Airline Industry Grp 4

Category: Entertainment

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History T he birth of flight in 1903. Early 20th Century In 1938, the Civil Aeronautics Board . Deregulation, mid-1970s, Alfred Kahn. Congress passed the Airline Deregulation Act of 1978. Late 20th Century. 21st Century. T he effects of another economic downturn Losses continued for years; the industry as a whole didn't return to profitability until 2006

Industry characteristics: Huge potential :

Under penetrated Market - Total Passenger Traffic only 50 mn as on 31st Dec 2005 amounting to only 0.05 trips per annum as compared to developed Nations like United States have 2.02 trips per annum - High Level of potential demand with growth in Indian economy Untapped Air Cargo Market - Air Cargo has not yet been fully taped in the Indian markets and is expected that in the coming years large no of players would have dedicated fleets What this means… - Build up of capacity by existing players and entry of new players Industry characteristics: Huge potential

Air Cargo :

Freight carriage in India currently around 4200 tons per day CAGR of 15% over the past 2 years Fuelled by a fast growing economy, supported by a strong industrial base Forecast to grow at 11.4% p.a. till 2011-12 Air Cargo

Ground Handling :

Ground handling business in India estimated at Rs. 1074 crores Expected to grow at 15% CAGR till 2011-12 Opportunity lies in 3rd party handling as well as entering into service contracts with private airports / AAI to offer comprehensive ground handling solutions, e.g. AI – CIAL at Cochin Ground Handling

Leveraging the internet :

Increasing numbers are booking directly from the airlines’ websites Traditional sales channels with paper tickets cost airlines ~10% of ticket price Comparatively, e-ticket sales from own website cost an airline only ~3% of ticket price For every direct booking from their website, airlines save an estimated US$ 4 plus 5% agency commission Airlines can also turn their websites into one stop shops for all travel related services, generating additional revenue Leveraging the internet

Current Scenario: Indian Aviation Industry :

The Indian aviation industry is one of the fastest growing aviation industries in the world. India has 454 airports and airstrips; of these, 16 are designated international airports. With the liberalization of the Indian aviation sector, aviation industry in India has undergone a rapid transformation. From being primarily a government-owned industry, the Indian aviation industry is now dominated by privately owned full-service airlines and low-cost carriers. Private airlines account for around 75 per cent share of the domestic aviation market. Current Scenario: Indian Aviation Industry

…..Cont. :

There has been phenomenal growth in the Indian aviation sector in 2007-08. India has jumped to 9th position in world's aviation market from 12th in 2006. As per the Ministry of Civil Aviation, the airline business is growing at 27 per cent per annum in India. During 2007, the domestic airline passenger traffic has shown a growth of 32.51 per cent. Further, the scheduled domestic air services are now available from 82 airports as against 75 in 2006. …..Cont.

…..Cont. :

35 other city airports are proposed to be upgraded. The city side development will be undertaken through PPP mode where an investment of US$ 357 million is being considered over the next 3 years. Over the next five years, AAI has planned a massive investment of US$ 3.07 billion - 43 per cent of which will be for the three metro airports in Kolkata, Chennai and Trivandrum, and the rest will go into upgrading other non-metro airports and modernizing the existing aeronautical facilities. …..Cont.

Marketing mix:

Marketing mix Product

Marketing Mix:

Marketing Mix Price : Premium, Cheap value & Apex fares. It depend on Class, Date & day of travel and profit margin & competitor pricing also. Place : Tour Operator, Travel agent & Online reservation. Promotion : Advertising, Publicity, Sales promotion & Personal selling. People : Reliability, Caring attitude & Goodwill. Physical Evidence : On the ground & Inflight. Process : Reservation, Flight Information, Facilities at The Airport, Baggage Handling, Meal Service & Flight Entertainment. Productivity & quality : To Deliver Quality Service by meeting demand with supply.

Marketing Mix Process:

Marketing Mix Process

PowerPoint Presentation:

An example of Ambush Marketing

Major Brands :

Major Brands Kingfisher Indian Airlines Lufthansa Jet Airways Qatar Fly Emirates Singapore Airlines British Airways

In sum……:

Despite a growing market, airlines in India are fighting for survival in a highly competitive environment A host of initiatives are required to be taken by all concerned, to tide over the current situation Control Costs Improve quality of service Develop a large pool of skilled / technical manpower Attract more professionals to manage the aviation industry Develop infrastructure to match growth plans Liberalize rules & regulations governing civil aviation, without compromising on safety & security Reduction in ATF prices and taxation on ATF and lease rentals In sum……

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