COMPETITIVE MARKETING STRATEGIES OF DOMESTIC AIRLINES

Submitted by: Nand Kishore Mehra

ACKNOWLEDGEMENT

I acknowledge the sincere assistance to provided to me from

several rather unexpected I vaster during the course of execution of

this study. It would be a mammoth task to place on record my

gratitude to each and every one of them but a whole hearted attempts

would be made nevertheless, least I be branded ungrateful.

First of all I express my thanks to the management of Indian

Airlines, Jet Airways and so has a Airlines for their concerted help.

Where the emotions also involved words cease to work. I am

deeply indebt to Prof. Maninder Singh and Prof. Sumanta Sharma for

their encouragement, affections, valuable advice and guidance that

helped me to complete this successfully.

TABLE OF CONTENTS

1. EXECUTIVE SUMMARY

2. INDUSTRY PROFILE (LOW COST AIRLINES PROFILE)

3. RESEARCH METHODOLOGY

4. PROFILES AND MARKETING STRTEGY OF THESE AIRLINES INDIAN AIRLINES JET AIRWAYS SAHARA AIRWAYS

5. COMPARATIVE MARKETING STRATEGY IN RESPONSE TO THE MARKETING MIX (INDIAN AIRLINES, JETAIRWAYS AND SAHARA)

6. COMPARATIVE MARKETING STRATEGIES (USP OF INDIAN AIRLINES,

JETAIRWAYS AND SAHARA AIRLINES)

7. PROFILE AND MARKETING STRATEGY OF TWO LOW COST AIRLINES

Air Deccan

Go Air

8. DATA ANALYSIS & FINDINGS

9. CONCLUSION AND RECOMMENDATIONS

10. LIMITATIONS OF THE STUDY

11. SAMPLE QUESTIONNAIRE

12. BIBLIOGRAPHY

EXECUTIVE SUMMARY

India has a civil aviation network comprising 449 airports/airstrips.

There has been a dramatic rise in the levels of passenger and cargo

traffic. From just 5.1 million passengers in 1970, domestic and

international passenger traffic has grown to nearly 64 million

passengers in 2005. During the last ten years the growth in passenger

traffic has been a spectacular 125%. By 2010, the forecast of the air

traffic will increase to around 90 million. Domestic and international

passenger traffic in India is projected to grow annually at 12.5% and

7% over the next decade. This growth potential, coupled with the

government's decision to allow private sector participation in the

running of five key airports as also in airport modernization, ground

services, aircraft manufacture, makes India a very attractive market

for airport and avionics equipment manufacturers and service

providers. The Government of India, policy to liberalize the civil

aviation market also presents foreign firms with significant export and

investment opportunities.

INTRODUCTION

THE INDIAN CIVIL AVIATION INDUSTRY

The history of Indian Aviation Industry dated back to the early 1930s,

when one of the leading Indian business houses, the Tata, established

Tata Airlines. There was limited activity in the sector over the next two

decades despite eight more private companies entering the airline

industry. In 1953, the Air Corporation Act came into force, and all the

assets of the existing nine airline companies were transferred to two

companies namely Indian Airlines Corporation (IA) and Air India

International (Air India). While Air India offered international air

services, IA offered domestic services. The Air Corporation Act 1953

prohibited any person or company to operate any scheduled air

transport services from, to or across India. Therefore, the two

corporations enjoyed a monopoly status in the scheduled air transport

services market. In 1962, Air India International was renamed as Air

India Limited.

In 1986, private airlines were allowed to operate chartered and non-

scheduled services under an ‘Air Taxi’ scheme. The scheme was

introduced to boost tourism and augment domestic air services. The

carriers were, however, not allowed to publish time schedules or issue

tickets to passengers. The government’s aviation policy was

progressively liberalized in the early 1990’s. In 1993, the Air

Corporation Act 1953 was abolished, which put an end to the monopoly

of IA and Air India in the scheduled air transport services market. After

the abolition of the act, there was a considerable change in the Indian

government’s aviation policy.

From March 1994, the market was opened to any company that

fulfilled the statutory requirements of scheduled airline services. The

government approved eight private carriers to start domestic

operations. They were Jet Airways, Air Sahara, Indian International,

Archana Airways, East West Airlines, NEPC Airlines, Modiluft and

Damania Airways. While Indian International was the first licensee after

the open skies policy came into force, East West was the first

scheduled airlines to take off from the ground.

In 1995, the Airports Authority of India (AAI) was formed after the

merger of the National Airports Authority (NAA) and the International

Airport Authority of India (IAAI). The AAI offered infrastructure facilities

to all airlines. There were five international airports-Delhi, Mumbai,

Kolkata, Chennai and Thiruvananthapuram for scheduled international

operations by Indian and foreign carriers.

By late 2000, however, most private players went out of business after

incurring heavy losses. The reasons included lack of experience in the

aviation field, inadequate planning and poor promoter support.

According to analysts, none of the private carriers had the staying

power or the professional expertise required for the aviation industry.

As a result, by mid 2001, only Jet Airways (JA) and Sahara managed to

stay afloat among the private carriers. In fact, they went step ahead by

grabbing a major market share from Indian Airlines, which had been

enjoying a monopoly. By mid 2001, Jet Airways commanded 42% of the

domestic market and Sahara claimed for 13% leaving and 39% for

Indian Airlines as per financial year 2003-04.

In early 2003, the Indian government expressed concerns that the civil

aviation industry remained a part-monopoly, with only three players.

To introduce more reforms, in August 2003, the government

established a committee under the chairmanship of Naresh Chandra,

former cabinet secretary, to prepare a road map for a civil aviation

policy. The committee recommended that the foreign direct

investment limit in the domestic civil aviation sector should be

increased to 49% from the permitted 40%, which the government

accepted. The government also stressed the need for making air travel

more affordable. The recommendations were accepted and excise duty

on Aviation Turbine Fuel (ATF) was cut to 8% from 16%. The

government also did away with the 15% inland air travel tax (IATT).

By August 2004, the government started reviewing other guidelines

pertaining to the aviation sector including the ban on financial

arrangements with foreign airlines for lease finance, hire purchase and

other loan arrangements. The existing policy prevented any such

financing arrangements. Industry analysts realized that the

government was clear in its intention of bringing air travel within the

reach of the common man. Taking advantage of liberal policies, Air

Deccan started operating in short-haul routes in all over India.

The aviation industry in India has overcome various setbacks during

the last few years following the global recession since 2000-01;

terrorist attacks in the USA on, the Iraq war and the SARS scare.

During 2003-04 Indian airports handled 48 million passengers - 16

million international and 32 million domestic - compared to 43 million

passengers in 2002-03 (14 million, international and 29 million.

domestic). Indian airports handled 1.06 million tonnes of cargo

(693,000 tonnes, international and 3.75,000, domestic) in 2003-04

compared to 979,000 tonnes (646,000 tonnes of international and

333,000 tonnes of domestic). During 2002-03 the overall passenger

traffic increased by 17.25 per cent. The cargo traffic was also up by 22

per cent. The traffic and cargo growth between 2002-03 and 2006-07

is forecast between 5-7.5 per cent per annum for domestic and

international traffic.

Passenger and Cargo Traffic Year 

No. Of Passengers - International and Domestic 

Freight Traffic 

1970 

5.1 million 

81,000 tonnes 

1998-99 

27 million 

699,000 tonnes 

2001-02 

40 million 

800,000 tonnes 

2002-03 

43 million 

979,000 tonnes 

2003-04 

48 million 

1,06,8000 tonnes 

2004-05 57 million 1,22,6500 tonnes

Upgrading the Infrastructure

The government of India has recognized the need to improving the

aviation infrastructure in the country. Airports account for 40% of

India's trade by value and 95% of international travel to and from

India. According to estimates, the present infrastructure can support a

20 per cent growth in passenger traffic and 10 per cent growth in

cargo traffic.

The two major airports at Mumbai and Delhi are facing significant

capacity constraints and will require a massive infusion of capital

investment over the next five years. The restructuring of the first

phase of Delhi airport is expected to be complete by 2009 at a cost of

Rs 1.9 billion. Expansion and upgradation of the current facility at

Mumbai is already under way. Work has started on a new international

airport at Bangalore. Apart from strengthening of the Hyderabad

runway at a cost of Rs 700 million, a new international airport is also

being planned at a cost of Rs 13 billion. The government has also

decided to modernize 25 airports in non-metro cities. Improvement of

another 55 airports is also on the way. The selection of airports will be

done based on their commercial and traffic growth potential. The

Airports Authority of India (AAI) is in the process of appointing Indian

Financial consultants (IFC) and Global Technical Advisors (GTA) who

will assist AAI in conducting techno-economic feasibility studies and

evolve an appropriate model based on viability of the project.

Currently, AAI manages 126 airports in the country. Nearly 40 airports

are non-operational. According to a CII paper, AAI generates barely 7%

of its total revenue from non-aeronautical services. It has suggested

that upgradation of the airports and provision of facilities such as duty-

free shopping and recreational activities would lead to growth in

tourism, business travel and exports. The government has decided to

encourage private sector investment in such activities, including

shopping complexes, golf courses, entertainment parks, aero-sports,

etc near airports to promote tourism.

Aircraft Acquisition and Refurbishment

The national carrier Air India, which has been facing a severe capacity

constraint, is set to acquire new aircraft for its fleet. The fleet size of

Air India would be enhanced from the current 34 to 74 by the year

2012-13. In the interim, Air India will go in for dry leasing of aircraft to

launch new flights to a number of destinations. Air India proposes to

expand its network and target an annual growth of 20-25% by leasing

passenger aircraft until the delivery of its new aircraft begins in 2007-

08. Air India has also undertaken major interior refurbishment on the

six B747-400 and eight A310-300 aircraft that it owns. Air India has

started flights to Shanghai and Los Angeles and also introduced

terminator flights from Ahmedabad to London. Air India has identified

need for non-stop operations to USA and is tailoring its fleet acquisition

accordingly. Services to 12 new destinations - San Francisco,

Washington, Houston, Toronto, Manchester, Beijing, Seoul, Taipei,

Sydney, Lagos, Mauritius and South Africa - are being introduced in a

phased manner.

Open Sky Policy

The government has adopted a limited open sky policy under which

designated private airlines can operate additional services to and from

India subject to the existing terms of commercial agreement with the

public sector Air India/Indian Airlines. The response to the scheme has

been overwhelming, with private airlines putting in a request for

operation of more than 2,400 additional flights (equivalent to 500,000

seats) to different airports in the country during the November 2004-

March 2005 period. This move is expected to assist greater

connectivity to/from India and ensure that confirmed passengers are

assured of their seats. In keeping with the government's policy of

allowing designated airlines of all countries that have signed the Air

Services. Agreement with India to operate 7 flights/week to any two

international airports in India, the airlines of Austria, Finland, Republic

of Korea, Maldives, Armenia and Yemen have been offered additional

capacity subject to reciprocal rights to Indian carriers.

Following Indo-UK bilateral negotiations on air traffic rights in 2004, air

services between India and the UK will be more than doubled. UK

carriers have also been granted access to Bangalore, Hyderabad and

Cochin besides the four metro destinations of Mumbai, Delhi, Chennai

and Kolkata. Indian carriers will fly to Glasgow, Edinburgh and Bristol in

addition to London, Manchester and Birmingham. Entitlements for

operations on the India-Australia sector will also be enhanced for both

sides significantly from the 2100 seats per week to 6500 seats per

week over the next two years. Australian carriers will also get access to

Chennai, Bangalore and Hyderabad.

Push towards Privatization

A greater push towards privatization is evidence from the fact that

private carriers are now being allowed to operate flights to all parts of

the world, except the Gulf and Saudi Arabia. The Gulf/Saudi Arabia

routes have been reserved for the public sector airlines for the next

three years. The government has also decided to review the mandated

commercial agreements entered into by Air India/Indian Airlines with

different airlines and faze them out over the next five years.

Appropriate measures for establishing improved operational synergy

between Air India and Indian Airlines for their mutual benefit are also

being formulated. Increased competition is expected to further drive

down tariffs. Simultaneously, the increase in capacity and connectivity

will benefit passengers.

Several low-cost carriers including, Air Deccan, Kingfisher Air, Go Air,

Royal Airways, Air One, Indus Air have begun to operate flights in the

domestic sector. Domestic airfares in India are expensive by global

standards, due to high fuel and other operating costs. As a result,

domestic air travel has been mostly restricted to business travelers or

the rich. But the competition in this sector promises to drive down

airfares in the near future. Several international players are looking at

operating budget airlines in India. Air Arabia has begun operations,

initially connecting with Kerala before expanding to other cities. Low-

cost airlines from Singapore like Jet Star, Value air and Tiger Airways

are among the others who are planning to introduce flights during

2005.

The AAI is working out modalities to unbundle the aircraft-refueling

infrastructure. The entry of private players will help bring down fuel

costs as refueling is now monopolized by three state-owned entities –

Indian Oil, Bharat Petroleum and Hindustan Petroleum. Indian Oil

Aviation Service is the market leader for aviation fuel with a market

share of 67.9%. From country, according to company officials. ATF is

one of the major operating costs of airlines in India, accounting for

about 30 to 35% of total operating costs as against the global level of

15%. Mumbai and Delhi airports account for over 50% of ATF sold in

the country.

Private oil firms like Reliance and Essar have not been able to grab a

pie of the aviation refueling market so far as very few airports have

land to spare for more oil storage facilities. But the state-owned oil

companies have responded by offering to form an airline refueling joint

venture with the AAI, putting on the table a mixed package of equity

and profit-sharing. This has sparked a fierce debate. The government

oil companies say competition already exists as all major airports have

at least two players supplying fuel while airports at the four metros

have all the three players – Indian Oil, Bharat Petroleum and Hindustan

Petroleum.

Foreign Direct Investment

49% foreign direct investment (FDI) is permitted in financing airport

infrastructure as well as in airport ground handling. The government

has recently increased FDI from 40% to 49% in domestic air carriers.

However foreign airlines are not permitted to pick up a stake directly

or indirectly. Non-resident Indians and corporate bodies are allowed to

hold up to 100 % equity in domestic airlines.

Aviation Regulator

The Civil Aviation Ministry plans to table a Bill to establish an

independent Civil Aviation Economic Regulatory Authority (CAERA).

The new regulator would be responsible for formalizing all charges to

be levied on operators and ensuring a level playing field for all players.

Its tasks would include fixing of tariff, finalizing parking and user

charges, issuing broad guidelines to service providers, settling disputes

among stakeholders in new airports and arbitrating between various

users and service providers, including airlines. Initially the scope of the

regulator would be limited to regulating the economic aspects of Delhi,

Mumbai, Bangalore and Hyderabad airports where there is private

participation and AAI is a stakeholder. Henceforth, the AAI too would

be answerable to the new regulator. To start with, CAERA is expected

to be a single-member regulator assisted by technical staff. The Bill

seeks to expand its role in the days ahead. That may become

necessary anyway, given the liberalization initiatives underway in the

sector.

KEY PROBLEM AREAS

Extremely low aircraft utilization

A shortage of pilot and engineers

Rampant industrial unrest

A completely demoralized and dispirited work force

Plunging market shares

Customer rejection

And overall, a grim financial scenario

LOW COST AIRLINES PROFILE

Life seems to have cruised a full circle in the India’s aviation industry.

Almost a decade after a dozen-odd carriers took to the Indian skies and

then quietly folded up, a whole new generation of entrepreneurs- nine

at last count-are now preparing to try their hand at doing business

30,000 feet up in the sky.

Albeit this time round, a good chunk of these new entrants want to

take the frills out of flying and are aiming to provide budget air travel –

with fares that are about 30% lower than those of the existing full

service carriers –in the Indian skies.

We have the following low cost careers in no-frills business In Civil

Aviation in India.

Air-India Express:

India's flagship airline, Air India, flies to more than 40 destinations

across the globe. Jumping on low fare bandwagon, the carrier has

plans to roll out a budget carrier of its own. The new carrier, Air India

Express, will operate under Air India's charter division and will start

flying passengers to destinations in the Gulf and Southeast Asia using

a fleet of six Boeing 737s. Air India anticipates doubling its fleet, which

consists of about 35 aircraft. Air India also provides maintenance and

cargo services. The carrier has several code sharing partners including

Air France and Austrian Airlines in Europe; Emirates and Kuwait

Airways in the Middle East; and Malaysia Airlines and Thai Airways in

Asia.

Air Deccan:

The first true budget carrier in the Indian skies, Air Deccan led the

price war with announcements of offering limited one-way air tickets at

as low as Rs 700. Though not too many passengers could claim to have

traveled at that cheap fare, the announcement did generate

excitement in the market and helped bring a lot of traditional train

travelers to the airport. The main base of this airline is Bangalore.

Spice Jet:

The born-again Modiluft, Spice jet is preparing to take to the domestic

skies this May with a fleet of Boeing 737-800s. Promoted by a group of

NRI’s – who bought-out the Modi family from the venture –Spice jet has

promised to offer fares 30-40% below the existing fares of full-service

carriers in India. It said overhead costs would be kept low by selling

food and beverages on-board. NRI owned spice jet is based in New

Delhi.

Kingfisher Airlines:

Kingfisher Airlines has ordered a total of 30 brand new A320 aircraft

from Airbus at a cost of $1.8 billion/Rs.8100 crores. The first 8 "Fun

liners" have been delivered in 2005 with 8 more being delivered in

2006.

Kingfisher has also leased 4 brand new Airbus A-320-200 aircraft from

Debis Air Finance, a Company of Daimler Chrysler, which has delivered

directly from the Airbus factory in Toulouse beginning April 2005. Debis

is also a significant investor in Kingfisher Airlines with over US$ 200

million assets placed.

By the year 2008 Kingfisher Airlines will have a total of 34 Aircraft in

its fleet. The Kingfisher "Fun liners" powered by the IAE V2500-5A

Engines manufactured by International Aero Engines - the quietest

and most fuel-efficient engine option available in the world.

The Aircraft will be based at Mumbai's Chhatrapati Shivaji Airport and

will operate flights to destinations across India.

Indus Airways:

Promoted by another liquor baron, Mohan Meakins chief Kapil Mohan,

Indus Airways is planning to start flights this summer. Floated with an

initial investment of Rs 100 crore, the airline would initially be

positioned as a feeder carrier connecting smaller towns in the country.

“In a phased manner, we will have a nation-wide network,” says Brig

Mohan. Using Delhi, Chandigarh and Amritsar as it base, Indus Airways

would connect towns like Jammu, Shimla, Srinagar and some other

major north Indian cities.

Go Airways:

Go Airways, is funded by the Wadia Group, Promoters of Bombay

Dyeing and Britannia. The Wadia family is in the process of finalizing

the aircraft type for this venture. “A detailed study will help us finalize

the aircraft type to be used and the number of sectors we will operate

in,” says Jeh Wadia, director.

Air One:

A budget carrier promoted by former Indian Airlines officials and pilots,

Air One plans to launch its services from May to link cities on country’s

western coast. It will link small towns to major cities, but will avoid the

competitive trunk routes. It has raised Rs 14 crores equity, with

investors from Kerala and Mangalore, besides NRI’s, says Air One CMD

J W Lobo.

Easy Jet:

Among the pioneers of budget travel in the international skies, Easy Jet

is also seeking an entry into the market. But with the Indian laws not

allowing foreign airlines to, directly or indirectly, buy into the domestic

market, its promoter Stelios Haji-Loannou is planning to take the

franchisee route.

RESEARCH METHODOLOGY

Research Objectives

OBJECTIVES OF THE STUDY

1. To get an insight into the competitive marketing strategies of these

Domestic Airlines: –

Indian

Jet Airways

Sahara Airlines

Go Air

Air Deccan

1. To do a comparative marketing strategy analysis of these airlines.

2. To understand the customer’s preferences or perceptions of

services provided by these airlines.

Type of study

The exploratory research was conducted which lays emphasis on the

discovery of ideas or extract new insights into the problem, the

problem of having a competitive advantage and know what are the

preferences of the customers with respect to the services provided by

the airlines.

Nature of the sample

A sample size of 100 was taken which consisted of people in the age

group of 30 to 55. Most of them were business travelers (75%).

Source of data collection

Primary source

a) The data was collected by the administration with the

systematically meeting and interviews.

b) Data was also gathered by informal chats with the employees of the

organization, mainly the marketing and public relations dept.

c) The data to find the preferences and perception of the consumers

towards the airlines is determined by simple questionnaire

Secondary source

a) The relevant information was gathered through Travel Trends,

Brand wagon and Brand equity, A&M, Business India, various

Newspapers and scrolling of the websites etc.

b) Brochures, Publicity Materials, Annual Reports, Press Releases and

Updates and other periodicals also formed a source of information.

Analysis of the data

Once the data was obtained it was tabulated and analyzed keeping in

mind the objectives of the study.

Statistical analysis

TOOL

Percentage

OBJECTIVE

To find out the customer

perceptions of services provided

by the domestic airlines and the

most preferred airlines.

INDIAN AIRLINES

Organization Profile

The history of flying in India dates back to over a 100 years. Joseph Lin

attempted the first flight across the Indian skies, in a balloon from Lal

Bagh in Mumbai in the year 1887, which rose to a height of 7500 feet.

India was also among the few to witness the first airmail flight on 18th

January 1911 when the French flier Henry Piquet carried the mail from

Allah bad to Naini.

After the First World War, in May 1945, the Government of India

announced a new policy for the development of Air transport Services.

In the first two years after it came into existence, the Government

gave license to 11 companies to operate air services in different

regions. Taking into considerations to deteriorating financial position

of the private airlines, the Government of India nationalized air

transport industry through the Air Corporation Act of 1953 and with

this incorporation began the “Saga of Indian Airlines on the 1st

August 1953”.

The National Domestic Airline came into being with the amalgamation

of all the private Airlines. Indian Airlines took to the sky with a fleet

included 74 DC-3 (Dakota), three-sky master, 12 Viking, 5 Sentinel and

1 each of a Twin Beach – a single beach, an Avro-XIX. A D.H. Dove and

a Saab Safir Aircraft. Ever since Indian Airlines has been constantly

innovating and upgrading its fleet to emerge as a Proud Symbol of

Modern India.

A phased fleet modernization program was begun by Indian Airlines

with the introduction of viscounts in 1957 followed by Fokker

Friendship Aircraft in 1961 with the arrival of the pilot friendly

Caravels Turbo – Jet in 1963, Indian Airlines took domestic aviation

into the jet age. The sixties occupy a place of pride as aircraft was

inducted into Indian Airlines. This aircraft was the HS-748 (AVRO), built

by Hindustan Aeronautics Limited under license from Hawker Siddley

Aviation of UK Boeing 737s followed in 1971. In 1976, Indian Airlines

became the first domestic airline in the world to induct the wide-bodied

273 seaters Airbus A 300 aircraft setting new standards in passenger

comfort. With the introduction of the state-of-art Airbus A 320 in 1989

with its Fly-By-Wire System, Indian Airlines acquired the latest in

aviation technology.

Today Indian Airlines has 30 such aircraft along with 10 A 300s as part

of its fleet. From the era of piston–engines to the modern day jets,

Indian Airlines has come a long way. In the last four decades, Indian

Airlines has grown from strength by keeping an excellent track record

of manpower and infrastructure development.

Indian Airlines’ commitment to provide world-class training to its

personnel resulted in the setting up of the internationally recognized

pilot training academy known as the Central Training Establishment

(CTE) at Hyderabad in 1958. This institute also trains engineers, cabin

crew and other personnel. In addition to world-class training, Indian

Airlines is self-sufficient with well-equipped maintenance facilities to

keep its aircraft in flying shape without disrupting schedules. As a

result, Indian Airlines is able to operate 220 flights daily providing

services to the remotest part of the country while achieving an

enviable 80% seat load factor. The airline also operates on several

non-economic routes to meet the country socio-economic needs.

Today, 44 years after its inception, Indian Airlines is continuing its

mission of providing an extensive air transport system to link the

farthest corners of our country while acting as a second line of

defense. Soaring through the skies, Indian Airlines today is one the

largest domestic airlines in the world a fleet of 58 aircraft. It connects

58 domestic and 17 international stations spanning the Middle

East, South Asia and South East Asia.

Wind beneath the wings

A makeover was long overdue. The last change at Indian Airlines

Limited (IAL) was way back in 1967. That's when it changed its name

from Indian Airlines Corporation to Indian Airlines and the slanting IA

painted in white on an orange background replaced the green-winged

logo. In the company spokesman's own words, every airline must

revisit its brand every 10 to 15 years.

Besides, the competition in the Indian airspace is increasing

exponentially. Civil aviation ministry estimates the growth in domestic

passenger movement at over 50 per cent in the past three years: from

26.36 million in 2001-02, to 40.09 million in 2004-05.

Granted, Indian Airlines Limited (IAL) is also reaping the benefits of

that increased traffic. The state-owned carrier posted a post-tax profit

of Rs 65.61 crore (Rs 656.1 million) in fiscal 2005.

But aviation analysts point out that more focus on cost-cutting

initiatives, than actual attempts to increase the customer base.

Initiatives such as a better insurance deal and thrifty fuel tanking

plans, that is, buying fuel from states where it is cheap, worked. IA also

looked at non-productive areas and ruthlessly cut costs there

"With the young staff, attractive ad campaigns and offers galore, the

newly-launched airlines are a force to reckon with," says an industry

analyst. The ministry of civil aviation estimates that air transport grew

24%, Indian Airlines Limited (IAL) needed to act, and fast.

An airlines' biggest asset is its fleet. With 43 more to be acquired this

year -- including A 319s, A 320s and A 321s -- at Indian Airlines Limited

(IAL) older fleet will slowly be converted into cargo aircraft.

In flying colors

The empanelled agencies of the company were asked to submit their

concept for the makeover. "The brief we were given was to come up

with something that signifies change, but with an element of

continuity. The creative team considered several options -- the national

flag, birds, animals and colors - before zeroing in on the wheel from the

Sun Temple at Konark, Orissa. "It signifies motion and represents the

Indian image perfectly"

What followed were intense discussions and brainstorming to develop

the idea further. The final result is quirky blue spokes -- "signifying the

sky, aviation and modernity," against a lively orange background, an

attempt to establish continuity with the old logo.

More important was the dropping of the suffix "Airlines" from the

name. "It seems simple, but is anything but that," pointing out how the

image and name change also involves a change in mindset -- from a

plodding public sector undertaking to an airline that is ready to take on

private airlines.

Looking beneath the surface

Indian Airlines Limited (IAL) announced its new look with a television

campaign that ran for two weeks across all major cable channels. But

Indian Airlines becoming Indian is such big news that the coverage it

generated left all paid advertising in the dust. News channels covered

the makeover extensively. Almost all the daily ran photographs of the

new A 319, the new logo and the new name -- creating more publicity

for the airline through word-of-mouth than any paid advertisement

could ever hope to achieve.

But a logo and name change is just part of the story. More important is

the overall image of the airline. If the new look has to seep into every

visible part of the airline, that means reigning close to 60 touch points

- from the ticket, the counter, the colour of the floor inside the aircraft,

to the uniforms and the standard of service.

"A new look comes with strings attached," as per said by the brand

analyst. "Indian will have to pay attention to the customer-airline

interface as well. The only worry is the company struggling to live up to

the expectations. A brand is not just about cosmetic changes but about

the experience, too. In the pipeline are new uniforms for the staff

(although the saree may still not make way for western outfits for the

female cabin crew); new interiors for the craft and new crockery and

flatware; and upgraded in-flight entertainment such as personal

screens, radios and so on. The new brand name will find its way onto

everything associated with the airline over the next month -- signage’s,

tickets, baggage tags, stationery, boarding passes and so on.

Of course, the bigger physical changes will take time. While all the new

aircraft will be emblazoned with the new logo, the old aircraft will be

repainted only during their "major maintenance" cycles -- every 12 to

18 months -- when they are painted anyway.

It is taken for granted that a private company will have a fresh image

and a PSU needs to look like a drab dowager.

Indian Airlines – Present, Past and Future Performance

For Indian Airlines, which is on course for a modest Rs. 60-65 crore net

profit in 2004-05 the first time in the last eight years, the last few

years have been a revelation. After reporting a Rs. 40 crore profit in

2001-02, Indian Airlines suddenly had seen its market share drop and

its supremacy challenged.

Pilots left the airlines in hordes to more lucrative jobs with the private

operators, which resulted in under utilization of its Boeing fleet.

Passengers, too, suddenly realized that there were airlines willing to

offer that little extra bit that means so much, and Indian Airlines

suddenly saw its market share drop to 53% from its earlier

unassailable position.

Besides, IA, because of its social responsibilities, was forced to operate

on some uneconomical routes. In fact 19% of the airlines capacity was

deployed on uneconomical routes, while the private airlines chose the

trunk routes. IAL pointed this out to the government and sought a level

playing field, IAL also felt that the private operations too should share

the social responsibility tried for it.

Some of the major problems that took the performance of Indian

Airlines to nose down position are mentioned as under:

(a) The wage bill kept shooting up and was more than double in first

three years while the operating cost remained much the same.

(b) The lowest paid employee in IA, sweeper or a peon take home

Rs. 8000 to 10000 every month, and there are 800 – odd

sweepers as regular employees which constitute a heavy load on

the operating cost.

Apart from handsome emoluments, IA staff diligently work

toward making more money by working overtime. In addition all

employees make quite a packet through IA’s generous

productivity linked Incentive Scheme (PLI) introduced in 1999.

(c) There could scarcely be a more undisciplined bunch of worker

than IA’s 22,000 employees. At the slight provocation they resort

to Industrial action.

(d) PLI scheme introduced mainly to increase the aircraft utilization

and giving boost to the company’s operating revenue, has in fact

become a liability. Today the PLI scheme gives the airline an

annual additional wage expenditure of 180 crore. This scheme

has been grossly misused.

The IA management realized that the time for complacency was over,

and if things were not corrected soon it would go out of hand.

IA had several advantages over its competitors: an established

network, a strong support system, an experienced engineering team,

an a large fleet with a certain degree of commonality.

The first thing that the management under managing director and

chairman Mr. P.C. Sen, did was to establish employee confidence, a

new productivity – linked incentive scheme was started, the jet

engine overhaul centre in Delhi was hiked off into an autonomous

profit centre. A 100% subsidiary, Alliance Air, was started in a bid to

match the pilot salaries being offered by the competitors.

The 12 aircraft strong Boeing fleet was transferred to Alliance and

pilots and cabin crew was recruited on contract basis, fares too were

increased. Besides, several incentive schemes too were started. IA is

offering a 25% discount on economy class on certain flights in certain

flights in certain sectors.

A new marketing strategy too helped put IA back on the rails. The

airlines decided to increase its international operations, and capture

the NRI traffic. IA focused on two factors: one the cultural identification

factor, and two, because it links smaller towns, IA can take a passenger

closest to his home town, IA has also increased the frequencies on

several sectors, and upgraded the meal services. Besides, IA has

undertaken changes in the seating arrangement to provide greater

legroom on the flights.

All these steps helped improve the aircraft utilization levels from the

abysmal low 1600 hours per aircraft per annum to 2700 hours per

aircraft per annum. The average passengers flying IA operated 220

flights to 58 domestic and 17 foreign destinations too.

AFTERMATH

To rectify the melody that has been slowly but surely creeping,

resulting in crippling results and damaging reputation. Indian Airlines

took resort to the turn around strategy.

Turn Around Strategy

On 1st March 1997 Indian Airlines became a Public Limited Company.

Till now IA had only emphasized on distribution, with marketing a non-

issue. Since the company was faced with increasing competition, lack

of resources and mounting losses, it had to formulate and implement a

Turn Around Strategy. To find its place in the sun again, IA has

unleashed an aggressive marketing & advertising exercise backed by

service upgradation & customer friendly overturns. The new plan

consisted, of the following:

1. HRD Initiatives

As the first step free and frank discussions with a cross section of

the employees were held. Top management undertook extensive

tours of all stations to communicate the details and vision behind all

major policy initiatives and to get their response to them. Focus on

training of personnel was enhanced to increase effectiveness. A

greater transparency was built into recruitment and transfer policies

with a view to boost their trust and confidence. In interactions with

unions and Associations a firm but fair attitude was taken.

Productivity Lined Agreements, where the inflows exceed the

outflows despite the fact that market wages were being given, were

entered into.

2. Increased Utilization of Aircraft

With a view to increasing aircraft utilization, pilots needed to be

made to put in more flying hours and steps had to be taken to

increase the number of Commanders. Productivity of Engineers also

had to be linked to the daily availability of aircraft.

i. Enhanced Productivity and Availability of Pilots

The agreement signed with ICPA in 1996 resulted in the

increase in monthly utilization of Pilots from 50 to 63 hour.

With the promotion of 80 Pilots into the executive cadre

monthly utilization went up further to 75 hours. Certain

rationalization and changes in training pattern of

Commanders, due to signing of a landmark agreement with

pilots’ Association resulted in increased out-turn of

Commanders.

ii. Increased Productivity of Engineers

Productivity of Engineers has also significantly increased as a

result of other productivity-linked agreement thereby

increasing daily availability of aircraft as follows:

A-300 7-8 aircraft per day from 4-5

A-320 25-26 aircraft per day from 20

3. Increased International Operations

(a) Indian Airlines went in for increasing the number of destinations to

neighboring countries. In 1999 Indian Airlines operated 14

international destinations, which went up to 24 stations in 2004.

(b) On the domestic front – IA is planning to start Shuttle type flights

on major metro routes like Mumbai – Bangalore, Mumbai –

Chennai, Delhi-Bangalore. It has already started launching shuttles

on the heavy Mumbai – Delhi routes.

4. Creation of Profit Centres

While on one hand, Indian Airlines’ size is strength; it is also a major

disadvantage when it comes to operating in a fast changing and

competitive environment. It is not possible to take decisions

specifically for small groups of employees without reference to the

strong work force. The organization is unable to be as nimble as it

ought to be in terms of decision-making, Customer Service and

employees motivation Consequently, an integral part of turn around

strategy was to hive off certain activities into separate profit

centres, to make them more focussed, flexible and accountable.

Also a more direct linkage between productivity and emoluments

has been created, thereby reducing problems of industrial relations.

The first of such profit centres was the state-of-the-art Jet Engine

Overhaul Shop at Delhi. Similarly the Central Training Establishment

at Hyderabad was also converted into a Profit Centre. On conversion

as Profit Centre the earnings of CTE from outside party jobs after

fully meeting the requirement of Indian Airlines, increased from Rs.

390 lacs in 1997-99 to Rs. 690 lacs in 2003-04.

Recently the Auxiliary Power Repair Unit at Calcutta, the Ground

Support Department and the Cargo Department has also been

declared a Profit Centre. Indian Airlines has also set up a subsidiary

airline, Alliance Air. This airline has helped in increase utilization of

the Boeing aircraft by inducting Commanders from the open market

and focussing on regional routes.

5. Marketing Initiatives

Indian Airlines took a number of economic initiatives and brought

about significant improvements in its product. Sustained and

meaningful campaign was launched to disseminate information

about these improvements. The marketing initiatives are taken

were:

I. PRODUCT IMPROVEMENT

1999-00

EXTRA SEAT-PITCH:

There was Extra seat-pitch in B-737 and Economy Class of

Airbus A-300.

WIDER SEATS:

Wider seats provided in Executive Class of Airbus A-320

aircraft.

CHOICE OF MEALS:

Introduction of a choice of meals, bread/fruit baskets, soups,

damask linen tablecloth and napkins, hot and cold towels.

FREQUENT FLIER PROGRAMME:

IA has further strengthened its frequent flyers program (FFP),

by entering into a reciprocal arrangement with Air France and

launching Joint promotions with American Express, Hertz Rent

– a – car and the Welcome group. It also launched a major

drive to enroll more members to its FFP program, with lucky

draws for a luxury car, for which passengers who had flown at

least five times between mid-December 2005 and mid-March

2006, tried their luck.

SENIOR CITIZEN DISCOUNT:

Persons who have attained the age of 65 years on the date of

travel land who are resident citizens of India are entitled to

50% discount on the normal rupee Adult Fare.

WAIVING OF CANCELLATION CHARGES:

Indian Airlines has waived of cancellation charges, provided

the reservation is cancelled one hour before the scheduled

departure of the flight. There will be a nominal refund fee of

Rs. 100/- only in case the ticket is refunded /reissued.

2000-04

CHICK-IN PLUS:

Provide Assistance for minors, elderly and handicapped

passengers during their check-in and boarding.

BAGGAGE PLUS:

The Baggage Allowance on all domestic flights enhanced by

10 kg. Infants also allowed 10 kg of free Baggage Allowance.

DIET SPECIAL:

Light, low fat, easily digestible recipes made by new cooking

methods and mediums, sugar, salt, fat free diet meals and

mineral water on special requests.

MEAL SPECIAL:

Better presented meals with weekly changes.

TRANSIT SPECIAL:

Special Transit Desks, through check-in of baggage and meals

during transit waiting time.

FESTIVAL FOODS:

Passengers were served special sweets on Diwali, Bengali

food on Puja, Avadhi food on Holi and Plum Cake on X’mas.

DIAL-A-CANCELLATION:

Passengers and Travel Agents can now effect cancellation on

telephone or through fax message.

REPORTING TIME:

Reporting Time reduced from 75 minutes to 60 minutes at all

the airports except Delhi, Srinagar, Leh and Jammu.

II. RESERVATION FACILITIES

To facilitate reservation between any two stations of Indian Airlines

network, the instant reservation facility has been extended to a

total number of 69 stations.

Off the 53 domestic stations where Indian Airlines flights are being

operated presently, 52 stations are equipped with computerized

reservation facility.

All the 17 international stations, where Indian Airlines is presently

operating are equipped with CRT terminals.

Computerized reservation facilities extended to about 750 agents

spread over 38 stations.

Indian Airlines and Air India jointly under National Marketing Division

(NMD) are distributing Systems Interface for Travel Agents

Reservations (SITAR), which is the state-of-the art technology from

SABRE

6. Incentive Schemes

IA has realized that unless the distribution network is rejuvenated

with generous doses of incentives, the agents, who account for two-

thirds of the airline sales, will just not respond. The airline has

introduced a three per cent sector-linked – incentive-

commission, which can be deducted by agents at source. Even

the bank guarantees were frozen at last year’s level for all the

agents and not raised to match over trading. The guarantees were

raised in proportion of increasing business, which invariably

discourage agents from plumping for more sales. The airlines set

up an “agency help desk” to focus on problems of the trade.

High – speed modems are also being installed to facilitate faster

transactions.

7. Price

In the year 1999, IA started a “make up strategy” i.e. slash in price

for the make up of losses. It was followed up by many airlines as a

quick penetrating strategy to draw in big crowds.

The General Managers in the four regions have been authorized to

extend a 15% bulk discount to passenger groups depending on

market conditions; point-to-point fares have been rationalized (a

special discount of 9% is offered on 135 specific routes) and

excess baggage payments are accepted in credit cards.

8. Offer of Free Pagers by Mobilink

It has also tied up with Mobilink to offer free pagers to some

70,000 frequent flyers at six major metros. The pagers will enable

the airline to inform the passenger about the changes in schedule,

flight delay etc. While the pagers service will be free in the first

year, in the subsequent years, Mobilink will levy a nominal user fee.

The pager Company will thus acquire a large chunk of customers

and ‘sell’ advertisements on the pager

9. Customer Contact Programs

The airline is finally laying more emphasis on customer contact

programs. In order to design an ideal flight schedule, IA has hired

IMRB to meet a sample group of 10,000 frequent flyers at Delhi,

Mumbai, Chennai, and Calcutta. It is also roping in a direct

marketing agency to respond to passengers’ grievances.

10. Touchdown boards

The message to the passenger, obviously, is “we care”. To increase

customer awareness, the airline has put up “touchdown” boards

at the six major metros, to keep passengers informed about

customer relevant developments in the airline such as the monthly

product upgrade, value addition schemes, promotional efforts, lucky

draws etc.

11. Advertisement Cum Media Blitzkrieg

Designed, developed and executed by Nexus Equity Advertising,

now known as Enterprise Nexus Communications after its merger

with Enterprise Advertising, the marketing program is a multi-media

communication module. The package aims at establishing the

strengths of IA, reinforcing its leadership and overall improving its

image amongst business travelers, the primary target. It includes

press ads, posters, picture postcards, calendars and the “travel wise

consumer contact programs”.

The first campaign in 1998 highlighted IA’s tangible strengths.

Using an almost negative creative approach, through a confessional

tone to disarm the angry passengers, one of the ads said: “We

admit Indian Airlines does not give you the same choice as others

do”, followed by copy that read, “Indeed, no other airline offers such

a wide choice of aircraft, and not just a choice of seats. Overall, this

campaign highlighted IA’s fleet size, maintenance efficiency,

infrastructure, leg- room, extra baggage allowance.

The second campaign in the same year was a progression of the

first but it adopted an emotional approach with lines such as: “I

choose my airline the same way I choose my doctor, on-sheer

experience”.

A third campaign, still ongoing, attempts to now bring out consumer

benefits that arise from IA’s strengths that were brought out in the

previous campaigns. While the visuals emphasis the reach and

spread of Indian Airlines, the tone is more assertive.

12. Cargo Handling

In the passenger segment, the IA cargo division – an independent

profit centre now-has launched an all-out drive to garner a large

share of the business. Unlike the passenger segment, the cargo cell

still retains about 80% of the market. But competition is slowly

catching up.

The ad campaign launched by the cargo division seeks to highlight

the changing face of business. It underscores the vast network, its

exclusive tie-up with GATI for door-to-door express service, a

special arrangement to go global with Air France and an attempt to

touch every nook and corner of the country with the Indian Posts

and Telegraphs Department.

IA has learnt to be a lot more flexible in its dealings with cargo

agents now. It is also working at automation of all the cargo

officers. Consolidation of assorted cargo with bulk rates is now

being allowed, and freight rates are being revised instead of

sticking to publish tariffs.

Through all its efforts, IA is gradually trying to shed its monolithic

image. And its communication exercise has, at least, given it a

clearer face as far as the consumer is concerned. But this public

sector organization will have to keep its bootstraps pulled up if it

wants to retain leadership in the market place. For, private airlines

are not exactly sitting back on their haunches.

Consequences of the Turn around Strategy

1. Aircraft utilization increases-: Good average utilization of

aircraft is 2600 hours per aircraft per annum, which was down to

a low of 1600 hours in 1997. Efforts were made to increase

aircraft utilization by increasing the productivity of engineers,

pilots and by increasing the number of commanders. Aircraft

utilization has exceeded the desired norm of 2600 hours per

annum.

2. Productivity of pilot’s rises-: The implementation of the

turnaround strategy, pilot productivity rose substantially. In fact,

the monthly average flying increasing from 50 to 63 hours

initially, and then to 75 hours.

3. Productivity of engineer’s grows-: The number of aircraft

made available for operation per day measures engineering

productivity. The aircraft availability improved significantly over

the last three years. The availability of A300s went up from a

mere 8 aircraft per day in 2000 to 11 in 2004 and A320 from 27

in 1999 to 34 aircraft in 2004.

4. Creation of Commanders-: Indian Airlines had lost 166 pilots

to private airlines. After the revised training pattern, the number

of new commanders added to the strength each year rose

dramatically.

5. International operations-: After 1997 five new destinations

were added- Doha, Kuala Lumpur, Kuwait, Yangon and Bahrain.

Also, fifteen new international city links were added.

6. Employee morale-: With increased training efforts and

management-staff interaction, there was a visible upsurge in

moral and productivity among employees

7. Creation of profit centres

a. Establishment of Alliance Air

There was a dramatic increase in the utilization of B737, A320

and A300 aircraft with the hiring of new commanders and

pilots, which benefited both Alliance Air and Indian Airlines.

b. Jet Engine Overhaul Shop

As a result of the creation of separate profit centre, the

Overhaul Shop saves the company an amount of Rs. 2.85

crore in foreign exchange every year.

c. Central Training Establishment

Prior to its setting up as a profit centre, the annual revenue

was around Rs. 30 lacs. This increased dramatically, with the

revenue touching Rs. 390 lacs.

8. Passenger perception improves-: From the ‘least preferred’

airline in 1997, IA has now become the ‘most preferred’ airline.

Image tracking studies carried out from amongst the airline

passengers by the reputed market research agency IMRB, over

the last three years, show that Indian Airlines is now ahead of the

private airlines.

Other surveys carried out by reputed organizations such as

MARG, MODE and MDRA also show that Indian Airlines is the

most preferred carrier presently.

JET AIRWAYS

COMPANY PROFILE

Jet Airways, launched on May 05, 1993 is one of the pre-eminent

entrepreneurial success stories and in a short span of 5 years, has

emerged as India’s leading Domestic Airlines. It has displayed a

staying power that seems nothing short of a logistical feat a B that rig

very deep packets & where regulation is overwhelmingly based in

favor of public sector.

With its corporate office in Mumbai, Jet Airways has flown other B/45

million passengers from May 1996 till January 2001, which includes

about 22% traffic originating abroad to with (tourist and businessmen)

thereby earning considerable foreign exchange.

Jet Airways currently operates with an average system wide seat factor

of around 75% and flies and flies to 27 cities in India – Ahmedabad,

Aurangabad, Bangalore, Kolkata, Calicut, Chennai, Cochin, Coimbatore,

Delhi, Goa, Guwahati, Hyderabad, Indore, Jaipur, Jammu, Jorhat,

Lucknow, Mangalore, Mumbai, Nagpur, Pune, Srinagar,

Thiruvananthapuram on an average the airline operates flights daily

that gives it a share of 27% of the domestic aviation market with a

fleet of 25 new generation Boeing 737 aircraft’s. With on estimated

turnover of Rs. 1,000 cr.

Jet Airways has interlined agreements with 108 international airlines

which facilities ticketing and allows for convenient transfer of

passengers.

Under an agreement concluded with Malaysia Airlines System,

technical and flying training are imported to engineers and pilots of Jet

Airways at their extensive and modern facilities in Kuala Lumpur,

Malaysia Airlines also undertakes major maintenance checks of the

enter fleet of aircraft of Jet Airways. British Airways, which has earned

a worldwide reputation for high standards of customer services, has

collaborated with Jet Airways to provide excellence in customer service

to its personnel at all levels.

VISION

The founders of Jet Airways set up the airline based on the vision that

Jet Airways would be an airline, which would upgrade the quality and

standard of domestic air travel in India, by achieving the standards of a

world-class domestic airline. This was sought to be achieved by

offering reliable and safe operations and high standards of service,

whilst simultaneously ensuring profitability and providing its

employees with an environment for excellence and growth.

CORPORATE MISSION STATEMENT

Jet Airways will be the most preferred domestic airline in India. It will

be the automatic first choice carrier for the travelling public and set

standards, which other competing airlines will seek to match.

Jet Airways will achieve this pre-eminent position by offering a high

quality of service and reliable, comfortable and efficient operations.

Jet Airways will be on airline that is going to upgrade the concept of

domestic airline travel – be a world-class domestic airline. Jet Airways

will achieve these objectives whilst simultaneously ensuring consistent

profitability, achieving health, long-term returns for the investors and

providing its employees with on environment for excellence and

growth.

MARKETING STRATEGIES

With an eye on the future Jet Airways (JA) aspires to take off into the

best practices in airspace to make air travel a smoother and enjoyable

experience. Working on the principle lay down by its chairman Naresh

Goyal “ never take the customer for granted” and “if the product is

right the customer will come”. Jet Airways has pressed the latest

Information Technology into service and has adopted a professional

attitude by hiring Lintas for developing the corporate identity and logo,

the IMRB to do the market survey and Anderson Consultancy to do a

feasibility study and help prepare the strategic business plan. Their

motif the yellow rose is the international symbol for friendship, warmth

and caring.

The main strength of Jet Airways lies in the excellent services provided

both on the ground and in the air, their quality consciousness and their

youngest fleet consisting of most advanced aircrafts.

Their marketing strategy encompasses the following-:

1. Services on the ground

Flight Information

JA has a special 24 hours flight information system in place in

Mumbai, Bangalore, Calcutta, Chennai and Delhi.

Computerized Reservations

To make reservations easy, hassle-free and reliable, JA has liaisons

with the world’s largest and most sophisticated reservation system

– SABRE. Since inception, JA’s network has been fully,

computerized and they were the first to automate their reservation

system.

Airport Check-in Time

It is first private airline to install the state-of-the-art computerized

check-in and flight handling system – CODECO across the network.

The international giants like KLM Royal Dutch Airlines have

developed this system. Check-in time is one hour prior to

departure, except for Club Premiere travelers and Jet Privilege

members.

Free Coach Service

Jet Airways offers a free transfer between Mumbai’s Sahar and

Santa Cruz airports, for passengers with connecting international

and domestic flights. An exclusive air-conditioned shuttle coach

service is in operation, 24 hours a day.

Baggage Allowance

Club Premiere passengers are allowed up to 30 kg, and other

passengers up to 20 kg of check-in baggage. Passengers holding

international tickets can carry 10 kg extra, in addition to 30 kg or

20 kg, depending upon the class of travel.

2. Services in the Air

Service in Safe Hands

They fly the latest, most modern 737-300/400 aircraft and now also

India’s first 737-500. Their pilots are veterans, with extensive

training abroad, and with a great deal of lying experience. They

also have a technical commendation from Boeing, for achieving

99.5% reliability.

Service with a Smile

The cabin crew dressed in designer’s out fits are trained to provide

the customer with warm and courteous service – of a standard

that’s unmatched by any other airline. They’ll welcome the

customer with refreshing hot or cold towels. Offer a welcome drink,

Serve fabulous meals. And make the flight as easy as possible.

Food and Beverage If you are a frequent flier with Jet Airways

there is very little chance you will tire of the in-flight cuisine as we

rotate meals every 8 days and change the entire menu every six

months.

Beef and pork are not served on board any Jet Airways flight. All

our food is cooked in pure vegetable oil. Special meals-diabetic, low

cholesterol, medical, Jain and baby meals are also available.

However passengers with special dietary requirements must inform

us of their needs at the time of making their reservations and at

least 24 hours prior to departure.

In-flight program “Jet Kids”

Jet Kids specially designed to keep the child passenger happy. It

includes a variety of meals/snacks in special carry boxes, chilled

tetra packed fruit drinks and a 'Jet Kids’ in-flight magazine.

Electronic Devices

Many electronic devices like cassette players and lap top

computers interfere with aircraft communications and radio

navigation systems. Passengers are requested to refrain from using

these devices during take-off and landing. Cellular phones must

always be in the 'Power Off’ mode from the time of boarding the

aircraft till the time of takeoff.

3. Value Added Service

Jet Privilege

Jet Privilege is the Frequent Flier Program of Jet Airways. The Jet

Privilege Program offers members an unmatched mix of rewards

and privileges. In addition to facilities like priority wait listing, tele-

check-in, excess baggage allowance etc., as a Jet Privilege member

you can now exchange your miles for free flights on the British

Airways worldwide network spanning 174 destinations across the

world. Jet Privilege members can also exchange their miles on the

KLM global network, covering more than 81 countries across 6

continents or on Northwest network covering more than 400 cities

in the world.

The Frequent Flyer Bonanza

As a Jet Privilege member, can exchange their miles for free flights

on KLM/Northwest global network, covering 400 cities and 80

countries spanning 6 continents. The KLM/Northwest partnership

now offers daily flights from India to Amsterdam with excellent

connections within Europe and to the USA and Canada. Thus the Jet

Airways and KLM/Northwest airline partnership gives you access to

a worldwide route network.

4. Other Services

Caring for the Disabled

Handicapped and infirm passengers can make a request while

booking their flight and an attendant with wheelchair will be

arranged.

Coach Service

Jet Airways operates a complimentary air-conditioned luxury

shuttle coach service between Mumbai’s Sahar and Santa Cruz

airports for passengers with connecting international and domestic

flights.

Interline Transfers

Jet Airways has interlined agreements with over 100 international

airlines, which allows convenient transfer of passengers from one

carrier to another.

For your Comfort

Club Premiere seats, fitted with armrest tables, are arranged in a

two by two configuration so that every passenger has a window or

aisle seat. The seat pitch is a luxurious 38 inches. Even in the

Economy class, a spacious 30 inches.

Infant & Child care

Should you require any assistance for changing nappies, please

call our cabin crew. Children below 12 are provided with books to

make their flying time with us more enjoyable.

Towels

Jet Airways passengers on most routes are welcomed aboard with

refreshing cold or hot towels.

Sleep Easy

Pillows and blankets are available on request on all our flights.

Reading Material

Every Jet Airways light has a wide choice of newspapers and

magazines. Club Premiere passengers may request the cabin

crew to provide them with exclusive stationary.

5. Pricing

“Visit India Fares”

Jet Airways has announced US dollar “Visit India Fares” for travel

on its network in India round the year.

The fares will be applicable for travel in India continuously for 15

days or 21 days in Economy Class. Under the Visit India scheme

journeys will be permitted only in one continuous direction or in a

circle trip. No city can be transited more than once except for

immediate transfer to a connecting flight. This will enable visitors

of India to undertake unlimited travel on Jet Airways extensive

network.

Under the “Visit India” scheme valid for 15 days the travel is to be

completed by the midnight of 15th day and “Visit India” for 21 days

on the mid-night of the 21st days from the date of commencement

of the journey.

With a view to promoting tourism the 15day Visit India tickets will

be available for USD 550 and 21day Visit India tickets will be

available for USD 800 per adult passenger for travel in the

Economy Class. These fares are available for non-resident Indians

and Foreign nationals.

Children below the age of 12 years will be given a discount of 50

per cent and infants below the age of 2 years will be given a

discount of 90 per cent of the adult fare. Visit India passengers will

also enjoy enhanced baggage allowance.

These fares can also be combined with all international fares as

well as Jet Airways USD sector fares provided such a combination

does not violate the Visit India Fare rules.

Jet Airway has earned a reputation for high standards of customer

services has flown over 8.45 million passengers till end January

1988 from its inception on 5 May 1996 which includes about 22 per

cent traffic originating abroad.

Jet Airways operates 155 flights daily with a fleet of 25 new

generations Boeing 737 aircraft linking 30 detentions, which

include all-important cities of business and tourist interest.

6. Night Saver Flights

Night flights help a traveler pack more into his working day. At the

same time saving the traveler a hefty 25% on ticket prices. A night

saver flight gives a customer great value when he travels on

business. He gets a full working day-no curtailed meeting no

unfinished work and he flies Jet Airways for a cost less.

THE SAHARA AIRLINES

A CORPORATE PROFILE

Sahara airlines are a part of the 4000 crore Sahara India Group.

The Sahara India group, which began with a very modest investment in

Gorakhpur in 1978, today, has a business level of Rs.6000 cr with over

1280 offices all over India.

Establishment

Sahara has one of the largest infrastructures in the private sector in

India. It has a workforce of 6,00,000 truly committed individuals. The

company has never had any union related problems due to the fact,

that there is no union in the Sahara Group.

Profit Sharing:

The policy of profit sharing is also very unique. The company gives:

25% towards social development, 35% towards company’s net owned

funds, 40% towards the welfare of Karmyogi workers.

SAHARA INDIA

Sahara India Group has business interests in the following sectors:

1. Para banking: Sahara Para banking is India’s largest savings

organization in the Pvt. Sector, Serving one out of every hundred

Indians i.e. more than 1 crore depositors.

2. Infrastructure and Housing: One of the largest Infrastructure

and House Company in India. Sahara India Housing is a highly

ambitious venture and promises to grow into a powerful unit of the

Sahara India Pariwar. Sahara activities are in progress on around

5,000 acre of company owned land and projects worth

approximately Rs.6, 000 cr, one of the largest in India.

3. Aviation: Sahara Airlines, was launched on 3rd December 1996.

The company has, ever since recorded an impressive performance.

It’s fleet includes Boeing 737-200 Aircrafts and the Advanced

Aviation Technology Boeing 737-400. Nearly 30 flights take off,

everyday.

4. Mass Communication:

(a) Social Research and Development Wing: An in-depth participative

study and survey of National issues like Election-Politics, Education,

Population, Religion and Media problems with an ambitious aim to

create a national Platform for debate on National issues.

(b) Rashtriya Sahara: India’s largest circulated Hindi daily launched in

the post independence period, with 14 morning editions. The

Rashtriya Sahara, English and Urdu Magazines have a combined

readership of over 32 lacs.

(c) Print Production: One of the largest and fully integrated, Pre-press

one-press and post press print production facilities in India.

(d) Audio-visual Production: House in Bombay is the biggest and the

best Audio-visual facility in India, in the Pvt. Sector.

INGREDIENTS OF SUCCESS

1. Policy of Slow and Steady Growth

The airline industry grows with experience. It is capital intensive, the

loss amounts tend to pile up and pre-mature expansion can cause

severe problems. The reason why Sahara Airlines could sustain was,

that the airline did its homework well. It watched the government

policy and the market pulse and was slow in expansion.

2. High On Technology and Engineering

The airline invests over Rs.50cr on aircraft maintenance and

computerized inventory to ensure high dispatch reliability and on-time

performance. The engineering departments is fully equipped with test

equipment, spiral tools etc. required for routine maintenance and

heavy maintenance like ‘C’ checks and engine changes advanced

ground support systems ensure that proper Technological Standards

are Maintained. The Frontline Systems are totally automated. The next

phase of automation includes computerization of Revenue

Management Flight Plan Operations, Engineering and Crew Roistering.

The airline intends to invest approx. 2 million US $ in a phased manner

in Information Technology and use it as a strategic advantage.

Sahara airlines have a major engineering base at New Delhi. The

airline intends to enhance the Engineering facilities at Mumbai in tune

with the expansion program. The engineering base is supported by

well- addressed systems from Malaysian Airline System. The airline has

a large force of skilled and experienced Engineers and Technicians.

The airline has its own NDT shops, Wheels and Brake assembly shop,

battery charging shop, Avionics shop and Seat Repair shop. Sahara

airlines are the only domestic airline that had its own Hangar for

Aircraft maintenance. The airline has successfully completed a ‘D’

check and 7’C' checks.

3. High on Corporate Culture

The Employees of Sahara Airlines share similar values and concerns

and follow the airlines tradition of customer care and service.

The Employees constitute a cohesive group and work together as a

team with the same culture, attitudes and motivation, and at the same

time ensuring continuous collective growth for collective sharing and

caring, that gives, an impetus to the airlines philosophy of collective

materialism.

4. High on People and Training

Sahara Airlines has over 1600 highly qualified, experienced and

dedicated staff including 91 pilots, 121flight crew, 61 Engineers, 82

Technicians and 865 ground staff.

The airline has a dedicated Aviation Training Academy. This academy

is totally equipped with all facilities and covers all In-house training

requirements of engineering and Commercial Operations.

Professional’s conduct specially designed courses and workshops on

product orientation, customer awareness, supervisory skills and other

service enhancement skills. The emphasis is also on soft skills such as

attitude and style apart from technical product knowledge.

5. High on Right Connections

Sahara’s new domestic network and alliance with intensive partners

have positioned the airline as a frontrunner in the aviation industry.

The airline has interline agreements with Air India, Air U.K., Anselt

Australia, Air Lanka, Air Mauritius, Air France, Asian Airlines, British

Airways, Canadian International, Delta Airlines, Everest Air, Emirates,

Ethiopian Airlines, ELAL, Egypt Air, Gulf Airways, JAL, KLM, Korean Air,

Kuwait Airways, Quantas, Royal Brunei, SAS, Singapore Airlines, UA

etc.

MARKETING STRATEGIES

HIGH ON QUALITY, CUSTOMER VALUE AND CUSTOMER CARE

Sahara Airlines is all about customer care. A service offered in all its

flights to all it passengers is high on quality. At Sahara, it is a firm

belief to uphold the highest standards of traditional Indian hospitality,

culture and courtesy. Sahara’s highly trained personnel ensure that a

clients trip is not only comfortable, but a memorable one right from the

time of check Sahara’s value additions such as Valet Service, Tele

Check personalized reading kit and meal preferences ensure highest

standard in customer care and customer satisfaction.

As competition increase and maximizing shareholders wealth attains

paramount importance, the need for enhancing customer value is now

felt by the corporate sector more than ever before. A firm’s

competitive advantage rests singularly on 2 factors:

(i) The manner in which it is able to create customer value to make

its offering unique vis-à-vis its competitors.

(ii) How it delivers such value at the least possible cost.

Value to an airlines customers, is a basket of benefits, which they get

while consuming the service offered by the airline. Value expectation

reflects a customers concern for the time, money and effort spent by

him to procure the airline’s service and the resulting tangible and

intangible benefits he gets out of the same.

Tracking Customer Value Expectations: If satisfying customer

value expectations is the hallmark of any company’s strategy (as is the

case with Sahara Airlines), it becomes important to track the benefits

customers are looking for. In order to understand this the 4 important

areas to examine are shown in the figure below:

(Identifying Customers Value Expectations)

An examination of the above four aspects reveals the areas where the

organization should concentrate upon to create the benefit or value

customer are looking for. Understanding the rationale behind customer

requirements can be obtained by studying the demographic and

Psychographic factors pertaining to the target customer group. This

clearly indicates what specific product features and ‘add-ons’ are to be

offered to ensure value acquisition by the customers.

Study of Psychographic and Demographic Factors to understand What are customer need specific benefits.

Study of post purchase behaviour

(including any dissatisfactory)

Customer Value Expectations

Study of how customers use the service

Study of the process of Acquisition of Service and underlying cost/Differentiation

Creating and Delivering the Value: Cost competitiveness of a

company’s value creation, delivery process, its uniqueness and

sustainability, provide the company with a long term competitive

advantage that cannot be watched by both existing and potential

opponents. To achieve this, value creating activities within the firm

should be organized and managed in a manner that help in creating

the customer value in a unique and cost-competitive way.

Sustaining the advantages of uniqueness and cost is possible only if

the internal value activities and underlying business processes are

designed and managed innovatively. Innovation in key since value

creating service features as well as the delivery process will always be

under the threat of imitation by competitors. Hence, staying ahead will

always be a major challenge.

Successful organizations are able to assess correctly and often, in

advance, what their target consumers truly want based on their

accumulated experience as well as through formal market research

and create, communicate and deliver these values in a manner that is

for better than that of their competitors.

Continuous customer response system plays a vital role. For this a

monthly in-house customer feed –back survey based on 15,000

responses has seen Sahara’s ratings rise from 6 to over 9 out of 10 in

the last 6 months.

The customer response is reflected in the market. Sahara’s business

class, with the brand name ‘Sahara Royale’ is the most expensive in

the domestic airline industry, enjoying an average premium of Rs. 300-

400 over Indian Airline and Jet Airways.

Sahara maintains that the higher price it commands is because of the

add-on that it provides to consumers. The airline believes in delivering

the best to all its customers. It is this belief that is reflected in its

services, which are mentioned below-:

(i) Sahara Valet Service: To ensure smooth baggage handling,

exclusive valet service is provided at Sahara airlines airport

counters. The idea of valet service came with reference to the

lack of adequate infrastructure at Indian airports. This is a free

valet service, for all classes at all airports in the country.

(ii) The airline has a unique concept of ‘Promise Fulfillment Cell’

to solve all customer problems instantly at the airports and a

dedicated Sr. Manager is exclusively in-charge of the cell.

(iii) Tele-check–In for All passengers: Another extension of

customer facilitation is the introduction of advance tele-check–in

facility for all passengers. Over 25 haunting lines have been

installed for this purpose.

(iv) Customized in Flight Cuisine: Sahara believes in the aged old

tradition of welcoming its guests with a spread of delicious

gourmet cuisine. Special care is taken in looking into personal

dietary preferences. Which are anticipated and provided

including special Meals like Jain Meals, Diabetic Meals and Child

Meals.

Sahara Royale has a unique concept of customized meal offer.

The passengers have a choice of Thai; Mexican, Italian, Chinese

and Continental health food is being incorporated in the special

meal plan. Sahara makes every effort to make the passengers

feel at home, even at great heights.

(v) In Flight Library: The airline has an international library on

board, which includes a choice of international dailies, Magazines

and an option of selecting the latest Best Sellers. Sahara Special

passengers are also provided with a personalized Reading Kit,

which includes at least 3 major dailies.

(vi) Increased legroom: To ensure greater legroom on both Sahara

Royale and Sahara Special classes, provide total seating comfort

on board.

(vii) The airline provides an on-board Executive on every flight to

ensure the clients comfort.

HIGH ON INNOVATIVE MARKETING STRATEGIES!!

BUSINESS SUCCESS

The requirements for business success today have changed

dramatically from those of yesterday years. The post-war period to the

mid-70’s was characterized by macroeconomics, and in turn, business

stability. From the mid-70’s however, the world of business turned

turbulent. Changing customer needs and attitudes, increased personal

wealth and emerging globalization dramatically altered the

determinants of business success. Not surprisingly, the gap between

the best and the worst performing firms has widened considerably.

Since the early 80’s, several firms have either collapsed or been taken over;

some have moved up the performance ladder and new ones have been

formed. A close examination of these firms reveals that there are a number

of attributes that characterize success or failure in today’s world of business.

These attributes are listed in the table below:

Successful Firms Poorly Performing Firms

Do the right things

Are customer –driven

Have a competitor “look”

Flat/flexible

Have good internal Communication.

Have strong leaders.

Do things right

Are product driven

Have an internal “look”.

Slow inflexible.

Have poor internal communication.

Have management structures.

While the factors given in the table are all important, it is the emphasis

on customer–focus that is supreme. The fact that “customer-focus”

is the most important determinant of business success today is support

led by several leading authors. According to Peter Drucker, there is

only one valid definition of business purpose “To create a customer”. In

facts, what the customer thinks he is buying, what he considers ‘value’

is decisive. The customer determines what a business is, what it

produces and whether or not if will prosper.

This is where “Marketing” comes in, being the segment of the

management practice that deals with the company-customer

relationships. Marketing is responsible for creating demands, products

and jobs. By it’s role in the satisfaction of consumer needs, Marketing

raises their standard of living and quality of life.

As mentioned earlier, the Sahara airlines is in the middle of an image

enhancing, brand building and expansion program and is pursuing a

two-pronged strategy to catapult it into the next century. Build fleet

strength from the current 6 Boeings to 10 by the year 2003. At the

same time, carefully enhance the Sahara Image in India, as well as

abroad.

The airlines helicopter division is looking at increasing its operations in

the tourist and commercial charter business. With a fleet of 4 six-eight

seater Euro copters, the airline plans to induct 3 more choppers in due

course. Sahara is looking at long-term commercial utilization of

choppers. In fact, the airline, has identified and short listed Several

Corporate clients for the same. Such clients will include hotel chains

and film companies.

ADVERTISING

Promotion, one of the four P’s of marketing has assumed added

significance in contemporary market conditions, with almost every

product or service category inundated with brands. What, when and

how to advertise, while coping with the conflicting requirement of high

recall and quality of advertisement on the one hand and cost

effectiveness on the other has necessitated a higher workload on the

grey cells of marketers for a long time. There should be constant

adaptations and innovation on promotional channels also.

As a part of the brand building exercise Sahara Airlines launched an

international advertising campaign last year, worth $ 2 million to target

the NRI market in the UK, USA and Middle East. An advertising

campaign was also launched in the Indian, print media focussing on

the airlines’ strengths, with an attempt to revamp the airlines’ image in

the minds of travelers.

The various types of advertising media used by Sahara Airlines are:-

1. Newspapers

2. Magazines

3. Television

4. Internet

5. Participation in travel trade events (ITB, Berlin, SATTE, TAAI, and

Tourism Expo).

6. Hoardings.

7. Transits at the airports.

It is the responsibility of the marketing department to provide all the

necessary guidelines of how, when and where the ads will appear to

the advertising agency (in this case, Percept) which then develops

attractive advertisements.

OTHER PROMOTIONAL ACTIVITIES

1. Packages

The Period From April to September is characterized as a low season

for the airline industry, when the flight load decreases drastically. To

maintain the load factor, passengers have to be pursued and lured into

travelling with a particular carrier. Sahara Airlines did this,

successfully, during the last 2 years.

The airline launched a successful, strategy in which it tied up with

renowned hotel chains and offered business and holiday packages, to

Goa, Mumbai and Bangalore, which included free hotel stay. This was a

Maneuver, which shook the domestic airline industry.

(a) Sahara’s Wonder Holiday To Goa

The Sahara Holiday plan to Goa was launched primarily to promote the

Del-Goa-Del Sector. For this, purpose the cur line had tied up with

premium hotels like the heritage village club, Holiday Inn, Bogmalo

Beach Park Plaza Resort, Cidade de Goa, Taj Holiday Village and Fort

Aguada Beach Resort.

Priced at nominal rates for 3 nights and 4 days, the package included:

Air fare Del-Goa-Del (Economy class) for a single person

Airport transfer by car/coach

Accommodation in a standard A.C. Twin room.

Buffet breakfast, lunch, and dinner and daylong snack buffets.

Welcome hamper of goan wine and cashew nuts in the room.

Half day sightseeing.

Special Gujarati Vegetarian meal, on request.

Casino coupon worth Rs. 100 per room, once during the stay.

All applicable taxes.

(b) Sahara Business Plan

This was a plan launched primarily for the promotion of Banglore and

Delhi sectors. Sahara, tied up with hotel ‘Le-Meridian (Banglore) and

The Park (New Delhi) to attract more and more corporate travelers and

by providing value added services.

(c) Sahara Airlines - Holidays

This plan was similar to the Goa plan. In addition to a return ticket on

Delhi – Banglore Delhi sector, a customer could avail of 2 nights and 3

days stay at the Taj Residency, at Bangalore.

2. Direct Mailers

Distribution of Direct Mailers at airports on board and at Reservation

Counter is another method adopted by Sahara airlines to convey

directly to the passengers about the airlines performance, dispatch

reliability and customers satisfaction levels.

Various Direct Mailers, usually distributed to passengers by Sahara are:

1. Updates

2. Sales kits

3. Schedules

4. Discounts etc.

3. Familiarization Trips

Familiarization trips for travel agents are organized by Sahara airlines

to various sectors, including Mumbai, Goa and Bangalore. This

facilitates package sales considerably.

4. Sponsoring Various Mega Events

Another step, undertaken by Sahara in the direction of creating

awareness in the minds of people is that of sponsoring mega Events

like the Sahara Cup (Cricket), gold lake open Tennis Championship and

First city Hyatt Tennis Tournament. Sahara airlines were the official

carrier for these tournaments.

AIRLINES AT A GLACE

INDIAN AIRLINES JET AIRWAYS SAHARA AIRLINE

Birth: 1st August 1953

5th May 1996 3rd Dec. 1996

Fleet: 57 aircrafts 27 aircrafts 14 aircrafts

Destinations: 58 30 13

Flight: 220 flights daily

Over 155 flights daily

28 flights daily

Market Share: 58% 27% 24%

Achievements:

1. Grand Pacific Asia Travel (PATA) Award in Beijing June 2000 for its marketing program.

1. Blue Moon Award in 2001 for service excellence as India’s best domestic Airline (given by Citibank Diners Club Members)

2. Global Award at the Travel Market in 2001 for quality service.

1. PATWA Award: March 10th 2000. Pacific Area Travel Writers Association for best domestic airline for international standards of service in Indian sky.

2. WTM – World Travel Market Global Award in 2000 for its quality of service within the Indian Airline Industry.

FREQUENT FLYER PROGRAMME (FFP)

INDIAN AIRLINES

Flying Returns:

This FFP brings to the customer free tickets both domestic and

international, choice of over 110 designations on IA’s extensive

network. There is also exclusive tie up to earn Add on Mileage Points

(AOMP) and Club Mileage points with the spouse.

Option 1

A free 2 line Alpha numeric pager with an advance payment of

Rs. 7770 which covers subscription rental and transfer facilities

for the next 18 months

Free flight link service

Option 2

A discounted Mobilink 2 line with an up front payment of Rs.

3793 which covers 6 months rental and trans net subscription.

Free flight link service.

JET AIRWAYS

Jet Privilege:

This FFP offers unmatched mix of rewards and privileges

In addition to facilities like priority wait listing, tele-check-in, excess

baggage allowance etc., one can exchange the miles for free flights on

the British Airways worldwide network spanning 174 destination across

the world. Jet privilege members can also exchange their miles on the

KLM global network, covering more than 81 countries across 6

continents or on North West network covering more than 400 cities in

the world.

SAHARA AIRLINE

Sahara Club Crown:

The Sahara Club Crown offers 3 level of benefits: Sahara Silver, Sahara

Gold, Sahara Platinum based, add on points. The provisions are for

redeeming the points instantly for gifts or accumulate them for more

expensive gifts. The other privileges includes priority wait listing, extra

baggage allowance, pooling of points, priority baggage handling,

priority check-in, class up gradation, dream holiday packages, existing

gifts, International & domestic ticket and also exclusive holiday

packages to Goa, Bangalore – Delhi – Mumbai etc.

COMPARATIVE MARKETING STRATEGIES IN RESPONSE TO THE MAEKTING

MIX

INDIAN AIRLINES JET AIRWAYS SAHARA AIRLINES

Place and Pace:

Largest network in terms of number of planes and flight destination.

To improve load factor they are targeting major trunk routes by increasing the number of flights.

Reservation facility extended to 69 stations.

Product:

Meal special - better presentation with weekly changes.

Place and pace:

Increase in flights on trunk routes due to acquiring new generation aircrafts.

Jet Airways currently operates with an average system wide seat factor of around 75% and flies and flies to 27 cities in India

Product:

New generation aircrafts 1 Boeing 737-500, 3 Boeing 737-400,

Place and pace:

Sahara club care – benefit agent incentive schemes for rewarding agents.

Helicopter division can be hired with fleet of 4,6 to 8 seater and 3 major fleet plane they are trying to induct.

Product:

Sahara Royal – Business class enjoys premium Rs. 300-400 because of add on

Festival foods - special food and festival.

Physical Evidence:

Extra seat pitch in B737 in economy class and Airbus A300.

Wider seats in Executive class in Airbus 320.

Customer Service Program for ideal flight schedule. Director marketing agency hired to

4 Boeing 737-400. Advance Generation Boeing 737-700 and 737-800.

A large variety of meal preferences (15 different variety)

Airport launches for Club Premium Passenger.

In flight service comforts example reading material first aid box, smoke detectors in toilet.

Seat request facility at the time of reservation.

Physical Evidence:

Special seat for newly acquired aircraft 40” seat pitch in business class and 30” in economy class.

conveniences.

Customize in-flight cuisine – special meal – Jains – no onion, diabetics and child meals.

In flight library – Bestseller books magazine, international daily, personalize reading material kit are provided.

Physical Evidence:

Widest legroom in both classes including ‘y’ class.

32,000 sq ft of hanger space for self maintenance

Customer care: Continuous response system – 15000 monthly in house feed backs. Promise fulfillment cell – run by senior manager

respond to customer grievances.

Promotion:

Strong aggressive advertising campaign by Nexus Equity Advertising Company. 3 separate campaigns highlight IA’s strength, fleet size maintenance and infrastructure and consumer benefits.

Senior citizen discount 50%.

Touchdown board at 6 major metros to keep passenger informed about relevant development.

Incentive schemes for agents – 3% sector linked incentive commission.

Promotion:

Aggressive advertising campaign-print media by Lintas Ad. Agency.

Cellular phones and sim cards to customer in association with Messer’s More Touch.

Interline agreements with more than 100 international airlines for transfer of passenger.

for instantaneous customer problem tackling.

Promotion:

Advertisements in newspaper, magazine, TV, Internet, participation in travel trade events.

Holiday packages – Up to Sep. – lean period – to maintain load factor they have tie-ups with Chain of Hotels for free stay holiday packages to Goa, Mumbai and Bangalore.

Direct mailer on board and reservation counter about updates, sale kits, schedule discount voucher to convey about the airline performance.

Sponsoring mega events like Sahara cricket cup, Gold Lake Open Tennis Championship etc.

Process:

Manage large size effectively by separating the whole activities and creating separate profit centre.

Waiving of cancellation charge provided reservation is cancelled 3 hrs before schedule and permitting postponing of ticket without extra charge.

Tele check-in Business class.

Dialer cancellation of ticket.

Cargo handling 80% market share. It has exclusive tie – ups with GATI for door-to-door service.

Process:

Fully computerized reservation system. First airline to be co-hosted with SABRE.

Specially designed check-in counter for club premium passenger.

Tele check-in 3 hrs prior to departure.

Speedy baggage clearance and coach service – auto motive baggage reconciliation system for matching baggage tags with boarding passes.

Process:

Exclusive Sahara valet services for baggage handling.

Tele check-in system for all passengers both class.

Price:

“Make up strategy” i.e. slash in price for the make up of losses. It was followed up by many airlines as a quick penetrating strategy to draw in big crowds.

There can be 15% bulk discount to passenger groups depending on market conditions.

Point-to-point fares have been rationalized (a special discount of 9% is offered on 135 specific routes) and excess baggage payments are accepted in credit cards.

Price:

Jet Airways has announced US dollar “Visit India Fares” for travel on its network in India round the year.

Caring for disabled handicapped and infirm passenger and get preference in allotment of seat and service.

Special attention to kids Jet Kids – in flights program for kids, which include variety in meals, cold drinks and Jet Kids in flights magazine.

Price:

Drastic Reduction in prices on trunk route during lean period.

Stand by fares – special 20% of on gross normal fare on all sectors salable to both classes 3 hrs before schedule.

COMPARATIVE MARKETING STRATEGIES

From the above table it is evident that Jet airways are by far the only

challenger to IA’s domination over Indian skies with Sahara India the

only contender a distant third in position. With the entry of Jet

Airways the Indian passenger got a taste of service they desired. Its

unique selling proposition (USP) is as follows:

Largest new generation aircrafts and maximum utilization factor.

High standard of quality in air and on ground and latest

processing tools.

Fresh recruits trend in Jet ways rather than people from other

airlines who carry the badge of the old culture with them. The

positive and helpful attitude of the frontline staff is the hallmark

of Jet service.

Strong performance Orientation and high loyalty of the

employees.

Maximum value added services. To ensure this Jet airways

monitor performance in three areas mainly called Key Result area

(KRA). These are:

(a) Feedback from its customer service department.

(b) Part time consultants flying in cognate.

(c) Customer service questionnaire placed in on all flights.

As regards Sahara Airlines USP is based on the “focus on

customer”. They have initiated certain measures in this regard such as

–

a) Valet services at the airport

b) Customized in-flight cuisine like diabetic, Jain food and children

meal

c) Holiday packages by tie-ups with chain of hotels

d) Offer stand by fare cuts

e) Drastic price slashes on major trunk routes.

Indian Airlines, the major operator is finding its domestic position

threatened by the new trend of service culture set up by the

competitors. Their major strength of large fleet and good

infrastructure is still holding them in high position. The new strategic

initiative of increasing the number of flights on trunk routes and

massive advertising campaign is helping them to regain its lost

ground. At present its USP is as follows:

a) Large network spanning 15 countries with 57 destinations in India

b) Large fleet of 55 aircrafts and very good infrastructure facilities

c) Very strong and aggressive advertising campaign.

AIR DECCAN

The low Cost Business Model (Air Deccan’s Model)

The globally successful low-cost model pioneered by the US-based

Southwest Airlines in the 1970 inspired the Air Deccan’s business

model. In the fiscal year 2003-2004, the Low cost airlines commanded

a global market share of 25% and their revenues had grown by 40%.

Low cost airlines were continuously offering lower flying rates by

inventing innovative ways to cut operational costs. Analysts claimed

that the overall costs for Low cost airlines were 45% to 60% to that

incurred by FSA’s (Full service Airlines).

To keep overall costs of the company low, Air Deccan took the

following measures:

Food: Unlike full service airlines, Air Deccan did not provide any

food on board. However, it sold snacks and water bottles on its flights

for a price. Serving and consumption of alcohol were not permitted.

The company felt that for short-distance domestic flights, most

passengers did not want food. It said the savings on food were passed

on to passengers in the form of lower fares.

Extra Seats: Since Air Deccan did not provide food, it did not require

space for storing meals. The saved space was utilized for putting in

extra seats. The company also reduced leg space compared to full

service airlines. This helped increase the seating capacity by another

20%. For example: An A-320 is having 140 seats in case of existing

airlines. Air Deccan has an advantage of over 20% extra seating

capacity as aircraft will have 180 seats.”

Turnaround Time: Air Deccan preferred operating small planes,

which took less time to be maintained and be ready again for flights

after landing. As no food was served, it took less time to clean the

aircraft. Moreover, the aircraft did not have to wait for food loading or

unloading. Compared to FSAs, which took an hour after landing, air

Deccan’s aircrafts took only 20 minutes to be prepared for flying. This

enabled extra trips. On an average, FSAs flew for 8 to 9 hours a day,

whereas Air Deccan flew for 11 hours a day. The company used the

same kind of aircraft in its fleet. This helped in quickly moving cabin

crew and the company did not have to worry about carrying spare

parts for different aircraft. This too reduced turnaround time.

Distribution Costs: Air Deccan did not sell tickets through travel

agents but did so through its websites and call centres. At the time of

booking, passengers got a booking number, which they had to quote to

air Deccan staff at the airport and show an ID with a photograph to

collect a boarding pass. This system did away with commission

charges for agents, printing charges for tickets and saved the company

close to 11% to 15% of total costs. Air Deccan outsourced its call

center connectivity to Bharti and Internet reservation system to the

Delhi-based Inter-Globe Enterprises.

Lower Employee Costs: Air Deccan operated with a small crew size,

which ranged between 4 and 6 and used only one airhostess per flight.

The company recruited employees on contracts. This helped reduce

was also 20% less than that of FSAs.

On flight Advertisements: To generate additional revenues, Air

Deccan decided to carry advertisements of other companies on its

flights. They have tied-up with Cutting Edge Media for this. Air Deccan

utilized spaces such as baggage tags, ladder steps, cockpit doors,

headrests, full centre aisle carpet and the reverse of the boarding pass

for putting advertisements.

Connecting Flights: Air Deccan did not provide any connecting

flights. The company felt that the flights of airlines, which offered

connecting flights, could not leave from one place unless all the flights

connected to it had arrived. This many a time resulted in flight delays.

Air Deccan offered point-to-point service in which passengers flying

from point A to Point B and willing to take another flight from B were

issued two different tickets. Once the flight landed at the point A, the

passengers were supposed to carry their luggage on their own and

board another flight from Point B. Air Deccan made it clear that it was

not answerable if passengers missed their onward flights in case, the

first flight got delayed. Therefore, this service did not require flights at

point B to wait resulting in lesser turnaround time.

Other Measures: Air Deccan did not hire any consultants for its

various operations or for preparing the company’s project report, thus

saving on project costs.

The Target Market and Positioning of Air Deccan’s

Services

Analysts felt that there was huge growth potential for LCAs in

India due to the country’s huge 200-million middle-income group

population. Mr. Gopinath expected that at least one-fourth of this

population would use LCAs in the near term. He pointed out that

India had 15million rail travelers everyday. Of these 1,70,000

traveled in the air-conditioned class, and were potential

customers for Air Deccan owing to the comparable prices.

The US had 40,000 commercial flights everyday, whereas India had

only 400 flights a day. But India had four times more population

than the US, so it could theoretically run 1,60,000 flights daily. Mr.

Gopinath said, “Assuming that we had tapped 1% of this potential,

we still need 1,600 flights a day. Therefore, we need a quadruple

jump in the number of commercial flights.”

Air Deccan defined its target segment as upper-middle class in

the short term, but planned to tap the lower-middle class

aggressively in a couple of years. The company targeted middle

level corporate employees, small and medium enterprises and

Visiting Friends and Relatives (VFR). Also there are several

companies in India, which sent their employees for corporate

trips by train, with the hope that these employees would now

switch to Air Deccan and save time.

Air Deccan also attempted to position its services for the

common people of India.

According to Us-based advertising company, orchard highlighted

the low-cost advantage of Air Deccan flights. The advertisement

showed people of different ages, hailing from different walks of

life, taking turns to stand behind the cardboard cut out. These

people include a schoolgirl, a housewife, a businessman, a small

boy and a young motorcyclist. As they come behind the cutout,

and positioned their heads in place of super hero’s head, it was

shown that they were ready to fly. The advertisement ended with

a punch line, “Now everyone can fly-Air Deccan up to 50% lower

airfares.

Air Deccan concentrated more on the print media to save costs.

The print advertisements essentially focused on the company’s

low fares. After giving details of the flights, the advertisement

discussed how ‘Dyna fares’ worked. Analysts appreciated the

airline for not going in for glossy ads and targeting the common

man instead.

All Air Deccan advertisements carried the tagline, which read,

“Simplify”. The advertisements were simple and significantly

different from traditional airline advertisements, which featured

smiling airhostesses, plush seats, elegant atmosphere and a

comfortable journey. Analysts felt Air Deccan successfully

projected itself as an inexpensive carrier.

The media reported that passenger feedback for Air Deccan was

largely positive. A few passengers felt they had a similar

experience to that in FSA’s.

The airhostesses were instructed to behave with utmost

politeness to everybody. They are also instructed not to judge

customers by their clothes or their knowledge of English. In fact,

they are advised to speak to passengers in whatever regional

languages the passengers are comfortable with, and have tried

to pick multilingual airhostesses.

Travelers found the seats comfortable and the in-flight

magazines. The service quality is acceptable and as it was

offered at 50% of FSA fares, Air Deccan was worth flying.

Industry analysts agreed that the low-fare business model of Air

Deccan would attract many passengers. However, they felt that

passengers must be told in advance of the “no frills” experience

on Air Deccan flights.

The Future of Low Cost Airlines (like Air Deccan)

There are two-business model in the civil aviation industry-Major

network and low cost careers. Major network careers operates on the

principle of hub and spoke models. Whereas low cost careers operate

on the basis of point-to-point models.

Presently major network careers are Air India, Indian Airlines, Jet

Airways and Air Sahara. Whereas Air Deccan is the first and only low

cost/no frills airlines.

These two business models serve two different segments of customers

and can, therefore, exist simultaneously. The major network carriers

are still suffering because the new Low Cost Carriers business model

took away a chunk of customers. Some of these customers could still

be lured back by the network carriers if the cost difference reduces.

There will always be a floating population of customers who will use

both kinds of service, as their needs change or as their income

increase. However, each will also have their very loyal segment of

customers. The network carriers will have those business customers

who always require the services offered by them. The Low Cost

Carriers too will have their niche customers who are the new segment

of air travelers they created-namely small businessmen and leisure

travel customers.

The LCC business is certainly set to grow more than that of the

network carriers and, hence, gain a higher market share.

Low Cost Carriers in 2004 had 400 orders out for new planes, whereas

the old network carriers had only 150 planes on order around the

world. Low Cost Carriers seem certain to grow and capture more

market share, and many of them profitably.

After 5 years of phenomenal growth, low cost airlines in Britain account

for 41% of seats on domestic flights and 32% on routes to continental

destinations.

In India, only Low Cost Carriers Air Deccan has been chipping

away the market share from Indian Airlines largely, then Air

Sahara and then Jet Airways.

The successful Low Cost Carriers have ensured that the basic elements

of punctuality, safety, baggage handling, housekeeping and ease of

booking have been in place. In fact, airlines such as Southwest, Easy

Jet and Ryan Air have achieved even greater degrees of punctuality

and less number of flight cancellations than the network carriers.

In India, the new entrants like Kingfisher and Spice Jet are succeeding

in pulling human resources like Pilots, Engineers and Technicians from

network carriers such as Air Sahara, Jet Airways and Indian Airlines.

Sometimes, resignations of pilots in large number have created even

cancellations of flight. This situation will be more complicated when

some more Low Cost Carriers like Air One, Go Airways and Indus

Airways will have footprints in the civil aviation industry in India. The

cost of labor again contributes a major portion to the Low Cost Carriers

cost advantage and this labor cost, therefore, likely to reduce over

time.

This cost creep at Low Cost Carriers due to the above, as well as the

cost reductions the network carriers have achieved and are targeting

for the future, have gradually reduced the difference between network

carriers and Low Cost Carriers. Even in other aspects such as the

airports they use, and the services and frills offered, these models

have started having some similarities. Some of the bigger Low Cost

Carriers also have started offering limited connections, moving towards

the hub and spoke model of the network carriers.

Thus its seems as if there is some kind of convergence in the two basic

models. How far these models converge and how much they retain

their basic differences is yet to be seen. For now, it is

Advantageous for Low Cost Carriers.

GO AIR

Profile

The Mumbai-based Go Air, yet another new entrant in the civil aviation

map, is launching its services on the Coimbatore - Mumbai sector

Go Air is from the Wadia group, which has Bombay Dyeing, Britannia

and Bombay Burmah Trading Corporation amongst the other entities in

its fold.

The Managing Director of Go Air is Jeh Wadia, Chairman of the Wadia

Group. Even an air-conditioned seat didn't guarantee the basic

facilities. The conditions were pathetic. That's when Wadia decided

that it did make a difference to their lives by having a low-cost airline,

offering train fares for flying, tracing the genesis that marked the

conception of Go Air.

Go Air would be India's third low cost, no-frills carrier after Air Deccan

and Spice Jet. The first aircraft was an Airbus A-320 with 180-all

economy seats.

The first aircraft flew in the Mumbai - Ahmedabad - Mumbai, Mumbai -

Goa - Mumbai and the Mumbai - Coimbatore - Mumbai sectors. Later,

on arrival of the second aircraft in November 2005, GO Air plans to

operate services to Chennai, Hyderabad, Bangalore, Nagpur, Jaipur and

Pune.

Delhi, Kolkata and other sectors were opened up in due course as the

other aircrafts get delivered. The airline would have 5 Airbus A-320

aircraft by the turn of its first year of its operations.

The Go Air terminal is sizzling with activity. Kingfisher Airline, which

had also made noises about being low-cost, is now being touted as a

full-service carrier. Go Air was claiming that they will be the lowest-fare

airline in India.

Go Air's initially flight schedule were believed to touch second-tier

destinations that will include Baroda, Ahmedabad, Goa, Nagpur,

Indore, Jammu, Srinagar and Hyderabad. "There were plans to keep

the aircraft for a minimum of eight to 10 hours in the air. GoAir will

have a no-frills airline with a focus on driving down costs and fares.

They will offer quality consistency, quality assurance and a time

efficient product.

The airport service is an issue -- such as the turnaround time (the time

taken to get people from the lounge into the plane). For Jet Airways,

the turnaround time today is 45 minutes. For Air Deccan, it is 30

minutes for a 180-seater Airbus and 15 minutes for a 48-seater ATR.

"Go Air will have to be really fast on the ground," as a competitor. Also,

most low-cost carriers started with second-hand ground service

equipment like coaches and push back tractors. Coaches, which

transport passengers from the terminal to the plane, account for 15%

of the costs as a new coach is priced between Rs 35-45 lacs.

The low-cost airline cost structure

Having a low-cost airline may be the flavor of the season, but the cost

structure is completely different compared to a full-service airline.

A. Fuel

B. Maintenance

C. Airport charge

D. Capital cost

E. Salaries

F. Marketing and distribution

G. Interest

H. Insurance

I. Other

MARKETING OF GO AIR

Go Air, positioned as India's lowest-cost airline.

A fleet of five Hyundai Getz cars will make their way from a dealer in

suburban Mumbai to the refurbished environs of the Rs 4,000 cr (Rs 40

billion). It will be a rally with a difference. The cars will drive in single

file, painted in bright turquoise blue and displaying a gigantic white

logo reading, "Go".

GoAir, the People's Airline, based in Mumbai, Go Air aviation project is

perhaps the Wadia group's most ambitious endeavor. India has signed

a Memorandum of Understanding (MOU) for 10 Airbus A320 Family

aircraft, plus 10 options to expand services to major business and

leisure destinations across the country. GoAir launched services with

two leased A320s in November 2005, with a further four leased A320s

scheduled to enter the fleet during 2006. All of the A320 aircraft on

firm order will seat 180 passengers in an all-economy layout.

Current projections are that Go Air will take off with a fleet of three

180-seater used A-320 aircraft. The strategy is to go in for a

combination of leased and owned planes. Wadia claims that they will

have 20 leased planes beginning in the second year, at least some of

which will include Boeing 737-800 aircraft. "The first of our new aircraft

will come in from 2008," who has being to Paris to talk with both

Boeing and Airbus.

The latest A320 order from GoAir serves to highlight the outstanding

popularity that the A320 Family has enjoyed with both established and

start up low-cost carriers, including in the Asia-Pacific region, over the

past few years. Almost 480 A320 Family aircraft are already in service

with 38 carriers across Asia-Pacific.

GoAir have selected the A320 Family for there future fleet

requirements. The A320 Family is the preferred choice of all leading

Indian operators. This is the beginning of a long-term partnership

between GoAir and Airbus. GoAir epitomizes the new spirit of the

Indian air transport industry, with its focus on keeping costs low and

passengers satisfied. The A320 is the perfect aircraft to meet GoAir’

expectations, with its combination of low fuel burn & maintenance

costs, and its well-equipped, comfortable cabin.

They share the same airframe - only the fuselage lengths are different

- plus the same cockpits, systems and engines. With the most modern

design of any single-aisle aircraft, the Airbus A320 Family is best

placed to deliver the lowest running costs, making it the most

economic aircraft in its class. And with the widest cabin in their class,

passengers get more space, comfort and overhead stowage space,

making the Airbus A320 Family the preferred aircraft on short-to-

medium haul routes. The Airbus A320 Family also delivers many

features as standard, such as weight-saving carbon fiber primary

structure, a choice of engines and auxiliary power units, fuel-saving

aerodynamic design that includes wingtip fences, weight-saving carbon

brakes, cost-saving centralized maintenance, and category 3B auto

land. Wadia says that there are no tie-ups being considered for GoAir.

GoAir planning expansion and free tickets to lure in customers

The Wadia Group-promoted GoAir is the latest to go on offensive in the

Indian domestic aviation sector. The group has planned to expand its

serviced areas to four more cities including some major destinations

like Hyderabad, Bangalore, Chennai, and Jaipur. They would be offering

flights to these regions within a week.

Also on plans is to bring in more customers by offering as many as

10,000 free tickets on its new destinations on first-come-first-serve

basis. Customers eligible for these tickets would only be required to

pay the taxes and can avail of the scheme until March 2006. Now, this

is one impressive scheme to bring in more air travelers.

The company had also started with a similar free ticket scheme when it

launched its operations in the Indian market. They started with

operations covering cities like Mumbai, Ahmedabad, Coimbatore, and

Goa initially. With the newly added destinations, GoAir would now be

serving customers from eight major cities in India.

GoAir has promised that they would rapidly expand their covered

destinations to more cities progressively. “The addition of new routes

substantiates our commitment to our passengers by connecting them

to important destinations in India. All four destinations have immense

business and leisure potential. Our services to these cities will not only

enhance our business but also increase tourist flow to these

destinations”.

ANALYSIS OF CUSTOMER PREFERENCE

Ques1. What types of travelers traveling frequently?

Business 75%

Professional 15%

Holidays/leisure 7%

Others 3%

It can be seen that as per the sample size taken there were 75% of the

business travelers, 15% of the employees or professionals and 7% on

holidays or leisure trips while the remaining 3% by others.

Ques2. How often do you travel by Airways?

Once in 2 weeks 78%

Once a month 20%

Once in 3 months 2%

The customers those travel once in 2 weeks constitute 78% these are

usually the business or professional purpose trips. While only 20% are

once in month travelers

Ques3. Which class of traveling do you prefer?

Business Class 42%

Economy Class 58%

It can bee seen from the pie diagram that 42% of the people prefer

traveling in business class these are basically the executives or M.D of

the big companies, while 58% o the people prefer traveling in economy

class because of the reason of pricing is low comparable to business

class and factors like meal, comfort and other facilities does not matter

in short duration trips.

Ques4. Which brand you recall the most?

Indian airlines 45

Jet Airways 18

Sahara 20

Go Air 6

Air Deccan 11

Ques5. When you are traveling by a particular Airline what are the reasons that influence your decision according to your satisfaction level?

Courtesy 15

Food 15

Comfort 12

Safety 18

Crew 5

Economical 35

In case of in flight comfort the most important parameter of ideal

service preferred are following:

Economical

Safety and Comfort

Choice of food and beverage

Staff courteous, caring and prompt in service.

Some secondary services

Provide necessary conveniences like water, refreshments etc.

Neatness and cleanliness while serving food.

Toilet area clean and hygienic.

Smoking and non-smoking areas clearly defined.

All these had equal weight age i.e. all of them are on top priority.

Probably these are the bare necessities, which a customer keeps in

mind. Also travelers wanted choice of meal and drinks, should be

provided to them irrespective of the class they travel. This shows that

the travelers are becoming all the more service conscious and do not

want any discrimination in the kind of services being offer to them.

Ques6.Whose Advertisement you like the most?

Indian 34

Jet Airways 20

Sahara 17

Go Air 8

Air Deccan 22

Their major strength of large fleet and good infrastructure is still

holding them in high position. The new strategic initiative of increasing

the number of flights on trunk routes and massive advertising

campaign is helping them to regain its lost ground.

Ques7. Which Airlines Advertisement you aware most?

Indian 39

Jet Airways 11

Sahara 20

Go Air 8

Air Deccan 22

This shows that people a generally aware of Indian Airlines (as

compared to Sahara and Jet and actually travel by it also. The most

preferred feature of the advertisement happens to be presentation for

Indian Airlines. As regards Jet Airways people are moderately aware of

it and also travel by it. Most liked feature of the advertisement is the

message. Similarly in Sahara Airlines the feature most preferred is the

media.

This shows that people who are aware of the airline are not just

verbally aware but also prefer to travel by that airline. This depicts

that the effect of advertisement of is directly proportional to the uses

to the airlines.

Besides the high percentage of Indian Airlines travelers can be

attributed to the fact that for the government officials it is mandatory

to travel by IA.

Ques8. Which ticketing procedure you prefer the most?

From the responses of the traveler it is evident that the most preferred

Service while buying a ticket is the computerization of the ticketing i.e.

the Internet, while travel agents also play vital role in ticket bookings

procedure, followed by tele –booking facilities and then the network-

ticketing offices.

Ques9. What arrangements do you prefer in case of delayed flights?

In case of delayed flights 43% respondents wanted immediate

adjustment to the next flight, whereas 30% were in favor of the

cancellation of ticket with no loss. However most of the respondents

were not happy with the existence system of cancellation procedure

and rules.

Ques10. Did you ever have bad experience with the airways?

Grievance Handling

Only 29% confessed that they had a bad experience with airlines.

Among these the 79% of the travelers had the main reason for the bad

experience was delayed flight or cancelled flights.

When asked to share a particular experience, among the 29% with bad

experience, 62% revealed that the bad experience was mainly because

of delayed in flights and the staff not being courteous to inform them

about the reason and duration of delay, resulting in prolonged waiting

time at the airport often with no layover arrangement.

Ques11. Which is the most Preferred Domestic Airlines in

terms of service?

The most preferred Domestic airline in term of service is Sahara

airlines followed by the Air Deccan and then the Indian airlines, with jet

airways and Go Air taking last two spots in the competition.

RECCOMENDATIONS

The research study and the analysis of the various aspects tapped lead

to the following recommendation:

1) With the oncoming of the Private Airlines on the country the

customer awareness and aspiration of quality of service has been

enhanced considerably. So all the airlines should emphasis on

providing more efficient services both on the ground and in the

air as done by Jet Airways to a large extent.

2) The check-in time should be minimal. Wherever there is likely to

be long que more counters should be opened.

3) The facility of valet services as introduced by Sahara Airlines

should be adopted by all airlines and it should be extended to all

classes.

4) Tele reservation and computerized check-in procedure should

mandatory for all airlines.

5) The process of ticketing and cancellation should be made more

easily, smooth and as flawless as possible as most of the

respondent were not happy with the present ticketing procedure.

6) Delayed flight, which is a very painful experience for the

travelers, should be attended to as top priority because the main

clientage is businessmen and they are time bound.

7) There is a need to improve the quality of in-flight comfort

especially for the economy class by way of seat pitch, legroom,

quality and choice of food.

8) The aspect of check-in procedure, which the traveler found most

cumbersome, was elaborate baggage check-in procedure.

9) In case the baggage got loss there should be computerized

baggage detection system as the most preferred service as the

travelers get irritated with baggage (lost) handling facilities and

do want extra attention to paid to this aspect of the service.

CONCLUSION

The healthy competition of domestic airlines has set new trends in the

quality of service. In the monopolistic environment of Indian Airlines

the quality and the desire to win over the constraints was totally

dismal. With the oncoming of Jet Airways and Sahara Airlines there is

sea change in the quality of service and the pride of the job.

It is a matter of great significance that the airlines staffs now care

about the passenger comfort and take pains to see that the flight is on

time. The service of Sahara Airlines is the hallmark of their quality of

service.

Effects of Recent changes

Air Fares set to dip:

It’s rush hour in the Indian skies. But this is making everyone

associated with the aviation industry, from the government to the

airline operator and finally to the traveler grinning.

While the government is under the glory of opening-up the skies and

increasing air connectivity both within the country and outside world-

the operators are raising a toast over the rapidly increasing number of

air passengers.

Air Fares-with the advance purchase (APEX) schemes- are already at a

record low and if airlines are to be believed, the coming few months

will see domestic ticket prices dropping by another 30-40% and, a host

of new no frills and low-cost carriers will lead this second wave of fare

cuts- nine at last count-waiting for take-off this summer.

Official statistics reveal that air travel in India since the introduction of

APEX fares, has seen an over 20% jump year-on-year and scope for the

growth, government officials say, is immense.

With a host of new airlines starting operations this year with promises

to drop airfares, the number of passengers in India is expected to grow

to 50 Million in 5 years. The global success of this low-fare model is

now creating huge new investment opportunities in airline startups and

restructuring older airlines.

While the scenario might seem similar to the early 1990s-when a host

of entrepreneurs rushed-in to set up aviation ventures that folded up at

an equally fast pace- analysts are confident that the industry is today

more resilient.

Global Touch and Look for Airports:

The UPA Government with Airport Authority of India has been busy

these days for mega plans to transform the airport infrastructure

across the country.

Rs. 3000 crores has been earmarked for the short-term upgradation of

the non-metro airports alone. In addition, around Rs 20,000 crore is

expected to invest in modernizing the infrastructure and the facilities

at the Delhi and Mumbai airports.

The government is close to finalizing its joint venture partners for

developing the two metro airports of Delhi and Mumbai. Steps have

also been initiated to upgrade the facilities- both city-side and airside

at 25 non-metro airports.

The upgrades do not cover just runway extensions and navigation aids.

The focus is on having user-friendly airports and terminals that provide

a pleasant and clean ambience. The new concept for upcoming

terminal buildings, the official adds, include features such as

structured steel with toughened glass glazing and walkways.

The other facilities being planned include in-line baggage screening for

check-in, escalators, improved parking in the city-side for passengers,

and a common user terminal system that will enable passengers to

check-in from any counter.

Besides using both the private and public sector enterprises, the

government is now planning to get air travelers to also pay for

development of new Greenfield airports across India.

Railways losing out to Aviation:

If airlines slash fare drastically, Rajdhani’s most loyal passengers

mostly consist of middle-class, upper-middle-class individuals,

politicians and not corporate clients (who are more pressed for the

time and less price sensitive) increase in the number of airline service

operators has given way to dramatic price cuts giving birth to APEX

fare tickets enabling the common man start traveling by air. It can also

safely be said that the cash-rich but short-on-time J (Club) class

passengers are confirmed aircraft users.

That leaves the more price sensitive ACI and ACII class travelers of

Rajdhani trains who are more likely to switch their loyalty to air travel.

But once again, the airlines will have to cut their price down

dramatically as the Rajdhani Vs Air Travel story could be summed up

as a low fares Vs less Time battle. While Apex fares make air travel

affordable and comparable to Rajdhani fares, such tickets are limited in

number and not readily available.

Agents may stop Air India ticket sale:

Over 2000 travel agents across the country threatened to suspend the

sale of Air India tickets to protest the national flag carrier’s decision to

cut agent commission from 7% to 5%.

This is evident that these commercial agents for the aviation industry

in India generate Rs 20,000 cr of revenues

High Fuel Costs:

Airlines in the domestic sector have blamed the high cost of aviation

turbine fuel (ATF) and the high sales tax on fuel ranging from 4% to

32%. Recently the government has reduced ATF for turboprop aircraft

to 4% of declared goods category under the central sales tax act, 1956

and exempted from Inland Air Travel Tax (IATT) operations in the

north-east, Andaman and Nicobar and Lakshadweep.

With this tax exemption it is privileges for the low profile airlines by

bringing turboprop plane like ATR-42 and ATR-72, which is very

economic to operate.

Fuel Costs of Rs. 32,250 per kilolitre of Aviation Turbine Fuel (ATF)

during April 2005, compared to Rs. 27,250 last month. The ATF rate for

April is close to November’s all time of high of Rs. 33,600 per kilolitre.

It is expected that the first casualty would be the heavily discounted

fares offered by the LCA (low cost airlines).

Regions get thicker

This is another problem in front of all airlines. India’s metro-routes that

are the air corridors connecting the five metros are getting ‘thicker’.

This means more and more connections everyday. Five airlines today

fly about 64 flights between Mumbai and Delhi everyday. The number

of flights has increased to 40% after the operation of two airlines

Kingfisher and spice jet. Future growth has to come from point-to-point

flights connecting the non-metro airports will also make thicker. The

region like Hyderabad, Visakhapatnam, Kochi, Bangalore, Ahmedabad,

Pune and Lucknow will be crowded in coming years.

LIMITATIONS OF THE STUDY

Marketing strategy of a company is indeed a closely guarded secret

especially in the face of stiff competition as in the case of the

airlines sector in India. Therefore, to extract information on the

marketing strategy was a difficult task.

The response of people to the questionnaire was not free from the

biases as some of the travelers, due to their busy schedule and

some compression did not respond frankly. Moreover, all the Central

Government Employees are obliged to travel by Indian Airlines by

Government orders. So they were not in such a position to really

compare the airlines.

The sample size was limited to 100 travelers only. This too was not

the correct mix as most of the customer turned out to be

Government employees who had the official obligation to stick to

Indian Airlines.

The comparison of private and public company has the inherent draw

back of their basic culture differ entirely. Also the Government

machinery/resources do give a titled picture when compared with

private enterprises where the resource crunch is inevitable.

QUESTIONNAIRE

NAME: ____________________________________

ADDRESS: ________________________________

OCCUPATION: ________________________________

1. What types of travelers traveling frequently?

Business Professional Holidays/leisure Others

2. How often do you travel by Airways?Once in 2 weeks Once a month Once in 3 months

3. Which class of Travelling do you prefer?Business class Economy class

4. Which brand you Recall the most?Indian Jet Airways Sahara Airline Go Air Air Deccan

5. When you are traveling by a particular Airline, what are the reasons that influence your decision according to your satisfaction level?

Courtesy Food

Comfort Safety

Crew Economical

6. Which Airlines Advertisement you aware most?Indian Jet Airways Sahara Airline Go Air Air Deccan

7. Which advertisement you like most?Indian Jet Airways Sahara Airline Go Air Air Deccan

8. Which Ticketing procedure do you prefer?Fully computerized Tele booking facilities Availability of network of ticketing office Expectance of Credit Cards

9. What do you prefer in case of delayed flights?Immediate adjustment to next Flight Cancellation of ticket with no loss Restaurant service Hotel Arrangement

Rest room at Airport

10. Did you ever have bad experience with the airways?

Yes No

If yes please tick (~) the reason of your bad experience

Rudeness of the staff Baggage lost Delayed flights Cancelled flights

11. Which is the most Preferred Domestic Airlines in terms of the service provided?

Indian Jet Airways Sahara Airline Go Air Air Deccan

12. Any recommendation and suggestions?

BIBLIOGRAPHY

Annual Report of Jet Airways , Sahara Airlines and Indian Airlines,

2004, 2005.

Press Release of Jet Airways, Sahara Airlines, Indian, Go Air & Air

Deccan

Web site; www.saharaairlines.com

www.jetairways.com

www.nic.in/indian-ailines

www.goair.com

www.airdeccan.net

Indian Aviation Weekly, Jan 30th, 2005; Sept 2004.

Business World, March 7th to 21st 2005.

The Economic Times (Various articles)

Hindustan Times and Times of India

Financial Express, 15th Dec, 2005.

Aviation Annual, 2005

The Hindu Business line, 14th Dec 2005.

Service Marketing by Bitner. Public relations is the art and science of managing communication between an organization and its key publics to build, manage and sustain its positive image.

NATURE OF THE WORK [About this section] Back to Top

An organization’s reputation, profitability, and even its continued existence can depend on the degree to which its targeted “publics” support its goals and policies. Public relations specialists—also referred to as communications specialists and media specialists, among other titles—serve as advocates for businesses, nonprofit associations, universities, hospitals, and other organizations, and build and maintain

positive relationships with the public. As managers recognize the importance of good public relations to the success of their organizations, they increasingly rely on public relations specialists for advice on the strategy and policy of such programs.

Public relations specialists handle organizational functions such as media, community, consumer, industry, and governmental relations; political campaigns; interest-group representation; conflict mediation; and employee and investor relations. They do more than “tell the organization’s story.” They must understand the attitudes and concerns of community, consumer, employee, and public interest groups and establish and maintain cooperative relationships with them and with representatives from print and broadcast journalism.

Public relations specialists draft press releases and contact people in the media who might print or broadcast their material. Many radio or television special reports, newspaper stories, and magazine articles start at the desks of public relations specialists. Sometimes the subject is an organization and its policies toward its employees or its role in the community. Often the subject is a public issue, such as health, energy, or the environment, and what an organization does to advance that issue.

Public relations specialists also arrange and conduct programs to keep up contact between organization representatives and the public. For example, they set up speaking engagements and often prepare speeches for company officials. These media specialists represent employers at community projects; make film, slide, or other visual presentations at meetings and school assemblies; and plan conventions. In addition, they are responsible for preparing annual reports and writing proposals for various projects.

In government, public relations specialists—who may be called press secretaries, information officers, public affairs specialists, or communication specialists—keep the public informed about the activities of agencies and officials. For example, public affairs specialists in the U.S. Department of State keep the public informed of travel advisories and of U.S. positions on foreign issues. A press secretary for a member of Congress keeps constituents aware of the representative’s accomplishments.

In large organizations, the key public relations executive, who often is a vice president, may develop overall plans and policies with other executives. In addition, public relations departments employ public relations specialists to write, research, prepare materials, maintain contacts, and respond to inquiries.

People who handle publicity for an individual or who direct public relations for a small organization may deal with all aspects of the job. They contact people, plan and research, and prepare materials for distribution. They also may handle advertising or sales promotion work to support marketing efforts.

WORKING CONDITIONS [About this section] Back to Top

Some public relations specialists work a standard 35- to 40-hour week, but unpaid overtime is common. Occasionally, they must be at the job or on call around the clock, especially if there is an emergency or crisis. Public relations offices are busy places; work schedules can be irregular and frequently interrupted. Schedules often have to be rearranged so that workers can meet deadlines, deliver speeches, attend meetings and community activities, and travel.

TRAINING, OTHER QUALIFICATIONS, AND ADVANCEMENT

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There are no defined standards for entry into a public relations career. A college degree combined with public relations experience, usually gained through an internship, is considered excellent preparation for public relations work; in fact, internships are becoming vital to obtaining employment. The ability to communicate effectively is essential. Many entry-level public relations specialists have a college major in public relations, journalism, advertising, or communication. Some firms seek college graduates who have worked in electronic or print journalism. Other employers seek applicants with demonstrated communication skills and training or experience in a field related to the firm’s business—information technology, health, science, engineering, sales, or finance, for example.

Many colleges and universities offer bachelor’s and postsecondary degrees in public relations, usually in a journalism or communications department. In addition, many other colleges offer at least one course in this field. A common public relations sequence includes courses in public relations principles and techniques; public relations management and administration, including organizational development; writing, emphasizing news releases, proposals, annual reports, scripts, speeches, and related items; visual communications, including desktop publishing and computer graphics; and research, emphasizing social science research and survey design and implementation. Courses in advertising, journalism, business administration, finance, political science, psychology, sociology, and

creative writing also are helpful. Specialties are offered in public relations for business, government, and nonprofit organizations.

Many colleges help students gain part-time internships in public relations that provide valuable experience and training. Membership in local chapters of the Public Relations Student Society of America (affiliated with the Public Relations Society of America) or in student chapters of the International Association of Business Communicators provides an opportunity for students to exchange views with public relations specialists and to make professional contacts that may help them find a job in the field. A portfolio of published articles, television or radio programs, slide presentations, and other work is an asset in finding a job. Writing for a school publication or television or radio station provides valuable experience and material for one’s portfolio.

Creativity, initiative, good judgment, and the ability to communicate thoughts clearly and simply are essential in this occupation. Decision-making, problem-solving, and research skills also are important. People who choose public relations as a career need an outgoing personality, self-confidence, an understanding of human psychology, and an enthusiasm for motivating people. They should be competitive, yet able to function as part of a team and open to new ideas.

Some organizations, particularly those with large public relations staffs, have formal training programs for new employees. In smaller organizations, new employees work under the guidance of experienced staff members. Beginners often maintain files of material about company activities, scan newspapers and magazines for appropriate articles to clip, and assemble information for speeches and pamphlets. They also may answer calls from the press and the public, work on invitation lists and details for press conferences, or escort visitors and clients. After gaining experience, they write news releases, speeches, and articles for publication or plan and carry out public relations programs. Public relations specialists in smaller firms usually get all-around experience, whereas those in larger firms tend to be more specialized.

The Universal Accreditation Board accredits public relations specialists who are members of the Public Relations Society of America and who participate in the Examination for Accreditation in Public Relations process. This process includes both a readiness review and an examination, which are designed for candidates who have at least 5 years of full-time work or teaching experience in public relations and who have earned a bachelor’s degree in a communications-related field. The readiness review includes a written submission by each candidate, a portfolio review, and dialogue between the candidate and a three-member panel. Candidates who successfully advance through

readiness review and pass the computer-based examination earn the Accredited in Public Relations (APR) designation.

The International Association of Business Communicators (IABC) also has an accreditation program for professionals in the communications field, including public relations specialists. Those who meet all the requirements of the program earn the Accredited Business Communicator (ABC) designation. Candidates must have at least 5 years of experience and a bachelor’s degree in a communications field and must pass written and oral examinations. They also must submit a portfolio of work samples demonstrating involvement in a range of communications projects and a thorough understanding of communications planning.

Employers may consider professional recognition through accreditation as a sign of competence in this field, which could be especially helpful in a competitive job market.

Promotion to supervisory jobs may come to public relations specialists who show that they can handle more demanding assignments. In public relations firms, a beginner might be hired as a research assistant or account coordinator and be promoted to account executive, senior account executive, account manager, and eventually vice president. A similar career path is followed in corporate public relations, although the titles may differ. Some experienced public relations specialists start their own consulting firms. (For more information on public relations managers, see the Handbook statement on advertising, marketing, promotions, public relations, and sales managers.)

EMPLOYMENT [About this section] Back to Top

Public relations specialists held about 188,000 jobs in 2004. Public relations specialists are concentrated in service-providing industries such as advertising and related services; health care and social assistance; educational services; and government. Others worked for communications firms, financial institutions, and government agencies.

Public relations specialists are concentrated in large cities, where press services and other communications facilities are readily available and many businesses and trade associations have their headquarters. Many public relations consulting firms, for example, are in New York, Los Angeles, San Francisco, Chicago, and Washington, DC. There is a trend, however, for public relations jobs to be dispersed throughout the Nation, closer to clients.