The Indian aviation industry has grown significantly over the past decade, with passenger traffic growing around 15% annually. However, growth slowed to 0.7% in 2009. The vision is for 280 million passengers by 2020. Private carriers were introduced in the 1990s and led to intense price competition through discounted fares like Apex. Low-cost carriers like Air Deccan further drove down prices. Major carriers have consolidated through mergers and acquisitions, like Jet Airways acquiring Air Sahara and Kingfisher Airlines acquiring a stake in Air Deccan. The industry now faces opportunities for further growth but also threats from economic slowdowns and infrastructure limitations.

1. Indian Aviation IndustryFramework Size: 75 million passengers5.6 billion dollarsGrowth:Around 15 % in last 10 yearsGrowth in current year ( 2009) O.7%Vision: 280 million customers by 2020

2. PHASE 1In 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 playersTypes of Air ServicesScheduled Air Transport Service

5. Non-Scheduled Operation

6. An air cargo serviceFactors affecting Aviation Industry Political

7. Economic

8. Technological

9. Demographic

10. Natural EnvironmentPoliticalDeregulations in different spheresOpen 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 PRICINGATFATF refers to air turbine fuel which is used by airlines in its operations.ATF contributes to the 40 % of operation costIt 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 RentalPrivate operators except Air India have leased aircraft from USA and Europe.They pay on average $375000 to $500000 per month depending on the aircraftThey contribute almost 33 % of operational cost.They generally have to pay their rents in dollar terms.

16. Airport ChargesIt is the basic fees that is charged by airports from airlinesThis include parking fees, landing fees , stop paging fees and aero bridge expensesNew airport charges more than established one to cover up all the cost incurred.

17. Other factorsAdvertising and Promotional ExpensesTechnology employed by the airlinesCurrent Financial positionPrices set by other airlines competing in the present environment.Pilot feesGovernment 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 AIRLINESAirFareWAR

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 AuctionWhat 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 APEXLed 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 marketBusiness travelersTime sensitiveOpportunity cost of time is highLeisure travelersPrice elasticity of demand very highResponsive to price changes

36. Change in travel preferences will continue to drive growth……CAPA Indian Domestic Market Forecast:Business vs Leisure/VFR