DOMESTIC AIRLINES IN INDIA:LEVERAGING PRICE
Presented By:SandeepNikitaAnkitaMonikaPriyankaVIPRARAHULNITISH
Home
Previous
Next
Help
INTRODUCTION
Case is about the Indian aviation sector.
Oligopoly Market
Oligopoly market depends on Market Share and Price.
In 2002 there were 3 major players in the Indian domestic market they were:
1.Jet airways 2.Indian Airlines 3.Sahara
Home
Previous
Next
Help
CONTD.
3 players were fighting for fares. The kink demand curve(that will
explain how they react when one player rise the price).
Home
Previous
Next
Help
CONTD.
kink demand curve
Home
Previous
Next
Help
JET AIRWAYS
• Jet airways introduced the ‘Every one can Fly’ scheme.
• In june 2002, After the indian airlines the jet airways reduced its prices by Rs. 635 for the economy class on the Mumbai-nagpur and the Mumbai-Goa route
• Jet airways reported an increase in the number of passengers flying after the introduction of APEX fares.
Home
Previous
Next
Help
CONTD.
Saroj dutta, executive director, JA, said, “ The average number of passengers flyingout on advance purchase tickets is around 1,500 per day.
They are selling most of the 1,850-2000 seats offered every day under the concessional window.
The response is very encouraging for a schemewhich has been recently introduced
Home
Previous
Next
Help
INDIAN AIRLINES SCHEMES:
• IA in 2002 have a 3-15% cut in fares for all classes on the western sector and on delhi-srinagar, delhi-jammu, and dehli-khajuraho routes.
• IA introduced the APEX (Advanced Purchase Excursion) fares under its ‘U Can Fly’ scheme. APEX fares, in which passengers who booked their tickets at least 3 weeks in advance, got a huge discount in fares.
• Under the APEX scheme passenger had to face 2 disadvantages :(a) planning air travel 3 weeks in advance was not very convenient.
Home
Previous
Next
Help
CONTD.
(b)cancelation charges were also too high. Passengers had to lose 50% of the ticket price if the ticket was canceled less than 21 days before the travel date. Despite these disadvantages, the scheme proved very successful for IA.
• IA launched the scheme ‘Wings of Freedom’, valid till limited period .this scheme offered unlimited travel on the domestic network for 7days for RS 15000(economy class) and RS 20000(business class).
Home
Previous
Next
Help
CONTD.
• IA launched the ‘Bharat Darshan’,(India tour) which allowed unlimited travel for passengers who bought tickets worth more than RS 80000.
Home
Previous
Next
Help
SAHARA AIRLINES SCHEMES
• Intelligent market strategy.• “Sixer” and “super sixer”.• Wings and Wheels.• Steal a Seat- online bid scheme.
Home
Previous
Next
Help
ADVANTAGES
Advanced purchase excursion fares scheme.
IA- ‘U Can Fly’ scheme.
JA- ‘Everyone Can Fly’ scheme.Apex Proved very successful for IA. JA also reported an increase in the
number of passengers.Air sahara went for different approach.
‘Sixer’ and ‘Super Sixer’ scheme.
Home
Previous
Next
Help
CONTD.
During july-august ,Sahara launched a ‘Sixer’
scheme that proved to be very successful.
Sahara’s ‘steal a seat’ offer online bid scheme in august 2002.
IA launched ‘Wings of Freedom’ that offer unlimited travel for the domestic network.
Home
Previous
Next
Help
DISADVANTAGES
Planning air travel in advance was not convenient.
Cancellation charges were also high.Air Sahara adopted a different
strategy. Not Flexible. Lower margins makes them difficult to
sustain.
Home
Previous
Next
Help
CONCLUSION
Employee shortage- there’s a clear shortage of skilled and trained employee as a consequence of which so aviation sector has to pay high wages to the current skilled employee.
Regional connectivity - lack of airports. Ever rising fuel prices - which leads to
increase in air fares.
Home
Previous
Next
Help
Contd…
Declining yields - Increase in growth attracts more players which increases competition thus declining yields of all operators.
Gaps in infrastructure - Inadequate air traffic control which hinders the growth of the aviation sector of India.
High input costs - Due to high input costsbecause of tax on interest repayment on foreigncurrency loan for aircraft acquisition.
Top Related