N.

KAVYA
BILASH DASH
VAIBHAV GOYAL
MANKHANBIRTH MOMIN
PRANEETA KAUL
NAKUL RAMNANI
History of Aviation

FIRST FLIGHT
On December 17, 1903, Orville and Wilbur Wright capped
four years of research and design efforts with a 120-foot,
12-second flight at Kitty Hawk, North Carolina - the first
powered flight in a heavier-than-air machine. Prior to that,
people had flown only in balloons and gliders.

FIRST PASSENGER
The first person to fly as a passenger was Leon Delagrange,
who rode with French pilot Henri Farman from a meadow
outside of Paris in 1908.
INDIAN AVIATION INDUSTRY

There was hectic activity to bring planes to India and show them off in
December 1910.

His Highness the Maharaja of Patiala sent British Engineer CW Bowles to
Europe to look at the new art or science of flying and bring a couple of planes
back with him.

Bowles returned to India in December 1910 with a Farman biplane made in
England and a Gnome-Bleriot monoplane fitted with two seats.

Fortune did not favour Patiala and neither of these aircraft became the first
to get into the air.
The first actual flight was successfully attained by Mr.
Davies in a Bleriot.

On the 10th of December Mr. Davies had the machine
ready and early in the morning circled the polo ground at
a height of twenty five or thirty feet.

Thus Allahabad has had the distinction of giving the lead
not only in India, but also to
the whole of Asian Continent
in connection with the latest
of scientific wonders.
INDIAN AVIATION INDUSTRY TODAY

India has the potential to become the third largest aviation market by
2020. There is large untapped potential for growth due to the fact that
access to aviation is still a dream for nearly 99.5 per cent of its population.

According to the report, the Indian civil aviation industry is on a high
growth trajectory, albeit with minor hiccups.

The industry has ushered in a new wave of expansion driven by Low Cost
Carriers (LCC), modern airports, Foreign Direct Investments (FDI) in
domestic airlines, cutting edge Information Technology (IT) interventions
and a growing emphasis on No-Frills Airports (NFA) and regional
connectivity.

The Indian civil aviation industry is amongst the top 10 in the world with a
size of around USD 16 billion. This is a fraction of what it can actually
achieve.
Various reports have highlighted the significant growth in
the Indian aviation sector over the last decade.

As per data from the Airports Authority of India (AAI),
passenger throughput grew to 159 million (FY 13) and
cargo throughput to 2.19 million MT (FY 13).
MARKET SHARE OF SCHEDULED DOMESTIC AIRLINES

The Role of Aviation Industry in Indias GDP

The Aviation Industry in India is the most rapidly growing aviation
sector of the world.

The growth of airlines traffic in Aviation Industry in India is almost
four times above international average.

Aviation Industry in India have placed the biggest orders for aircrafts
globally.

Aviation Industry in India holds around 69% of the total share of the
airlines traffic in the region of South Asia.


Upto 1990, Indian Airlines was a single service provider having many
users of service. It had low elasticity with no close substitute.

In April 1990, the Government adopted open-sky policy. With Open Sky
Policy many private operators began operation in the domestic sector.
The carriage increased from a modest 15,000 passengers in 1990 to more
than 0.4 million in 1992.

Opening up of the Aviation industry to 41% FDI in the form of equity stake
has also increased the competition in the economy.

By 1995, Private airlines occupied 10% of the domestic air traffic.

Hence the various players broke into the monopoly of IA and AI creating a
situation of Oligopoly market.

There are 8 major airways in the current Indian aviation industry. Each and
every player has a control on the prices and influences the market prices.



The business strategies of pricing of tickets, advertisements, promotion
schemes etc are in line with that of the competitors. A slight change in any type
policy by a company will lead to the others to follow suit.

Eg: Like when Air Deccan came up
with a promotional scheme of Re 1
ticket, its immediate competitor
Spice Jet launched a scheme of
99p/ticket.


The product offered by each and
every airline i.e. air services is
more or less homogeneous with
minor differences.

The prices in this industry are fixed
by the players according to the
segment of market they want to
cater to.
Market Share of Domestic Airlines
Source: Live Mint
Region/Area Focus
IndiGo
Main Hub Indira Gandhi International Airport, New Delhi.
Secondary Hub Chhatrapati Shivaji International Airport,
Mumbai and Kempegowda International Airport, Bangalore.
Focus Cities Netaji Subash Chandra Bose International
Airport, Kolkata; Chennai International Airport, Chennai; Cochin
International Airport, Kochi; Rajiv Gandhi International Airport,
Hyderabad; Sardar Vallabhbhai Patel International Airport,
Ahmedabad; Lucknow International Airport, Lucknow.
SWOT Analysis
Strengths
The only profitable airlines running
in India in low cost carriers segment.
Incorporates the best technology,
human resource and service at an
affordable cost to the customer.
Growth is ahead of aviations overall
industry growth in India.
Covers 32 destinations(all the major
cities in India).
Weakness
Concentrates only on middle class
society.
Customers are not happy with inflight
catering services.
It has to focus on proper baggage
handling and improve the seating
comfort level.
Opportunities
IndiGo has attracted many loyal
customers of other airlines and
converted into IndiGo flyers over a
short span of time.
Shown tremendous growth both in
terms of market share and profit in
the recent years.
Witnessed a rapid expansion by
buying a new A320S airbus.
Threats
Rising fuel cost.
Facing competition from other
low fare airlines like Spice Jet and
Jet Konnect.
Rising labour cost.
Air India
Main Hubs - Indira Gandhi International Airport, New Delhi &
Chhatrapati Shivaji International Airport, Mumbai.
Secondary Hubs - Chennai International Airport, Chennai & Netaji
Subash Chandra Bose International Airport, Kolkata.
Focus Cities Hongkong International Airport, Hongkong; Singapore
Changi Airport, Singapore; Kempegowda International Airport, Bengaluru;
Trivandrum International Airport, Trivandrum; Cochin International
Airport, Cochin; Rajiv Gandhi International Airport, Hyderabad; Sardar
Vallabhbhai Patel International Airport, Ahmedabad.
SWOT Analysis
Strengths
Largest air carrier in India in terms of traffic
volume and company assets.
Owns the most updated fleet and competent
repairs and maintenance expertise.
Has financial backing of the government.
Weakness
Air India is operating Lack of clarity on
the across broad international and
domestic markets competing with world
leading airlines as well as local small
operators. This lack of clarity on the
strategic direction largely dilutes its
capabilities and confuses its brand
within markets.
Low profitability and utilization of
capacity.
Opportunities
Worldwide regulation make the skies more
accessible; the route agreement is easier to
achieve. The number of foreign visitors are
increasing rapidly.
Customers are getting wealthier, tend to be less
price conscious and prefer to choose service over
cost.
Best time for introducing Low Cost Carriers
(LCCs).
Threats
Air India faces imminent aggressive
competition from world leading
airlines and price wars triggered by
domestic players.
The Indian Railway Ministry has
dramatically improved speed and
services in their medium/long distant
routes, attracting passengers away
from air service, with prices almost at
par with the low cost carreirs.
Jet Airways
Main Hubs - Chhatrapati Shivaji International Airport, Mumbai.
Secondary Hubs - Chennai International Airport, Chennai; Netaji Subash
Chandra Bose International Airport, Kolkata; Kempegowda International
Airport, Bengaluru; Indira Gandhi International Airport, New Delhi.
Focus Cities - Cochin International Airport, Cochin; Rajiv Gandhi International
Airport, Hyderabad; Sardar Vallabhbhai Patel International Airport,
Ahmedabad & Lucknow International Airport, Lucknow.
SWOT Analysis
Strengths
Has created a good image among the Indian
fliers.
Trusted airline by the corporate.
One of the biggest Indian airline companies
with over 13000 employees.
Operations in over 75 Indian cities and over
400 daily flights.
International destinations in nearly 20
countries.
Top brand due to excellent operations and
marketing.
Weakness
Competition from Lower Cost
Carriers(LCCs) and other competitor means
market share growth is tough.
Presence of other airlines on international
routes making it difficult to have significant
market share.
High Cost.

Opportunities
Strongly positioned in the international
routes.
Has presence in every segment.
Increasing number of people opting to travel
by airlines..
Threats
Lower Carrier Costs (LCCs).
Rising fuel cost and Labour costs.
Jet Lite
Main Hub - Indira Gandhi International Airport, New Delhi.
Secondary Hubs - Chhatrapati Shivaji International Airport,
Mumbai & Netaji Subash Chandra Bose International
Airport, Kolkata.
Focus Cities - Kempegowda International Airport,
Bengaluru; Chennai International Airport, Chennai; Cochin
International Airport, Cochin; Chaudhary Charan Singh
International Airport, Lucknow; Rajiv Gandhi International
Airport, Hyderabad.

SWOT Analysis
Strengths
Low cost.
Subsidiary of Jet Airways.
Covers 42 destinations.
Weakness
No international destinations.
Very low market share.
Not too many destinations as compared to its
competitors
Opportunities
Growing aviation market.
Expand their destinations.
Increasing number of flight
passengers.
Threats
Rising labour cost.
Rising fuel cost.
Competition
Spice Jet
Main Hubs - Indira Gandhi International Airport, New Delhi; ; Chennai
International Airport, Chennai & Rajiv Gandhi International Airport,
Hyderabad.
Secondary Hubs - Chhatrapati Shivaji International Airport, Mumbai &
Kempegowda International Airport, Bengaluru.
Focus Cities - Cochin International Airport, Cochin; Netaji Subash
Chandra Bose International Airport, Kolkata; Sardar Vallabhbhai Patel
International Airport, Ahmedabad & Pune International Airport, Pune.
SWOT Analysis
Strengths
Entered with Rs 99 fare for the first 99
days.
Strong backing by the Promoters.
Having more than 35 destinations in
India.
Good presence in the market due to its
branding and advertising.
Weakness
No international destinations.
Dependency on leased assets.

Opportunities
Growing aviation market.
International tie up would boost brand
image.
Threats
Rising fuel cost.
Strong Competition.

Go Air
Main Hub - Chhatrapati Shivaji International Airport, Mumbai
Secondary Hub - Indira Gandhi International Airport, New Delhi.
Focus Cities - Kempegowda International Airport, Bengaluru & Srinagar
Airport
SWOT Analysis
Strengths
Strong backing by the promoters.
Covers almost all major cities.
Good branding and marketing in India.
Weakness
Very low market share.
It entered Indian market very late.
Not too many destinations compared with its
competitor
Opportunities
More destinations yet to be covered.
Global operations can also be a value
addition.
Threats
Plenty of Low Cost Carriers (LCCs) to compete
with who already have taken the lead.
Rising labour cost.
Rising fuel cost.
Type of Market for Aviation Industry
The market structure for airlines is an
oligopoly.
There are only a handful of companies that
compete in this industry.
Oligopolies are more competitive than
monopolies, industries for which there is only
one seller of the product, but are less
competitive than industries that experience
near perfect competition.
Reason for Aviation industry Market-
Oligopoly Market
Each company has some pricing power, but
they can't set prices to whatever they want.
There are regulatory bodies such as DGCA to
control pricing.
Each company affects the market (unlike
perfect competition) but is also affected by
other companies in the market (unlike
monopolies).
Oligopolies are industries where set-up costs are
extremely high, so people can't just enter the
market even if there's money to be made in the
industry.
People will sometimes refer to them as "Big 3" or
"Big 4" or "Big" however many major players there
are in the market.
That's not to say that there aren't small players in
the airline industries that fill a special niche in the
market, but the small companies don't affect the
major players.
One characteristic of oligopolies is that they engage in
price wars.
When one airline company decides to cut fares the other
industries will usually cut theirs as well vice-versa is not
true.
Price wars happen because some company is trying to
grab a larger percentage of the market, and the other
companies lower their prices to not lose market share.
People feel some loyalty for various reasons (such as
frequent flyer program or availability of certain flights), so
people might stick with their preferred company when a
competitor offers a lower price, so just because one
company is selling at a higher price doesn't mean they
won't sell at all.
Issues faced by the Aviation Industry
Labor - According to the ATA, labor is the an airline's No.1 cost; airlines
must pay pilots, flight attendants, baggage handlers, dispatchers,
customer service and others.
Fuel Cost - According to the Air Transportation Association (ATA), fuel is
an airline's second largest expense. Fuel makes up a significant portion
of an airline's total costs, although efficiency among different carriers
can vary widely. Short haul airlines typically get lower fuel efficiency
because take-offs and landings consume high amounts of jet fuel.
Weather - Weather is variable and unpredictable. Extreme heat, cold,
fog and snow can shut down airports and cancel flights, which costs an
airline money.
Airport capacity, route structures, technology and costs to lease or buy
the physical aircraft are significant in the airline industry.
Porters Five Force Model

Competetive
Rivalry
Air Transport Services
DGCA, under the provisions of Rule 134 of the
Aircraft Rules, 1937 grants permission to
persons to operate an air transport service to,
within and from India.
Different Air Transport services in India
Scheduled Air Transport Services (Passenger)
Non- Scheduled Air Transport Services
(Passenger)
Air Transport Services (Cargo)
Non-Scheduled Air Transport Services
(Charter Operation)
Social Costs
Flying possesses the ability to negatively impact the health of
passengers.

Long Travel Duration

Noise pollution

People living near Airport

Air pollution

Capacity Utilization
Capacity utilization can be defined as the ratio of actual
output to some measure of potential output.
Effect of market demand on Capacity utilization.
If capacity utilized optimally
Reducing the cost per unit of the services provided
Widening the market by making Indian Airlines more
competitive
Capacity Utilization
Three measures of capacity utilization :
(1) passenger load factor (%),
(2) flown hours per day (as a % of the
maximum) and
(3) aircraft in use (as a % of the total fleet)
Passenger Load Factor : It is generally used to
assess how efficiently a transport provider
"fills seats" and generates fare revenue.

Capacity Utilization
Resource Allocation
Resource Allocation is a plan for using available resources.
Example - human resources

Airline Pilot
Co-Pilot
Flight Engineer
Assistant Controller
Flight Dispatcher
Flight Attendant
Resource Allocation
Aircraft mechanic or service technician
Ground Staff
Assistant manager in Customer Service
Department
Staff

Resource Allocation
Problems

Indias aviation regulator the Directorate General of Civil
Aviation (DGCA) facing issue due to a serious shortage of
resources, with several key departments remaining well
below sanctioned staffing levels.

Insufficient investment in training the existing staff

Consumer Protection
The primary responsibility of the DGCA is Safety Oversight, and to
meet this obligation, DGCA implements an Annual Surveillance
Programme ( ASP ) covering all aviation activities.
Safety aspects like fastening of seat belts, no smoking, evacuation
procedures
Airline security
Adequate safety measures are taken during landing/take-off
Quality of fuel should be ensured. Adequate fuel should be uplifted
for the flight.

Consumer Protection
Before departure from base, the operator
should ensure that the aircraft is free from any
defect and proper rectification/maintenance
procedures have been followed
No excess passenger/load
Passengers with disabilities

Market Share
On-Time Performance (Scheduled Domestic
Airlines)
Total Domestic Passengers Carried By Scheduled
Domestic Airlines (Year 2014)
Emerging trends- CAGR
Emerging trends- Investments
0
1
2
3
4
5
6
7
8
9
10
11th 5 year plan 12th 5 year plan
5.5
9.5
Private Sector Investment
Amount (in Billion $)
Government is investing in Northeastern India for connectivity with rest of the country

Greenfields are under consideration under Public Private partnerships.
Emerging trends
Emerging trends- Growing demands
Emerging trends
New JV from Tata-SIA and Tata-AirAsia.
Four airline Etihad,AirAsia,SIA,Tiger Airways
expanding in India.
FDI brings growth.
A-380 will help in reducing cost
Government is looking to make all 450 airport
fully functional for connectivity.

CONCLUSION
Industry is pushing their limits.
Government is investing in order to increase
Growth rate as Indian travelling trends are
changing.
New Projects lined up are new promises.