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Air Deccan

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Air Deccan

  1. 1. Air Deccan Presented By : Sharad Verma Mohd. Aquib
  2. 2. Analysis on Indian Aviation Industry with respect to Low Cost Carriers <ul><li>Under Penetrated Market </li></ul><ul><li>Infrastructure Constraints </li></ul><ul><li>Limited Reach </li></ul><ul><li>High Fuel Cost. </li></ul>
  3. 3. Birth of Air Deccan <ul><li>Modelled on the following international Low Cost Airlines: </li></ul>Air Asia Ryan Air Easy Jet <ul><li>2003: Low Cost Carriers allowed to operate. </li></ul>
  4. 4. Pricing Strategies for Low Cost Carriers <ul><li>Selecting the Pricing Objective </li></ul><ul><li>Determining Demand </li></ul><ul><li>Estimating Costs </li></ul><ul><li>Analyzing Competitor’s Costs, Prices and Offers. </li></ul><ul><li>Selecting Pricing Method </li></ul><ul><li>Selecting the Final Price </li></ul>
  5. 5. Constituents of Low Cost Airline Model <ul><li>A single passenger class. </li></ul><ul><li>A single type of airplane reducing service and training costs. </li></ul><ul><li>No-Frills such as free food/drinks, lounges, etc. </li></ul><ul><li>Emphasis on direct selling of tickets through Internet, Direct phone lines avoiding the fee and commission paid to agents. </li></ul>
  6. 6. Three Generic Strategies Model <ul><li>Cost Leadership Strategy </li></ul><ul><li>Differentiation Strategy </li></ul><ul><li>Focus Strategy </li></ul>
  7. 7. Generic Strategies Model (Cont.) Cost Leadership Strategy <ul><li>Single Air Hostess per flight. </li></ul><ul><li>48 seater aircraft to lower maintenance and service fee. </li></ul><ul><li>Unique Online Reservation system. </li></ul><ul><li>No-Frills airline but food/beverage can be bought inside the aircraft. </li></ul><ul><li>Prices are almost 50% lower than the full-service airlines. </li></ul>
  8. 8. <ul><li>Single passenger class system. </li></ul><ul><li>Tie ups with Café Coffee Day, HPCL and Reliance Web World. </li></ul><ul><li>Provides flights even to the hinterland. </li></ul><ul><li>Allocation of prices to various percentage of seats. </li></ul>Generic Strategies Model (Cont.) Differentiation Strategy
  9. 9. <ul><li>Frequent Business travellers. </li></ul><ul><li>AC Train travellers. </li></ul>Generic Strategies Model (Cont.) Focus Strategy
  10. 10. Criticisms of Air Deccan’s Marketing Strategies <ul><li>Too much focus on South India. </li></ul><ul><li>CNN-IBN had accused it of deliberately slowing down at check-in & overbooking. </li></ul><ul><li>No lounges to attend the passengers of delayed flights. </li></ul><ul><li>Shortage of airport personnel. </li></ul><ul><li>Frequent breakdowns and near misses. </li></ul><ul><li>Dynafare and Refund Policy. </li></ul>
  11. 11. Acquisition and Post Acquisition Issues <ul><li>Air Deccan in May 2007 sold 26% stake to Kingfisher Airlines. </li></ul><ul><li>Combined Market share of 33%. Second largest player after Jet-Sahara. </li></ul><ul><li>Air Deccan will continue to have independent identity. </li></ul><ul><li>Capt. Gopinath – Exec. Chairman and Dr. Vijay Mallya – Vice Chairman </li></ul>
  12. 12. Rebranding <ul><li>Renaming from ‘Air Deccan’ to ‘Deccan’. </li></ul><ul><li>New Tagline: ‘The Choice is Simple’. </li></ul><ul><li>Blue and Yellow theme replaced by Red and White. </li></ul><ul><li>No outsourcing of Check-in Staff. </li></ul><ul><li>Replacement of Ailing Aircrafts. </li></ul><ul><li>Cost incurred in rebranding process: Rs. 15 Crore. </li></ul>
  13. 13. Recommendations <ul><li>Make available flight services in North India. </li></ul><ul><li>More friendlier and trained ground staff required. </li></ul><ul><li>Slow check in can be removed by using automated check in process. </li></ul><ul><li>Strengthening of reservation system to handle overbooking. </li></ul><ul><li>Venturing into air cargo. </li></ul><ul><li>Strengthening of its position in the industry. </li></ul>

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