Simplify Deccan

Evolution of Low Cost Carrier in India

• Air Deccan was the largest private low cost sector in India.

• June 2007 vijay mallya bought 26% controlling stakes for Rs 5.5 billion.

• Launch in 2003 & serving two destination to 65 destination in 2007.

• Airline image came down due to unreliable services

• Facing competition from new low cost airline

• Vision was “Empowering every Indian to fly”.

• Operating loss of more than rs 6.5 million in 2005-2007.

Indian Aviation Market in 2007:• Confederation of Indian Industry (CII) report in 2000 between 45-70 million passengers

were expected to fly domestically by 2010.

• Centre for Asia Pacific Aviation (CAPA) estimates 60 million passengers by 2010.

• In 2006,delhi-mumbai air route became the 7th busiest air traffic route in the world.

• Aviation analyst in India estimated a total loss of more than 20 billion for the airline

industy in 2006-2007.

Demand Pattern

• Demand mainly driven by leisure/visiting friends & relatives(VFR).

• Between april-dec,2006 was the low cost carriers carried more than 31% of the total

passenger traffic.

• According to CAPA(centre for asia pacific aviation),low cost carriers were expected to

have a market share as high as 70% by 2010.

Airport Infrastructure• 2005-2006,airport authority of India(AAI) managed 94 civil airports,65 used actively.40

airports had runways of more than 5000 feet required for landing by large aircrafts.

• In 2003 85% of total passenger traffic handled by 10 airports which generates 80% of

total revenue for AAI

Aviation manpower

• increase in air traffic leads to increase in demand for pilots and cabin crews

• In 2006 AAI had talks with private sectors to setup a joint venture aviaton centre for

training pilots.

Some threats

• Lack of maintenance and repair facilities

• High fuel expenses

Opportunities

• Demand in smaller cities

• Amble opportunities as and when compared with America

• low cost air travel which can be taken as a substitute for train

travelling, where prime target market segment was upper class

train passengers