EXECUTIVE SUMMARY

Indian Airlines is the oldest carrier in the domestic aviation industry. It has been the main
stay for domestic air travel in India for more than 45 years. With the arrival of other private
airlines, its interests have been hurt, but it is continuing it’s quest to be the leader in this industry.
During the research, the main objectives of the study have been:

a) To understand the perception of travellers towards Indian Airlines.

b) Also to apprehend the perceptions of travel agents towards Indian Airlines.
c) To know how Indian Airlines can improve its overall performance
d) The specific objectives are to improve service quality of Indian Airlines
e) To have a better marketing strategy
f) Market image of Indian Airlines as compared to its counterparts

To find out the required information primary data was collected through self-administered
questionnaire for the passengers and travel agents and secondary data from library and the
internet. A sample size of 200 was taken including 150 passengers and 50 travel agents.

The passengers and travel agents felt that private airlines were better in certain service factors.
They also could identify a change in Indian Airlines, after the arrival of private airlines and
believed that it was overcoming it’s ‘I care less’ syndrome.

For analysis of the data, statistical tools, based on the data collected were used and comparative
analysis was done.

Indian Airlines is a financially strong company and if it carefully plans it’s strategies, with more
focus on passengers, it will remain the market leader.
1.1 PURPOSE OF THE STUDY
The purpose of the study was to understand the perception of travelers towards Indian Airlines,
to apprehend the perceptions of travel agents towards Indian Airlines, to know how Indian
Airlines can improve its overall performance in terms of its marketing as well as its quality of
services provided and total customer satisfaction and hence with the help of the above to assess
the image of Indian Airlines in the market as compared to its counterparts viz. Jet air and Sahara
Airlines.

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 REASERCH OBJECTIVES OF THE STUDY

a) To understand the perception of travelers towards Indian Airlines.

b) Also to apprehend the perceptions of travel agents towards Indian Airlines.
c) To know how Indian Airlines can improve its overall performance
d) The specific objectives are to improve service quality of Indian Airlines
e) To have a better marketing strategy
f) Market image of Indian Airlines as compared to its counterparts
 1.3 RESEARCH METHODOLOGY OF THE STUDY

Research Design: -

There are three kinds of research designs namely;

• Exploratory

• Descriptive

• Causative

In my project, a Descriptive Research was initiated because it was generally a study which was

carried out to describe the market characteristics of various airlines, and of Indian Airlines in

particular, as well as the buying behaviour of travellers.

Situation Analysis: - Conducting a situational analysis means analysing the company, its market,

its competition and the industry in general. The situation analysis is a background investigation.

It involves obtaining information about the company and its business environment by means of

library, research.

Data collection- primary and secondary data: -

Data would be collected through both primary and secondary data for carrying out the research

project.
Primary Data: - Primary data relates to data which has been collected first hand and which has

been collected for the purpose of analysis. It is undertaken, when data needed by the researcher

does not exist, or are dated inaccurate, incomplete or unreliable, the researcher has to collect

primary data. The primary data was collected through questionnaires.

Sources of Primary Data: -

Primary data was collected through

• Corporate travellers.

• Professional’s

• Students.

Secondary Data

Secondary research invariably precedes primary research. Secondary data are data that were

collected for another purpose and already exists somewhere.

Sources of Secondary Data

• Travel Magazine.

• Business Travel Journals.

• Brochures,

• Libraries

• Annual Report.

Sample design
Doing research via sampling was important because of impossibility of finding all of a

population, as well as other restrictive parameters like cost, time etc. Our sampling decision

should be in-coordination with the research and data objectives. The method opted for taking

samples was `Non-probability sampling’. It was a `Purposive Non-probability sampling/

Judgement Sampling’ was used. The key assumption underlined this type of sampling is that,

with sound judgement or expertise, and an appropriate strategy, one can carefully and

consciously choose the elements to be included in the sample, so that samples can be developed

that are suitable for one’s needs. My objective for using `Judgement Sampling’ was that since

airline travel is not experienced by everybody, so `Judgement Sampling’ was a must to get the

closest and the correct response.

Sample Size: -

• 150 passengers/ respondents

• 50 travel agents.

Method of Data Collection:-

Survey/ Personal Contact Method:- In a survey, the researcher carries out opinion polls involving

customers, sales persons, dealers, traders and experts. In the survey, the main method of

interviewing was by Personal Interviews, as this gave me a better understanding of the needs and

preferences of the passenger. Most of the data is quantitative in nature and supported by

qualitative data.

Instruments for data collection: -

The research instruments used for this survey were structured questionnaires. The questionnaires
were designed to find the satisfaction levels of Domestic Airlines, in particular, Indian Airlines.
Questionnaire: -

A questionnaire consists of a set of questions prepared to respondents for their answers. Because

of its flexibility, the questionnaire is by far the common instrument used to collect primary data.

Closed Ended as well as Open Ended questionnaire were used in my market research .

Drafting of a Questionnaire: -

The formulation of the questionnaire, i.e., the structure and the disguise to be used in the

questionnaire depends upon the kind of information that is desired. Questionnaire was prepared

over a period of 5 days by intensive brainstorming. Valuable advice regarding changes was given

by my ORP tutor, Mr. S.L.Gupta, has resulted in the formulation of the questionnaire through

which responses were collected and analysed. A copy of the questionnaire has been attached as

an annexure to the project.

Since my objective was to derive out the maximum information out of the passengers without

making the whole exercise boring and troublesome, I decided to keep majority of the

questionnaire close-ended.

In order to generate and sustain the interest of the respondents, the initial questions pertained to

the gathering of simple information like the frequency of travel, the choice of airline and the

purpose of travel. Since, I had to balance the twin objectives of gathering maximum information

and at the same time retaining the interest of the customers, I was compelled to squeeze in a lot

of questions and club them up in a single question.

The question pertaining to assessing the impact of private airlines on Indian Airlines, for this the

respondents ticked in the various options under different parameters. Last but not the least, the

respondents were asked to pen down some personal information purely for statistical purposes,

with an assurance that it would be kept confidential.

Research Plan:

Market Survey
Type of Research
Market Segment Passengers / travellers
Geographical Area New Delhi
Data Sources Secondary - Print Media

- Internet

-Company documentation

Primary - Survey research

Research Instrument questionnaire
Sampling Plan Sampling Unit- Airline passengers

- Travel agents

Sample Size- 150 passengers

50 travel agents

Sampling Procedure-Non-probability

judgemental
Contact Method Personal Interviews.

LIMITATIONS
• The study could have been more comprehensive and more representative of the universe, had

the sample-size been larger, but it was not possible mainly due to lack of time and some other

constraints.

• The areas covered were restricted to Delhi city only and as such the results of questionnaires

are valid for Delhi city only.

• All this report has been an individual attempt and also it involves the human process of

interpretation and analysis, so there are chances of human error.

• The marketing research is done on the basis of certain assumptions as regards to the future of

the industry, but due to environmental changes, research results may not be valid.

• Despite repeated proof-reading, there is a possibility of spelling error of otherwise, which

may have been overlooked.

ABOUT TOPIC

About Aviation Industry

The first Indian State air service began to function on 20th Dec. 1929. All technical and operation

control was left in the hands of Imperial Airways. After that Tata Airways came into existence.

This airline was dealing with the taking off passengers and cargo from one place to another.

There were as many as eight private airlines till 1953.

• Air India Limited

• Air Services of India Limited.

• Air Airways (India) Limited.

• The Bharat Airways Limited.

• The Deccan Airways Limited.

• The Himalayan Aviation Limited.

• The Indian National Airways Limited.

• The Kalinga Airlines.

They were all having their own individual scheduled services in and around India. However,

the private sector of Indian aviation industry was brought to an end in June 1953 by the

introduction of an act of parliament known as Air Corporation Act 1953. This brought in the

nationalization of air-transport. Consequently, all the existing eight private airlines were

amalgamated to form one nationalized airline called Indian Airlines.

Indian Airlines came into existence in June 1953. Today it is well-established brand name

with sound infrastructure and an overwhelming size.

Progress of India’s Domestic Airlines.

Item 1971 1981 1990-91 1991-92

Hours flown 90 93 89 107

(‘000’s)
Kilometers 33.4 44.4 49.7 57.6

Flown ( million)
Passengers 2056 5650 7484 8316

carried (000’s)
Freight Tonnes 14.1 59.8 88.0 84.5

(km)
OPEN SKY POLICY

The process of liberalisation of the Indian air transport industry commenced with Government’s

declaration of open sky policy in 1990.In fact, the first step in this direction was taken when Air

Taxi Scheme was introduced as non scheduled operations in 1987. The scheme did not take off

because of severely restrictive conditions. It was modified in 1990 to remove restrictions on

capacity, schedules, route selection and airfares. The import duty on aircraft was also reduced to

3% to make airlines operations cheaper. This initiative further received impetus with the

liberalisationof the economy, trade and industry from 1991. The entry of private scheduled

airlines in Indian domestic skies was signaled in October 1992.As a result of these measures a

number of parties started air taxi operations on trunk and high density routes. As Indian Airlines

began losing market share and technical staff, the government took a number of steps to bolster

Indian Airlines.

Achievements

• Air Cooperation Act, 1953, repealed on March 1st, 1994, ending the state’s monopoly of the

skies.

• Air Taxi Operation allowed in 1994 to seek scheduled airline status if they have at least 3

aircrafts.

• Vayudoot, the third public sector airline, is merged with Indian Airlines and its infrastructure

offered to private airlines.

• No restrictions imposed by the government, of pricing by the private airlines and air cargo

operators.

• Most restrictions on types and imports of aircraft and operating routes relaxed in 1994.
Private Airlines Currently Operating:

• JET AIRWAYS

• SAHARA INDIA

JET AIRWAYS :

Jet Airways has emerged as a major competitor of Indian Airlines on the sector it operates. It was

launched on 5,May 1993 by Mr. Naresh Goyal with approximately 100 employees and 2

aircrafts. It has an interline agreement with over 90 international airlines which facilitates

ticketing and allows for convenient transfer of passengers. The crew has been trained in Malaysia

Airlines and Ansett-Rankett among the leading aviation training centresin the world. Jet airways

have the most latest and modern fleet of Aircraft’s operating in India. They have a total of 30

Aircraft’s, out of which

• AIRPLANES – fleet Model No. of Planes

Boeing 737 25

A.T.R 5

Total 30

The reservation system used by them is SABRE. They have an efficient and courteous ground

staff to take care of the needs of passengers. They have the quickest baggage system.

Jet Airways is not just a passenger airline – an important part of their revenue accrues from their

cargo division. They have capability of upto 2.5 tons per flight and with the current fleet

expansion the tonnage would be 35000 tons.

Their basic aim is to fly more people and more cargo to more destinations faster and more often

than any other airline in the country.

Sahara India: -

It was launched in 1978 from Gorakhpur. It was started with a small capital of Rs. 2000/- and the

establishment was one small room.

The business today has reached over 1600 crores. Now they have 971 offices and the biggest

infrastructure in the private sector in India. They work force is over 70,000 and the growth is

over 180%. The various activities they carry out are parabanking, housing, steel, aviation and

mass communication.

The philosophy of Sahara India is growing emotionally and materially together like a family i.e.

Collective Materialism. They operate with Boeing aircrafts. It follows the motto of “Value Added

flying”. They have a central reservation system and Gabriel II programmes. They have in-flight

entertainment through audio-visual facility. They have taken technical assistance from British

Airways and provide ratable maintenance and material management support. They have special

security expert team and state of the art explosive detection equipment.

PROBLEMS FACED BY PRIVATE AIRLINES

These include: -

• Lack of training facilities.

• Poor maintenance facilities.

• Low inventory of spares due to prohibitive costs of importing spares.

• No proper monitoring cell for analysing information.

• Lack of skilled manpower with respect to pilots and engineering staff.

• Necessity of keeping operation at a low cost.

• Poor infrastructure at airport.

COMPANY PROFILE

The saga of Indian Airlines began by the amalgamation of 8 private airlines, with the passing of

Air Corporation Act to nationalise the air transport industry. The journey began with a modest

fleet as well as high aspirations and over the years, Indian Airlines innovated and upgraded its

fleet to emerge as one of the largest domestic airlines in the world. Today Indian Airlines, along

with its subsidiary Alliance Air, provides an extensive network which encompasses the whole of

India – a geographical area equivalent to Western Europe, besides reaching out to 17

international stations.

In the last four decades, Indian Airlines has progressed by leaps and bounds and has built an

excellent track record of manpower and infrastructural development. It has thus emerged as a
proud symbol of modern India.

Some of the highlights of this glorious period of evolution include –

• Increase in passenger carriage from 0.5 million in 1954-55 to 8.4 million in 1997-98.

• Spread of network from 23,000 kms in 1953 to 1,18,000 kms in 1998-99.

• Growth of assets from Rs. 21 million to Rs. 30,000 million in 1998-99.

• A manifold increase in system seat capacity from 3070 seats per day in 1955 to 35,700 seats

per day.

THE HUMAN COMPONENT

Indian Airline’s success could not have been possible without its 21,990 personnel (as on 31st

March 1999). Everyone from pilots, cabin crew and engineers to commercial and administrative

staff.

Moral building communication initiatives have helped at Indian Airlines to play their part in the

turn around. Productivity linked incentives and greater transparency in recruitment, promotion

and transfer policies have greatly contributed to major improvements in the efficiency of the

company’s service.

The diverse programmes offered by the Central Training Establishment, Hyderabad virtually a

university of the air, it trains personnel in all aspects of airlines operations. Effective refresher

training programmes have helped to further enhance the skills learned at Central Training

Establishment. The company also continues to provide various welfare measures to employees,

such as medical facilities, subsidised canteens, educational scholarships, holiday homes, sports

clubs, festival advance etc.

CONTINUED FLEET EXPANSION AND MODERNISATION.

On its inception in 1953, Indian Airlines took to the sky with the fleet that included: -

• 74 DC-3 (Dakota) • 3 Sky Master • 12 Viking • 5 Sentinel

• 1 Twin Beach • 1 Single Beach • 1 Auro xix • 1 D.H.Dove

• 1 Saab Safir Aircraft

A phased fleet modernisation programme was started by Indian Airlines with the introduction of

Viscounts in 1957, followed by Fokker Friendship Aircraft in 1961. With the arrival of the pilot

friendly Caravelle turbo jet in 1963, Indian Airlines took domestic aviation in to the jet age. In

the 60’s, the first Indian built aircraft HS- 748 (Avro) was induced into Indian Airlines and the

year 1971 saw the induction of Boeing 737’s. In 1976, Indian Airlines, became the first domestic

airline in the world to induct wide-bodied 273 seater Airbus A- 300 aircraft, thus setting new

standards in passenger comfort. With the introduction of the state of the art Airbus A-320 in 1989

and its fly by wire technology, Indian Airlines acquired the latest in aviation equipment.

1. Indian Airlines has an extensive fleet of 52 aircrafts comprising

AIRPLANES – fleet Model No. of Planes

Airbus A300 10

Airbus A320 30

Boeing 737 12

Total 52
2. Indian Airlines flies 25000 passengers on 210 flights to 59 cities in India and 17 international

destinations. Indian Airlines has the largest domestic reach in the country with the network

that stretches from Leh and Srinagar to Port Blair and Dibru Garh.

3. Indian Airlines bases are situated at the 4 metros.

No. of bases 4 – Delhi, Mumbai, Calcutta and Chennai.

CONTRIBUTION TO NATIONAL EXCHEQUER.

The company has contributed Rs. 169.88 crores to the Govt. Exchequer by way of customs duty,

sales tax, excise duty etc., during the year.

Joint Venture & Hub and Spoke Operations.

Arrangements with Air India Ltd. for joint venture operations on the Indo- Gulf sector and the

Hub and Spoke operations continued during the year. The hours flown during the year vis-à-vis

the hours previous year were as follows: -

1998-99 1997-98

Joint Venture 4687 4812

Hub and Spoke 538 600

Jet Engine Overhaul Complex.

The JEOC, functioning as a separate profit centre since May 1996, has saved the company

expenditure to the tune of Rs. 6.70 crores, besides saving precious foreign exchange.

Cargo Promotion:-

With a carefully planned marketing strategy the company was able to generate substantially high

revenue of Rs 156.83 crores on carriage as compared to Rs126.73 crores in the previous year.

This is due to the success of it’s new door-to-door cargo service with M/S Gati Cargo.

Capacity Production and Utilisation:-

The performance of the company in terms of Capacity Production -`Available Tonne Kilometers’

(ATKms) and Capacity Utilisation -`Revenue Tonne Kilometers’ (RTKms) improved

significantly.Similarly, the number of passengers also registered a growth, despite recession in

the economy and sluggish market conditions, as results below indicate.

1998-99 1997-98
ATKms (Millions) 1296.157 1170.767
RTKms (Millions) 827.553 765.209
Passengers Carried 8.38 8.17
(Including Alliance Air)
Financial performance of Indian Airlines:-

The net profit has dropped from the previous year from 47.27 crores in the year 1997-98 to 15.6

crores in 1998-99. Although in the current financial year, i.e, 1999-2000, it is expected to rise to

Rs. 70 crore.

Real Time Computer:-

The Passenger reservation system of Indian Airlines was switched on to the new IBM ES-900

computer on the 8,March 1998 replacing the UNISYS mainframe computer which was in use

since March 1985.The improved central processing response time of the system has resulted in a

three fold increase in the capacity to handle queries. The new system uses the IBM hardware and

software designed by the subsidiary of British Airways.

Computerised Reservation System

Indian Airlines possesses an extensive computerised reservation system to provide online

reservations service to its clients. The reservation system is being maintained through a powerful

mainframe computer, which is accessed by more than EDP 2000 terminals across the length and

breadth of India, apart from the International Stations. Access to the reservation system is also

available through several hundred travel agencies operating in the country.

Indian Airlines participates in the following major CRS' in the world thereby providing access to

the Reservation System to travel agents around the globe-

Sabre

Galileo

Amadeus

Abacus

World Span

Gemini

Infiniti

GETS

Access
ANALYSIS
 ANALYSIS OF PASSENGER SURVEY

On collection of all the completed questionnaire from passengers and travel agents, the data was
aggregated and methods of its analysis applied so as to interpret the required information and
meaning.

1) Purchasing decision of tickets for the passengers:-

Out of the 150 respondents surveyed, it was found most of the passengers, purchased their tickets
from a travel agent. Primarily because travel agents offered discounts and provided better
options.

 47% of the passengers purchased their tickets from travel agents.

 32% say that their company books it.
 21% purchased their tickets directly from an airline counter.

2) As, air travel is more convenient and less time consuming than other modes of travelling,
people with now increased purchasing power as well as due to better services in air travel are
flying more often.

The results show that

 42% of the passengers travel every week.

 40% of the passengers travel every fortnight.
 16% of the passengers travel every month.
 Only 2% of the passengers travel every year.
3) Which of the following domestic airline have you travelled by?

Out of the 150 passengers surveyed, all had traveled by Indian Airlines, as it is the oldest and has
better connections than rest of the airlines and it still is the leader. These results indicate the
following: -

 100% respondents/passengers have traveled by ‘Indian Airlines’

 96% respondents/passengers have travelled by ‘Jet Airways’. Showing that it is the main
competitor of Indian Airlines.
 92% respondents/passengers have traveled by ‘Sahara Airlines’. Sahara is slowly and
gradually increasing it’s market share through continuos advertising, discount and better
flight services.
4) Most Preferred Airline

In accordance to the survey, the passengers are seeking better levels of service and quality than
ever before. Out of the 150 respondents surveyed the results are indicating a growing preference
for private airlines over Indian Airlines. But, passengers also feel, Indian Airlines is improving
after being bitten in the knee.

Indian Airlines - 42%

Jet Airways – 44%
Sahara Airlines – 16%

Out of the 150 travelers, who prefer Indian Airlines for domestic travelling say that they prefer
Indian Airlines because of the following reasons: -

 It has better connections all over India and it has a wide coverage all over the country.
 For it’s flight timing and improving punctuality.
 Since it is a Government undertaking, all the government employees travel by this airline
 Oldest airline, therefore goodwill.
5) Purpose Of Travel

The purpose of this question No. 5 is to deter mine the trend of the new age traveller. Does he
use the airline’s just for business/work, as was the case in 70’s and 80’s due to high tariff and low
purchasing power. The results indicate that 74% of the passengers surveyed travel both for work
as well as leisure/holiday. 20% of the passengers only travel by air for work purposes and
remaining 6% travel by air only for leisure/holiday.

6) Frequent Flier Programme

Frequent flier programmes were started first by Indian Airlines, to promote travel with them, as
they faced threat from various private airlines. All, the airlines now have a frequent flier
programme, but as of now it has not gained much popularity as the results show.

7) The number of respondents who were members of a frequent flier programme out of 150
were 38. Out of these 38 people 20 were the members of ‘Jet Privilege’, the frequent flier
programme of Jet Airways and the rest ‘15’ were members of Indian Airlines frequent flier
programme. 2 were members of both and 1 was a member of Sahara and Indian airlines.

The travellers are mostly corporate travelers who are members of these programmes. And
they get following benefits: -
 • Priority reservation.

• Free tickets after certain mileage.

• Separate check in counter.

• Extra baggage allowance.

• Priority waitlist. Priority on booking of international tickets, who are in collaboration

with the domestic airlines.
8) Factors considered important for relative influence on the ‘Choice of Airline’

In the buying process decision for an airline ticket, consumer usually goes through these
factors viz, suitability of timings, on time performance, in – flight service, in – flight comfort,
appearance and hospitality of crew, ease of reservation and cancellation, baggage handling,
frequent flier benefits and airfare. In the questionnaire I have taken all these factors with a rating
of 1 to 4.
1) Stands for Not Important
2) Least Important
3) Important
4) Very Important

Suitability of timings: - in accordance to the important survey conducted, the following results
were achieved.
(Suitability of Timings) (%)

1) Not Important 4%
2) Least Important 2%
3) Important 58%
4) Very Important 36%
On time performance: - On time performance is an important consideration for corporate
travellers but when compared on time performance standards of domestic airlines are relatively
poor as compared to the west.
(On time performance) (%)
1) Not Important 0%
2) Least Important 28%
3) Important 54%
4) Very important 18%

In flight service: - With the recent entry of private airlines, the in flight service standards have
improved both for national domestic carriers and private airlines. Continuos improvements seem
to be a part of the programme.
( In Flight Service) (%)

1) Not Important 0%
2) Least Important 0%
3) Important 62%
4) Very Important 38%

Ease of reservation and cancellation: - Indian Airlines, Jet and Sahara are all in the race for
providing better service, and ease of reservation and cancellation is another important factor
considered by the respondents
(Ease of reservations And Cancellation) (%)
1) Not Important 10%
2) Least Important 40%
3) Important 40%
4) Very Important 10%

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