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SPICEJET INDUSTRY ANALYSIS
SPICEJET
• Parent company : spice jet
• Category : Indian domestic sector
• Sector : airlines
• Tagline/slogan: flying for everyone
• Usp: lowest price
• Segment: cost conscious passengers
• Target: lower middle class/ middle
class
• Positioning : low cost no frills
INTRODUCTION
• Spice jet is a low-cost airline based in New Delhi.
• It began service in 23 May 2005.
• Spice Jet was earlier known as Royal Airway
• The director of this airlines is Mr. Ajay Singh.
• This airline has more than 2500 employees working with them
currently.
• SpiceJet names all its aircraft after various spices and herbs like
Cinnamon, Thyme, Oregano.
Swot analysis
STRENGTH
• Entered with RS 99 fares for the
first 99 days
• Strong backing by the promoters
• Having more than 35
destinations in India
• Good presence in the market due
to its branding and advertising
SWOT
WEAKNESS
• Low market share due to
presence of significant
competition
• no international
destinations
• Dependency on leased
assets
• Small load deficiency
compared with competitors
OPPORTUNITIES
• Growing population for
• demographics
• growing interest on tourism
• Growing aviation market
• International tie ups would
boost brand image
• Tax holiday on aircraft
leasing– The Union Budget
Government of India
announced 5year tax holiday
on aircraft leasing.
THREATS :
• RISING FUEL COST
• STRONG COMPETITION
• CHANGING GOVERNMENT POLICIES
Spicejet industry analysis
SWOT
ANALYSIS
STRENGTH
• One of the largest low cost
carrier
• Only LCC to make consistent
profit
• Has entered international
markets and boosted its
brand value
• Increased brand recall due to
goodmarketing and
advertising
WEAKNESS
• Not on too many routes
compared to competitors
• Still has to establish itself
on international
destinations
• Concentrate only on middle
class society
• Customers are not happy
with Inflight services
OPPORTUNITITES
• Attracted loyal customers
and converted them into
indigo flyers
• Opportunity to go abroad
markets
• Rapid expansion by buying
new airbuses
• International tie-ups would
boost the image of indigo
THREATS
• Strong competition in the
LCC segment
• Rising fuel cost
• Changing government
policies
• Companies are cutting air
travels due to economic
crises
Spicejet industry analysis
STRENGTH
• 1. Has created a good image
among Indian fliers
2. Strong backing from
promoters
• 3. Awarded as one of the most
premium domestic airlines in
India
• 4. More than 1 million
passengers catered in a year
• 5. Exclusive and premium
advertising and sponsorship give
it a high brand recall
• 6. It has flights to 25 Indian
destinations and international
flights as well
WEAKNESS
• 1. Financial issues due to
Heavy Debt
• 2. Laying off employees
caused a bad image
OPPORTUNITIES
• 1. Reputation of providing
the best amenities in Indian
skies
• 2. Financial stability can
improve operations
• 3. More domestic and
international destinations
THREATS
1. LCCs eating up the market
share
2. Rising Fuel Costs
3. Pressure from aviation
committees and govt
policies
strength
• Strong backing by the
promoters
• Nearly 1000 flights per
week
• Covers almost all major
cities
• Good branding and
marketing in India
weakness
• market share is very less
• It entered Indian market
very late
• Not too many destinations
compared with its
competitor
OPPORTUNITIES
• More destinations yet to be
covered
• Global operations can also
be a value addition
THREATS
• Plenty of new LCC’s to
compete with who already
have taken the lead
• Rising labour costs
• Rising fuel costs
Airline Industry market analysis
EXTERNAL ANALYSIS OF SPICEJET
CUSTOMER ANALYSIS
• SEGMENTATION
Geographic : tier I and tier II cities
Target : premium class of train travellers
business people
corporate employees
Psychographic
Segmentation : aiming for higher life style
• UNMET NEEDS
More international destinations
Need for technological advancement
Need for trained cabin crews
COMPETITOR ANALYSIS
COMPETITOR ANALYSIS
• Quality
• Reputation
• Customer security
• Product performance
• Product features
• Price
• Geo coverage
• Add effects
ENVIRONMENTAL ANALYSIS
PEST
POLITICAL FACTORS :
• Bureaucracy
• No clear policies for state carriers
ECONOMIC FACTORS:
• increasing tax and tariff
• Price depends upon individual firm’s behaviour
• International fuel price
PEST .. (CONT)
SOCIAL FACTORS :
• Lack of skilled manpower ( in flight staffs)
• Customers services
• Safety concerns (9/11)
TECHNOLOGICAL FACTORS :
• Night landing facilities
• Operation during winter
• Capital intensive technology
MARKET AND SUBMARKET ANALYSIS
• MARKET : aviation industry
• SUB MARKET : low cost carriers ( LCC’S)
• SIZE AND GROWTH : 14 % of market share
• MARKET ATTRACTIVENESS : fast
transportation
MARKET TRENDS ( EMERGING
MARKET)
India’s fastest growing tourism destination (majordemand
driver)
• economic growth
• growth in business travels
Low cost carriers ( Lcc’s)
• Resulted in middle income people people and self employed
shifting from premium class travel in trains to air travel
• Domestic air passengers grew at a 38.5% from 25 %
• CAPA predicts that domestic traffic would increase from 25%
to 30%
CUSTOMER PROFITABILITY
• Focusing towards enhancing the customer experience
• Complimentary supervision of unaccompanied minors
• Hot beverage and combo meals available for sale
• Waiver on additional charges on sport kits
Reaching out to business travellers :
1. business travellers can collect their boarding passes on
the same day return flight.
2. introduction of corporate travel programs
3. free two piece baggage
Key success factors
• Low cost carrier
• Point to point services
• Cheaper product design
• Sales via internet
• Word of mouth marketing
CUSTOMER SERVICES
• personal wallet at airport
• Personal and exclusive baggies
• Refreshment and music
• Three course meal
• Baggage assistance
Promotional tools
• Word of mouth marketing
• Print ads in newspapers
• TV commercials
• Internet media initiatives
• Hoardings in railways, platforms, airports
and shopping malls
COST AND VALUE DRIVERS
(COMPETATIVE ADVANTAGE)
HIGH SEAT DENSITY :
• Single class 189 seats per flight
• Focus on maximum space utilization for generating
more revenue per flight
DIRECT DISTRIBUTION OF TICKETS :
• Sells its ticket via internet or call centres
HIGH CRAFT UTILIZATION:
• consistently reporting high aircraft utilization
Strategic uncertainty
• Uncertainty in forecasting the future
• Market fluctuations
• Rapidly changing clients
How to over come ?
• Government should develop and promote
policies
SCENARIO ANALYSIS
• control of emission level
• Risk of high-jacks
• Increasing fuel price
• Decreasing rupee value
How to overcome ?
• Increase security level
• Fuel hedging
Thank you for flying with us . .

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Spicejet industry analysis

  • 2. SPICEJET • Parent company : spice jet • Category : Indian domestic sector • Sector : airlines • Tagline/slogan: flying for everyone • Usp: lowest price • Segment: cost conscious passengers • Target: lower middle class/ middle class • Positioning : low cost no frills
  • 3. INTRODUCTION • Spice jet is a low-cost airline based in New Delhi. • It began service in 23 May 2005. • Spice Jet was earlier known as Royal Airway • The director of this airlines is Mr. Ajay Singh. • This airline has more than 2500 employees working with them currently. • SpiceJet names all its aircraft after various spices and herbs like Cinnamon, Thyme, Oregano.
  • 4. Swot analysis STRENGTH • Entered with RS 99 fares for the first 99 days • Strong backing by the promoters • Having more than 35 destinations in India • Good presence in the market due to its branding and advertising
  • 5. SWOT WEAKNESS • Low market share due to presence of significant competition • no international destinations • Dependency on leased assets • Small load deficiency compared with competitors OPPORTUNITIES • Growing population for • demographics • growing interest on tourism • Growing aviation market • International tie ups would boost brand image • Tax holiday on aircraft leasing– The Union Budget Government of India announced 5year tax holiday on aircraft leasing.
  • 6. THREATS : • RISING FUEL COST • STRONG COMPETITION • CHANGING GOVERNMENT POLICIES
  • 8. SWOT ANALYSIS STRENGTH • One of the largest low cost carrier • Only LCC to make consistent profit • Has entered international markets and boosted its brand value • Increased brand recall due to goodmarketing and advertising WEAKNESS • Not on too many routes compared to competitors • Still has to establish itself on international destinations • Concentrate only on middle class society • Customers are not happy with Inflight services
  • 9. OPPORTUNITITES • Attracted loyal customers and converted them into indigo flyers • Opportunity to go abroad markets • Rapid expansion by buying new airbuses • International tie-ups would boost the image of indigo THREATS • Strong competition in the LCC segment • Rising fuel cost • Changing government policies • Companies are cutting air travels due to economic crises
  • 11. STRENGTH • 1. Has created a good image among Indian fliers 2. Strong backing from promoters • 3. Awarded as one of the most premium domestic airlines in India • 4. More than 1 million passengers catered in a year • 5. Exclusive and premium advertising and sponsorship give it a high brand recall • 6. It has flights to 25 Indian destinations and international flights as well WEAKNESS • 1. Financial issues due to Heavy Debt • 2. Laying off employees caused a bad image
  • 12. OPPORTUNITIES • 1. Reputation of providing the best amenities in Indian skies • 2. Financial stability can improve operations • 3. More domestic and international destinations THREATS 1. LCCs eating up the market share 2. Rising Fuel Costs 3. Pressure from aviation committees and govt policies
  • 13. strength • Strong backing by the promoters • Nearly 1000 flights per week • Covers almost all major cities • Good branding and marketing in India weakness • market share is very less • It entered Indian market very late • Not too many destinations compared with its competitor
  • 14. OPPORTUNITIES • More destinations yet to be covered • Global operations can also be a value addition THREATS • Plenty of new LCC’s to compete with who already have taken the lead • Rising labour costs • Rising fuel costs
  • 17. CUSTOMER ANALYSIS • SEGMENTATION Geographic : tier I and tier II cities Target : premium class of train travellers business people corporate employees Psychographic Segmentation : aiming for higher life style • UNMET NEEDS More international destinations Need for technological advancement Need for trained cabin crews
  • 19. COMPETITOR ANALYSIS • Quality • Reputation • Customer security • Product performance • Product features • Price • Geo coverage • Add effects
  • 20. ENVIRONMENTAL ANALYSIS PEST POLITICAL FACTORS : • Bureaucracy • No clear policies for state carriers ECONOMIC FACTORS: • increasing tax and tariff • Price depends upon individual firm’s behaviour • International fuel price
  • 21. PEST .. (CONT) SOCIAL FACTORS : • Lack of skilled manpower ( in flight staffs) • Customers services • Safety concerns (9/11) TECHNOLOGICAL FACTORS : • Night landing facilities • Operation during winter • Capital intensive technology
  • 22. MARKET AND SUBMARKET ANALYSIS • MARKET : aviation industry • SUB MARKET : low cost carriers ( LCC’S) • SIZE AND GROWTH : 14 % of market share • MARKET ATTRACTIVENESS : fast transportation
  • 23. MARKET TRENDS ( EMERGING MARKET) India’s fastest growing tourism destination (majordemand driver) • economic growth • growth in business travels Low cost carriers ( Lcc’s) • Resulted in middle income people people and self employed shifting from premium class travel in trains to air travel • Domestic air passengers grew at a 38.5% from 25 % • CAPA predicts that domestic traffic would increase from 25% to 30%
  • 24. CUSTOMER PROFITABILITY • Focusing towards enhancing the customer experience • Complimentary supervision of unaccompanied minors • Hot beverage and combo meals available for sale • Waiver on additional charges on sport kits Reaching out to business travellers : 1. business travellers can collect their boarding passes on the same day return flight. 2. introduction of corporate travel programs 3. free two piece baggage
  • 25. Key success factors • Low cost carrier • Point to point services • Cheaper product design • Sales via internet • Word of mouth marketing
  • 26. CUSTOMER SERVICES • personal wallet at airport • Personal and exclusive baggies • Refreshment and music • Three course meal • Baggage assistance
  • 27. Promotional tools • Word of mouth marketing • Print ads in newspapers • TV commercials • Internet media initiatives • Hoardings in railways, platforms, airports and shopping malls
  • 28. COST AND VALUE DRIVERS (COMPETATIVE ADVANTAGE) HIGH SEAT DENSITY : • Single class 189 seats per flight • Focus on maximum space utilization for generating more revenue per flight DIRECT DISTRIBUTION OF TICKETS : • Sells its ticket via internet or call centres HIGH CRAFT UTILIZATION: • consistently reporting high aircraft utilization
  • 29. Strategic uncertainty • Uncertainty in forecasting the future • Market fluctuations • Rapidly changing clients How to over come ? • Government should develop and promote policies
  • 30. SCENARIO ANALYSIS • control of emission level • Risk of high-jacks • Increasing fuel price • Decreasing rupee value How to overcome ? • Increase security level • Fuel hedging
  • 31. Thank you for flying with us . .