Escolar Documentos
Profissional Documentos
Cultura Documentos
Grand Project
In the pursuit of management excellence, every student owes a great deal to the insights
and suggestions of others and I am no exception. I believe learning is a process that
entails to give and take, exchange of ideas and value addition through discussion.
I begin by acknowledging our humble thanks to my Guide, Prof. Praneti Shah for giving
me enthusiastic support for preparing this Grand Project report in our M.B.A. programme
and for their constant guidance, constructive criticism and judicious supervision, which
brought this challenging task to success.
Last but not in the least I would like to thank all those people who have directly or
indirectly contributed in the successful completion of my Grand project.
EXECUTIVE SUMMARY
The low cost airline industry has changed the definition of airlines that air travel is a
luxury and it is only for the upper segment of the population. The key objective of low
cost carriers is to increase their reach and provide the services to a large segment. In
India, low cost carriers came into existence in 2003 when Air Deccan launched its first
low cost airline and that was the first move to open the doors of the airlines industry for
middle class.
Rising GDP and increasing per capita income is positively impacting the airlines
industry. Another major driver is the booming tourism industry in India. However, the
low cost airline segment is facing challenges of increasing competition, rising fuel prices
and inadequate infrastructure.
Air Deccan is the market leader, holding the maximum share in LCC market, followed by
Jetlite, Air India Express, GoAir, and Indigo, who are making the competition stiffer. Air
Deccan enjoys the first mover advantage in terms of access to a large number of
overnight parking spaces and landing & take-off slots during the peak period.
This report analyzes the low cost airlines market in India. It discusses the market share of
leading carriers, growth drivers and challenges being faced by the industry. The report
also profiles the major low cost carriers, with a discussion of their key business strategies.
This report focuses on the comparison of three low cost airlines. It also includes the
consumer preference towards such LCC as well as their satisfaction level about their
overall services.
RESEARCH METHODOLOGY
Objectives:
To study the competition between low cost Airlines and how they target their
segments.
To find out best consumer preference towards Low cost Airlines and level of
satisfaction in overall services.
Comparison of three different cheapest service providers in Airline Industry and their
market share.
To study the competition intensity between these three players.
Research Design:
Research design is the blueprint of the research project. It includes the different things
which are methods, sampling plan, data collection methods. It provides the guidance as
well as information for the study. Research design has been in “Descriptive nature.”
As per the nature of project and objectives of the study is concern data collection
consist of two ways:
Data collection sources:
Secondary data:
• Aviation Industry’s website
• Magazines and Articles in News Paper
Primary data:
• Questionnaire
Sampling Plan
Target Population:
For the research of particular project the target population is customers of low cost
airlines and people come out from airport.
Sample Units:
Sample units would be the customers of different low cost airlines like Go, Spicejet and
Air Deccan from the city of Ahmedabad and Gandhinagar.
Sampling Method:
.
Step out sampling
Convenience sampling
Sample Size:
Contribution:
It may help Co. to know the effect of promotional scheme in Low Cost Airlines
Beneficiaries
Beneficiaries:
Those who planning to travel in any low cost airline will get proper idea about the
current scenario and have better option for selection.
It helps you make confident business decisions quickly.
Airline authority to provide better services and find out the problems.
Students or those who want to study about low cost airlines.
Limitation:
Lack of time and knowledge.
Study is restricted to Ahmedabad and Gandhinagar only.
Surveyed only 150 customers.
LITRATURE REVIEW :
The Aviation industry in India began with the birth of Tata Airlines, through the business
relationship between Mr. Nevill Vintcent, a Royal Air Force pilot and Mr. JRD Tata, the
first Indian to get an A-license. Tata Airlines became Air India in August 1946. In 1953,
the Air Corporation Act nationalized all existing airline assets and established the Indian
Airline Corporation and Air India International for domestic and international air services
respectively.
These two companies enjoyed monopoly power in the industry until 1991, when private
airlines were given permission to operate charter and non scheduled services under the
‘Air Taxi’ scheme to boost tourism. These carriers were not allowed at the time, to fly
scheduled flights or issue air tickets to passengers. As a result, a number of private
players including Jet Airways, Air Sahara, Modiluft, Damania Airways, NEPC airlines
and East West Airlines commenced domestic operations. In 1994, following the repeal of
the Air Corporation Act, private players were permitted to operate scheduled services.
Ultimately the carriers with more efficient operations and strategies survived and by
1997, only Jet Airways and Air Sahara made the cut from the original group.
The next big change in the industry came in late 2003 with the emergence of India’s first
no-frill airlines, Air Deccan. It revolutionized the industry, offering fares as low as INR
500 (USD 10 roughly), compared with Full Service fares offered by the incumbents,
averaging about INR 3000 or more. Since then, Spice Jet (restructured Royal Airways
and Modiluft), Go Airways and Kingfisher Air have also entered the industry. Paramount
Airways is another player, though it is positioned on the other end of the spectrum, as an
‘all business class’ airline. With the further advent of online ticket sales through
companies such as makemytrip.com, prices have crashed and tickets are available for as
little as INR 0.99. In fact, now many airline tickets can be bought for a price comparable
to an upper class railway ticket for the same route. A the a ......................................
The low cost airline industry has changed the definition of airlines that air travel is a
luxury and it is only for the upper segment of the population. The key objective of low
cost carriers is to increase their reach and provide the services to a large segment. In
India, low cost carriers came into existence in 2003 when Air Deccan launched its first
low cost airline and that was the first move to open the doors of the airlines industry for
middle class. ..........................................................................................................................
Rising GDP and increasing per capita income is positively impacting the airlines
industry. Another major driver is the booming tourism industry in India. However, the
low cost airline segment is facing challenges of increasing competition, rising fuel prices
and inadequate infrastructure. .................. ............................................................................
.
Air Deccan is the market leader, holding the maximum share in LCC market, followed by
Jetlite, Air India Express, GoAir, and Indigo, who are making the competition stiffer. Air
Deccan enjoys the first mover advantage in terms of access to a large number of
overnight parking spaces and landing & take-off slots during the peak period.
This report analyzes the low cost airlines market in India. It discusses the market share of
leading carriers, growth drivers and challenges being faced by the industry. The report
also profiles the major low cost carriers, with a discussion of their key business strategies.
INTRODUCTION
India at present has twelve competing airlines in the domestic market as against a single
government owned airline in 1991. According to McKinsey Quarterly(2005) the Indian
aircraft market is the world’s second largest commercial aircraft market. On-time
performance and service levels have risen dramatically and fares have dropped. Passenger
traffic is expected to grow by 20 percent annually over the next five years. Only a small
percentage of India’s population travels by air partly due to the high costs of domestic
flying. According to the Center for Asia Pacific Aviation (CAPA) consultancy, new
players will help domestic passenger numbers. The players in the current airline market
include airlines like Air Deccan with low-cost, low-fare and no frills along with airlines
like Kingfisher, which offers some frills, and premium airline like Jet Airways.
Competition has brought in some price advantages to travelers and has converted many
railway passengers to airline travelers. This article examines customer satisfaction among
travelers of four major domestic airlines in India. Because of proliferated number of
players in the airline industry, airlines may enjoy new business opportunities along with
high competitive threats. The objective of this study is to understand the customer
satisfaction levels and the comparative analyses of three low cost airlines.
A comparison of customer satisfaction based on service quality was done among the two
major airlines based on responses from frequent fliers. A flying experience was divided
into three stages- namely, pre-flight, in-flight and post-flight experience. A questionnaire
was designed in such a way that the same sets of variables were measured among the
customers of the two airlines under study. Fliers who had flown any of the two airlines
could answer the questions pertaining to those airlines. The objective of this study was to
understand the satisfaction levels of the airline customers.
Aviation is defined as the design, manufacture, use or operation of aircraft in which the
term aircraft refers to any capable of flight. Aircraft can either be heavier-than-air or
lighter-than-air, lighter than aircraft including balloons and airships where heavier-than-
air including airplane, autogiro, gliders, helicopters and or night hopters.
For a centuries man has dreamed to soar with the birds. Famous inventors such as
Leonardo da Vinci, John String fellow etc. have conjured up ideas of hoe to get some of
the strongest machines to fly long before the Write brothers famous flight at Kitty Hawk.
EARLY AVIATION
The first form of an aircraft was the kite, designed in the 5th century BC. Later on in the
13th century, Roger Bacon, an English monk, performed studies which later gave him the
idea that air supports a craft just like water support boat. In the 16th century, Leonardo da
Vinci studied bird flight and later produced the airscrew and the parachute. The airscrew
leading to the propeller later on, and the parachute were tremendously important
contribution to aviation.
The first commercial flight in India was made on February 18, 1911, when a French pilot
Monseigneur Piguet flew airmails from Allahabad to Naini, covering a distance of about
10 km in as many minutes.
Tata Services became Tata Airlines and then Air-India and spread its wings as Air-India
International. The domestic aviation scene, however, was chaotic. When the American
Tenth Air Force in India disposed of its planes at throwaway prices, 11 domestic airlines
sprang up, scrambling for traffic that could sustain only two or three. In 1953, the
government nationalized the airlines, merged them, and created Indian Airlines. For the
next 25 years JRD Tata remained the chairman of Air-India and a director on the board of
Indian Airlines. After JRD left, voracious unions mushroomed, spawned on the pork
barrel jobs created by politicians. In 1999, A-I had 700 employees per plane; today it has
474 whereas other airlines have 350.
For many years in India air travel was perceived to be an elitist activity. This view arose
from the “Maharajah” syndrome where, due to the prohibitive cost of air travel, the only
people who could afford it were the rich and powerful.
The origin of Indian civil aviation industry can be traced back to 1912, when the first air
flight between Karachi and Delhi was started by the Indian State Air Services in
collaboration with the UK based Imperial Airways. It was an extension of London-
Karachi flight of the Imperial Airways. In 1932, JRD Tata founded Tata Airline, the first
Indian airline. At the time of independence, nine air transport companies were carrying
both air cargo and passengers. These were Tata Airlines, Indian National Airways, Air
service of India, Deccan Airways, Ambica Airways, Bharat Airways, Orient Airways and
Ministry Airways. After partition Orient Airways shifted to Pakistan.
In recent years, however, this image of Civil Aviation has undergone a change and
aviation is now viewed in a different light - as an essential link not only for international
travel and trade but also for providing connectivity to different parts of the country.
Aviation is, by its very nature, a critical part of the infrastructure of the country and has
important ramifications for the development of tourism and trade, the opening up of
inaccessible areas of the country and for providing stimulus to business activity and
economic growth.
Until less than a decade ago, all aspects of aviation were firmly controlled by the
Government. In the early fifties, all airlines operating in the country were merged into
either Indian Airlines or Air India and, by virtue of the Air Corporations Act, 1953; this
monopoly was perpetuated for the next forty years. The Directorate General of Civil
Aviation controlled every aspect of flying including granting flying licenses, pilots,
certifying aircrafts for flight and issuing all rules and procedures governing Indian
airports and airspace. Finally, the Airports Authority of India was entrusted with the
responsibility of managing all national and international air ports and administering every
aspect of air transport operation through the Air Traffic Control. With the opening up of
the Indian economy in the early Nineties, aviation saw some important changes. Most
importantly, the Air Corporation Act was repealed to end the monopoly of the public
sector and private airlines were reintroduced.
By 1995, several private airlines had ventured into the aviation business and accounted
for more than 10 percent of the domestic air traffic. These included Jet Airways Sahara,
NEPC Airlines, East West Airlines, ModiLuft Airlines, Jagsons Airlines, Continental
Aviation, and Damania Airways. But only Jet Airways and Sahara managed to survive
the competition. Meanwhile, Indian Airlines, which had dominated the Indian air travel
industry, began to lose market share to Jet Airways and Sahara. Today, Indian aviation
industry is dominated by private airlines and these include low cost carriers such as
Deccan Airlines, GoAir, SpiceJet etc, who have made air travel affordable.
CH.-1.2 INTRODUCTION TO THE AVIATION
INDUSTRY:
Introduction:
The Indian Aviation industry can be broadly classified into two segments Civil
and Cargo. In fact the birth of civil aviation is attributed to air cargo and mail. In the
beginning mail and cargo were the only the elements of air carrier services. Passenger
came much later. The major players in the Indian context are air India in the international
segment and Indian, Jet airways and Sahara in the domestic segment.
Over the years the aviation sector in India has evolved and today it is on the
threshold of a major shake-out with the divestment of the Indian Government’s stake in
air India and Indian cards. A number of domestic and foreign parties have evinced intrest
in the divestment process. Foreign airlines like virgin Atlantic of Britain and Singapore
airlines have also entered the Indian skies.
Aviation
Industry
Civil Cargo
Domestic Domestic
International International
Domestic and International passenger traffic in India is projected to grow annually at a
compound rate of 12.5% and 7% respectively over the next decade. At the same time
domestic and international cargo traffic is expected to grow at a compound rate of 5.6%
and 14% respectively.
The civil aviation activities can be broadly classified into three areas.
1. Operational
2. Infrastructural
3. Regulatory cum development
On the operational front, air India provides international air services while Indian
involved in the field of domestic air service. Pavan has supplies helicopter support
service, primarily to the petroleum sector. Air India, Indian and its subsidiary alliances
air and Pavanhans are Govt. owned. Other than them there are private domestic operators
too. Infrastructural facilities are supplied by Airport Authority of India (AAI), which was
formed in April 1995.
In terms of size the Indian aviation industry’s turnover was approximately Rs. 60 billion
in the financial year 2007, with 16 million passengers using its services. The growth of
the industry is given below.
Aircraft Passenger Passengers
Year (million km flown ( million km
flown) ( ‘000 nos ) flown)
1970-71 37.8 2,123 1,559.0
1980-81 41.2 4,850 3,917.2
1990-91 58.7 7,912 7,028.1
1995-2000 88.8 10,356 9,249.3
2001-2005 112.5 12,312 11,047.3
2005-2006 109.4 11,549 10,702.9
2006-2007 117.2 12,017 10,820.3
2007-2008 123.5 13,245 11,250.7
2008-2009 208.8 19,236 17,235.8
From the above table, it is clear that the aviation industry in the country has grown by
leaps and bounds in terms of kms flown and also number of passengers served.
In terms of characteristics, the aviation industry is seasonal in nature. In the period April
to May and again from November to December, demand is high.
Positioning
• Non-business passengers, leisure traffic, price conscious business passengers
• Short-haul point traffic with high frequencies
• Aggressive marketing
• Secondary airports
• Competition with all transportation carriers
Low-cost Carriers (LCCs) get this tag primarily due to their low operating cost structure.
However, irrespective of their cost structure, budget airlines are today recognised because
of their low ticket fares and limited services.
The idea of LCC originated in the US. Founded in Dallas Texas on June 18, 1971 by
Herb Kelleher, Southwest Airlines offered tickets that worked out to be cheaper than a
car or coach ride. It is the fourth largest US airline in terms of domestic customers carried
annually. It has been profitable every year since 1973.
Rising GDP and increasing per capita income is positively impacting the airlines
industry. Another major driver is the booming tourism industry in India. However, the
low cost airline segment is facing challenges of increasing competition, rising fuel prices
and inadequate infrastructure.
Air Deccan is the market leader, holding the maximum share in LCC market, followed by
Jetlite, Air India Express, GoAir, and Indigo, who are making the competition stiffer. Air
Deccan enjoys the first mover advantage in terms of access to a large number of
overnight parking spaces and landing & take-off slots during the peak period.
This report analyzes the low cost airlines market in India. It discusses the market share of
leading carriers, growth drivers and challenges being faced by the industry. The report
also profiles the major low cost carriers, with a discussion of their key business strategies.
CH. 3 CURRENT SCENARIO
With a growth rate of 18 per cent per annum, the Indian aviation industry is one of the
fastest growing aviation industries in the world. The government's open sky policy has
lead to many overseas players entering the market and the industry has been growing both
in terms of players and number of aircrafts.
With the liberalization of the Indian aviation sector, the 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.
Indian carriers currently have a fleet size of 310 aircrafts, but have 480 aircrafts on order,
scheduled for delivery by 2012.
Earlier, air travel was a privilege only a few could afford, but today air travel has become
much cheaper and can be afforded by a large number of people. Furthermore, the price of
aviation turbine fuel (ATF) crashed drastically in December 2008, hitting US$ 0.665-
US$ 0.789, which is its lowest level since the last four to five years. With this move,
airlines are likely to prune their airfares considerably. Jet Airways, the country's largest
private carrier, has slashed domestic fares by 40 per cent and national carrier Air India
has announced that it will cut basic fares anywhere between 45 per cent and 60 per cent
in February 2009 following a drop in ATF prices.
India has jumped to 9th position in world's aviation market from 12th in 2006. The
scheduled domestic air services are now available from 82 airports as against 75 in 2006.
Further, Kapil Kaul, CEO India & Middle East, Centre for Asia Pacific Aviation, has
said, "India's civil aviation passenger growth, at 20 per cent, is among the highest in the
world. The sector is slated to cruise far ahead of other Asian giants like China or even
strong economies like France and Australia. The number of passengers who will be
airborne by 2020 is a whopping 400 million."
The Indian Civil Aviation market grew at a compound annual growth rate (CAGR) of 18
per cent, and was worth US$ 7.6 billion in 2011.
The government is planning to upgrade 45 big and small airports across India. For
greenfield airports, foreign equity up to 100 per cent is allowed through automatic
approvals. For upgrading present airports, foreign equity up to 74 per cent is allowed
through automatic approvals and 100 per cent through special permission (from FIPB).
The Centre for Asia Pacific Aviation (CAPA) has forecast that domestic traffic will
increase by 25 per cent to 30 per cent till 2012 and international traffic growth by 15 per
cent, taking the total market to more than 100 million passengers by 2012. India's civil
aviation passenger growth, presently at 20 per cent, is one of the highest in the world, and
is expected to surpass countries like China, France and Australia. By 2020, 400 million
Indian passengers are likely to be airborne.
By 2020, Indian airports are expected to handle more than 100 million passengers
including 60 million domestic passengers and around 3.4 million tonnes of cargo per
annum.
Domestic air traffic is likely to more than double and touch 86.1 million passengers by
2012, up from 32.2 million passengers in 2010, states the market research firm PhoCus.
Moreover, significant measures to propel growth in the civil aviation sector are on the
anvil. The government plans to invest US$ 9 billion to modernise existing airports by
2010.
The government is also planning to develop around 300 unused airstrips, and
subsequently, Boeing and Airbus, along with Embraer (Brazil), Bombardier (Canada),
Sukhoi (Russia), ATR (France) and BAE System (UK) are now looking at foraying into
the Indian jet market.
Airport Infrastructure
• Of the 454 airports and airstrips in India, 16 are designated international airports.
Currently 97 airports are owned and operated by the Airports Authority of India
(AAI). India's Civil Aviation Ministry aims at 500 operational airports in the next
12 years, as per a report by Centre for Asia Pacific Aviation (CAPA). The
government aims to attract private investment in aviation infrastructure.
• A projected investment of US$ 8.5 billion has been planned during the 11th plan
for the development of Indian airports.
• Mumbai and Delhi airports have already been privatised and are being upgraded
at an estimated investment of US$ 4 billion over 2006-16.
• A greenfield airport is already operational at Bangalore and the one at Hyderabad
will be operational soon. These are built by private consortia at a total investment
of over US$ 800 million.
• A second greenfield airport being planned at Navi Mumbai is going to be
developed using public-private partnership (PPP) mode at an estimated cost of
US$ 2.5 billion.
• 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 three 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 modernising the existing aeronautical facilities.
The demand for corporate jets in India has gone up considerably in the past few years and
is likely to grow two-fold by the end of 2011. To further fuel the rapidly growing private
jet industry, the government has plans of developing over 300 redundant airstrips in the
country. The work will be carried out in a phased manner subsequent to the expansion
and development of 35 non-metro airports by 2010. The government plans to focus on
airstrips near major cities in order to relieve major airports of their burgeoning traffic.
Additionally, the government is also considering a new policy to permit private airstrips
in the country. The Indian civil aviation minister, Praful Patel has said that India will
require around 300 to 400 private jets in the next three to five years. The demand for
private jets can even see a growth rate of about 50 per cent on a year-to-year basis.
As per the Investment Commission of India, the aviation sector is likely to boom further
in the coming years, attracting huge investment.
• Passenger traffic is projected to grow at a CAGR of over 15 per cent in the next 5
years.
• The Vision 2020 statement announced by the Ministry of Civil Aviation,
envisages creating infrastructure to handle 280 million passengers by 2020.
• Investment opportunities of US$ 110 billion envisaged up to 2020 with US$ 80
billion in new aircraft and US$ 30 billion in development of airport infrastructure.
• Associated areas like maintenance, repair and overhaul (MRO) and training offer
high investment potential. A report by Ernst & Young says the MRO category in
the aviation sector can absorb up to US$ 120 billion worth of investments by
2020.
• Air cargo traffic will grow at over 11.4 per cent p.a. over the next 5 years to
exceed 2.8 million tonnes by 2010.
• Foreign air cargo players are betting big on India and many are planning to add
capacity. As part of its expansion, Emirates is increasing its flights to New Delhi,
Mumbai, Bangalore, Hyderabad, Chennai and Kochi over a period of time.
• Eurocopter, a division of EADS, world leader in aerospace defence and related
services, is keen to enter the emergency medical services (EMS) business in India
and the company is in talks with leading hospital majors like the Manipal group
and the Apollo group. The company has 480 helicopters operating in India in both
the civil and military sectors and the company also hopes to increase its business
through heli-tourism.
• India has signed a new air service pact with the United Arab Emirates (UAE) for
the revision of the air services agreement between the two countries.
The Indian aviation sector is likely to see clear skies ahead in the years to come.
Giovanni Bisignani, Director General and CEO of the International Air Transport
Association (IATA), has called on India to give direction to the efforts in shaping future
aviation policies, including environment and commercial freedoms. "In a few years, Asia
Pacific will be the largest single aviation market. India is a key driver of that growth.
India's enormous size makes it an important market."
With a growth rate of 18 per cent per annum, the industry will see rapid expansion in
terms of players as well as the number of aircrafts. The strength of the Indian fleet is
projected to be 500-550 by 2010.
In the context of a multiplicity of airlines, airport operators (including private sector), and
the possibility of oligopolistic practices, there is a need for an autonomous regulatory
authority which could work as a watchdog, as well as a facilitator for the sector, prescribe
and enforce minimum standards for all agencies, settle disputes with regard to abuse of
monopoly and ensure level playing field for all agencies. The CAA was commissioned to
maintain a competitive civil aviation environment which ensures safety and security in
accordance with international standards, promotes efficient, cost-effective and orderly
growth of air transport and contributes to social and economic development of the
country.
a. Private sector participation will be a major thrust area in the civil aviation
sector for promoting investment, improving quality and efficiency and
increasing competition.
b. Competitive regulatory framework with minimal controls encourages
entry and operation of private airlines/ airports.
c. Encouragement of private sector investment in the construction, up
gradation and operation of new and existing airports including cargo
related infrastructure.
d. Rationalization of various charges and price of ATF/AV Gas will be
undertaken to render operation of smaller aircraft viable so as to encourage
major investment in feeder and regional air services by the private sector.
e. Training Institutes for pilots, flight engineers, maintenance personnel, air-
traffic controller, and security will be encouraged in private sector.
f. Private sector investment in non-aeronautical activities like shopping
complex, golf course, Entertainment Park, aero-sports etc. near airports
will be encouraged to increase revenue, improve viability of airports and
to promote tourism. CAA will ensure that this is not at the cost of primary
aeronautical functions, and is consistent with the security requirements.
g. Government will gradually reduce its equity in PSUs in the sector.
h. Government will encourage employee participation through issue of shares
and ESOP
Meaning:
At the outset we must point out that the concept of 'Open Skies' is much misunderstood in
its meaning and implications. Open Skies means unrestricted access by any carrier into
the sovereign territory of a country without any written agreement specifying capacity,
ports of call or schedule of services. “In other words an Open Skies policy would allow
the foreign airline of any country or ownership to land at any port on any number of
occasions and with unlimited seat capacity.” There would be no restriction on the type of
aircraft used, no demand for certification, no regularity of service and no need to specify
at which airports they would land. Defined in this manner, it is not surprising that Open
Skies policies are adopted only by a handful of countries, most commonly those that have
no national carriers of their own and that have only one or two airports. No sovereign
country of any eminence practices Open Skies least of all the European Union, UK, USA,
Japan, Australia or countries in South East Asia.
A recurring demand often voiced by interested parties is that, in order to promote Travel
& Tourism, India should adopt an Open Skies policy. It is argued that the current policy
restricts the access of foreign airlines. As a result potential tourists are not offered a
choice of airlines or seats when traveling to India. This problem is exacerbated during the
holiday season when it is difficult, if not impossible, to get a seat either into the country
or out of it. It is argued, therefore, that India should adopt an Open Skies approach to any
foreign carrier wanting to fly into India, which literally means allowing them unlimited
service, capacity and points of call.
Bilateral Treaties
However, almost 99 per cent of Members of the International Civil Aviation Organization
(ICAO) follow the system of negotiated bilateral treaties determining the aviation
relations between two sovereign Contracting parties. In fact, the bilateral aviation regime
is considered the fundamental basis for a disciplined and regulated aviation system
between the nations of the world. It provides not only regularity
of operations through scheduled services but also stipulates the basis of ownership,
number of seats to be utilized, type and certification of aircraft and visiting ports of call.
The Bilateral Agreements also protect the different kinds of aviation Freedoms granted to
contracting parties by specifying the reciprocal rights to be enjoyed by each.
India has signed over 180 Bilateral Agreements with different countries. In 2002 the total
number of seats available was 38.09 million. Of this, the capacity operated was
approximately 19.174 million seats. Since the average size of traffic to and from the
country is slightly in excess of approximately 14 million passengers, normally the
contracted rights should suffice the traffic demand.
Political Factors
In India, one can never over-look the political factors which influence each and every
industry existing in the country. Like it or not, the political interference has to be present
everywhere. Given below are a few of the political factors with respect to the airline
industry:
o The airline industry is very susceptible to changes in the political environment as it has
a great bearing on the travel habits of its customers. An unstable political environment
causes uncertainty in the minds of the air travelers, regarding traveling to a particular
country.
o Overall India’s recent political environment has been largely unstable due to
international events & continued tension with Pakistan.
o The most significant political event however has been September 11. The events
occurring on September had special significance for the airline industry since airplanes
were involved. The immediate results were a huge drop in air traffic due to safety &
security concerns of the people.
o International airlines are greatly affected by trade relations that their country has with
others. Unless governments of the two countries trade with each other, there could be
restrictions of flying into particular area leading to a loss of potential air traffic (e.g.
Pakistan & India)
o Another aspect is that in countries with high corruption levels like India, bribes have to
be paid for every permit & license required. Therefore constant liasoning with the
minister & other government official is necessary.
The state owned airlines suffer the maximum from this problem. These airlines have to
make several special considerations with respect to selection of routes, free seats to
ministers, etc which a privately owned airline need not do. The state owned airlines also
suffers from archaic laws applying only to them such as the retirement age of the pursers
& hostesses, the labour regulations which make the management less flexible in taking
decision due to the presence of a strong union, & the heavy control &interference of the
government. This affects the quality of the service delivery & therefore these airlines
shave to think of innovative service marketing ideas to circumvent their problems &
compete with the private operators.
Economic Factors
Business cycles have a wide reaching impact on the airline industry. During recession,
airline is considered a luxury & therefore spending on air travel is cut which leads to
reduce prices. During prosperity phase people indulge themselves in travel & prices
increase.
After the September 11 incidents, the world economy plunged into global recession due
to the depressed sentiment of consumers.
The loss of income for airlines led to higher operational costs not only due to low demand
but also due to higher insurance costs, which increased after the WTC bombing. This
prompted the industry to lay off employees, which further fuelled the recession as
spending decreased due to the rise in unemployment.
Even the Indian carriers like Air India was deeply affected as many flights were
cancelled due to internal (employee relations) as well as external problems, which has
been discussed later.
Social Factors
The changing travel habits of people have very wide implications for the airline industry.
In a country like India, there are people from varied income groups. The airlines have to
recognize these individuals and should serve them accordingly. Air India needs to focus
on their clientele which are mostly low income clients & their habits in order to keep
them satisfied. The destination, kind of food etc all has to be chosen carefully in
accordance with the tastes of their major clientele.
Especially, since India is a land of extremes there are people from various religions and
castes and every individual travelling by the airline would expect customization to the
greatest possible extent. For e.g. A Jain would be satisfied with the service only if he is
served jain food and it should be kept in mind that the customers next to him are also jain
or at least vegetarian.
Technological Factors
The increasing use of the Internet has provided many opportunities to airlines. For e.g.
Air Sahara has introduced a service through the internet, wherein the unoccupied seats are
auctioned one week prior to the departure.
Air India also provides many internet based services to its customer such as online ticket
booking, updated flight information & handling of customer complaints.
USTDA (US trade & development association) is funding a feasibility study and
workshops for the Airports Authority of India as part of a long-term effort to promote
Indian aviation infrastructure. The Authority is developing modern communication,
navigation, surveillance, and air traffic management systems for India's aviation sector
that will help the country meet the expected growth and demand for air passenger and
cargo service over the next decade.
A proposal for restructuring the existing airports at Delhi, Mumbai, Chennai and Kolkata
through long-term lease to make them world class is under consideration. This will help
in attracting investments in improving the infrastructure and services at these airports.
Setting up of new international airports at Bangalore, Hyderabad and Goa with private
sector participation is also envisaged.
A good example of the impact of technology would be that of AAI, wherein with the help
of technology it has converted its obsolete and unused hangars into profit centers. AAI is
now leasing these hangars to international airlines and is earning huge profits out of it.
AAI has also tried to utilize space that was previously wasted installing a lamination
machine to laminate the luggage of travelers. This activity earns AAI a lot of revenue.
These technological changes in the environment have an impact on Air India as well.
Better airport infrastructure, means better handling of airplanes, which can help reduce
maintenance cost. It also facilitates more flights to such destinations.
CH. 6 COST FACTORS:
Labor
Given the valuable contribution that aviation and tourism make to national welfare, it is
essential that the aviation market is globally competitive and functions in the most
efficient way. This means that the inputs that the industry depends on, such as labour and
capital, must also be available on an internationally competitive basis.
Fuel Price
ATF is the major cost for domestic carriers accounting for 30% of the total operating
costs in India, which is much higher than around 10-15% for airlines worldwide. The
exorbitant sales tax on the ATF, which increases the price of ATF, is the major reason for
this higher share in operating cost. The Jet fuel price has increased by 13.1 % to USD
424.64/ KL in New Delhi during the period May-Aug ’04.
...................................................................................
Capital
The relatively capital-intensive nature of the airline industry, combined with the fact that
airlines are generally regarded as being inherently risky investments, means that access to
large, well-functioning capital markets is an important issue for all airlines. The effects of
these restrictions may vary from country to country, but are likely to be greater for
countries with small domestic capital markets.
Operating.Costs
The regulatory system affects where, how and when airlines can fly. Thus it affects
airlines’ ability to operate efficient networks and their revenue. To the extent that airlines
cannot use the least cost combinations of aircraft types to carry passengers and freight,
the costs of operating existing networks are higher than they otherwise might be
(technical inefficiency). Further, they may be prevented from flying the optimum sized
and configured network (allocative inefficiency). Thus, costs may be reduced as airlines
are able to operate the right aircraft at the right frequencies on an existing route.
Airlines, by changing the design of a network and increasing its size, may also be able to
decrease costs through economies of scale and scope.
Ownership and control
As airlines strive for greater efficiencies, they consider the benefits of consolidation.
However, the normal commercial process of acquisition and/or merger is not available
due to restrictions contained in bilateral agreements that are designed to ensure that
ownership and control of airlines remain with nationals of the countries where they are
based.
Growth through merger or acquisition enables airlines to achieve economies scale and
scope by consolidating airline functions. The merger of two airlines, for example, may
allow them to consolidate their ground handling, maintenance, information technology
and various managerial functions.
Taking aircraft on lease is one of the preferred modes among the Indian carriers.
However, this has suddenly become costlier affair due to changes proposed in Union
Budget 2004-05. The budget proposes withdrawal of tax exemption granted to acquire
aircraft or an aircraft engine on lease prospectively from September 1, 2004. This has
resulted in imposition of withholding tax of 42% on leasing of aircraft. Impediment of
this kind at a juncture when almost all, Indian carriers are firming up their expansion
plans especially through leasing of aircraft is a setback. But after hard lobbying by the
industry the deadline was deferred until April 1, 2005, and would now be withdrawn for
lease agreements entered into after April 1, 2004.
All carriers barring Jet Airways will feel the heat of the sudden withdrawal of exemption
for taking aircraft for lease as they have significant plan to expand the fleet capacity by
leasing route. This includes both state carriers like Air India (AI), Indian Airlines (IA),
Alliance Air and private carriers like Air Sahara, Air Deccan. As Jet Airways that has
predominantly prefers owning aircraft rather than going for leasing.
As tax exemption will not be available for lease agreements entered on or after April 1,
2005 the Indian carriers who have plans to take aircraft on lease have to sign agreement
either on or before the expiry date or they will have to bear additional cost burden.
Alternatively, taking aircraft on lease from a country with which India has double
taxation treaty or getting lease agreement signed in a third country could help avoid the
tax on lease rental. This may not be much helpful to state carriers and to some extent the
private players also due to auditing/ accounting procedures.
As leasing route is the most preferred one for a new entrant, the Budget initiatives will
prove be a heavy deterrent as they will escalate the effective lease rental cost by almost
42%.
CH.7 MAJOR PLAYERS:
• Indian Airlines
• Air India
• Indigo
• Paramount Airways
• Jagson Airline
• Jet Airways
• Air Sahara
1. Indian Airlines:
Indian Airlines, India’s premier airline, has now been renamed as Indian. But Indian
Airlines (IA) had establish itself as such a strong brand name that majority of people are
still not aware that its name has been changed to Indian. Indian Airlines is fully owned by
the Government of India and came into came into being with the enactment of the Air
Corporations Act 1953.
Indian Airlines began its operation on 1st August 1953 and was entrusted with the
responsibility of providing air transportation within the country as well as to the
neighboring countries. Indian Airlines came into existence after nationalization of eight
private airlines. At the time of nationalization, Indian Airlines inherited a fleet of 99
aircraft consisting of various types of aircrafts. With nationalization Indian Airlines
started modernization in Indian civil aviation industry. Year 1964 heralded the beginning
of the jet era in Indian Airlines when the Caravelle aircraft was inducted into the fleet.
Continuous upgradation in its fleet has been going on ever since.
Presently, Indian Airlines, together with its fully owned subsidiary Alliance Air, has a
fleet of 70 aircraft (3 wide bodied airbus A300s, 47 fly-by-wire airbus A320s, 3 Airbus
A319s, 11 Boeing 737s, 2 Dornier Do-228 aircraft and 4 ATR-42). Another 43 new
aircrafts (i.e. 19 A319s, 4 A320s & 21 A321s ) are expected to be inducted in Indian
Airlines by November 2006.
Indian Airlines transport network spans from Kuwait in the west to Singapore in the east
and covers 76 destinations (58 within India and 18 abroad). The Indian Airlines
international network covers Kuwait, Oman, UAE, Qatar and Bahrain in West Asia;
Thailand, Singapore, Malaysia and Myanmar in South East Asia and Pakistan,
Afghanistan, Nepal, Bangladesh, Sri Lanka and Maldives in the South Asia
subcontinent.
2. Air India
Air India is India’s national Airline. Air India’s history can be traced to October 15, 1932.
On this day J.R.D. Tata, the father of Civil Aviation in India and founder of Air India,
took off from Drigh Road Airport, Karachi, in a tiny, light single-engine de Havilland
Puss Moth on his flight to Mumbai via Ahmedabad.
Air India was earlier known as Tata Airlines. At the time of its commencement, Tata
Airlines consisted of one Puss Moth, one Leopard Moth, one palm-thatched shed, one
whole time pilot, one part-time engineer, and two apprentice-mechanics. Tata Airlines
was converted into a Public Company under the name of Air India in August 1946.
On March 8, 1948, Air India International Limited was formed to start Air India’s
international operations. On June 8, 1948, Air India started its international services with
a weekly flight from Mumbai to London via Cairo and Geneva with a Lockheed
Constellation aircraft.
In early 1950s due to deteriorating financial condition of various airlines, the Government
decided to nationalize air transport. On August 1, 1953 two autonomous corporations
were created. Indian Airlines was formed with the merger of eight domestic airlines to
operate domestic services, while Air India International was established to operate the
overseas services. The word 'International' was dropped in 1962. With effect from March
1, 1994, the airline has been functioning as Air India Limited.
Air India's worldwide network today covers 44 destinations by operating services with its
own aircraft and through code-shared flights. Important destinations covered by Air India
are Bangkok, Hongkong, Jakarta, Kuala Lumpur, Osaka, Singapore, Tokyo, Seoul, Dar-
es-Salam, Nairobi, Frankfurt, London, Paris, Birmingham, Abu Dhabi, Al Ain, Bahrain,
Dammam, Doha, Dubai, Jeddah, Muscat, Riyadh, Kuwait, Los Angeles, Chicago,
Newark, New York, and Toronto. Air India’s fleet consists of 38 aircrafts. These include
12 Boeing 747-400, 1 Boeing 747-400 COMBI, 2 Boeing 747-300 COMBI, 19 Airbus
310-300, and 4 Boeing 777-200.
3. Indigo
IndiGo is the latest entrant to the domestic civil aviation space in India. The low cost
carrier took off its inaugural flight from Delhi to Imphal on August 4, 2006. IndiGo is
targeting those people who are cost conscious and are looking for affordability,
punctuality and hassle-free processing.
IndiGo presently has a fleet of four aircrafts and plans to expand its fleet and network in a
phased manner. By the end of 2006, IndiGo is aiming at six aircrafts and 12 cities and has
plans to expand its fleet to 15 by the end of 2007. IndiGo proposes to serve around 30
Indian cities with a fleet of 40 Airbus A-320s by 2010. IndiGo would have fleet of only
one type of aircraft, the A-320 that has a capacity of 180 passengers.
Some of the sectors on which IndiGo is concentrating are Delhi - Imphal, Delhi - Pune -
Bangalore, Delhi - Kolkata - Guwahati, Delhi - Hyderabad, Delhi - Mumbai, and Delhi –
Nagpur.
4. Paramount
Paramount Airways has number of firsts to its credit. It is the first airline in India to
launch the New Generation Embraer 170/190 Family Series Aircrafts. It is the first to
offer full business class services but at prices that are equivalent to the economy class
fares of other carriers. Paramount Airways is also the premium service schedule airline
offering first time direct services to a number of commercial Hubs in India, connecting
them to primary metros across the country.
5. Jagson
Jagson Airline is a private low-cost budget airline based in Delhi, India. In 1991 when
the aviation sector was opened for the private sector, Jagson Airlines, was the first private
airline to avail of this opportunity. It commenced its operations in 1992.
Jagson Airline presently flies to select destinations in Himachal Pradesh, Uttaranchal and
Rajasthan. It also operates a helicopter service between Srinagar, Baltal and Amarnath.
Jagson Airlines has decided to expand its operations and would cover Delhi, Patna,
Bangalore, Mumbai, Kolkata, Guwahati, Jaipur, Dibrugarh and Goa in initial phase. In
the second phase, services would be expanded to Lucknow, Kochi and Hyderabad. For its
initial operations Jagson Airlines has taken six Airbus aircrafts on dry-lease.
• Delhi • Jaipur
• Udaipur
• Jaisalmer
• Kullu
• Shimla
6. Jet Airways
7. Air Sahara
CH. 9 COMPANY
INFORMATION
1 Air Deccan
2 Go Air
3 Spice Jet
Kingfisher Red has been one of the most persistent low cost
Airlines in India . Kingfisher Red is the largest low cost
carrier in India and continues to grow along with the market.
From the very beginning, KingfisherRed has set very high
standards for itself in bringing air travel within the reach of
the majority of Indians and to this end Kingfisher Red has
remained seriously committed.Flights
Kingfisher Red is the first low cost carrier in India and a few
other airlines have come up since then which are competing
in the same segment of the market. The list includes other
airliners like Spicejet and Indigo. KingfisherRed operates its
flights on a completely no frills policy and the passengers
have to pay for the food which they can order from the menu
provided to them by the Cabin crew. From time to time they
run shopping campaigns as well onboard Kingfisher Red
flights.
Air Deccan is India 's No.1 cheap air carrier working under
the aegis of Deccan Air Aviation Pvt. Ltd. which is the
largest heli-charter company in India . Air Deccan was found
in 1995 and since then it has gained up a noticeable sector of
the Indian Aviation Industry. Air Decan Airlines has been
enjoying a reputation in the industry for delivering fast and
reliable heliporting to corporate segment, for tourism,
medical support and transit and logisctics support at off-shore
locations.ath, the MD is a graduate from the highly honored
National Defense Academy and is an ex-serviceman of the
Indian Army. He has also received the ROLEX Award for
Ecological site farming and the WIPRO PRSI Award for
commendable achievements in the industry. Air Decan is
already a major player in the low cost carrier segment
offering low airfares.
Mumbai-New Delhi
Flights Air Deccan Kolkata
Mumbai-Chennai Flights
Hyderabad-Kolkata
Kolkata-New Delhi Flights
Flights Hyderabad-Bangalore
Kolkata-Mumbai Flights Flights
Kolkata-Bangalore
Flights
Kolkata-Chennai Flights Air Deccan Bangalore
Kolkata-Hyderabad
Flights
Bangalore-New Delhi
Flights
Air Deccan Hyderabad Bangalore-Mumbai
Flights
Bangalore-Chennai
Hyderabad-New Delhi Flights
Flights Bangalore-Kolkata
Hyderabad-Mumbai Flights
Flights Bangalore-Hyderabad
Hyderabad-Chennai
Flights
Rates
Kingfisher Red Kingfisher Red
Ahmedabad to Hyderabad to
Hyderabad Rs.99 Ahmedabad Rs.99
Departing - Saturday, Departing - Tuesday, April
April 25, 2009 21, 2009
Departing - 02:55 PM Departing - 02:55 PM
Arrival - 04:25 PM Arrival - 04:25 PM
Kingfisher Red Kingfisher Red Goa to
Hyderabad to Mumbai Rs.1550
Ahmedabad Rs.99 Departing - Monday,
Departing - Wednesday, March 23, 2009
April 22, 2009 Departing - 06:30 AM
Departing - 02:55 PM Arrival - 07:25 AM
Arrival - 04:25 PM
Kingfisher Red Goa to
Kingfisher Red New Delhi Rs.2800
Ahmedabad to New Departing - Friday, April
Delhi Rs.500 17, 2009
Departing - Saturday, Departing - 06:30 AM
April 11, 2009 Arrival - 10:05 AM
Departing - 06:00 AM
Arrival - 07:35 AM Kingfisher Red
Ahmedabad to New
Kingfisher Red Mumbai Delhi Rs.500
to Ahmedabad Rs.500 Departing - Monday, April
Departing - Thursday, 13, 2009
March 26, 2009 Departing - 06:00 AM
Departing - 09:40 PM Arrival - 07:35 AM
Arrival - 10:40 PM
Kingfisher Red
Kingfisher Red Mumbai Ahmedabad to New
to Ahmedabad Rs.500 Delhi Rs.500
Departing - Wednesday, Departing - Sunday, April
March 25, 2009 12, 2009
Departing - 10:00 PM Departing - 06:00 AM
Arrival - 11:00 PM Arrival - 07:35 AM
Go Air History
GoAir Fleet
Hyderabad Chennai
Hyderabad Bangalore
Hyderabad Mumbai
Arrival - 06:35 PM
Spice Jet:
SpiceJet’s mission is to become India’s preferred low-cost
airline, delivering the lowest
air fares with the highest consumer value, to price
sensitive consumers. We hope to
fulfill everyone’s dream of flying! With India's
economic and business growth, the percentage of
traveling population is burgeoning. More and more
Indians are traveling for both business and pleasure
and everyone needs to save both time and money.
SpiceJet's vision is to adress that and ensure that
flying is for everyone.
Spice Jet is a cheap price airline that does not treats its
passengers as one in the herd. They have a dynamic airfare
plan with multiple options available to passengers like Red
Hot Fares and Everyday Spicy Fares which are much below
what others offer.
Spice Jet has opted for a single aircraft type fleet which
serves the purpose of better efficiency and cut maintenance
costs. The Spice Jet Airways possess the new Boeing 737 189
seater aircrafts which provide comfort, safety and an efficient
flying best suited for short distance domestic flights.
SpiceJet Achievements
Spicejet Flights:
Mumbai-New Delhi
Spicejet New Delhi Flights
Mumbai-Chennai Flights
Mumbai-Kolkata Flights
New Delhi-Mumbai Mumbai-Bangalore
Flights Flights
New Delhi-Chennai Mumbai-Hyderabad
Flights Flights
New Delhi-Kolkata Mumbai-Goa Flights
Flights
New Delhi-Bangalore
Flights Spicejet Chennai
New Delhi-Hyderabad
Flights
New Delhi-Goa Flights Chennai-New Delhi
Flights
Chennai-Mumbai Flights
Spicejet Mumbai Chennai-Kolkata Flights
Chennai-Bangalore Bangalore-Chennai
Flights Flights
Chennai-Hyderabad Bangalore-Kolkata
Flights Flights
Chennai-Goa Flights Bangalore-Hyderabad
Flights
Spicejet Kolkata Bangalore-Goa Flights
Kolkata-New Delhi
Flights Spicejet Goa
Kolkata-Mumbai Flights
Kolkata-Bangalore
Flights Goa-New Delhi Flights
Kolkata-Chennai Flights Goa-Mumbai Flights
Kolkata-Hyderabad Goa-Chennai Flights
Flights Goa-Kolkata Flights
Kolkata-Goa Flights Goa-Bangalore Flights
Goa –Haydrabad Flights
Spicejet Hyderabad
Hyderabad-New Delhi
Flights
Hyderabad-Mumbai
Flights
Hyderabad-Chennai Destination:
Flights
Hyderabad-Kolkata
Flights
Hyderabad-Goa Flights
Hyderabad-Bangalore
Flights
Spicejet Bangalore
Bangalore-New Delhi
Flights
Bangalore-Mumbai
Flights
CH.10 5 P’ s of Low cost airlines
Product
Price
Place
Promotion
1. Occupation of respondents.
Occupation of respondents
50
44
40
30
20 21
20
10 Percentage
10 7
3
0
Studen P.T. F.T. Busine Retire Nt.
Percentage 20 7 44 21 10 3
Catagory
Analysis:
The above chart gives full details about the low cost airline
traveler. Customer has divided in to different categories and
out of that Full time employees traveled more. It is 44% of
the total population on the second position Businessman
comes who have 21% and third position acquired by students
with 20%. Older people also prefer low cost air traveling they
have travel 10% of overall population.
Findings:
Out of all the categories of respondents those who are full
time employees has preferred to travel more in low cost
airline. As they are full time employees they travel more for
their service or business purpose. Students and Businessman
obtain 20% and senior citizen acquire 10%
Monthly salary
100 98 98
100
80 <20,000
60 47 20-40
40 3434 30-40
23
13 15 13 15 >40
20
1 1 1 2 0 0
0
Student/P.T. P.T. F.T. Businessman Retired
employee employees employees People
Analysis:
This chart draws attention to the monthly salary of the
respondents. It gives idea about income level of those who
travel through low cost airline. 82% of the respondents salary
is <20,000. Those who are businessman and full time
employees earn more as compare to other categories of
traveler.
Findings:
As it is low cost airline most of the traveler belongs to
middleclass. More than 80% of the respondents earn <20,000
monthly. Those who earn >40,000 monthly has only 34%
part out of all respondents answer.
Yes No
Frequency 43 57
Frequency
Yes No
43%
57%
Interpretation:
Findings:
Personal
Other
3%
Business &
Both services
30% Personal Both
44%
Other
& Business
services
23%
Analysis:
Personal travelers are more as compare to other. At the same
time 30% of the population travels for both personal and
business purposes. Personal travelers are mostly the students
and part time employees. Business travelers acquire 23% out
of all survey.
Findings:
Most of the low cost traveling took place for the personal
purpose. People use to travel in the plane for both the purpose
which shows their preference towards low cost air lines.
Business travelers are generally Govt. employees who
preferred to travel only for their services.
60
51
50
40
30 Pref. 1
24 Pref. 2
20 16
15
13
10
10 6
5
0
Availability Price Qua.&Ser. Safeety & Reli.
Analysis:
This chart shows which are the factors who plays an
important role while any customer planning to purchase any
air ticket. Respondents had given two preferences and out of
150 respondents only 60 respondents go for second
preference. 50% of the respondents give first preference to
“Price of the ticket” while 16% give second. 24% keep in
mind quality and services before purchasing tickets and
lowest 10% out weight on safety and reliability.
Findings:
Most of the travelers are price conscious. As 44% of the
respondents are personal traveler they give first preference to
price. On the second position quality and services gain 19%
which shows that low cost traveler expect good services from
such service provider.
I never
booked
ticket
myself
Co. Office
Agents
50%
Analysis:
The above chart shows how respondents book their tickets.
50% book their tickets through agents. Such agents are
available near by their residents therefore they prefer to book
tickets by them. Internet users increasing everyday and 30%
of the respondents prefer to book their tickets via net. Some
people use to have tickets from co. office and 11% have
never book tickets themselves. Such travelers are students
and Govt. employee.
Findings:
People use traditional method to book their tickets. 50% go to
the near by agents for ticket booking. Internet booking has
been increased now a days those who are business traveler
generally prefer online booking rather than booking through
agents.
Strongly Strongly
Satisfied. Satisfied Neutral Dissatisfied Dissatisfied
Fares 7 23 13 8 3
Timings 4 18 17 3 2
Booking system 9 29 8 4 4
Food quality 5 9 17 9 14
Safety 10 26 15 2 1
Checking system 8 35 7 4 -
Baggage safety 13 33 8 - -
Promotional -
campaign 7 10 15 -
13 17 Neutral
9
60% Satisfied
33
Strongly
35 Satisfied.
29 17 26
40% 26 10
23
18
20%
9
10 13 7
7 9 8 8
4 5
0%
Fares Timings Booking Staff & Food quality Safety Checking Baggage Promotional
system services system safety campaign
Analysis:
Strongly Strongly
Satisfied. Satisfied Neutral Dissatisfied Dissatisfied
Fares 8 28 19 3
Timings 11 25 13 7 2
Booking system 14 27 12 5
Staff & services 8 26 14 4 2
Food quality 7 30 10 7 4
Safety 13 18 22 5
Checking system 19 23 14 2
Baggage safety 17 32 9
Promotional
campaign 4 13 12
Air Deccan sisfaction level
100%
3 2 5 2 4 5 2
90% 7 4 9
7
14
80%
19 12 12
13 14
70%
10 22
20%
19 17
10% 11 14 13
8 8 7 4
0%
Fares Timings Booking Staff & Food quality Safety Checking Baggage Promotional
system services system safety campaign
Analysis:
13 17 Neutral
9
Satisfied
60%
33 Strongly
Satisfied.
35
29 17 26
40% 26 10
23
18
20%
9
13 7
9 8 10 8
7 4 5
0%
Fares Timings Booking Staff & Food quality Safety Checking Baggage Promotional
system services system safety campaign
Analysis:
This chart shows satisfaction level of Spice Jet traveler. Out
of 150 respondents 67 has traveled at least once in Air
Deccan.
In terms of fares 56% of the respondents are satisfied, 19%
are strongly satisfied. 20% remain neutral they are neither
satisfied nor dissatisfied. Where in dissatisfaction ratio
overall carries 3% which are dissatisfied with the fares.
43% of the respondents satisfied with the timing of Spice Jet.
25% remain neutral with timings. 26% are strongly satisfied
and at the same time 4% of the traveler of Spice Jet is
strongly dissatisfied.
Booking system is quite pleasing more than 67% of the
respondents are happy with the booking system. 22% are
strongly satisfied and 16% are dissatisfied with their system.
When it comes to staff and services 58% are satisfied which
include 14% strongly satisfied ratio. 22% of the respondents
remain neutral where 10% are dissatisfied and 9% strongly
dissatisfied with their staff and services
Food quality is the area of concern 20% of the respondents
remain neutral and dissatisfaction level also high with 64%
which include 25% strongly dissatisfaction level. Only 26%
are satisfied with the food quality.
Safety covers more than 60% satisfaction level which shows
excellent security system. 23% remain neutral and only 13%
dissatisfied with safety measurement.
Checking system is one of the best satisfaction areas
amongst the entire factor. This obtain 62% satisfaction level
and only 2% are dissatisfied. 34% remain neutral with their
checking system
67% are satisfied with the baggage safety at the airport. 16%
neutral and there is 14% dissatisfaction in this factor.
Only 54 respondents out of 67 remember any promotional
campaign of Spice jet. Out of that 54 respondents 59%
satisfied and rest of the 41% remain neutral.
Have you ever received any gifts from low cost service
provider?
Yes No
Total 63 87
Percentage 42 58
Yes
42%
Yes
No
No
58%
Analysis:
Some Airlines like Air Deccan and Spice Jet provides gifts to
their customers. So there are 42% of the respondents who get
small gifts from the service provider
Which kind of gifts you have received from the Air lines?
Total Percentage
Earpiece 43 68
Pen drive 12 19
Other 7 13
Other
11%
Pendrive
19% Earpiece
Pendrive
Other
Earpiece
70%
Analysis:
Those who ever received any gifts are mostly Air Deccan
traveler. They have received ear piece, pen, pen drive etc.
Findings:
To give an emotional touch and brand recall such gifts have
been provided to the customers.
Strongly Strongly
agree Agree Disagree disagree
Total 10 9 48 83
Percentage 7 6 32 55
Strongly agree
Strongly agree
7% Agree
Agree
6%
Strongly diaagree
55% Disagree
Strongly diaagree
Disagree
32%
Analysis:
Respondents do not agree with the statement that they will
travel more if gift have been provided to them. Only 7%
agree that people travel more if such gifts have been provided
to them.
Findings:
Such small gifts do not attract people and because of gifts
people will not travel more as compare to their regular usage.
49
50
41
40 36
33
30 27
24 24 Total
20 16 Percentage
10
0
Go Spicejet Air Deccan Other
Analysis:
Out of all the 150 respondents Air Deccan stands first in
terms of the most preferred airlines. Others include Jet
Airways, Sahara, and Air India etc.
Findings:
Though people travel more in Spice Jet but when it comes to
best preferred air line Air Deccan won the race.
Total Percentage
Advertisement 5 3
Schemes 28 18
Cheaper price 60 40
Brand name 53 35
Others 5 3
Factors that make difference in decision making
Others Advertisement
3% 3%
Schemes
19% Advertisement
Brand name Schemes
35% Cheaper price
Brand name
Others
Cheaper price
40%
Analysis:
The above chart shows the different factors which makes
changes in the decision making of the customers. Price of the
tickets is main focused area by the respondents.
9%
25%
46%
Go
Air Deccan
Spice jet
Other
20%
Analysis:
Brand recall is the best way to know about brand awareness
in the market. When respondent read this questions most of
the time they remain blank they took a time to think and
replied. Other brand recall ratio is high as compare to these
three brands. Though Air Deccan got maximum brand recall
and Spice Jet stands at second stage.
Findings:
Brand recall is very poor about these players. It shows weak
market awareness of such service providers. They should
have to make more attempts to spread awareness in the
market.
Spice Jet is poor in terms of food quality Spice Jet have maximum destination as
here SJ have similar problem like Go Air. compare Go and Air Deccan. Serve free food
Customers are not willingly pay for the food to the longer destination at the beginning.
in plane itself.
30% of the respondents are not satisfied with Be punctual and if flight is going to late than
the timings of Spice Jet. give best treatment to the customers.
Providing small gift to the customer create It is a good way to maintain relationship but at
healthy relation and this helpful in the the same time take care on cabin service rather
maintain customer satisfaction as well as than focuses on gifts
brand recall.
Such small gifts makes customer more Gift do not attract more people to travel in the
happy and loyal towards such air line air line. It is good way to make relation with
customer but not for attract them.
BIBLIOGRAPHY
Reference Books
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