lccs in india. history of airline industry in india 1948: air india international came into being...

LCCS IN INDIA

History of Airline Industry in India 1948: Air India International came into being between Indian Govt. and AIR India (TATA Airline) 1986: Private Sector Players permitted as Air taxi operators Players including Jet, Air Sahara, Sky liner, East West, Modiluft 1994: Private Carriers permitted to operate scheduled services Six operators granted license however only Jet and Air Sahara able to servive

Cont In 2003, Four carriers Air India, Indian Airlines, Jet Airways and Air Sahara Today, 11 different brands. Air India + Air India Express Jet Airways + Jet Konnect + JetLite Kingfisher Airlines + Kingfisher Red IndiGo SpiceJet Go Air

Why a LCC is needed? The worlds largest democracy, India has a population of 1.1 billion. With a middle class estimated at 300 million in 2005 and projected to hit 400 million in 2010. 15 Million People Travel by Train Daily, 700,000 people a day travel by Air Condition. If just 5 % of this segment Switches to Air travel, it will result in 40,000 seats a day being added.

Total LCC working in India There are total 6 LCCs 1. Air India Express 2. GoAir 3. IndiGo 4. SpiceJet 5. Kingfisher Red 6. Jetlite

Cont On May 1993, Jet Airways had started its operation. In 2000, Sahara come, later it was re-launched as JetLite by Jet Airways on 2007. In Aug 2003, Air Deccan started its services. In May 2005, Kingfisher Airlines & Spice Jet began their operation. In Aug 2005, IndiGo launched. In Oct 2008, Air Deccan had merged with Kingfisher Airlines to form Kingfisher RED.

Domestic Market Share

Air India Express Air India Express is a low-cost airline subsidiary of Air India, HQ in Kochi, operating from Kerala. Operates to the Middle East and Southeast Asia.

Cont A/L belongs to Air India Charters Limited, subsidiary of Air India Limited. Today Air India Express operates nearly 100 flights per week, mainly from southern states of Tamil Nadu and Kerala in India.

Go Air Go Airlines (India) Ltd. is owned by Wadia Group. Main base is Chhatrapati Shivaji Int Airport, Mumbai. Operates domestic passenger services to 22 cities with 92 daily flights and approx 638 weekly flights.

IndiGo IndiGo, is based in Gurgaon, Haryana India. Largest LCC in India by market share as of August 2012. IndiGo was setup in 2006. Has 17.3% of the market share, behind Kingfisher Airlines and Jet Airways. Always affordable, no gimmicks, hassle free

Spice Jet SpiceJet Has HQ in Chennai, India. Began service in May 2005 By 2012, it was India's third largest airline in terms of market share ahead of Air India, Kingfisher Airlines and GoAir.

Kingfisher Airlines Kingfisher Airlines Limited has HQ in Andheri (East), Mumbai. Until December 2011, Kingfisher Airlines had the second largest share in India's domestic air travel market. Airline facing financial issues for many years. Has lowest market share since April 2012

Merger of Airlines Kingfisher Airlines, through its parent company United Breweries Group, has a 50% stake in low-cost carrier Kingfisher Red. Kingfisher Airlines merger with Air Deccan in 2008, to create Kingfisher Red but it helped to stem some of the irrational pricing behavior in the domestic market.

Jetlite Jetlite, formerly Air Sahara, is based in Mumbai, India. Operate scheduled services connecting metropolitan centers in India. Jetlite ended service on 25 March 2012 after merger with Jet Konnect, a division of Jet Airways.

Fleet As of 2010, average age of Air-India Express Fleet is 2.9 yrs Air-India Express Fleet AircraftIn Service Passengers (Economy) Boeing 737-800 17186 4189 Total21

Tail Art Each Air-India Express aircraft features a different tail design that reflects a facet of Indian culture, history and tradition.

Destinations Operates flights from Kerala, Punjab and Mangalore. Also in Dubai, Abu Dhabi, Al Ain, Muscat and Salalah in the Middle East and Singapore in the east.

Fleet Go Air's fleet consists of Airbus A320-200s, a medium range airliner with capacity of 180 passengers.

Cont Go Air Fleet AircraftIn ServiceOrders Passengers (Economy) Notes Airbus A320-200137180 one owned 12 dry leased Airbus A320neo72TBA Deliveries begin 2015 Total1373

Destinations 21 destinations in India, with 156 daily flights and approx 1092 weekly flights Jammu & Kashmir Delhi Goa Gujarat Assam Bihar Chandigarh Jharkhand Rajasthan Uttar Pradesh Karnataka Kerala Maharashtra Tamil Nadu West Bengal Port Blair

Fleet Operates only Airbus A320 family. IndiGo operates 60 such aircraft and the average fleet age is 2.3 years.

Cont IndiGo Fleet AircraftIn ServiceOrders Passengers (Economy) Airbus A320-20065 180 Airbus A320neo150180 Total65215

Destinations IndiGo operates 33 destinations in India and abroad with 373 flights each day. IndiGo uses a hub and spoke model used by FSC where the airline flights to different destinations are routed through its hub.

IndiGo Route Map

Fleet SpiceJet owns 40 aircraft with an average age of 4.6 years.

Cont SpiceJet fleet AircraftIn ServiceOrders Passengers (Economy) Notes Boeing 7378003020189 5 dry leased, 22 owned New deliveries since December 2010 Boeing 737-900ER6212 Bombardier Dash 8 Q400 121878New deliveries since August 2011 Total4838

Destinations Delhi Goa Amritsar Chandigarh Bhopal Dehradun Ahmedabad Chennai Aurangabad Bagdogra Bangalore Mumbai Nagpur Hubli Hyderabad Jabalpur Jaipur Jammu Kochi Kolkata Madurai Guwahati

SpiceJet Destination Map

Fleet Has fleet of Airbus A-320 and ATR-72 aircraft that were inherited from Air Deccan Due to the financial problems of Kingfisher Airlines, the fleet was drastically reduced from 63 to 16.

Cont Kingfisher Airlines Fleet AircraftIn FleetTotal Passengers Airbus A319-1331VIP Airbus A320-2326134 ATR 72-500466 Boeing 727-0441VIP Total12

Destinations As of 10 April 2012, Kingfisher Airlines served 25 domestic destinations within India. It had suspended all international operations from 10 April 2012 with the final flight between London Heathrow and Delhi. All routes are now operated with the Airbus A320 family, ATR 42s and ATR 72 aircraft.

Fleet Jetlite fleet consisted of the following aircraft as of 25 March 2012 Jetlite Fleet AircraftIn ServicePassengers Boeing 737-7009 144 149 Boeing 737-8008186 Boeing 737-900ER2202 Total19

Destinations Delhi Punjab Goa Gujarat Assam Bihar Jammu and Kashmir Andaman Andhra Pradesh Chhattisgarh West Bengal Uttar Pradesh Karnataka Kerala Madhya Pradesh Manipur Orissa Rajasthan Tamil Nadu Jharkhand

Jetlite Destination Map

Future Plan Planning to add many more destinations to the already impressive list. Plans to cover destinations in North America and Europe. They order 10 ATR 72-500, 19 Boeing 737-800, 5 Boeing 777-300ER and 10 Boeing 787-8.

In-Flight Service Offers a complimentary pre-set snack box or light meal to its passengers with veg and non veg options. Limited entertainment facilities are available for passengers.

In-Flight Service Does not offer a complimentary meal service to its passengers. Offer a buy-on-board in-flight meal program. Caf Coffee Day Snacks, sandwiches, parathas, cookies, nuts, soft drinks, Mineral water and other beverages are available on board.

In-Flight Service Offer buy-on board meal program offering vegetarian & non- vegetarian wraps, malabar parathas, sandwiches, flavored cashew nuts, cakes, potato sticks and samosas. Complimentary drinking water is offered. No in-flight entertainment systems are made available.

In-Flight Service No in-flight entertainment systems. Spice Jet operates aircraft configured with a single passenger class.

In-Flight Service Passengers received full length blankets, full size pillows and meals. Passengers are served meals on most flights. Before take-off, passengers are served bottled lemonade.

In-Flight Service Jetlite offered a buy on board service called Jet Caf, offering food for purchase.

Awards and Achievements Go Air, has been ranked by Airbus as the "Best Performing Airline" in the Airbus A320 category operator in Asia Pacific / Middle East/ Africa. Go Air has also been registered with IATA Operational Safety Audit (IOSA) program. Go Air has bagged the coveted award for 'Best Domestic Airline For Excellence in Quality and Efficient Service' during the global tourism event, ITB, at Berlin.

Cont This is the second consecutive year that GoAir has been awarded the prestigious award, in a very stiff competition among airlines of the Asia Pacific Region. According to the Centre for Asia Pacific Aviation (CAPA), GoAir achieved the highest gross fares in the market (Rs 5,100-5,200) amongst low-cost carriers, in part because it seeks to fly more on routes with limited competition.

Awards and Achievements IndiGo has won the following awards for its excellent service across the Indian airspace. Best LCC by the Airline Passengers Association of India (2007) Best LCC at the Galileo Express Travel Awards (2008) Skytrax Central Asia's best low-cost airline award (2009) CNBC Awaaz's Travel Award for best low cost airline (2009)

Cont Safety Excellence Award by Rajiv Gandhi International Airport (2009) Most Admired Travel Product of the Year 2009 by SATTE (2010) Skytrax Central Asia's best low-cost airline award (2010) Best Domestic Low Cost Service Airline for the Year 2010 by Travel Agents Association of India (TAAI) (2010) Safety Excellence Award by BIAL (2010) Skytrax Central Asia's best low-cost airline award (2011)

Awards and Achievements SpiceJet has won the following awards for its excellent service across the Indian airspace. Smart Travel Asias Top 5 Best Budget Airlines in Asia (Aug 2010) and in Top 10 list for 2 consecutive years (Aug 2008 & Sept 2009, Hong Kong) Outlook Travelers Best Low Cost Airline (Feb 2008 & Feb 2010) Award for Best Website at World Low Cost Airlines Asia Pacific Conference (January 2010, Singapore)

Cont Indias best low-fare airline in a survey conducted by MaRs on behalf of Hindustan Times (December 2009) World Travel Market Award for multi-channel approach in distribution (November 2009, London) National Award (ICWAI) for excellence in Cost Management (March 2009) CIO 100 Award for IT efforts for customer satisfaction and business growth (2007, 2008, 2009 & 2011)

Pricing Policy Go Air has a premium service known as Go Business in which the passengers, at a higher fare, get seats in the first two rows of the aircraft. Perks include more space with the middle seat remaining empty, abesides free meals and an increased luggage allowance. Go Air also offers a frequent flyer program knows as Go Club.

Pricing Policy IndiGo offers a premium service called IndiGo Plus,where the passengers, at a higher fare, can avail additional benefits like a pre-assigned seat and a complementary meal on board. Also offers service called IndiGo Corporate Program for corporate travelers.

Pricing Policy 10% of the seats on any flight are offered at the lowest price, and are the first to sell. Fares increase as the plane fills up. A/C operate with a minimum set of optional equipment, further reducing costs of acquisition and maintenance. SpiceJet often offers simpler fare scheme, such as charging one-way tickets.

Cont No refunds or No transfers to later flights in the event of missed flights Flies to smaller, less congested secondary airports/off-peak hours to avoid air traffic delays and taking advantage of lower landing fees. SpiceJet have short turn around time, allowing maximum utilization of aircraft.

Pricing Policy First airline to have in-flight entertainment systems on every seat even on domestic flights. All passengers were given a "welcome kit" consisting of pen, facial tissue and headphones for IFE system. Frequent-flyer program of Kingfisher Airlines is called King Club

Pricing Policy Strict luggage restrictions are imposed on bags carried inside the cabin. Jetlite is a common man airline focussing on middle class. Made every effort to keep Jetlite airline tickets as little as possible.

Go Air - S.W.O.T Analysis 2% Strengths LCC promoted by The Wadia Group GoAir Free Fares Weaknesses Small network : flights in southern & western India with the first nine A320s Small Fleet Structure Small Load Efficiency compared to Air Deccan & Spice Jet Opportunities Future Fleet expansion will increase its Market Share.

Cont Flight network extension Attractive fares and up to date quality service will generate a huge customer base comprising Frequent Flyers. The Threat of New Entrants into (LCC) segment esp. GoAir, Indigo and Jagson Airlines

Spice Jet S.W.O.T Analysis 6% Strengths Entered with Rs. 99 fares for first 99 days Aim: Compete with Indian Railways AC segment Weaknesses Small fleet structure. Concentrating at only North-West-South. Opportunities Future Fleet expansion will increase its Market Share. Attractive fares and up to date quality service. The Threat of New Entrants into (LCC) segment esp. GoAir, Indigo and Jetlite.

Air Deccan S.W.O.T Analysis 21.2% Strengths Highest load efficiency. First to target the Middle Class Weaknesses Focuses almost exclusive on south Indian markets. Image plagued by frequent breakdowns and near misses Very limited advertising Already reached the threshold of cost efficiency

Cont Opportunities Extensive network to exploit the booming Air cargo business. Plenty of scope for expansion of operations Could start Contractual Employment Strengthen its position in the Chartered Flight segment. The Threat of New Entrants into (LCC) segment especially Go Air, Spice Jet, Indigo and Jagson Airlines

Current Trends: Kingfisher-Air Deccan Deal Kingfisher buys out 26 % stake for Rs.550 Crore. They have combined Market share of 33% They are second biggest player after Jet Sahara deal Jet airways and Air Sahara merger Air Sahara name changed to JetLite

Future Trends The projection for Indian Aviation for 2020 is estimated at: 400 million passengers Including 180 million domestic passengers 1,000 aircraft in the civil aviation sector Likely to follow the footholds of International Low Price Carriers e.g. Air Arabia, Southwest Airlines etc. More emphasis will be on Arabian and South-East Asian circuits.

Passengers In Millions Future Trends Passenger Forecast

Future Trends Proposed Addition

S.W.O.T Analysis of the Industry Expecting investments - US $30 billion by 2012 and about US $50 billion by 2015. Expected Market Size to be about 50 million by 2010. Crippling Oil Shock Acute shortage of trained Pilots, severely limiting growth prospects. Pilot license applications have tripled.

Unplanned location of Airports. Absence to Institutionalized Funding & Infrastructure Constraints. Shortage of 1. Airport Facilities 2. Parking Bays 3. Air Traffic Control Facilities 4. Takeoff and Landing Slots Continued growth might be hampered Relatively Limited Reach Cont

Future Information IndiGo and SpiceJet are changing the market dynamics by opening up new international routes to low-cost competition. The Ministry of Civil Aviation grants private carriers additional access. Air India and Kingfisher Airlines, have cut back their respective international networks. SpiceJet, IndiGo and Jet Airways are planning to expand as a result of being granted additional international seat allocations.

Only 454 airports with less than 100 airports having more than one daily service Airline Industry in India High Growth in Passenger and Air Cargo Traffic Trends 2010 (Projection ) : 3,360 thousand tones 2010 (Projection ) : 105-115 million (69 million domestic & 40 million international) Medium Term Growth Forecast over next 10 years Airline Industry in India: GDP: 9.6% Domestic Air Travel: 20% - 25% Travel & Tourism: 8.8% Cont

Recommendations Allow all Indian Careers, Public or Private-to operate International roots. Lower the cost of aviation turbine fuel. Strengthen and promote short haul tourism for business development, trade and tourism. Training more Pilots and Air Traffic Controllers. Raising retirement age of pilots to 65 from 61.

Cont Encourage of Proactive involvement of overseas investors and technical managers in the privatization of airports. Encourage commercial activities within airports such as hotel, restaurants etc. Ensure a healthy growth in traffic to the private airports. Lower the Landing and airport charges.

References http://www.wikipedia.org http://www.flyairdeccan.net http://www.goair.in http://www.spicejet.com http://www.hinduonline.com http://www.civilaviationweek.com http://www.businesstravelindia.com http://www.yahoo.com http://civilaviation.nic.in http://www.skygod.com /quotes/ http://www.flykingfisher.com http://www.goindigo.in http://indiaaviation.aero www.airliners.net www.flyaow.com www.hamiltonsundstrand.com www.slideshare.net

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