AVIATAION INDUSTRY

PRESENTED BY :

AJAY PAL KUNAL SINGH (MMS) MANALI VENDE SNEHAL KATVI SUPRIYA SINGH VIVEK SINGH

Aviation sector…..

The sector deals with the transport of passenger and cargo from one place to another, using the aerial route.

Size :Approximately 75 million Passengers$5.6billion

Growth Around 15% growth in last 10 years. Growth in 2009 : 0.7% Vision 2020 statement predicts handling 280 million customers by 2020

From then to now……….

1953: NATIONALISATION OF AIRCRAFT INDUSTRYAssets of 9 existing companies transferred to two entities in the aviation sector controlled by the Government in Indian Airlines, primarily serving domestic sectors Air India, primarily serving the international sectors IMPLICATIONS Aviation became a preferred mode of transport for elite class Restricted Growth of Aviation Industry High Cost structure Underdevelopment of infrastructure

1986: Private Sector Players permitted as Air taxi operators. Jet, Air Sahara, etc started service.

1994: Private Carriers permitted to operate scheduled services. Six operators granted license, however only Jet and Air Sahara able to service.

2003: Entry of low cost carriers. Air Deccan, Spice Jet, Go Air, Indigo.

IMPLICATIONS Aviation is now affordable with check fares

and discount schemes. Various Operators with different business

model. Huge growth foreseen in Aviation

Players in Aviation Industry

The players in aviation industry can be categorized in three groups:

Public players : Indian Airlines, Air India

Private players : Jet Airways, Kingfisher Airlines, Spice Jet, Air Deccan, International players

Start up players : Omega Air, Premier Star Air.

PEST ANALYSIS

POLITICAL FACTORS:

• “Open sky policy” has helped the private airlines to enter into the aviation sector , as earlier only government owned airlines were rendering service to the customers

• Deregulation as the market increases in size, therefore economies of scale may arise.

• Liberalisation of skies

ECONOMIC FACTORS:

• Many airlines in serious financial trouble due to increase in fuel prices

• Rising cost of fuel. .(Aviation Turbine Fuel)

• The growth of the middle class income group family which affects the aviation sector.

SOCIAL FACTOR:• Need to rebuild confidence in air travel.

• Development of cities leads to better services and airports.

• Employment opportunities.

• Safety regulations.

TECHNOLOGICAL FACTORS:• The growth of e-commerce and e-ticketing.

• Satellite based navigation system.

• Modernisation and privatisation of the airports.

• Developing green field airports with private sector for example in Bangalore the airport corporation limited.

FIVE FORCES MODEL

Internal Rivalry:

• Price competition especially from no frills carriers• Competition for airport landing/departure slot. Therefore barriers to entry at major hub airports• Passenger demand declining/static in most places.• Regulation barriers decreasing, therefore there is

increase in competition

Entrants

• The “open skies” agreements are brought in; therefore potential future threat is maintaining the cost and equally maintaining the brand image of the airline company.

• To strike a balance with rise in fuel prices and rising cost.

• Tough competition from giants like Sahara, Jet group.

Substitutes:• Travel by sea or road ,rail is always convenient

• Spend leisure money on alternatives or domestic holidays.

Customer Power:• Loyalty from Frequent Flyer Program.

Supplier Power:• Fuel prices are a major cost with no substitute, therefore

powerful hold on airlines.

Major Players (Market Share)

Top 3 Players

Flight services in India Airlines Aircrafts Destinations Daily flights

Air India 157 106 400

Jet airways 85 63 380

Kingfisher airlines

73 69 400

KINGFISHER

• Dr. Vijay Malaya is the Chairman and CEO of Kingfisher Airlines.

• Kingfisher launched its airline services in May 2005.• 5 star rating from “Skytrax”

Kingfisher Then and Now

STRENGHTS:• Strong Brand value & Reputation in the minds

of customers.• Quality of the service.• First airline to have new fleet of airbuses.

(pioneers in India)

WEAKNESSESS:• High Ticket prices.

OPPORTUNITIES:• The expanding tourism Industry.• Untapped Air cargo market• Under penetrated Domestic Market

THREATS:• Competitors.• Fuel Price Hike.• Economic Slowdown/Recession.

MARKETING STRATEGIES• Kingfisher Airlines is the first carrier in the country to

offer live in-flight entertainment.

• Kingfisher Airlines Ltd & Dish TV have joined hands to provide live in-flight entertainment on Kingfisher aircraft .

• The service would enable airline’s customers to have “fun liners” experience , sophisticated communication navigation security systems for “guests”

On the promotional front, Kingfisher has signed up

the latest diva of Bollywood Ms.Deepika Padukone as the Brand

Ambassador

STP Analysis for Kingfisher airlines Segmentation: Geographic Region Density Social Classes Income Level

Targeting Kingfisher First - Premium Business class of service Kingfisher Class - Premium Economy class of service Kingfisher Red - Low fare class of service comparable to the Economy class of service in other full fare airlines

Positioning Lifestyle Benefits Quality

Differentiation: Fun liners experience Guests Sophisticated communication and navigation security system,

7 P’S ANALYSIS• Product:

Domestic & International Air TransportService.74 domestic destinations & 3 international destinations in 3 countries across Asia & Europe.

• Services:

Domestic & International:Kingfisher FirstKingfisher Red Kingfisher Class

Place:Services range from Ahmadabad to Agartala & to the major cities such as Delhi, Bangalore, & Chennai etc.

The main strategy that kingfisher follows is to target the metro cities and the tier 2 cities in India.

• Promotion: • Events & advertisements • Multiple touch points & finer promotional

services working for the promotionalactivities.

• Loyalty & frequent flyer programs are also carried out.

Price:

Higher income group as well as the upper middle class background.

The youth & the high lifestyle segments.

Sec A, sec B+ socio economic class mainly in the age group of 25-45 years: a specific prices offered by kingfisher.

Services offered by kingfisher do emphasis on their policy to target those segments which are willing to pay for luxury

People:Hospitality industry, Interpersonal skills,aptitude, & service knowledge people.

Physical evidence:Exclusive lounge space, Gourmetcuisine, world class cabin crew, trendyvideo- Fun TV, 10 music stations -KingfisherRadio .

Process: Booking the ticket-online booking

Tele - booking Kingfisher outlet

BCG MATRIX

GE MATRIX

MCKINSEY FRAMEWORK

Balance score card of Kingfisher Airlines

Balance scorecard• Vision:• The Kingfisher Airlines family will consistently deliver a safe,

value-based and enjoyable travel experience to all our guests.”• Mission:• Dedication to the highest quality of Customer Service delivered

with a sense of warmth, friendliness, individual pride, and Company Spirit.

• Values:Safety , service ,happiness, accountability and team work

Continued on the word doc…..

Jet Airways

• Naresh Goyal is the founder & chairman• Started Indian commercial airline operations in

May 1993.• In April 2007, they acquired Air Sahara.

• Jet Airways is an airline based in Mumbai. It is India's third largest airline after Air India and Kingfisher Airlines . It operates over 400 daily flights to 64 destinations worldwide. Jet Airways is widely regarded as India's biggest and best airline. It's a privately owned, full service airline that commenced operating in mid 1993. It's now captured almost 23% of the market, and has bases in Delhi, Mumbai, Pune, Kolkata, Hyderabad, Chennai, and Bangalore.

• Jet Airways has won many awards for quality service. In particular, the airline is known for its outstanding in-flight service, food, punctuality, and baggage handling. Staff are extremely efficient and courteous, and will go out of their way to ensure that you're comfortable and well looked after.

• Jet Airways operates on a code share basis with Kingfisher Airlines.

Jet Airways SWOT Analysis

Strengths• Jet is the strong brand among the Indian people.

• Jet has been efficiently utilizing the resources which result in low operating cost.

• Efficient and talented employee help Jet to perform operation in a better way to facilitate its customers.

• Customers are satisfied from the services offered by Jet airways.

• Better use of technology, reservation are handled online with the unique reservation system.

WEAKNESS

Struggling with the carcass of Air Sahara.* Poor people management skills of chairman.

(recession hit issue of removal of 1800 employees in 2008 )* Inability to raise money for the last two year

A perceived drop in service standards when pitted against Kingfisher

OPPORTUNITIES

• Jet airways financial position is strong, so it can think for further expansion nationally and internationally.

• Add up more services for the passengers.• Increase in number of flights.• Joint ventures with other Airlines for new

market development.

THREATS

• Terrorism is the major concern after 9/11 Incident.

• Raise in fuel prices• Strong competition from Kingfisher , and low

cost airlines in Domestic & in international airlines Cathay pacific, Qatar, British airlines etc.

• Employee Unions

ANSOFF MATRIX

ANSOFF MATRIX

MARKET PENETRATION:{ existing product , existing market} Jet airways JP miles for frequent players Jet cargo services Advertisement Jet life service

DIVERSIFICATION{new product, new market} Jet mall for lifestyle products

PRODUCT DEVELOPMENT {Existing market, new product}

JET KONNECT – 15% cheaper than jet airwaysJet escapes travel package

MARKET DEVELOPMENT{Existing Product, new market}

International star – alliance membershipTargeting potential customers traveling by rail

Kingfisher vs. Jet Airways

Kingfisher Jet Airways

• Kingfisher is the latestAirline in India from

2005• Overall loss in June

2009 of $500 ml.• Kingfisher acquired

46% in Air Deccan

• Jet airways is aexperienced Airline in India from 1993• Jet airways had a slight profit in the 1st quarter of 2009.• Jet acquired Air Sahara

Kingfisher Vs Jet Airways

• Well capitalized airline, prepared to take losses.

• Better handling of employees and staff

• The Deccan deal - which gives it market share, a new market segment and was cheap

• Ability to survive downturns earlier

• Excellent lobbying skills and ability to leverage connections within government

• A massive pool of loyal customers

• Financing raised on strength of own balance sheet.

New government initiatives to develop India’s potential as the world’s fastest growing aviation

market……

Changing regulation policies

Increased privatization of airports

Growing Infrastructure developments

OUTLOOK INDIA 2020……

The growth of India’s aviation sector has the potential to absorb up to US$120 billion of investment by 2020.

However, we must close the gap between the demand for aviationservices and the ability of our aviation system to meet that demand.

India must prepare a blueprint for the expansion of system capacity whilst maintaining safety, security and the environment.

India must develop a roadmap for infrastructure development beyond 2010.

Jobs in Aviation

The boom in the aviation sector is likely to generate nearly 2.5 lakh jobs by the year 2014.

The study says that the civil aviation sector is also set to become a Rs 55,000-crore industry by the same time.

The industry is expected to add 130 airliners to its current fleet of 270 airliners, which would, in turn, increase manpower demand

Thank you