swot analysis of low cost carriers in aviation sector

8/17/2019 swot analysis of low cost carriers in aviation sector

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Figure - SWOT Analysis of Low Cost Carriers

Air India

Strengths

• Air India has been the largest air carrier in India in terms of traffic volume and

company assets.

• It owns the most updated fleet and competent repairs and maintenance expertise.

• Its information systems are advanced and compatible with its operation and service.

• It has a good reputation in both international and domestic markets, quality service

and the age-old oodwill that has still kept it alive in the interests of the rescue

operators.

• !as financial backing of the overnment

"eaknesses

• Air India is operating across broad international and domestic markets competing

with world leading giant airlines as well as local small operators. #his lack of

clarity on the strategic direction largely dilutes its capabilities and confuses its

brand within markets.• $ow profitability and utili%ation of capacity.

• rowing &ompetitor base and entry of $ow-&ost &arriers '$&&(s)

• #he airline(s high-cost structure and the compulsions of being a public sector unit

are the reasons and it had been making a loss and shall continue to make losses for

some more quarters.

*pportunities

• India airline industry is growing faster and will continue to grow as the +

increases, and the trend is predicted to continue once the slowdown recedes.• "orldwide deregulations make the skies more accessible the route agreement is

easier to be achieved. #he number of foreign visitors and investors to India is

increasing rapidly.

• &omplementary industry like tourism will increase demand for airline service. #he

&ivil Aviation inistry(s strong regulation and protection provides opportunities

for consolidation and optimi%ation.

• &ustomers are getting wealthier, tend to be less price-conscious and prefer to

choose quality service over cost.#hreats


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• Air India faces imminent aggressive competition from world leading airlines and

price wars triggered by domestic players.

• #he Indian /ailway inistry has dramatically improved speed and services in their

medium0long distant routes, attracting passengers away from air service, with prices almost at par with the low cost carriers.1234

SpiceJet

Strengths

• 5ntered with /s. 66 fares for first 66 days

• 7 *ffering low everyday spicey fares8

• Aim9 &ompete with Indian /ailways A& sgment

• :leet of ; =-?@@ with 2?6 seats

"eaknesses

• Small fleet structure

• &oncentrating at only orth-"est-South Indian Sectors

• Small $oad 5fficiency compared to Air +eccan

*pportunities

• :uture :leet expansion will increase its arket Share

• Attractive fares and up to date quality service will generate a huge customer base

comprising :requent :lyers

#hreats

• !igh Attrition rate

• #he #hreat of ew 5ntrants into '$&&) segment especially oAir, Indigo and

Bagson Airlines

• !igh /isk erception

GoAir

Strengths

• romoted by "adia roup

• oAir free fares

"eaknesses• Small network 9 *nly in Southern and "estern India

• Small fleet structure

• Small $oad 5fficiency compared to Air +eccan C Spice Bet

*pportunities

• :uture :leet expansion will increase its arket Share

• :light network extension

• Attractive fares and up to date quality service will generate a huge customer base

comprising :requent :lyers

#hreats• !igh Attrition rate


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• #he #hreat of ew 5ntrants into '$&&) segment especially oAir, Indigo and

Bagson Airlines

• !igh /isk erception

Indigo

Strenghts

• Strong backing romoters and is one of the largest low cost carriers in India

*nly $&& to make consistent profits

• It has one of the maDor airlines in India in terms of market share.

•

$&& which has entered international markets has boosted its brand value

• ood advertising and marketing strategies have increased its brand recall

"eaknesses

• ot on too many routes as compared to competitors

• Still has to establish itself on international destinations

*pportunities

• *pening up of International routes

• $argest arketshare among $&&s in Indian arket

• iddle &lass taking to the skies

#hreats

• lenty of new $&&s to compete with


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• /ising $abour costs and changing government policies

• /ising :uel &osts. 12>4

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swot analysis of low cost carriers in aviation sector