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A Presentation on Indian Civil Aviation Industry

This document provides an overview of a presentation on the Indian civil aviation industry. It includes sections on the history and types of aviation, research methodology, major aircraft manufacturers, segmentation of the industry, PESTEL analysis, Porter's Five Forces model, BCG matrix, strategic group mapping, key success factors, and financial analysis. The presentation was delivered to an honorable jury by 5 students and aimed to analyze the macroenvironment factors affecting the aviation industry in India.

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A PRESENTATION OF COMPREHENSIVE PROJECT REPORT - I ON “A STUDY ON INDIAN CIVIL AVIATION INDUSTRY” Presented To:- Honourable Jury Member’s Presented By:- No Name Exam No 1. Bhavik Parmar 75 2. Devang Modh 69 3. Harish Parmar 76 4. Ghanshyam Sarasariya 94 5. Sujeet Thakur 106
FLOW OF PRESENTATION • About Aviation • History • Types of Aviation • Research Methodology • Major Aircraft Manufacturer • Product Profile • Top 10 Companies • Segmentation • PESTEL • Five Force Model • BCG MATRIX • Strategic Group Mapping • Key Success Factors • Financial Analysis • OT Analysis • Conclusion
WHAT IS AVIATION? The dictionary defines aviation as having the capacity to fly, from one perspective, such as a bird’s capability to fly. From the human angle, aviation is defined as the operation of aircraft and it can also extend to design and development of aircrafts. In the early days of flying the pilot was known as an aviator because he could fly in a craft that was heavier than air. Today, one uses the term pilot to designate an aviator.
HISTORY OF CIVIL AVIATION IN INDIA • Civil Aviation in India traces back to 18 February 1911 • when the first commercial civil aviation flight took off from Allahabad for Naini. • India is the fourth largest civil aviation market in the world having a potential of becoming third largest aviation market by 2020.
TYPES OF AVIATION 1. Civil Aviation 2. General Aviation 3. Military Aviation 1. Bombers 2. Fighters 3. Reconnaissance 4. Transport 5. Helicopters 6. Experimental
TYPES OF CIVIL AVIATION 1. Scheduled Flight 2. Non Scheduled 3. Cargo Aircraft
RESEARCH METHODOLOGY PRIMARY OBJECTIVE: • To study the macro environment factors affecting Aviation industry. SECONDARY OBJECTIVE: • To study political, economic, social and technological factors affecting Aviation industry • To study opportunities and threats for the Aviation industry • To find out the global trends in Aviation industry • To identify the level of competition between different players in Aviation industry • To find out the key success factor in Aviation industry ANALYSIS PLAN: • PEST Analysis • Michel Porter’s Five Force Model • BCG Matrix • Strategic Group Mapping • Driving Forces • Key Success Factors
MAJOR AIRCRAFT MANUFACTURER 1. Boeing 2. Airbus 3. Lockheed Martin 4. United Technology 5. GE Aviation IN INDIA 1. Hindustan Aeronautics Limited
PRODUCT PROFILE 1. In-flight services: 2. On ground services CORE PRODUCT AND SUPPLEMENT SERVICES • Core Product • Supplementary Services • Consultation • Order taking • Hospitality & Caretaking • Billing & payment
TOP 10 COMPANIES IN CIVIL AVIATION 1. Indi Go 2. Spice Jet 3. Jet Airways 4. Air India 5. Air India Express 6. Go Air 7. Jet Konnect 8. Air Asia India 9. Air Costa 10. Vistara Express
SEGMENTATION • By class of seating Economy Class Business Class First Class.
PESTEL ANALYSIS POLITICAL FACTORS • Unstable Environment • There is requirement of trade Relation between two nation • Bribes have to be paid for every permit & license required • Open sky policy • FDI limits: 100% for Greenfield airports 74% for the existing airports 100% through special permission 49% for airlines
ECONOMIC FACTORS • Contribution to the Indian economy • Rising cost of fuel • Investment in the sector of aviation • The growth of the middle income group family affects the aviation • World with increasing income of middle class, people prefer to go by air because it saves time
SOCIAL FACTORS • People from various religions and castes and every individual travelling by the airline would expect customization to the greatest possible extent. • Development of cities leads to better services • Employment opportunities • Safety regulations. • The status symbol attached to a plane travel
TECHNOLOGICAL FACTORS • The growth of e-commerce and e-ticketing is now adopting the airline companies for the facilities and services to the customers. • Satellite based navigation system is the most advanced technological factor. • Modernisation and privatisation of the airports • Developing green field airports with private sector
ENVIRONMENTAL FACTORS • . Airline industry is responsible for 3.5% of weather change that may grow up to 15% in future. • Customers increasingly prefer eco-friendly airlines. • The increase in the global warming due to increase in the number of aeroplanes flying in the air. this makes bad effect on our atmosphere. • The sudden and unexpected behaviour of the atmosphere and the dependency on whether. • Shortage of the infrastructural capacity • Tourism saturation.
LEGAL FACTORS • laws related to air traffic and passenger safety • The airlines are held liable for air crashes or any other kind of disaster • New laws have been enforced regarding how the airlines treat their passengers
PORTER’S FIVE FORCE MODEL COMPETITOS Factors Attractiveness Intensity Very High(1) High(2) Medium(3) Low(4) Very Low( 5) Number of Players  Switching Cost  Market Growth Rate  Service Differentiation  Exit Barrier  High Fixed Cost  Sum of score 2 6 0 4 0 Total Score 12 Number of Factors 6
NEW ENTRANTS Factors Attractiveness Intensity Very High(1) High(2) Medium(3) Low(4) Very Low( 5) Capital Requirement  Customer Loyalty  Customer Switching Cost  Government Policy  Service Distribution Channel  Sum of score 12 10 Total Score 22 Number of Factors 5 Average Score/Mean Score 4.4
SUPPLIERS Factors Attractiveness Intensity Very High(1) High(2) Medium(3) Low(4) Very Low( 5) Number of Suppliers  Switching Cost  Differentiation of Inputs of Suppliers  Manufacturing Cost  Sum of score 3 3 Total Score 6 Number of Factors 4 Average Score/Mean Score 1.5
SUBSTITUES Factors Attractiveness Intensity Very High( 1) High(2) Medium( 3) Low(4 ) Very Low( 5) Available Substitute  Switching Cost  Price of Substitute Service  Sum of score 4 3 Total Score 7 Number of Factors 3 Average Score/Mean Score 2.33
BUYERS Factors Attractiveness Intensity Very High(1) High(2) Medium(3) Low(4) Very Low( 5) Number of Buyers  Buyers are not loyal  Switching Cost  Sum of score 3 8 Total Score 11 Number of Factors 3 Average Score/Mean Score 3.67
ATTRACTIVENESS OF INDUSTRY Competitive Force Intensity Score Rivalry Among the Competitors 2 Threat of New Entry 4.4 Bargaining Power of Suppliers 1.5 Threat from Substitute Product 2.33 Bargaining Power of Buyers 3.67 Total 13.9 No. Factors 5 Average Score 2.78
BCG MATRIX Compan y Name Relative Market Share(%) Market Growth Rate (%) Air India 0.35 14.10 Jet Airways 0.38 15.50 Spice Jet 0.32 12.80 Go air 0.20 8.20 IndiGo 1 39.80 Others 0.24 9.60
STRATEGIC GROUP MAPPING SpiceJet, 94.5, 1 AirAsia, 85.8, 1 GoAir, 85.4, 1 IndiGo, 83.6, 1 80 82 84 86 88 90 92 94 96 98 0 1 2 3 4 5 Sales Sales We have made the group mapping of four companies which are listed as below: • IndiGo • Spice Jet • Air Asia • Go Air We have selected two variables – Sales Figure of airline companies and Domestic airline passenger booking
KEY SUCCESS FACTORS • Strong Management • Non-Stop Flying • Service Promotion and In-flight Service • Financial Management • Route System • Efficient Management of Cost • Capable Workforce
FINANCIAL ANALYSIS PAT Year Company IndiGo SpiceJet Jet Airways 2013 783.36 -191.08 -485.5 2014 474.44 -1003.24 -3667.85 2015 1295.59 -687.05 -1813.71 2016 1989.72 407.2 1173.56 2017 1659.19 430.73 390.43
CURRENT RATIO Year Current Ratio IndiGo SpiceJet Jet Airways Average 2013 0.75 0.68 0.45 1.58 2014 0.69 0.39 0.44 1.226667 2015 0.8 0.32 0.49 1.283333 2016 0.89 0.45 0.53 1.516667 2017 0.85 0.4 0.64 1.463333 Operating Profit Margin Year Company IndiGo SpiceJet Jet Airways 2013 9.71 -3.5 5.35 2014 4.55 -13.5 -8.58 2015 13.42 -12.65 -0.59 2016 18.62 -8.49 10.46 2017 11.53 -8.77 5.34 PROFIT MARGIN RATIO
Gross Profit Margin Year Company IndiGo SpiceJet Jet Airways 2013 8.7 -4.99 -0.14 2014 2.52 -15.85 -13.64 2015 11.25 -15.08 -4.48 2016 15.5 6.18 5.75 2017 9.07 5.56 1.22 Cash Profit Margin Year Company IndiGo SpiceJet Jet Airways 2013 9.2 -2.6 1.92 2014 6.12 -13.36 -11.68 2015 11.16 -11.55 -1.44 2016 15.01 8.83 9.53 2017 10.92 9.37 5.91
Return on Capital Employed Year Company IndiGo SpiceJet Jet Airways 2013 50.05 -8.11 6.72 2014 17.02 -182.18 -32.25 2015 48.6 -392.72 -2.92 2016 61.95 111.61 33.25 2017 40.08 109.08 31 Net Profit Margin Year Company IndiGo SpiceJet Jet Airways 2013 8.51 -3.41 -2.88 2014 4.26 -15.67 -21.19 2015 9.3 -12.76 -9.26 2016 12.32 7.8 5.54 2017 8.92 6.83 1.81
OPPORTUNITIES • Technological advancement and investment in information technology • Development of new products and services can have a substantial blow on the profits • Expected investment is one of the opportunities • Should evaluate end user response to its services to gain information on what areas of its services to improve. • The organization should also take the opportunity to expand and cover a larger geographical area. • Acquiring better supply deals, for example, a less expensive fuel supplier would greatly minimize the operation cost • less refunds and minimal compensation due to inconveniences made.
THREATS • Travelling for leisure and business is greatly impacted by the global economy. • Some government legislation can also be a major threat to investors in the aviation industry. • Air travel is very vulnerable to environmental changes. • Air travel has a seasonal demand especially where the largest percentage of travellers involves those travelling for leisure. • In recent times, air travel has been a target to terrorists, and this has had a very negative impact on the airlines themselves. • Over the next few years, huge investments are expected to be made in the aviation industry • With the increasing number of airlines and aircrafts, there is likely to be a marked shortage of airports and airport facilities. • The organization also faces the threat of being vulnerable to attacks by its major competitors. • The greatest hurdle facing many airlines today is high fuel prices.
CONCLUSION • The study concluded to look into some key aspects on global industry characteristics. And the initial finding of this study global industry characteristics includes internationalization, technology adoption, attention to details and working with people are main global characteristics right now happing in the world. • Next we analysed growth of civil aviation industry in India and we found that India is one of the fastest growing economic in the world with the GDP growth 8.9. and aviation is an important part of national infrastructure sector and also improves transportation facility and also India is 9th largest aviation market in the world and size of aviation market is 16 billion USD. Moreover, Indian aviation market grew by 27.4% in 2015-16. • During PESTEL analysis we found that political and technological factors affects a lot to civil aviation industry. • We did five force model analysis where we found attractiveness of industry by competitive environment and the result is moderate or medium total industry attractiveness in our study. • Lastly we did opportunities and threats analysis in our study and also we analysed future outlook of civil aviation industry. Which shows how industry will grow in future and is it good or bad? And what benefits customer will get in future from civil aviation industry.
THANK YOU