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Submitted To: Submitted By:
Mrs. Amandeep Kaur Neetika Goyal
MBA-1st Sem
FMS








 
 
 

1.p ndustry Background
2.p Company¶s Profile
3.p Micro & Macro Environment of the company
4.p SWOT analysis
5.p Competitors and its strategies
6.p Present segmentation and Positioning Strategy
7.p Product Mix
8.p Pricing Strategy
9.p Distribution Channel
10.pAdvertising and other communication tech.
 


 


Aviation ndustry in ndia is one of the fastest growing aviation industries in the world. With the
liberalization of the ndian aviation sector, aviation industry in ndia has undergone a rapid
transformation. From being primarily a government-owned industry, the ndian aviation industry
is now dominated by privately owned full service airlines and low cost carriers. Private airlines
account for around 75% share of the domestic aviation market. Earlier air travel was a privilege
only a few could afford, but today air travel has become much cheaper and can be afforded by a
large number of people.

The origin of ndian civil aviation industry can be traced back to 1912, when the first air flight
between Karachi and Delhi was started by the ndian State Air Services in collaboration with the
UK based mperial Airways. t was an extension of London-Karachi flight of the mperial
Airways. n 1932, JRD Tata founded Tata Airline, the first ndian airline. At the time of
independence, nine air transport companies were carrying both air cargo and passengers. These
were Tata Airlines, ndian National Airways, Air service of ndia, Deccan Airways, Ambica
Airways, Bharat Airways, Orient Airways and Mistry Airways. After partition Orient Airways
shifted to Pakistan.

n early 1948, Government of ndia established a joint sector company, Air ndia nternational
Ltd in collaboration with Air ndia (earlier Tata Airline) with a capital of Rs 2 crore and a fleet
of three Lockheed constellation aircraft. The inaugural flight of Air ndia nternational Ltd took
off on June 8, 1948 on the Mumbai-London air route. The Government nationalized nine airline
companies vide the Air Corporations Act, 1953. Accordingly it established the ndian Airlines
Corporation (AC) to cater to domestic air travel passengers and Air ndia nternational (A) for
international air travel passengers. The assets of the existing airline companies were transferred
to these two corporations. This Act ensured that AC and A had a monopoly over the ndian
skies. A third government-owned airline, Vayudoot, which provided feeder services between
smaller cities, was merged with AC in 1994. These government-owned airlines dominated
ndian aviation industry till the mid-1990s.

n April 1990, the Government adopted open-sky policy and allowed air taxi- operators to
operate flights from any airport, both on a charter and a non charter basis and to decide their own
flight schedules, cargo and passenger fares. n 1994, the ndian Government, as part of its open
sky policy, ended the monopoly of A and A in the air transport services by repealing the Air
Corporations Act of 1953 and replacing it with the Air Corporations (Transfer of Undertaking
and Repeal) Act, 1994. Private operators were allowed to provide air transport services. Foreign
direct investment (FD) of up to 49 percent equity stake and NR (Non Resident ndian)
investment of up to 100 percent equity stake were permitted through the automatic FD route in
the domestic air transport services sector. However, no foreign airline could directly or indirectly
hold equity in a domestic airline company.
By 1995, several private airlines had ventured into the aviation business and accounted for more
than 10 percent of the domestic air traffic. These included Jet Airways Sahara, NEPC Airlines,
East West Airlines, ModiLuft Airlines, Jagsons Airlines, Continental Aviation, and Damania
Airways. But only Jet Airways and Sahara managed to survive the competition. Meanwhile,
ndian Airlines, which had dominated the ndian air travel industry, began to lose market share to
Jet Airways and Sahara. Today, ndian aviation industry is dominated by private airlines and
these include low cost carriers such as Deccan Airlines, GoAir, SpiceJet etc, who have made air
travel affordable.

The Aviation industry is growing at a compound annual growth rate (CAGR) of 18 per cent. The
country has 454 airports and airstrips, of which 16 are designated as international airports.

Mr Praful Patel, Union Civil Aviation Minister has stated that the ndian aviation sector will
become one of the top five civil aviation markets in the world over the next five years. Currently,
ndia ranks ninth in the global civil aviation market.

Passengers carried by domestic airlines from January-June 2010 stood at 25.71 million as against
21.1 million in the corresponding period of 2009²a growth of 22 per cent²according to data
released by the Directorate General of Civil Aviation (DGCA). n terms of market share, private
carrier Jet Airways was the market leader with 26.5 per cent share, followed by Kingfisher
Airlines with 21 per cent, Air ndia with 16.9 per cent, ndigo with 16.4 per cent, SpiceJet with
13.3 per cent and GoAir with 5.8 per cent during the month of June 2010.

Leading aircraft manufacturers Airbus and Boeing have expressed optimism over the growth of
the civil aviation industry in ndia. As per Airbus, the country would need 1,032 new aircrafts
worth around US$ 138 billion by 2028. On a similar note, Boeing has also predicted that the
sector would require 1,150 commercial jets worth US$ 135 billion in the next 20 years.

The Hyderabad nternational Airport has been ranked amongst the world's top five in the annual
Airport Service Quality (ASQ) passenger survey along with airports at Seoul, Singapore, Hong
Kong and Beijing. The Hyderabad nternational Airport is being managed by a public-private
joint venture of the GMR Group, Malaysia Airports Holdings Berhad and the State Government
of Andhra Pradesh along with the Airports Authority of ndia (AA).

But Airline industry in ndia is plagued with several problems. These include high aviation
turbine fuel (ATF) prices, rising labor costs and shortage of skilled labor, rapid fleet expansion,
and intense price competition among the players. But one of the major challenges facing ndian
aviation industry is infrastructure constraint. Airport infrastructure needs to be upgraded rapidly
if ndian aviation industry has to continue its success story. Some steps have been taken in this
direction. Two of ndia's largest airports-Mumbai and New Delhi-were privatized recently. Two
green field airports are coming up at Bangalore and Hyderabad in southern ndia. nvestments
are pouring into almost all aspects of the industry, including aircraft maintenance, pilot training
and air cargo services. The future prospects of ndian aviation sector look bright.
ntroduction


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Kingfisher Airlines is an airline group based in ndia. ts head office is Kingfisher House in Vile
Parle (East), Mumbai. Kingfisher Airlines, through its parent company United Breweries Group,
has a 50% stake in low-cost carrier Kingfisher Red.

Kingfisher Airlines is one of six airlines in the world to have a 5-star rating from Skytrax, along
with Asian Airlines, Cathay Pacific, Malaysia Airlines, Qatar Airways and Singapore Airlines.
Kingfisher operates more than 375 daily flights to 71 destinations, with regional and long-haul
international services. n May 2009, Kingfisher Airlines carried more than a million passengers,
giving it the highest market share among airlines in ndia.

The airline is owned by Vijay Mallya of United Beverages Group. Kingfisher Airlines started its
operations on May 9, 2005 with a fleet of 4 Airbus A320 aircrafts. The airline currently operates
on domestic routes. The destinations covered by Kingfisher Airlines are Bangalore, Mumbai,
Delhi, Goa, Chennai, Hyderabad, Ahmedabad, Cochin, Guwahati, Kolkata, Pune, Agartala,
Dibrugarh, Mangalore and Jaipur.

n a short span of time Kingfisher Airline has carved a niche for itself. The airline offers several
unique services to its customers. These include: personal valet at the airport to assist in baggage
handling and boarding, accompanied with refreshments and music at the airport, audio and video
on-demand, with extra-wide personalized screens in the aircraft and three- course gourmet
cuisine.

Kingfisher Airlines currently operates with a brand new fleet of 8 Airbus A320 aircraft, 3 Airbus
A319-100 aircraft and 4 ATR-72 aircraft. t was the first airline in ndia to operate with all new
aircrafts. Kingfisher Airlines is also the first ndian airline to order the Airbus A380. UB
holdings Ltd, has acquired 26% stake in the budget airline Air Deccan and has option to buy
further of 20% stake from the secondary market.
*

Kingfisher Airlines is a subsidiary of the UB Group, one of the largest beverage companies in
the world. The branding of the airline is linked to that of Kingfisher Beer, ndia¶s largest
brewery.

The airline, which is headed by the charismatic Dr Vijay Mallya, took to the skies in May 2005,
and attracted attention for its high quality product with personal inflight entertainment in every
seat; custom interior designs for each aircraft; valet assistance at airports and complimentary hot
food and beverages. The airline initially operated a single class service but subsequently
introduced a highly acclaimed First Class, allowing it to compete with Jet Airways for the high
yield corporate market. n addition to its A320 family aircraft used on domestic routes,
Kingfisher Airlines also operates ATR-72 turboprops on regional sectors.

Under current ndian regulations, which require airlines to operate 5 years domestic service
before being granted international rights, Kingfisher will not be permitted to operate overseas
until 2010. However, the airline has very clear international ambitions, with an order book for 45
wide body aircraft, including A330s, A340s, A350s and A380s.

n just over two years, Kingfisher Airlines has achieved a market share of 10% and has one of
the most aggressive expansion plans of all ndian carriers during 2007. n Jun-07, it dramatically
increased its influence in the market with the acquisition of a 26% shareholding in ndia¶s largest
LCC, Air Deccan, for approximately USD130 million, and an open offer for a further 20%.
Through schedule coordination and joint operations in ground handling, training, and
maintenance, the carriers are projecting annual cost savings of over USD70 million.

There will also be greater coordination between the two brands, with Air Deccan to adopt the
Kingfisher image in its logo and to switch to a red, rather than a blue color scheme.

The combined Kingfisher/Deccan group has a market share of just over 30% and a product range
spanning from the price-sensitive, first-time flyer, to the high yield business traveler, making it
one of the key pillars of the airline industry.

The airline which started its operation on 9th May 2005 following the lease of 4 Airbus A320
aircraft. As of July2007, Kingfisher operates only on domestic routes; however it has announced
plans to start flights to the USA with Airbus A380 aircraft.

The airline is owned by the United Beverages Group under the leadership of Vijay Mallya
(which also owns the popular ndian beer of the same name). The airline promises to suit the
needs of air travelers and to provide reasonable air fares. Kingfisher Airlines' main "luxury"
component is its n- Flight Entertainment System, a first among ndian airlines. The airliners in-
flight Mobile Phone and nternet Services will be provided by On Air starting 2008 for long haul
flights.



UB Group entered aviation sector in 2005 with the launch of Kingfisher Airlines Limited.
Kingfisher Airlines has captured an impressive market share and has established a niche identity
for itself. The airlines recently acquired 25% stake in Deccan Airlines.


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³The Kingfisher Airlines family will consistently deliver a safe, value-based and enjoyable travel
experience to all our guests.´

6
7 

This is our overriding value. n our line of business, there is no compromise.

‡  

We are all in the hospitality business; we must always seek to serve our guests and gain their
trust, goodwill and loyalty.

‡ *


We seek to build an organisation with people who choose to be happy, and will endeavour to
influence our guests and co-workers to be happy too.

‡ 85
9

We will succeed or fail as a team. Each one of us must respect our colleagues regardless of their
rank, and we must work together to ensure our mutual success.

‡ 



Each one of us will be held accountable for the successful execution of our duties, commitments
and obligations, and we will strive to lead by example.
 
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lp Jet Airways
lp Kingfisher
lp ndian Airline
lp Spice Jet
lp Air ndia

 9  

lp Jet Airlines + Air Sahara -> Jet & Jet Lite -> 29.4%
lp Kingfisher + Deccan -> 28.9%
lp ndian Airlines + Air ndia -> 19.8%
 c" 8$


POLTCALFACTORS

1) Open sky policy

2) FD limits: 100% for Greenfield airports ,74% for the existing airports 100% through special
permission, 49% for airlines.

ECONOMCALFACTORS

1) Contribution to the ndian economy.

2) Rising cost of fuel.

3) nvestment in the sector of aviation.

4) The growth of the middle income

SOCALFACTORS
1) Development of cities leads to better services and airports.

2) Employment opportunities.

3) Safety regulations.

4) The status symbol attached to a plane travel.

TECHNOLOGCALFACTORS
1) The growth of e-commerce and e-ticketing.

2) Satellite based navigation system.

3) Modernization and privatization of the airports.

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

ENVRONMENTALFACTORS
1) The increase in the global warming.

2) The sudden and unexpected behavior of the atmosphere and the dependency on whether.

3) Shortage of the infrastructural capacity

4) Tourism saturation.

LEGALFACTORS
1) FD limits

2) Bilateral treaties

3) Airlines acquisitions and the leasing cost

: 8