The document summarizes the domestic aviation industry in India. It discusses the history and key players in the industry. Some of the major players mentioned are Air India, Jet Airways, IndiGo, SpiceJet and Go Air. It also analyzes the macro environment factors like growing economy, middle class and potential for future growth. Low cost carriers have been gaining popularity in India and the business models of these carriers are also summarized. The document concludes with future trends of increasing passenger traffic and challenges around infrastructure constraints.

1. DOMESTIC AVIATION INDUSTRY Group - IV

2. PRESENTED BY Rupali M04 Milind Sarode M Amarpreet Singh Ghura M02 Gurpreet Kour Lote M07 Vijeta Wagle M24 Santosh Singh M Sharif M10

3. Aviation Industry in India “ Once you get hooked on the airline business, it's worse than dope.” “ This is a nasty, rotten business.” “ Air transport is just a glorified bus operation.”

4. Aviation Industry in India History : Before Independence Public Sector Privatization Open Sky Policy Bilateral Treaties

5. Players Air Deccan Air-India Express Air India Air Sahara Go Air Indian Airlines IndiGo Jet Airways Jet Lite SpiceJet Paramount Airways Kingfisher

6. Aviation Industry in India Characteristics : Huge Potential Under penetrated market Total Passenger Traffic : 50 million Passenger trips per annum : India : 0.05 United states : 2.02 Untapped air cargo market

7. Medium Term Growth Forecast : India GDP : 8.6 % per annum WTTC Travel & Tourism : 8.8 % Over next 10 years Domestic air travel : 12 % annually

8. Macro Environment Analysis Main Factors P olitical : Open Sky Policy Deregulations in different spheres Low entry barriers FDI limits : 49 % for airlines 100% for airports

9. S ocio-cultural : Growing middle class : 1993-1999 : 39.5 m to 56.7 m households 2005 : 300 m 2010 : 400 m (Estimated) Increase in leisure travel by tourists by 15 % in 2005 Foreign tourists in 2006 : 3.2 million Status symbol to travel in plane

10. E conomical : Growing middle class income Consistent GDP growth of more than 8% and projected rate in two digits Hike in average salary 14%(highest) in the world Tourism industry growth :8.8 %in 2005

11. T echnological : Modernization & Privatization of Airports Modern Technology for efficient handling of aircraft, passenger and cargo. Example : ILS, CAT-3 Developing Greenfield Airports with Private Sector Example : Bangalore Airport Corporation Ltd.

12. Other Factors : Demographic and Natural Environment Changing pattern of consumers Highest percentage people of age group 20-25 Educational environment Shift towards family concept High energy cost

13. Low Cost Carriers In the past five years, low-cost airlines have been growing at more than 40 % a year globally

14. Business Model of Low Cost Carriers A single Passenger class A single type of airplane reducing training and service cost No frills such as free food/drinks, lounges etc. Emphasis on direct sale of ticket through Internet avoiding fee and commission paid to travel agents. Employees working in multiple roles Unbundling of ancillary charges to make the Headline fare lower

15. Low Cost Carriers in India Air Deccan SpiceJet IndiGo Airlines Go Air Jetlite (Formerly known as Air Sahara)

16. Airline Industry in India : Service Vs Price Graph P R I C E SERVICE

17. Current Trends : Consolidations All Around Kingfisher-Air Deccan Deal Kingfisher buys out 26 % stake for Rs.550 crore. They have combined Market share of 33% They are second biggest player after Jet Sahara deal Jet airways and Air Sahara merger Air Sahara name changed to JetLite

18. Present Scenario 496 No. of Aircraft Set to be Import in Next Five Year 72 No. of Import Permit for Aircraft Granted in 2007 201 No. of Aircraft Possessed 65 No. of Non-scheduled Operator 334 No. of Aircraft Possessed 14 Scheduled Domestic Operator

19. Future Trends : Passenger Forecast

20. Future Trends The projection for Indian Aviation for 2020 is estimated at: 400 million passengers Including 180 million domestic passengers 1,000 aircraft in the civil aviation sector Likely to follow the footholds of International Low Price Carriers e.g. Air Arabia, Southwest Airlines etc. More emphasis will be on Arabian and South-East Asian circuits.

21. Future Trends : Proposed Addition

22. Challenges Constraints : Infrastructure constraints Shortage of airport facilities Parking bays Air traffic control facilities Takeoff and landing slots. Less than 100 airports having more than one daily service.

23. References/Acknowledgements Article of Mr. S Sharma, Oct 2007 The Civil Aviation Act, 2000 (Draft) Business News from Hindustan Times Daily Report on ‘Study of the Indian Aviation Industry’ on www.foolonahill.com www.findarticles.com Wikipedia, the free content encyclopedia Economic servey, 2008 All site of domestic aviation Player Remote Access Aviation System – RAAS

24. Thank You