Indian Aviation Industry 1

Marketing Presentation

IndianAviation

PRATIK AGAWANE (M-11-01)CHINTAN NANDU (M-11-35)VARUN RAJEGORE (M-11-43)PRADEEP SINGH (M-11-55)

Indian Aviation Industry

1911

On February 18, 1911, the first commercial flight was made from Allahabad to Naini by a French pilot named Monseigneur Piguet

2011

TATA

AIR INDIA

ENTRY OF PRIVATE PLAYERS

ENTRY OF LCCs

COMPETITION INTENSIFIES

INTERNATIONAL PLAYERS ENTRY

EVOLUTIONIndian Aviation Industry


FLIGHTSOFAR

THE

Indian Airline Industry• 9th largest aviation market in the world• 15% growth in passenger traffic recorded in

2010-11 at 142 mn passengers, way above international average.

• The Aviation Industry in India is the most rapidly growing aviation sector of the world.

• Aviation Industry in India holds around 69% of the total share of the airlines traffic in the region of South Asia

• Budget 2012-13


Strategic Groups• Full Range Carriers with medium

price:– Jet, Indian Airlines, Kingfisher

• Low cost carriers with low price:– Air Deccan, Spice Jet, Go Air, Indigo

• Very good service with high price:– Taj Air, Club One Airways

• Good service with medium price:– Kingfisher, Jet Airways


Known Factors Influencing Growth Rate

• Increased Inward and outward tourism• Increased competition has driven down

prices and margins• Additional purchasing power due to rapidly

rising real incomes amongst the middle class• Increased business trade due to the rapidly

growing economy and free trade agreements with neighbouring countries

• Favourable Government policies and tax reforms


AIR INDIA


History

•TATA Air l ines Founded by JRD TATA

•Air Ind ia Internat ional

•Domest ic Serv ices- Indian Ai r l ines


Air India Subsidiaries

Air India Cargo

Air India Express

Air India Regional


Air India : In Troubled Skies

•Merger with Indian Airlines•Total management failure •Lack of vision to develop responsive Strategies•Current market pressures •High wage bill in the form of salary and incentives•Increase in ATF prices


Reinvigorate AIGovernment Assistance: To sustain operations To leverage changeMore independent directors with real, commercial expertise & SkillsManagement team financially-savvy which ready to compete in an open marketplace


An unionized workforce which take more commercial responsibility

An improved fleet with fuel-efficient planes

More effective planning of route structures

Most IMP. a clear and distinctive value proposition to the international and domestic markets.


New Branding & AD CampaignMother’s Love: New positioning

•Maa Ka Pyaar•Elderly flight crew as care-givers who treat passengers with motherly love•Unlike the new breed of airlines who have only brash crews of inexperienced youngsters


•Olives and Marshmallows (O&M)•Budget: Around Rs.100 cr.•Flight attendants will be trained to treat passengers just like their children•Bring dinner just like mum and will also sing lullabies on request•Reema Lagoo for Motherly roles & Rakhi Sawant for the role of a rude flight attendant of a rival airline



KINGFISER V/S JET

• Established in 2003• Commenced in

2005• International

operations started in 2008

• Target: Corporate and Upper Middle Class preferring comfort and quality service

• Positioned as Premium

• Established in 1992• Commenced in 1993• International

Operations in 2004• Target: Corporate

and Upper Middle Class preferring comfort and quality service

• Positioned as PremiumIndian Aviation Industry

Kingfisher Airlines Jet Airways

Cabin Class Domestic International Domestic International

Kingfisher First Kingfisher First Première First Class

Kingfisher Class Kingfisher Class Economy Class Première

Kingfisher Red Economy Class

Cargo Kingfisher Express Jet Cargo Plus

Inflight Service Inflight Entertainment Jet Privilege

Kingfisher Lounge Jet Lounge

King Club

Alliance Kingfisher Red, (One World) Jet Lite, Jet Konnect


A Tale of Two Rivals• Jet enjoyed peace before the war• Aggressive Kingfisher enters the competition• Vijay Mallya spent money like water to grab Jet’s

market• Target also included the young generation• Jet buys Sahara• Kingfisher buys Deccan• Kingfisher – Jet Alliance


Other Strategies

AIR DECCAN


• Air Deccan Created History

• Lean and Mean Approach• Reducing training and service costs• A dynamic fare scheme• Unreserved seating• flying to less congested secondary airports• short flights and fast turnaround times• simplified routes emphasizing point-to-point

transit instead of transfer at hubs.• emphasis on direct sales of tickets• elimination of free catering and other

complimentary services


How is Air Deccan able to create value for its customers?

• Cost leadership• “people’s airlines”• Unreserved seating•Wide network coverage• E-ticket

Mr. Citizen


Strengths•Highest load efficiency•Destination coverage•‘Lean-and-Mean’ approach•Leader in LCC segment

Weakness•Focuses on south Indian market•Frequent breakdown & near misses•Very limited advertising•Reached the threshold of cost efficiency


New EntrantsLack of

Government Support

Brand Awareness Weak Economic Condition

CHALLENGES


Why Air Deccan Failed????

• Out of cash• Spread its cost over too many

overheads• Increasing capacity was an issue• Rise in global crude oil prices


LCC Players in India


Benefits for LCC• Market share 41.1%• Kingfisher and Indigo’s on time schedule• Alternative to road travel for short distance

Factors contributing to the growth of LCCs

Low price tags Apex fare Internet bookings

Bulk purchases

Targeting the increasing

middle class

Lean-and-Mean

approach


INDIGO


Budget airline players like GoAir, SpiceJet, Kingfisher Red and Jet Lite were already in Indian sky when Indigo, the low cost air

carrier entered the market in 2006.CHALLENGES• Segmenting the market, which most of the existing airlines were targeting was the most difficult task.

• The second was to create a differentiated service product and connect.


I

N

D

I

G

O

• Though operating in the budget airlines category, Indigo differentiated itself not on the basis of its low fares but on the basis of its great service• Targets travelers who have a service bias attached to budget airlines• Has positioned itself as an efficient, hassle-free, yet affordable airline

• A punctual and service efficient airline• Operates in the budget airlines category, yet never identifies it as its USP• Has used TVCs and the internet to create a buzz about the brand• Operates 245 flights to 25 destinations in India (an increasing day by day)

• Has managed to capture the highest market share in the budget airlines category• Has a 19.5% share in the airline industry• Has an occupany rate of more than 90 %

The Success Path

‘We focus only on what matters’ philosophy


http://www.pitchonnet.com/wp-content/uploads/2011/11/Indigo-2.jpg

Ad Campaigns

‘Every supermodel’s

favourite airline’

‘Late is a four letter

word’

‘Sleep with your wife’

‘We are so

predictable’

Towards the end of the TVC, the voiceover quips in an upbeat voice, “We become the world’s most powerful economy… on time.”

TVCs

http://i.haymarket.net.au/News/PRESS%20AD%2012x20_CT.jpg

COMPETITORS REACTIONS


‘HELLO 6E’

Imagine saying

6E in an Indian/B

ritish accent. Do you

realize it sounds

a helluva lot like, "Hello sexy?"

Coincidence? I think not.

Too much SPICE causes problems

Eat SPICE, Drink BEER, Fly INDIGO

“Indigo has done everything right which Kingfisher has done wrong,” said Rajan Mehra, executive director at the Asia Pacific Academy for Aviation and Hospitality.

FEEDBACKS


Ushnish Paul, 29 February ”…Indian Aviation has seen many airlines which started operating with many promises. Many airlines tried to differentiate on the class of on board service.I used to be a frequent flyer of Kingfisher Airlines But now if I have to travel my first priority is Indigo (how badly I wish you guys too had a frequent flyer program, I understand that the back end support cost will shoot up. I don’t mind flying with Indigo without a frequent flyer program, if service is of such personalized level-as I will be disclosing in this mail and the basic requirement of travel is fulfilled).You serve my basic need of travel. To go from point A to point B, at a very reasonable price and most importantly on time (before time sometimes). To add to that I have had two wonderful experience with Indigo staffs at Kolkata airport and on a flight from Bangalore to New Delhi.On 31st of Jan, 2012 my close friend was traveling from Kolkata to Bangalore by the evening flight. I wanted to surprise her with a note. Few days before she was supposed to travel I got in touch with one of your employee at the Kolkata Airport, Ms. Gargi Saha. I explained to her what I wanted and she assured that it will be taken care. She even went out of the way to deliver the note to her by checking with her when she was reaching the airport. I was really impressed by the personalized service I got.The next incident happened on 28th February, when I was traveling to New Delhi from Bangalore by the 19:45 flight (6E106). I had a long day and managed to reach the Bangalore airport just in time for checking in. I had some 70 Kg of extra luggage so ended up emptying my pocket. To add to the bad long day the ATM at the Bangalore airport was out of order. I was hungry as I had to skip my lunch. After the flight took off and as the on board sales started I inquired if I could pay by card. I was dishearten to learn that the minimum purchase has to be of Rs. 500 if one wishes to use the card and as I was traveling alone there was no way I could have finished all that food. But then one of the flight attendant Ms. Javita Kataria came as a savior, she suggested that she will serve me the crew food from her quota and I need not pay. I was in double mind as I dint want to accept the food without paying but my stomach gave a growl and I said yes. She gave an option between a veg and a non-veg burger and also served me a lemonade. Later she even came back and asked me how the sandwich was.After a long bad day, all someone wants is a little extra care and personalized service. The right cord was hit in my case. I was flattered.

GHOSH gave an example of how the IndiGo staff at the Chennai airport gave feedback to the senior management that the airline was often short of wheelchairs. This was puzzling because the company had followed the same count it did at other airports based on passenger estimates. The requirement at Chennai, IndiGo figured, was disproportionately higher because there were more people flying in and out for medical treatment. "So we gave a bigger budget for wheelchairs. This was a simple idea but had huge customer impact," Ghosh had said in April.

IndiGo suspends staff for refusing ticket to disabled


“ Their customer care doesn’t even reply to complaints. On the other hand, when I had complained about Indigo’s seating policy last time I flew with them, I got multiple replies. This time the problem seems to have been rectified. ”“ The only thing I felt missing in Indigo flight is that the flight does not serve tea or coffee during the flight.”


THANK YOU

Documents

Indian Aviation Industry 1