This document discusses best practices that can be adopted from the airline industry by the IT/ITES industry in India. It summarizes that the airline industry in India has grown rapidly in recent years and will become the third largest domestic aviation market by 2026. Key practices that could be adopted by IT/ITES include tapping new markets and reducing costs by setting up facilities in tier 2/3 cities with government incentives, as well as packaging basic and premium service offerings similarly to low-cost carriers versus full-service carriers in airlines. Government initiatives could also be supported to help drive growth and transactions in IT/ITES as seen in schemes to boost digital banking and transactions.

1. Airlines & IT/ITES
POOJA , NAMAN, HEMANT SINGH - MPE18, NMIMS,
BANGALORE

2. Objective
• What best practices can be adopted from Airlines industry to
IT/ITES

3. Overview – Airlines Industry
• The airlines industry in India has
emerged as one of the fastest growing
industries in the country during the last
three years. India is currently considered
the third largest domestic civil aviation
market in the world.
• According to International Air Transport
Association IATA, India will displace the
UK for the third place in 2026.
• The Civil Aviation industry has ushered
in a new era of expansion, driven by
factors such as low-cost carriers (LCCs),
modern airports, Foreign Direct
Investment (FDI) in domestic airlines,
advanced information technology (IT)
interventions and growing emphasis on
regional connectivity.

4. EVOLUTION OF AIRLINE INDUSTRY
We have evolved from:
AND THIS
TO THIS
THIS

5. No. of Passengers (million)

6. Facts of Industry – Growth & Structure
•Crude Oil Price
•(120-90) $
•Deprecation of Rs/-
•High Interest rate
FY2011-
2013
FY2013-2017
•Crude Oil Price (29-60)$
•3rd largest growing country
•Population growth 13%
•Per capita income 100,000

8. UDAN – Ministry of Civil Aviation Scheme
• How to tap the potential ?
• Regional Connectivity
• Development of Small cities
• Using of Unserved airport 25 & Helipads 31
• Viability Gap funding /seat - To make the route viable & economically feasible

9. Advantage India

10. FDI Route in Aviation
• 100 % FDI in Greenfield project via automatic route
• 74 % FDI In brown filed project via automatic route
• Infrastructure Improvement
• 100% in Indian airlines by Foreign entities via automatic route

11. LCC approach Vs FSC
• Basic service @Base Price
• Additional services like extra baggage ,snack provided on
extra charge
• Above approach can be adopted in IT /ITES in form of basic &
premium services e.g. SaaS , IasS .. i.e. use and pay in cloud
computing which will help in reducing infrastructure cost

12. Introduction to IT
• The global sourcing market in India continues to grow at a higher pace compared to the
IT-BPM industry. The global IT & ITeS market (excluding hardware) reached US$ 1.2 trillion
in 2016-17, while the global sourcing market increased by 1.7 times to reach US$ 173-178
billion. India remained the world’s top sourcing destination in 2016-17 with a share of 55
per cent. Indian IT & ITeS companies have set up over 1,000 global delivery centres in
over 200 cities around the world.
• More importantly, the industry has led the economic transformation of the country and
altered the perception of India in the global economy. India's cost competitiveness in
providing IT services, which is approximately 3-4 times cheaper than the US, continues to
be the mainstay of its Unique Selling Proposition (USP) in the global sourcing market.
However, India is also gaining prominence in terms of intellectual capital with several
global IT firms setting up their innovation centres in India.
• The IT industry has also created significant demand in the Indian education sector,
especially for engineering and computer science. The Indian IT and ITeS industry is
divided into four major segments – IT services, Business Process Management (BPM),
software products and engineering services, and hardware.

13. Structure of Indian IT Industry

16. Advantage India

17. Indian IOT Market

18. Mega Trends

19. Growth of GICs in India
• In March 2017, there were over 1500
GICs operating out of India.
• GICs in India today represent a US$ 23.1
billion industry.
• Within the captive landscape,
Engineering Research and
Development/Software Product
Development (ER D/SPD) is the largest
sub-segment.
• Companies from North America and
Europe are major investors in the captive
segment in India, accounting for over 90
per cent of captives in the country.

20. Key Priorities for Creating GICs of Future

21. Notable Trends

22. Notable Trends - Cntd

23. Actions - Replicated from Airline Industry
• Tapping the potential of new markets or creating the demand for new products
with innovation in domestic market.
• Reductions in costs by setting up GICs in Tier 2 or 3 cities with better
Government incentives.
• Look for wider revenue opportunities from Newer geographies and verticals
across Asian Countries.
• Involvement of government agencies e.g. RBI is executing a plan to reduce
online transaction costs to encourage digital banking in India.
• Becoming a part of Government initiatives e.g. “In March 2017, the government
set a target of achieving 25 billion digital transactions for banks with the help of
PoS machines, transactions enabled and merchants, which have been added in
firms” .
• Indian Banking sector is likely to increase its spending on IT infrastructure by 11.7
per cent to US$ 10.1 billion in 2018.

24. Airline Industry Vs IT Industry –
Recommendations
Sr. No. Airlines IT Industry
1 Tap the demand –UDAN Tap the potential from Tier 2 city or rural
India which will provide further growth
2 FDI: Capital Incentive
100 % FDI in Green Field
74 % FDI in Brown Field
Provide Tax holiday benefit for Startups
and setup infrastructure in Tier 2 cities
3 Packaging – Add on service
like Extra Baggage, meal –
LCC Vs FSE
IT /ITES in form of basic & premium
services e.g. SaaS , IaaS .. i.e. use and
So based on polices adopted by airlines industries some of the
practices can be adopted by IT/ITES industries as below:

25. Thank You!!