Expect On a Voodoo Cemetery Tour in New Orleans.pptx
Comparative study of aviation Sector in 2017-18
1. Project Report
(Submitted for the Degree of B.Com. Honours in Accounting & Finance under the University of
Calcutta)
Study on Aviation Sector of India
(Based on comparative study on Air India and Indigo airlines)
Submitted by
Name of the Candidate : Ankita Sen Gupta
Name of the College : Jogamaya Devi College
Supervised by
Name of the Supervisor: Syamales Maiti
Name of the College: Jogamaya Devi College
Month & Year of Submission
February,2018
2. Annexure- IA
Supervisor's Certificate
This is to certify that Ms Ankita Sen Gupta a student of B.Com. Honours in Accounting & Finance of
Jogamaya Devi College under the University of Calcutta has worked under my supervision and guidance for
her Project Work and prepared a Project Report with the title Study on Aviation Sector of India
( Based on comparative study on Air India and Indigo airlines) which she is submitting, is her genuine and
original work to the best of my knowledge.
Signature
Place:Kolkata Name: Syamales Maiti
Date: Designation:
Name of the College: Jogamaya devi college
Annexure- IB
Student's Declaration
I hereby declare that the Project Work with the title (in block letters) STUDY ON AVIAITON
SECTOR(BASED ON COMPARATIVE STUDY ON AIR INDIA AND INDIGO AIRLINES)
submitted by me for the partial fulfillment of the degree of B.Com. Honours in Accounting & Finance under
the University of Calcutta is my original work and has not been submitted earlier to any other
University/Institution for the fulfillment of the requirement for any course of study.
I also declare that no chapter of this manuscript in whole or in part has been incorporated in this report from
any earlier work done by others or by me. However, extracts of any literature which has been used for this
report has been duly acknowledged providing details of such literature in the references.
Signature
Name: Ankita SenGupta
Address: New barrackpur,kolkata
Place:Kolkata
Date:
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1. INTRODUCTION 1
1.1 Background 1
1.2 Review of Literature 1
1.3 Objectives of study 2
1.4 Research Methodology 3
1.5 Limitations of Study 3
1.6 Chapter Planning 3
2. CONCEPTUAL FRAMEWORK
2.1 National Scenario of Aviation Industry 4
3. PRESENTATION, ANALYSIS &
FINDINGS
3.1 Introduction of AIR INDIA 8
3.2 Introduction of INDIGO 9
3.3 The Sinking Yet Surviving Tale of AIR INDIA 10
3.4 The Pristine Profitable Story of INDIGO 12
3.5 SWOT analysis of AIR INDIA 16
3.6 SWOT analysis of INDIGO 17
3.7 Route map of Indigo 18
3.8 Route map of Air India 18
3.9 Findings from :- 19
ANNUAL REPORT from F.Y. 2011-2016
4. CONCLUSIONS & RECOMMENDATIONS 25
5. BIBLIOGRAPHY 26
4. 1
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The word "AVIATION" was coined by French Writer and former Naval Officer "GABRIEL LA
LANDELLE" in 1863 from the verb avier, itself derived from the Latin word avis (bird) and the
suffix-ation. Aviation is the practical aspect or art of aeronautics, being the design,
development, production, operation and use of aircraft especially heavier-than-aircraft.
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Indian Aviation Industry is one of the fastest growing airline industry in the world. The
history of Indian Aviation Industry started in December 1912 with its first domestic air route
between Karachi and Delhi. It was opened by the Indian Air Services in collaboration with the
UK based Imperial Airways. Tata sons limited, the first Indian airline, started a regular airmail
service between Karachi and Madras three years later without any backing from the Indian
Government.
Indian Aviation can be broadly divided into:
Scheduled air transport service includes Domestic and International airlines.
Non-scheduled air transport service consists of Charter operations and Air taxi operators.
Air cargo services which includes air transportation of Cargo and Mail.
An overview of aviation companies in INDIA:
Indian airlines
Jet airways
Indigo
Go airlines
Kingfisher airlines
Spice jet
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Customer review On Air India:-
M.Andrews (UK) on 5/1/2014,from Birmingham to Chennai via Delhi
"Cabin staff not very helpful or willing to even give you a drink of water. My flight from
Birmingham got delayed which meant I missed my flight from Chennai. Customer service
don't care about anything."RATING- 1/10
Sumeeta Singla (UN) on 8/12/2015,from Chicago to Delhi
"TV didn't work. Tray and armrest was broken. I could barely eat food. Recliner didn't recline
fully leading to back pain. Cabin crew failed to respond when called. My checking bag was
torn". RATING-3/10
PAGE-1
5. Yeshi (India) on 16/8/2013,from Bangalore to Kathmandu
"... had a very bad experience with Air India staff and manager were not at all supportive. Air
India lost a genuine client because of ego and attitude of manager as they didn't care about
passengers by saying that these are the rules..." RATING-1/10
Sudheer Borra (India) on 5/4/2015,from Vadodara to Delhi
"Received A sms from Air India about delay of forty minutes and ulti9mately flight departed
with a delay of one and half hours. Boarding gates no staff... meal was a bad choice of
combination" RATING-4/10
Customer review on Indigo:-
H.Advani (Thailand) on 20/11/2015,from Bangkok to Pune via Kolkata
" As usual on this run, a route I have flow close to thirty times in the past 6 years, an almost
flawless flight. The only problem being no arrival cards on boards for non-Indians nationals
thus needlessly spending a
much longer time in queue at Kolkata immigration. other than that, an impeccable flight
especially the superb cabin crew." RATING-9/10
S Chhatwani (India) on 27/10/2014,from Bangalore to Mumbai
"I was not feeling well and air hostess provided me as much help as she can during my
journey. I am very much impressed with this behavior of staff towards passengers. Thanks for
choosing such a helpful and lovely staff" RATING-10/10
Mohammed Nishal (Qatar) on 2/10/2015,from Doha to Kochi via Mumbai
"I was having least expectation for this early morning flight. But crew on board offered
genuine hospitality and big smile. They seems to be attentive and happy to operate this flight
and seating in the forward cabin crew working in the forward
cabin crew working did a good job on this flight. I would recommend indigo and would
definitely fly with them again" RATING-9/10
Sounak Moulik (India) on 5/7/2014,from Kolkata to Hyderabad
"It is the best domestic airline in India with best prices and the most punctual one. It is seldom
late arrivals as I mostly travel in late night flights. Food is basically paid one but I have never
tried anytime. They consists of mainly ready to eat meals." RATING-8/10
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The main intent of the study are:-
To delve into the incessant failing yet surviving story of AIR INDIA.
To scrutinize the profitable and persistent story of INDIGO.
To have a comparison of both the companies for five financial years with ratios, cash flow
statement, swot analysis along with graphical representation to find out their position in
contrast to each other.
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The data collected for this relevant project is of mainly one types:-
Secondary data- It invariably precedes primary research. It is that collected for another
purpose and already exists somewhere. The secondary data for this project is taken from
internet article, newspaper, magazine, journals, reviews, annual report.
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Although the study was carried out with extreme enthusiasm and careful planning there
are several limitations, which handicapped the research viz.,
The study could have been comprehensive and more representative of the universe, had the
sample size be larger, but it was impossible mainly due to lack of time and some other
constraints.
The areas for questionnaire covered were restricted to Kolkata and Bangalore only.
Everything in the project is individual attempt involving human process of
interpretation and analysis, so there are chance of human errors.
Due to unavailability of some secondary data and less stipulated time a thorough case
study was not feasible.
Despite repeated proof reading , there is high chances of spelling error as well as numerical
data error of otherwise, which may have been overlooked.
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Each and every thing in life needs a planning. Similarly a project needs to be pre-sketched by
a researcher before it's research is commenced
Conceptual frame work
National scenario of aviation sector of India.
Presentation , analysis and findings
Introduction of Air India
Introduction of Indigo
The Sinking Yet Surviving Tale of AIR INDIA
The Pristine Profitable Story of INDIGO
Findings from :-
ANNUAL REPORT from F.Y. 2011-2016
Survey using QUESTIONNAIRE
Conclusion and Recommendations
Bibliography
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A country's transportation sector plays an important integral role in the growth and
development of an economy.
The civil aviation industry in India has emerged as one of the fastest
growing industries in the country during the last three years. India is being rapidly transformed
and air travel becoming indispensable. India is now considered the third largest domestic civil
aviation market in the world. It is now the fastest growing major aviation market- the number
of air passengers has been growing more than 20% year on year. India will likely become the
third largest aviation market in the world by 2020 after US and CHINA and is expected to be
the largest by 2020.
The civil aviation industry has ushered in a new era of expansion, driven, by factors such as
low cost carriers, modern airports, foreign direct investment in domestic airlines, advanced IT
interventions and growing emphasis on regional connectivity.
From the source of AIRPORTS AUTHORITY OF INDIA :
Domestic passenger traffic expanded at CAGR of 11.46% over F.Y. 06-17
According to Directorate General of Civil aviation, domestic passenger traffic witness growth at a rate of
22% in comparison 21.24% in F.Y.16.
Freight traffic on airports in India is expected to cross 11.4 million tons by 2032.
During February 2017, domestic airlines carried over 8.23 million passengers, showing a growth of more
than 23%.
During F.Y.16, international passenger traffic increased by 7.72%.
In coming 20 years, Indian companies will buy 2,100 new planes worth US $ 290 billion. Indian Aviation
Industry is highly growing market and it is largely untapped thus having huge growth opportunities.
PAGE-4
8. Growth in Domestic passenger traffic has been robust
PAX LOAD FACTOR ( % )
PAGE-5
40%
18%
13%
13%
9%
3% 3% 1%
AIRLINE MARKET SHARE (Data for Feb,2017{%})
INDIGO
JET AIRWAYS
AIR INDIA
SPICE JET
GO AIR
VISTARA
AIR ASIA
OTHERS
0
20
40
60
80
100
120
140
160
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
International
National
0
10
20
30
40
50
60
70
80
90
100
JULY(2017)
AUGUST(2017)
9. Indian Domestic Airlines- On Time Performance
Note F.Y.- Indian financial year ( April- March)
PAGE-6
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
jun,14 jul,14 aug,14 sept,14 oct,14 nov,14 dec,14 jan,15 feb,15 mar,15 apr,15 may,15
go air
indigo
spicejet
jet
air india
0
0.5
1
1.5
2
2.5
3
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
Freight traffic(million tonnes )
Freight taffic
0 0.5 1 1.5 2
AIR INDIA
JET AIRWAYS+JETLITE
GO AIR
TRUEJET
AIR ASIA
INDIGO
SPICEJET
VISTARA
ZOOM AIR
No. of complaints/10000 PAX
No. of
complaints/10000 PAX
10. PAGE-7
0 20 40 60 80 100
INDIGO
SPICEJET
VISTARA
GO AIR
AIR INDIA
JET AIRWAYS+JET
OTP AT FOUR METRO AIRPORTS
OTP AT FOUR METRO AIRPORTS
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HISTORY- Air India, the flag carrier airline of India, had its origin as Tata air services later
renamed to Tata Airlines in 1932.It was founded by JRD TATA of Tata sons, an Indian aviator
and business tycoon. Tata won a contract to carry mail for imperial airways and the aviation
department of Tata sons was formed with two single engine De Havilland Puss Moths. On 15th
October 1932 Tata flew a Puss Moths carrying air mail from Karachi to Bombay(now
Mumbai) and continued to madras"(now Chennai) piloted by NEVIL VINTCENT, former
Royal Air Force pilot and friend of Tata.
After World War II, it became a public limited company and was renamed as
AIR INDIA. on 21st February 1960, it took delivery of its first BOEING 707 named GAURI
SHANKAR and became the first Asian Airline to induct a jet aircraft in its fleet. In 2000-01
attempts were made to privatize Air India and from 2006 onwards, it suffered losses after its
merger with INDIAN AIRLINES.
HEADQUARTER-Indian airline house, New Delhi from 2013.
MASCOT- Air India's mascot is the Maharajah(Emperor).
SLOGAN- Air Indian-Truly Indian.
KEY PEOPLE- Pradeep Kharola, CMD & JRD Tata,
founder.DESTINATIONS-As of january 2017, it fliesto a total
of 89 destinations including 52 domstyicdestinations and 37
international destinations in 27 countries across four continets
around the world.
Primary Hub- Indira GandhiInternational Airport, New Delhi
& Secondary Hub- Chhatrapati Shivaji International Airport,
Mumbai.
SUBSIDIARIES- Air India express, Alliance air.
EMPLOYESS- 20956 (2015-16).
PAST AIRCRAFT OPERATED-Air bus A300-100,Boeing
707-320B, Doughlas DC-8-60F,Ilyushin 1162M,Lockheed L-
1011,Tristar,etc.
PRESENTAIRCRFT OPERATING- Airbus A319-100, Airbus A320-200,Airbus A320 neo,
Boeing 747-400,Boeing 777-200LR,Boeing 777-300ER,etc.
PAGE-8
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HISTORY- Indigo is a low cost airline and the largest airline in India by passengers carried
and fleet size with a 39.6% market share as of october,2017. It is the largest low cost carrier in
terms of jet fleet size an passengers carried and the 7th largest carrier in Asia with over 41
million passengers carried in 2016. It was founded in 2006 as a private co. by RAHUL
BHATIA of Interglobe enterprises and RAKSH AGGARWAL, a US based NRI. Interglobe
had a 51.2% stake in Indigo and 47.88% was held by Gangwal's Virginia based company
caelum investments. It commenced operations on 4th august 2006 with a service from New
Delhi to Imphal via Guwahati. In December 2010, it replaced state carrier Air India as the
third largest airline in India, behind kingfisher airlines and jet airways with a passenger market
share of 17.3%.
On 17th august 2012 it became the largest airline in India in terms of market share surpassing
jet airways, six years after commencement. In January 2013, it was the 2nd fastest growing
low cost carrier in Asia. As of march 2014, it was the 2nd largest low carrier in Asia in terms
of seat flown.
HEADQUARTER- Gurgaon, India.
TAGLINE- on time.
KEY PEOPLE- Rakesh aggarwal, co- founder , Rahul bhatia , co founder and MD, and
Aditya Ghosh, president.
EMPLOYYES- 12362 (2015-16).
DESTINATIONS-As of January 2018, it operates more than 1000 daily flights to 48
destinations, 41 in India and 7 abroad. its main base is located in New Delhi with additional
base at Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, Jaipur and Ahmadabad. Its fist
domestic international service was launched between New Delhi and Dubai on 1st September
2011.
AIRCRAFT OPEATING- Airbus A320-200,Airbus A320-neo, Airbus A321neo, ATR 72-
600.
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The real reasons behind the present financial crisis are the interest burden, repayment and
overhead expenses. On 23/5/2001 it lost approx. 570 million because of extra commissions that
sanctioned. Around 2006-07 it began showing signs of financial distress. Its combined losses in
2006-07 was Rupees 7.7 billion and after the merger it went up to Rupees 72 billion by march
2009.It sold three A300s in march 2009 due to debts. In July 2009 State Bank of India was
appointed to prepare road map for the recovery of the airline. By march 2011, it accumulated a
debt of Rupees 425.7 billion and an operating loss of Rupees 220 billion and seeks Rupees
42920 crore from the government. for the past 3 months of 2011( June-July-August ), the
carrier has been missing salary payments and interest payment. Air India is facing a tight
financial situation and is in talks with leaders to restructure its debt of Rupees 40,000 crore. A
report by the Comptroller and Auditor General blamed the decision to buy 111 new planes as
one of the major causes of the debt troubles. The government pumped Rupees 32 billion into
Air India in march 2012. In January 2013, it cleared some of its debts by selling and leasing
back the newly acquired Boeing 787 dreamliners. The airline shut down the Frankfurt hub on
30th October 2010 because of high operating costs. In may 2012, the carrier invited offers from
banks to raise up to $ 8200 million via external commercial borrowing and bridge financing. In
may 2012, the airline was fined $ 80,000 by the US Transportation Department for failing to
post customer service and tarmac delay contingency plans on its website.
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The merger was approved in 2007 and the merged body was called NACIL( National Aviation
Company of India Limited ). All does not have the ability to compete with the private sector.
Slow and painful.
Continuous share fall
Fear of substantial job losses.
PAGE-10
14. Government measures failed to reach the target: Amending tax and finance laws , Carried
forward unabsorbed depreciation , Tax shield against future profit. These measure would
save the merged airline around 4171 million .
The combined workforce of around 35000 fares badly when compared against its main
rival.
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Private airlines account for around 75% share of the domestic aviation market. Airline
industry in India is plagued with several problems, some are :-
High aviation turbine fuel prices.
Rising labour costs and shortage of skilled labour .
Rapid fleet expansion.
Intense price competition among the players
Infrastructure constraint/ poor maintenance.
Bad management and unreliable policies.
complete lack of ownership.
Deeply ingrained corruption in all level.
Unionized strike with political financial support has physical disability.
Lack of responsibility for results and failures.
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Bailout plan for Rs. 30000 cr - Rs 5000 cr as equity infusion and the balance as soft loan
with long term repayment period and subsidized interest rate. Improved defined work
methods which could lead to substantial cost reductions.
PAGE- 11
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Air India Jet Sahara Indian Airlines
ASKs per employee
ASKs per employee
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13 long haul international routes accounted for 80% of losses in the long haul routes.
cash cost of 3 domestic and 5 international routes were not met.
60 international routes meeting cost of jet fuel, but not total cost.
Three loss making long haul routes be discontinued and 10 to be replaced by 787
dreamliners.
New destinations like Australia, Moscow and Paris started with deamliners.
Reducing service time of the aircrafts high on agenda.
Re route traffic based on priorities of star alliance.
Make IT structure foolproof.
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Rationalize pay packages and promotions of all employees, regardless of their original
employer- Be it Air India or Indian Airlines.
Hold open house meetings with employees.
Act tough on striking pilots.
Dispense the government approved funds so that resources are paid well and vendors
cheques do not bounce.
In short , operations should not be affected.
3.4. THE PRISTINE PROFITABLETALE OF INDIGO
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Emergence of the Great Indian middle class willing to spend money swifter travel.
For the individual on the Go, who values time and on-timeliness.
Budget travel is not cheap travel, quality of service
PAGE- 12
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To be the best Airline in India by providing the following values to the customer:
Affordable Fares
On time Performance
Hassle free Service
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Ef
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:-
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Turnaround time.
Aircraft utilization
On-time performance for time-services travelers
Young fleet of aircraft
Lower employees per aircraft
Fuel efficient engine
Zero inventory of components
Low turnaround times
Same configuration of all
Aircrafts providing flexibility in allocation
P
Po
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g:
:-
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Limited passenger service
Low price tickets
Point to point routes Frequent and reliable departures
Targeting high load factor
C
Co
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de
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sh
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& C
Co
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s:-
Avoiding in-flight services
No free meals
Strategic usage of disposable bags for quick cleaning of aircrafts before landing'
Highest no. of seats
Light weight seats
Internet reservations
Costand service culture
Human resource training on efficient processes
Centralized operations controls centre
Highest no. of CAT-III compliant pilots
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Pricing to be differentiated with respect to days before the travel.
High seating density and load factor.
No frills such as free food/drinks or lounges.
Targeting segments locally based on seasons and festivals.
Recently launched EMI options for consumers thereby expanding the potential base.
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Airport hoardings
Social media
Collaboration with multiplexes
Magazines
Sponsoring events
Collaboration wish banks/credit card/ cos./hotels/websites.
Use of regional languages.
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Unlike manual systems used by other airlines Indigo planes are equipped with a digital link
system for transmission of short, simple messages between aircraft and ground stations via
radio or satellite called Aircraft Communications Addressing and Reporting
System(ACARS). Before every Indigo flight departs an automatic message is triggered
from the aircraft to its operations control centre and immediately the same departure time
PAGE-14
18. gets recorded in the software. Similarly the moment the flight lands, an automatic message
is triggered from aircraft to control centre. Hence, the on time performance is diligently
monitored for every flight in real time.
3
3.
.4
4.
.g
g.
. Q
Qu
ua
al
li
it
ty
y a
an
nd
d d
de
et
ta
ai
il
l k
ke
ey
y t
to
o g
go
oo
od
d s
se
er
rv
vi
ic
ce
e
Indigo's executives, including staff at the check in counters, air crew and sales and
marketing staff are hired only after Bhatia meets each of them individually. Besides the
airline also employees far fewer people, with one of the industry leanest work forces. The
airline also broke industry standards with simple things like turnaround time. This is the
time taken for a plane to be ready for the next flight between landing and takeoff. Indigo's
boasts of a turnaround time of less than 30. minutes.
3
3.
.4
4.
.h
h.
. S
Se
el
ll
li
in
ng
g a
an
nd
d l
le
ea
as
si
in
ng
g b
ba
ac
ck
k p
pl
la
an
ne
es
s h
he
el
lp
ps
s i
it
ts
s B
Ba
al
la
an
nc
ce
e S
Sh
he
ee
et
t
It maintains a young fleet by selling and leasing back planes. It uses six year sale and lease
back agreements, so the airline is constantly replacing its aircraft. This prevents the need for
overall checks and major repairs, which means it understands how to work the margins,
Operationally it would be impossible to make a profit at the very low fares they were
offering through the first four years of operations where tickets prices on indigo were
roughly 40% of cost of operation.
PAGE-15
6%
33%
9%
24%
7%
15%
6%
CANCELLATIONS
INDIGO
AIR INDIA
GO AIR
JET AIRWAYS
JET LITE
KINGFISHER
SPICEJET
19. 3
3.
.5
5.
. S
SW
WO
OT
T a
an
na
al
ly
ys
si
is
s o
of
f A
AI
IR
R I
IN
ND
DI
IA
A
S
St
tr
re
en
ng
gt
th
h:-
-largest air carrier in traffic volume and company assets in India.
-Government of India supporting very well.
-It has brand new fleet of Aircraft
-Presence in 19 Countries
-covers more than 45 Destinations
-Unique Image of ''Maharaja''
PAGE-16
18%
18%
16%
16%
0%
16%
16%
CABIN OCCUPANCY
INDIGO
SPICEJET
GO AIR
KINGFISHER
JET LITE
JET AIRWAYS
AIR INDIA
0%
5%
10%
15%
20%
25%
30%
35%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
GROWTH PATH OF INDIGO
GROWTH PATH OF INDIGO
20. W
We
ea
ak
kn
ne
es
ss
s:
:-
-
-Political intervention
-Many time financial crisis
-Low profitability
-Growing Competitor base and entry of Low-CostCarriers
O
Op
pp
po
or
rt
tu
un
ni
it
ti
ie
es
s:
:-
-
-Growing India’s GDP Its predict well for its growth.
-Foreign visitors continuously increasing.
-Expansion of routes and international destinations
-many internal issues solved.
T
Th
hr
re
ea
at
t:
:-
-
-Fuel costincreasing.
-labour cost increasing.
-Competitors rising.
3
3.
.6
6.
. S
SW
WO
OT
T a
an
na
al
ly
ys
si
is
s o
of
f I
IN
ND
DI
IG
GO
O
S
St
tr
re
en
ng
gt
th
h:
:-
-
-Powerful promoters support
-continuous profit maker
-Big Market share
-Good advertising, and strategies
-Also Surrounded out of India also.
W
We
ea
ak
kn
ne
es
ss
s:
:-
-
-Competition against other competitors
-no more routes compare to others.
-Not internationally established.
O
Op
pp
po
or
rt
tu
un
ni
it
ti
ie
es
s:
:-
-
–Middle class increasing
-untapped cities
-Great Market For LCC in India
-global entrance is also good
T
Th
hr
re
ea
at
t:
:-
-
-Unfavorable Government policies
-labour costincreased
-Fuel costalso
PAGE-17
22. 3
3.
.9
9.
. F
Fi
in
nd
di
in
ng
gs
s f
fr
ro
om
m A
An
nn
nu
ua
al
l r
re
ep
po
or
rt
t o
of
f A
AI
IR
R I
IN
ND
DI
IA
A A
AN
ND
D I
IN
ND
DI
IG
GO
O A
AI
IR
RL
LI
IN
NE
ES
S
f
fr
ro
om
m F
F.
.Y
Y.
.-
-2
20
01
11
1-
-1
16
6
3
3.
.9
9.
.a
a.
. F
Fi
in
na
an
nc
ci
ia
al
l s
st
ta
at
te
em
me
en
nt
t a
an
na
al
ly
ys
si
is
s w
wi
it
th
h s
so
om
me
e i
im
mp
po
or
rt
ta
an
nt
t a
ac
cc
co
ou
un
nt
ti
in
ng
g r
ra
at
ti
io
os
s
C
Cu
ur
rr
re
en
nt
t R
Ra
at
ti
io
o =
= c
cu
ur
rr
re
en
nt
t a
as
ss
se
et
ts
s /
/ c
cu
ur
rr
re
en
nt
t l
li
ia
ab
bi
il
li
it
ti
ie
es
s
Interpretation-Current ratio measures the ability of an enterprise to meet its short term liabilities. The
standard ratio is considered as 2:1.It means perfect ability of the business is existing after keeping funds to
meet day to day expenses. From the chart it can be seen that Indigo airlines have more than enough current
assets i.e. it has invested excessive in current assets. This can lead to decrease in profitability due to
blockage of day to day funds in working capital of Indigo. It can be also understood that Air India's current
assets position should be taken care as it is so less in amount that after meeting its current liabilities there
will be nothing left.
A
Ac
ci
id
d t
te
es
st
t r
ra
at
ti
io
o/
/L
Li
iq
qu
ui
id
d r
ra
at
ti
io
o/
/Q
Qu
ui
ic
ck
k r
ra
at
ti
io
o =
= Q
Qu
ui
ic
ck
k a
as
ss
se
et
ts
s /
/ q
qu
ui
ic
ck
k l
li
ia
ab
bi
il
li
it
ti
ie
es
s
I
In
nt
te
er
rp
pr
re
et
ta
at
ti
io
on
n-
-This ratio is used to ascertain the short term or immediate liquidity of a firm , to see whether
it is able t meet its current liabilities within a short term, like a month or so. The minimum desired ratio is
1:1.A firm must have at least one rupee to pay its one rupee quick liabilities. From the chart it is found that
PAGE-19
0
0.5
1
1.5
2
2.5
2011-12 2012-13 2013-14 2014-15 2015-16
AIR INDIA
INDIGO
0 0.5 1 1.5 2
2011-12
2012-13
2013-14
2014-15
2015-16
INDIGO
AIR INDIA
23. INDIGO have sufficient amount of quick assets to pay its quick liabilities whenever required. Whereas
AIR INDIA needs to overcome its quick assets to pay its quick liabilities. Due to merger and for some
other reasons condition of Air India has deteriorated.
This ratio is an accurate test.
S
St
to
oc
ck
k t
tu
ur
rn
no
ov
ve
er
r r
ra
at
ti
io
o =
= C
Co
os
st
t o
of
f g
go
oo
od
ds
s s
so
ol
ld
d /
/ A
Av
ve
er
ra
ag
ge
e s
st
to
oc
ck
k
I
In
nt
te
er
rp
pr
re
et
ta
at
ti
io
on
n-
- This result indicates the degree of efficiency in inventory management. A high ratio stands
for even movement of stock. A low ratio hints at excessive stock level. It indicates the inventory holding
period. From the chart it can be found that Indigo's stock level is very good and has good movement
whereas Air India's stock level is high due to low ratio. It means air India has to take great care.
F
Fi
ix
xe
ed
d a
as
ss
se
et
ts
s t
tu
ur
rn
no
ov
ve
er
r r
ra
at
ti
io
o =
= S
Sa
al
le
es
s /
/ F
Fi
ix
xe
ed
d a
as
ss
se
et
ts
s
I
In
nt
te
er
rp
pr
re
et
ta
at
ti
io
on
n-
- If the ratio is high, that indicates efficiency of the management in utilizing the resources of
the firm. The firm has become able to make larger sales in comparison to its assets. A low ratio indicates
under trading. Here it can be seen that Indigo has higher ratio which reflects that it made larger sales but
there might have been overtrading which can occur only under unusual circumstances. Whereas Air
India's ratio is low in comparison to Indigo which indicates under trading.
PAGE-20
0
1
2
3
4
5
6
7
8
9
2011-12 2012-13 2013-14 2014-15 2015-16
AIR INDIA
INDIGO
0
2
4
6
8
2011-12 2012-13 2013-14 2014-15 2015-16
INDIGO
AIR INDIA
24. D
De
eb
bt
t -
- e
eq
qu
ui
it
ty
y r
ra
at
ti
io
o=
= D
De
eb
bt
t/
/ E
Eq
qu
ui
it
ty
y
I
In
nt
te
er
rp
pr
re
et
ta
at
ti
io
on
n-
-This ratio is used to ascertain the respective claims of the outsiders and the owners. The
ideal ratio is 2:1. .A high ratio may indicate too much dependence on outside funds, greater financial
risk. Therefore Indigo should take greater care regarding External equities. Whereas a low ratio indicate
too much dependence on own funds. This means Air India is in a very bad condition.
P
Pr
ro
op
pr
ri
ie
et
ta
ar
ry
y f
fu
un
nd
d =
= F
Fi
ix
xe
ed
d a
as
ss
se
et
ts
s /
/ P
Pr
ro
op
pr
ri
ie
et
ta
ar
ry
y f
fu
un
nd
d
I
In
nt
te
er
rp
pr
re
et
ta
at
ti
io
on
n- This ratio indicates how much of the proprietor funds has been blocked by fixed assets.
The result should be less than 1.For example, if it says 0.75, the balance has been invested in working
capital. For Indigo we can see that it is mostly less than 1 except in 2013-14.In the same year even Air
India's ratio crossed 1 which means more has been in fixed assets and nothing in working capital.
PAGE-21
-3
-2
-1
0
1
2
3
4
5
2011-12 2012-13 2013-14 2014-15 2015-16
AIR INDIA
INDIGO
0 0.2 0.4 0.6 0.8 1 1.2
2011-12
2012-13
2013-14
2014-15
2015-16
INDIGO
AIR INDIA
25. C
Ca
as
sh
h p
po
os
si
it
ti
io
on
n r
ra
at
ti
io
o=
= C
Ca
as
sh
h a
an
nd
d c
ca
as
sh
h e
eq
qu
ui
iv
va
al
le
en
nt
ts
s /
/ T
To
ot
ta
al
l a
as
ss
se
et
t
I
In
nt
te
er
rp
pr
re
et
ta
at
ti
io
on
n-
- It indicates how much portion of the total asset is represented by cash and cash
equivalents. If the ratio is high that indicates availability of sufficient cash to meet the dues in time. It can
observe from the graph that Indigo have high ratio whereas Air India have minimum ratio. This shows that
Air India needs more and more cash and cash equivalents to overcome its losses.
E
Ea
ar
rn
ni
in
ng
gs
s p
pe
er
r s
sh
ha
ar
re
e =
= P
Pr
ro
of
fi
it
t a
av
va
ai
il
la
ab
bl
le
e t
to
o e
eq
qu
ui
it
ty
y s
sh
ha
ar
re
eh
ho
ol
ld
de
er
r/
/n
no
o.
. o
of
f e
eq
qu
ui
it
ty
y s
sh
ha
ar
re
es
s
I
In
nt
te
er
rp
pr
re
et
ta
at
ti
io
on
n-
- It indicates the extent of earning made per equity share. It is meant for comparison with
earnings of other firms. It helps the prospective investors take the right decisions. The graph shows that
Indigo's EPS every year have increased and decreased but it is very minimum with positive amount .
Whereas Air India's it negative which indicates that investors will not invest in this company.
PAGE-22
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
2011-12 2012-13 2013-14 2014-15 2015-16
AIR INDIA
INDIGO
-40
-30
-20
-10
0
10
20
30
40
50
60
70
2011-12 2012-13 2013-14 2014-15 2015-16
AIR INDIA
INDIGO
26. 3
3.
.9
9.
.b
b.
. C
Co
om
mp
pa
ar
ri
is
so
on
n o
on
n t
th
he
e b
ba
as
si
is
s o
of
f c
ca
as
sh
h f
fl
lo
ow
w s
st
ta
at
te
em
me
en
nt
t
CASH FROM OPERATING ACTIVITIES
I
In
nt
te
er
rp
pr
re
et
ta
at
ti
io
on
n-
- The cash from operating activities of Air India was once negative but it improved from
the year 2014 and have overcome a huge amount in 2015.Whereas Indigo has a positive effect
throughout the last five years.
CASH FROM INVESTING ACTIVITIES
PAGE-23
-80000
-60000
-40000
-20000
0
20000
40000
2011-12 2012-13 2013-14 2014-15 2015-16
AIR INDIA
INDIGO
-40000
-35000
-30000
-25000
-20000
-15000
-10000
-5000
0
5000
2011-12 2012-13 2013-14 2014-15 2015-16
AIR INDIA
INDIGO
27. I
In
nt
te
er
rp
pr
re
et
ta
at
ti
io
on
n-
- Both the companies have negative cash from investing activities. It indicates that both
the companies have invested more in investment, fixed asset. This in turn make lead to blockage cash
and cash equivalents.
CASH FROM FINANCING ACTIVITIES
I
In
nt
te
er
rp
pr
re
et
ta
at
ti
io
on
n -
- Cash flow from financing activities of both the companies is positive. It indicates that
both have issued shares, long term loans, debentures etc. This helps to increase cash balance.
3.7.c. Customer ratings
PAGE-24
0
5000
10000
15000
20000
25000
30000
35000
2011-12 2012-13 2013-14 2014-15 2015-16
AIR INDIA
INDIGO
28. 4
4.
. C
CO
ON
NC
CL
LU
US
SI
IO
ON
N &
& R
RE
EC
CO
OM
MM
ME
EN
ND
DA
AT
TI
IO
ON
NS
S
This project brings out the various comparisons between the companies which we have
taken under study, different marketing parameters through which the airline companies
do branding , pricing activities. It also shows the financial prospects of companies with
the help of the annual reports published by them. This project reflects that being a new
company ,INDIGO have grabbed the market almost with its different strategies.
On the basis of the study it was found that INDIGO was best in its
business packages offered by them. It has competed excellently with its competitors with
minimum prices, high quality services , cash discounts given to customers.
On the basis of the study it was found that Air India being the first
airline company with goodwill, due to some wrong decisions specially the decision of
the merger lead them into huge losses. Though it tried to overcome with the help of the
government still It is running under losses..As compared to Indigo it did not gave good
quality services, charging lump sum amount from customers , having poor quality
management.
The study has helped us to attain knowledge in airline industry and to see
any particular industry or any company with a different perception, to make efficient use
of MS EXCEL for calculating formulas and MS WORD for the project.
RECOMMENDATION- It is recommended that Air India should look after all the in
flight services they are providing which may be helpful for them to overcome their loss
running situation. It will have to cut layers of management, align staff by role, bring in
lateral hires, overhaul customer facing functions, and implement a massive training
exercise. It should providing direct booking of hotels from company, quality foods and
accommodations also.
It is recommended to Indigo that it should take care of its current
position in the market. It should maintain its strategies every year and should of new
way to increase its profit to gain more share in the market. It hasthe potential to become
a global low cost carrier, provided it can tide over the current slowdown. It should
indulge in brand building exercises.
PAGE-25
