DOMESTIC AVIATIONDOMESTIC AVIATION INDUSTRYINDUSTRY

Group - IVGroup - IV

PRESENTED BYPRESENTED BY Rupali M04Rupali M04 Milind Sarode MMilind Sarode M Amarpreet Singh Ghura M02 Amarpreet Singh Ghura M02 Gurpreet Kour Lote M07Gurpreet Kour Lote M07 Vijeta Wagle M24Vijeta Wagle M24 Santosh Singh Santosh Singh MM Sharif M10Sharif M10

Aviation Industry in IndiaAviation Industry in India

““Once you get hooked on the airline Once you get hooked on the airline business, it's worse than dope.”business, it's worse than dope.”

““This is a nasty, rotten business.”This is a nasty, rotten business.”

““Air transport is just a glorified bus Air transport is just a glorified bus operation.”operation.”

Aviation Industry in IndiaAviation Industry in India

History : History : Before IndependenceBefore IndependencePublic SectorPublic SectorPrivatization Privatization

Open Sky PolicyOpen Sky PolicyBilateral Treaties Bilateral Treaties

PlayersPlayers

• Air Deccan• Air-India Express• Air India• Air Sahara• Go Air• Indian Airlines• IndiGo• Jet Airways• Jet Lite• SpiceJet• Paramount Airways• Kingfisher

The Domestic Aviation Market Share

34%

20%21%

8%

8%6%

2%

1%

Jet airways

Indian

Air Deccan

Air Sahara

Kingfisher

Spicejet

Goair

Others

Aviation Industry in IndiaAviation Industry in IndiaCharacteristics Characteristics ::

Huge PotentialHuge Potential Under penetrated marketUnder penetrated market

oTotal Passenger Traffic : 50 millionTotal Passenger Traffic : 50 millionoPassenger trips per annum : Passenger trips per annum :

India : 0.05 India : 0.05 United states : 2.02United states : 2.02

Untapped air cargo marketUntapped air cargo market

Medium Term Growth Forecast :

India GDP : 8.6 % per annum

WTTC Travel & Tourism : 8.8 %Over next 10 years

Domestic air travel : 12 % annually

Macro Environment Analysis Macro Environment Analysis

Main FactorsMain Factors

PPoliticalolitical : : Open Sky PolicyOpen Sky Policy Deregulations in different spheresDeregulations in different spheres Low entry barriersLow entry barriers FDI limits :FDI limits : 49 % for airlines 49 % for airlines

100% for airports100% for airports

SSocio-culturalocio-cultural : :

Growing middle class :1993-1999 : 39.5 m to 56.7 m

households 2005 : 300 m 2010 : 400 m (Estimated)

Increase in leisure travel by tourists by 15 % in 2005Foreign tourists in 2006 : 3.2 million Status symbol to travel in plane

EEconomicalconomical : : Growing middle class incomeGrowing middle class income Consistent GDP growth of more than Consistent GDP growth of more than

8% and projected rate in two digits 8% and projected rate in two digits Hike in average salary 14%(highest) Hike in average salary 14%(highest)

in the worldin the world Tourism industry growth :8.8 %in Tourism industry growth :8.8 %in

20052005

TTechnologicalechnological : : Modernization & Privatization of AirportsModernization & Privatization of Airports

Modern Technology for efficient handling Modern Technology for efficient handling of aircraft, passenger and cargo.of aircraft, passenger and cargo.

Example : ILS, CAT-3Example : ILS, CAT-3 Developing Greenfield Airports with Developing Greenfield Airports with

Private SectorPrivate Sector

Example : Bangalore Airport Corporation Example : Bangalore Airport Corporation Ltd.Ltd.

Other FactorsOther Factors : :Demographic and Natural Environment Demographic and Natural Environment

Changing pattern of consumersChanging pattern of consumers Highest percentage people of age group Highest percentage people of age group

20-2520-25 Educational environmentEducational environment Shift towards family conceptShift towards family concept High energy costHigh energy cost

Low Cost CarriersLow Cost Carriers

In the past five years, low-cost airlines have been growing at more than 40 % a year globally

Business Model of Low Cost Business Model of Low Cost CarriersCarriers

A single Passenger class A single type of airplane reducing training

and service cost No frills such as free food/drinks, lounges

etc. Emphasis on direct sale of ticket through

Internet avoiding fee and commission paid to travel agents.

Employees working in multiple roles Unbundling of ancillary charges to make

the Headline fare lower

Low Cost Carriers in IndiaLow Cost Carriers in India

Air DeccanAir Deccan SpiceJetSpiceJet IndiGo AirlinesIndiGo Airlines Go AirGo Air Jetlite (Formerly known as Air Jetlite (Formerly known as Air

Sahara)Sahara)

Airline Industry in India : Airline Industry in India : Service Vs Price GraphService Vs Price Graph

P R I C E

SERVICE

Current Trends :Current Trends :Consolidations All AroundConsolidations All Around

Kingfisher-Air Deccan DealKingfisher-Air Deccan Dealo Kingfisher buys out 26 % stake for Rs.550 Kingfisher buys out 26 % stake for Rs.550

crore.crore.o They have combined Market share of 33%They have combined Market share of 33%o They are second biggest player after Jet Sahara They are second biggest player after Jet Sahara

dealdeal

Jet airways and Air Sahara mergerJet airways and Air Sahara mergero Air Sahara name changed to JetLiteAir Sahara name changed to JetLite

Present ScenarioPresent Scenario

Scheduled Domestic OperatorScheduled Domestic Operator 1414

No. of Aircraft Possessed No. of Aircraft Possessed 334334

No. of Non-scheduled OperatorNo. of Non-scheduled Operator 6565

No. of Aircraft Possessed No. of Aircraft Possessed 201201

No. of Import Permit for No. of Import Permit for Aircraft Granted in 2007Aircraft Granted in 2007

7272

No. of Aircraft Set to be Import No. of Aircraft Set to be Import in Next Five Yearin Next Five Year

496496

Future Trends : Passenger Future Trends : Passenger ForecastForecast

Future TrendsFuture Trends The projection for Indian Aviation for The projection for Indian Aviation for

2020 is estimated at:2020 is estimated at:o 400 million passengers 400 million passengers o Including 180 million domestic Including 180 million domestic

passengers passengers o 1,000 aircraft in the civil aviation sector1,000 aircraft in the civil aviation sector

Likely to follow the footholds of Likely to follow the footholds of International Low Price Carriers e.g. Air International Low Price Carriers e.g. Air Arabia, Southwest Airlines etc. Arabia, Southwest Airlines etc.

More emphasis will be on Arabian and More emphasis will be on Arabian and South-East Asian circuits.South-East Asian circuits.

Future Trends : Proposed AdditionFuture Trends : Proposed Addition

Challenges Challenges

Constraints :• Infrastructure constraints• Shortage of airport facilities• Parking bays• Air traffic control facilities• Takeoff and landing slots.• Less than 100 airports having more

than one daily service.

References/AcknowledgementsReferences/Acknowledgements Article of Mr. S Sharma, Oct 2007Article of Mr. S Sharma, Oct 2007

The Civil Aviation Act, 2000 (Draft)The Civil Aviation Act, 2000 (Draft)

Business News from Hindustan Times DailyBusiness News from Hindustan Times Daily

Report on ‘Study of the Indian Aviation Industry’ onReport on ‘Study of the Indian Aviation Industry’ on www.foolonahill.comwww.foolonahill.com

www.findarticles.comwww.findarticles.com       Wikipedia, the free content encyclopediaWikipedia, the free content encyclopedia

Economic servey, 2008Economic servey, 2008

All site of domestic aviation Player All site of domestic aviation Player

Remote Access Aviation System – RAAS Remote Access Aviation System – RAAS

Thank YouThank You