A STUDY ON AVIATIONINDUSTRY OF INDIA

Annapurna Juhi Gupta Lalit Kumar Anirudh T. Venkat Chinna Srinivas

FLOW OF THE PRESENTATION

• Introduction• Market Share• SWOT analysis• PEST analysis• Porter’s five forces• Business Diversification• Consolidations – Mergers and Acquisitions• Technology Intensity• Marketing Initiatives• Future Outlooks• Comparison• Findings & Conclusion

INTRODUCTION

• Indian Aviation Industry has been one of the fastest-growing aviation industries in the world.

• It showed an impressive growth of 19 percent while considering 2008 global financial slowdown

• Less than 2 percent of India’s 1.27 billion population travels by air, which shows massive potential for growth

• As India is becoming a major destination, international travel has been rising which effect on commercial aviation in India

• These problems include high rise in ATF prices, increase in inflation rate, shortage in skill labour, entry of low air fare carriers and intense competition among the players.

MARKET SHARE

Airline Market share (%)

Jet Airways

(Jet Airways +Jet Lite)

26

(18.6+7.4)

Kingfisher Airlines

20.6

NACIL 17.6IndiGo 16.3Spice Jet 12.9Go Air 5.9Paramount 0.9

SWOT ANALYSIS• Strength: India’s cultural and the scope of business in the country.

• Weakness: Development of Aviation is slow. Import of Airplanes with huge tax liabilities.

• Opportunities: It is expected that by 2012 investment in India would increase US$30 billion and also market share is expected to grow.

• Threats: 70% is still in rural areas. Shortage of well trained staff. Security concerns.

PEST ANALYSIS• Political Disputes between countries Trading Business between countries Corruption Natural disasters

• Economic Monetary and Fiscal Policy Rise in airline turbine fuels (ATF) Recession

• Social Diversity in population Crew members behaviour Increasing expectations of the customers

• Technological Internet (Online facilities) Modernization of airports Satellite based Navigation system

Porter’s 5 forces of competition• Threat of new entrants :- High

entry and exist barriers.• Bargaining Power of buyers :-

Low in terms of switching cost.• Bargaining power of

suppliers:- The powers of suppliers are high.

• Threat of Substitutes:- Other means of transport poses little threat.

BUSINESS DIVERSIFICATION

• Kingfisher

• Spice jet

• Air India

• Indigo

• Jet airways

CONSOLIDATIONS – MERGERS AND ACQUISITIONS:

• Indian airlines and Air India – NACIL

• Jet Airways and Air Sahara – Jet Lite

• Kingfisher and Air Deccan

• NACIL, Jet Airways and Kingfisher controlling over 80% of the market currently.

Technology Intensity• Remote controlled airliners• Bio monitors• Remote video monitoring• Light guns to dazzle attackers• Bar code technology• Whole body imaging• The touch screen

Marketing Initiatives

• Less emphasis on television advertisements.

• More emphasis on magazines

which are available at airports.

• Heavy advertisement are done

by Kingfisher airlines domestically.

• Qatar airlines have spent the

highest advertisement budget this year.

Future Outlooks

• Growth being 18% as on 2011, in

spite of having global economic slowdown.

• Low cost carriers haven't done well,

recent being Kingfisher.

• India needs 3 times the amount

of airports in future.

• Fuel accounts to 38% of total operating cost.

Comparison

• Services - The services are almost

the same of our players with the

global players.

• Cost/pricing – Indian airlines are

relatively cheaper in terms of the

global personally.

• Quality – Indian airlines have in fact proven

superior in terms of quality.

Findings and conclusion

• Though Indian aviation t is doing well. It has a lot more problems

to face.

• The constant increase in the fuel cost has led to heavy losses in

the sector.

• Low cost airlines are phasing out.

• Unpaid bills have led to fuel supply backlash.

• The shortage of trained pilots and other personnel are also the

shortcomings of Indian aviation sector.

THANK YOU