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Indian Aviation Industry


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Indian Aviation Industry

  2. 2. HISTORY  The airline was set up under the Air Corporations Act, 1953 with an initial capital of 32 million and started operations on 1 August 1953.  Airline industry in India was established after Legislation.  Air India took over international routes and Indian Airlines Corporation (IAC) took over the domestic and regional routes.  Eight pre-Independence domestic airlines Deccan Airways Airways India Bharat Airways Himalayan Aviation Merged to form the new domestic Kalinga Airlines national carrier Indian National Airways Indian Airlines Air Services of India Co. Domestic wing of Air India
  3. 3.  Indian Airlines Corporation inherited a fleet of 99 aircraft including 74 Douglas DC-3 Dakotas  12 Vickers Vikings  3 Douglas DC-4s  And various smaller types from the seven airlines that made it up.  Vickers Viscounts -1957  Fokker F27 Friendships -delivered in 1961  Hawker Siddeley HS 748- 1967 manufactured in India by Hindustan Aeronautics Limited
  4. 4. JET AGE BEGAN-1960      Introduction of the pure-jet Sud Aviation Caravelle airliner -in 1964 Followed by Boeing 737-200s in early 1970s First three Airbus A300 wide-body jets – April 1976 were introduced The regional airline, Vayudoot established in 1981, was reintegrated By 1990,Airbus A320-200s were introduced.
  5. 5. TATA GROUP  Tata Sons, a division of Tata Sons Ltd. (now Tata Group) - founded by J. R. D. Tata in 1932.  The aviator Nevill Vintcent had an idea to run mail flights from Bombay and Colombo that connected with the Imperial Airways flights from the United Kingdom.  He found a supporter for his plans from J. R. D. Tata of the Tata Iron and Steel Company.  After three years of negotiations Vintcent and Tata won a contract to carry the mail in April 1932 and in July 1932 the Aviation Department of Tata Sons was formed.  On 15 October 1932, J.R.D. Tata flew a single-engined De Havilland Puss Moth carrying air mail (postal mail of Imperial Airways) from Karachi's Drigh Road Aerodrome to Bombay's Juhu Airstrip via Ahmedabad. The aircraft continued to Madras via Bellary piloted by Vintcent.
  6. 6.  Tata Airlines initially consisted of one Puss Moth aircraft, one Leopard Moth, one palm-thatched shed, one whole time pilot.  Tata Air Mail made a profit of 60,000 rupees its first year, and by 1937, that profit had risen to 600,000 rupees.  After World War II, Tata Airlines became a public limited company on 29 July 1946 under the name Air India.  In 1948, after the independence of India, 49% of the airline was acquired by the Government of India, with an option to purchase an additional 2%.  In return the airline was granted status to operate international services from India as the designated flag carrier under the name Air India International.  Air India One (also referred to as AI-1 or AIC001) is the call sign of any Air India aircraft carrying the Prime Minister of India, President of India or the Vice President of India.  The aircrafts are operated as VIP flights by the Indian Air Force (IAF).  Air India One mainly operates on one of the five Boeing 747-400s
  7. 7. Current Scenario of Indian Aviation Industry  In 2011, India completed 100 years in aviation sector.  It one of the fastest growing aviation industries in the world.  The most important policy decision was to allow 49% FDI by the foreign carriers in domestic airlines  Private airlines account for around 75% share of domestic airline aviation market.
  8. 8. MARKET SIZE  India is currently the 9th largest aviation market in the world.  It is handling 121 million domestic and 41 million international passengers.  Today, more than 85 international airlines operate to India and 5 Indian carriers connect over 40 countries.  Airline business growing at 27% per annum: Ministry of Civil Aviation
  9. 9. PLAYERS IN AVIATION INDUSTRY The Players in aviation industry can be categorized into two groups:  PUBLIC PLAYERS: Air India, Air India Charters Limited and Alliance Air.  PRIVATE PLAYERS: Jet Airways, Sahara Airlines, Deccan Aviation, Go Airways, Spice Jet, Kingfisher Airlines, Paramount Airways and Inter Globe Aviation Ltd. (Indigo)
  10. 10. DOMESTIC AIRLINES          Air India Go Air Airlines Indigo Airlines Jagson Airline Jet Airways JetLite Paramount Airways Spice Jet Airways MDLR Airlines
  14. 14. LOW COST AIRLINES           AirAsia AirAsia X Indigo Jetstar Asia Scoot SpiceJet Tiger Airways (Singapore) Peach Nok Air Air Busan
  15. 15. SPICE JET         Founded : 23rd May 2005 SpiceJet is an Indian low-cost airline owned by the Sun Group of India. Registered office :Chennai, Tamil Nadu Headquarters & Corporate office : Gurgaon, Haryana, India Spice Jet was earlier known as Royal Airway 2500 + employees Stock price: Rs. 20.80+0.50 (+2.46%) 25 Oct,2013 3:58 pm IST Voted as India's Favourite Domestic Airline for the year 2012 by Outlook Traveller  Voted amongst the Top 5 Best Budget Airline in Asia by Smart Travel Asia (2010, 2011 & 2012)  India's International Low Cost Carrier of the Year 2012 by Travel Agents Association of India (TAAI)
  16. 16. Marketing Theme & AIM  Theme - Offering Low ‘Everyday Spice fares’ and great guest services to price conscious travellers  Aim – Compete with the Indian Railways Passengers travelling in Air Conditioned Coaches Mission & Vision of SpiceJet  Mission :To become India's favorite low-cost airline, providing tickets to customers at the lowest possible prices with the highest consumer value.  Vision: To ensure that flying is not only restricted to CEO's and business travelers , but affordable to everyone.
  17. 17.       Carrier Domestic Share : 19.80% from 16.80% last year Capacity Deployed increased 31% due new aircrafts like Q400 bombardier Operating revenue increased 39% due to addition of aircrafts 330 daily flights to 42 Indian Cities and 7 International Destinations No. of departures went up 25% 27% growth in number of passengers
  18. 18. MARKETING PROMOTION      Word of Mouth Marketing Print ads in newspaper and magazines TV commercials Internet Media Initiatives Outdoor Mix – Hoardings at railway platforms, airports and shopping malls  Brand Campaign – Flying for Everyone – Get more when you fly Spice Jet  Spicy Codes
  20. 20. SPICE JET-SWOT ANALYSIS Strengths Opportunities • Positioned as smart low cost carrier operating on the mainline routes • Low Maintenance Cost – single fleet advantages • Changing Population Demographics • Growing Tourist Traffic • Improving Infrastructure • Growing Aviation Market Weakness Threats •Dependency on leased assets •Dependence on Internet Penetration •Not integrated on GDS • Rising Fuel Cost • Current Infrastructure Facilities • Regulatory issues
  21. 21. SWOT ANALYSIS OF INDIAN AVIATION INDUSTRY  Strengths: •Most preferred mode of transport. •Time Saving. •Economic Growth. •Liberal Environment. Weakness •Airport Infrastructure •High Cost Structure •Inefficiency •Lack of Skilled Resources
  22. 22. CONTD…  Opportunities •Geographic Location. •Boom in Tourism Industry. •Customers becoming less price conscious. Threats •Major competition from Transnational Airlines. •Terrorism.
  23. 23. FUTURE OF AVIATION INDUSTRY  The potential of the growing Indian market can only be realised through a coordinated aviation policy – IATA  An approach that addresses central challenges of infrastructure, taxes and cost.  Since India is a huge country in terms of geography, socially and culturally there is enormous potential for aviation industry.  The market already has 150 million travellers passing through its airports.  if Indians begin to travel by the same frequency as Americans, the market might boom beyond 2 billion.
  24. 24.  Development of aviation industry depends on increase in per capita GDP.  By 2020 traffic at Indian airports is expected to reach 450 million, making it the third largest aviation market in the world.  A holistic approach to airport infrastructure and its management is the need of the hour.
  25. 25. ACTION PLAN FOR INDIA  Collaboration between the ministry of civil aviation, other related ministries, regulators and the industry  Promote other sectors that can support and benefit the aviation sector.  Reduce fuel sales tax.  Create essential air services fund[ EASF]  Implement recent policy decisions.
  26. 26.  Establish an air cargo promotion board [ACPB].  Promote domestic maintenance, repair and overhaul industry.  Establish a world class National aviation university.
  27. 27. SINGAPORE AIRLINES, TATAS TO FLOAT $100M AIRLINE  The Tata’s and Singapore Airlines (SIA) are taking to the skies with a new joint venture after two aborted take-offs 18 and 13 years ago  Has sought approval from FIPB to establish a full-service airline headquartered in New Delhi , at an initial investment of $100 million.  With a stake of 51 per cent, the Tata's would be the driving force in the joint venture  The airline has chosen Delhi as its operational hub, owing to capacity constraints at the Mumbai airport.
  28. 28.      The airline would start operations sometimes next year, subject to clearances. The project teams are already working on the business plan and the number of planes they would require. The final contours would depend on whether the government scraps the rule under which domestic carriers have operate for five years before flying abroad. Its business plan incorporates international services, as and when permitted. If they play it well, Tata-SIA has the potential to be among the top three airlines in India by 2015.
  29. 29. MOTIVE BEHIND THE JOINT VENTURE  We have always been a strong believer in the growth potential of India's aviation sector.  With the recent liberalization, the time is right to jointly bring consumers a fresh new option for full-service air travel .
  30. 30. AIRLINES TO TAP SOCIAL MEDIA FOR BUISNESS  Over the next three years, 70% of the airlines will use social media to reach out to passengers  India is the world's third-largest social media market with the number of users in urban India estimated at 66 million.  The ever increasing use of smart phones and tablets will also have a major bearing on the airline-passenger relationship  By 2015, 100% of airlines surveyed will offer mobile check-in, flight status notification, ticket purchase, itinerary integration and sharing and on-board mobile services
  31. 31. Check-ins , itinerary integration through mobiles Airports enhance their engagement with passengers, during periods of disruption Social Media Customer relationshi p managem ent To promote their brand and offer reservations ,
  32. 32. DOWNFALL OF THE KINGFISHER AIRLINE  Kingfisher Airlines Limited was an airline group based in India  Its head office is in Andheri (East), Mumbai and Registered Office in ,Bangalore  Kingfisher Airlines, through its parent company United Breweries Group, has a 50% stake in low-cost carrier Kingfisher Red  The airline had been facing financial issues for many years