 International) Market Share: 17.9% Losses: INR 1003.2cr [FY 2013-14, from INR 191cr in 2012-13] Reasons: Volatile Dollar Rate, ATF Cost rising, Competitive Pricing Founded: 1993 (as ModiLuft) Hubs: Chennai, New Delhi, Hyderabad Secondary Hubs: Mumbai, Bangalore Parent company: Sun Group Headquarters: Gurgaon Fleet Size: 58 In Order: 57 Current Situation STP Segment Cost Conscious Passengers Target Group Lower Middle Class / Middle Class Positioning Low Cost No Frills
  6. 6. SWOT Analysis Strengths Weaknesses Connectivity Leased Aircrafts Smart Positioning and Branding Few International Destinations Financial Backing by Sun Group Current Losses Low Maintenance Cost Load Factor 73.3% Opportunities Threats Changing Lifestyle New entrants in the LCC market Opening of New Routes and Airports Government regulations Tie-ups with International Alliance Groups Rising prices of ATF Growing Tourist traffic Predatory Pricing
  7. 7. Company Overview Founded in : 2006 Hub: Delhi Secondary Hub: Mumbai, Kolkata Parent Company: InterGlobe Enterprises Headquarters: Gurgaon, Haryana Fleet Size: 78 Orders: 186 History 2005- 2006 Licensed in 2005 Started Operations in 2006 Ordered 100 aircrafts from Airbus 2011 Largest order in Aviation History: 180 Aircrafts from Airbus 2012 Market Leader with 27% share Only Carrier in India to make a profit Ranked Amongst top 10 LCCs of the World Second Fastest growing LCC in Asia 2013
  8. 8. Company Overview Founded in : 2006 Hub: Delhi Secondary Hub: Mumbai, Kolkata Parent Company: InterGlobe Enterprises Headquarters: Gurgaon, Haryana Fleet Size: 78 Orders: 186 Current Situation Destinations: 36 (31 Domestic & 5 International) Market Share: 31.6% Profits: INR 993cr [FY 2013] STP Segment Cost Conscious Passengers Target Group Lower Middle Class / Middle Class Positioning Low Cost No Frills
  9. 9. SWOT Analysis Strengths Weaknesses Low Maintenance Cost (Efficient Staff) Low International presence Aircraft Condition (Does Not use aircrafts more than 6 years) No Frequent Flyer program Strong Brand Positioning Load Factor 76% Connectivity-Frequency-Pricing Opportunities Threats Changing Lifestyle New entrants in the LCC market Opening of New Routes and Airports Government regulations Tie-ups with International Alliance Groups Rising prices of ATF Growing Tourist traffic Predatory Pricing
  10. 10. Company Overview Founded in : 1992 Hub: Mumbai Secondary Hub: Chennai, Bangalore, Kolkata, Delhi Parent Company: Tailwinds Limited Headquarters: Mumbai Fleet Size: 114 Orders: 77 1993 • Started operations as Indian Commercial Carrier • 4 leased Aircrafts from Malaysian Airlines 1995-2004 • Licensed as Scheduled Airlines (1995) • Started International Service (2004) 2007-2009 • Acquired Air Sahara (2007), renamed the same to JetLite • Started Jet Konnect (2009) as a low cost version 2012-2013 • Membership of Star Alliance (2012) • Merged JetLite and JetKonnect • Sold Stakes to Etihad (2013) History
  11. 11. Company Overview Founded in : 1992 Hub: Mumbai Secondary Hub: Chennai, Bangalore, Kolkata, Delhi Parent Company: Tailwinds Limited Headquarters: Mumbai Fleet Size: 114 Orders: 77 Current Situation Destinations: 114 Market Share: 21.8% Losses: 4129.7 [FY2013-14] Reasons: Change in Management, Volatile Foreign Exchange Index STP Segment Passengers preferring comfort Target Group Corporate, Upper Middle Class Positioning Premium
  12. 12. SWOT Analysis Strengths Weaknesses High Connectivity and Frequency of flights Unstable Management Alliances Few Advertising Premium Positioning Dilution of Image Fleet Size and Infrastructure Financial Condition Premium Lounge Opportunities Threats Changing Lifestyle and Aspirations New entrants in the Premium market Opening of New Routes and Airports Government regulations Growing International Traffic Rising prices of ATF Innovative Premium Services Price Conscious Market
  13. 13. Marketing Mix Criteria Product • On Ground Services • In Flight Services • On Ground Services • In Flight Services • On Ground Services • In Flight Services Place • Online Reservation System • Travel Agents • 57 Airports • Online Reservation System • Travel Agents • 36 Airports • Online Reservation System • Travel Agents • 114 Airports Price Low Cost Pricing Low Cost Pricing Value for Money Pricing/Premium Pricing Promotion • Advertisement • Sales Promotion • Email Marketing • Advertisement • Social Media Marketing • Sales Promotion • Word of Mouth • Advertising • Email Marketing • Promotional offers for Loyal Members Process • Reservations • Baggage Handling • Meal Service • Reservations • Baggage Handling • Meal Service • Reservations • Baggage Handling • Facilities in the Airport (Lounges) • Flight Entertainment • Meal Service People Few People Multitasking Few People Multitasking Specialized People Premium quality Service providers Physical Evidence On The Ground • Booking Offices • Check In Counters • Boarding Passes In Flight • Good Interior and Exterior Ambience • Cleanliness • Safety Equipment On The Ground • Booking Offices • Check In Counters • Boarding Passes In Flight • Good Interior and Exterior Ambience • Cleanliness • Safety Equipment On The Ground • Booking Offices • Check In Counters • Boarding Passes • Lounge In Flight • Good Interior and Exterior Ambience • Cleanliness • Safety Equipment • In Flight Entertainment
  14. 14. Factors to determine the best service provider User Friendly Booking Interface Efficient and Adequate Check-In-Counters On Time Service In Flight Ambience: Seating Comfort, Temperature Control, Entertainment In Flight Services: Food & Beverage, Shopping, Friendly Cabin Crew Efficient Baggage Handling Price
  15. 15. Secondary Research COMPARATIVE ANALYSIS
  16. 16. Comparative Analysis HASSLE-FREE BOOKING Source: http://articles.economictimes.indiatimes.com/2013-12-01/news/44596775_1_five-airlines-fares-air-travellers ON TIME PERFORMANCE Indigo, 86.95% SpiceJet, 81.90% Jet Airways, 80.78% 77.00% 78.00% 79.00% 80.00% 81.00% 82.00% 83.00% 84.00% 85.00% 86.00% 87.00% 88.00% PercentageOnTime 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00% 1 Jet Airways Spicejet Indigo
  17. 17. Comparative Analysis IN-FLIGHT-AMBIENCECHECK-IN-PROCESS 82.00% 8.60% 39.20% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% 1 Indigo SpiceJet Jet Airways 0 5 10 15 20 25 30 35 40 45 Indigo SpiceJet Jet Airways Source: http://articles.economictimes.indiatimes.com/2013-12-01/news/44596775_1_five-airlines-fares-air-travellers
  18. 18. Comparative Analysis EFFICIENT BAGGAGE HANDLINGIN FLIGHT SERVICES Source: http://articles.economictimes.indiatimes.com/2013-12-01/news/44596775_1_five-airlines-fares-air-travellers 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% Jet Airways Spicejet Indigo 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% Jet Airways Spicejet Indigo
  19. 19. Comparative Analysis OVERALL RATINGAFFORDABILITY Source: http://articles.economictimes.indiatimes.com/2013-12-01/news/44596775_1_five-airlines-fares-air-travellers 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00% Jet Airways Spicejet Indigo 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% Jet Airways Spicejet Indigo
  20. 20. Compilation Criteria Indigo Airlines Jet Airways Hassle-free booking On Time Performance Check-in-Process In-Flight-Ambience In-Flight-Service Efficient Baggage Handling Affordability Overall Rating Total 5 3
  21. 21. Thank You
  22. 22. Presented By: Name Enrolment Number Karan Mehta 13BSP 1258 Dharmesh Dosi 13BSP 0223 Sarvesh Shete 13BSP 0715 Kamlendra Singh 13BSP 1078 Shubham Dasgupta 13BSP 0776

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