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MARKETINGMANAGEMENT

Market Analysis of Aviation Industry

SAURABH DOSHI (15)

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INTRODUCTION

:

Air Travel is the quickest and the most

hassle free mode of travel. You can cover a

distance in a couple of hours in a flight which

would take a couple of days in train or five to six

days in an automobile. India is one of the fastest

growing aviation markets in the world. No wonder

there are hordes of Airlines in India which cater to

the Indian public. All these airlines strive

incessantly to give you the best flight fares, the warmest of customer service and great value

added services like the frequent fliers benefits. There are over 450 airports and 1091 registered

aircrafts in the country. The genesis of civil aviation in India goes back to December 1912

when the first domestic air route between Karachi and Delhi became operational. 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 continued for the next forty

years.

Indian Aviation History

:

First flight from Karachi to Delhi started by Indian State Air Services andImperial Airways UK collaboration.

1912

Tata Airline introduced by JRD Tata.1932

Tata Airlines was transformed into Air India.1946

Air India was nationalized.1953

Liberalization in the aviation industry, with private players being allowed tooperate as air taxi operators, but not permitted to operate scheduled service.1990

Private carriers permitted to operate scheduled services.1994

Jet, Sahara, Modiluft, Damania, NEPC, East West granted scheduled carrierstatus.

1995

4 out of 6 operators shut down. Jet & Sahara continue.1997

Air Deccan starts operations as Indias 1st Low Cost Carrier.2003Kingfisher, SpiceJet, Go Air, Paramount start operations.2005

Indigo starts operations.2006

Jet-Sahara Merger.2007

2008 Kingfisher-Air Deccan Merger.

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Revolutionized by liberalization, the aviation sector in India has been marked by fast-

paced change in the past few years. From being a service that few could afford, the sector has

now graduated to being a fiercely competitive industry with the presence of a number of

private and public airlines and several consumer-oriented offerings. 1.2% of the GDP is

generated by this sector. So, its in a developing stage.

It is a phase of rapid growth in the industry with estimated growth of domestic

passenger segment at 50% per annum. This has led to intense price competition due to which

full service carriers like Jet Airways, Indian Airlines and Kingfisher Airlines are giving

discounts of up to 60-70% for certain routes to match the new entrants' ticket prices. The

customer has thus gained enormously as a result of liberalization of the sector.

The promise and the potential of the Indian aviation market are awesome. Over 135

aircrafts have been added in the last two years alone. By 2010, India's fleet strength will stand

at 500550. In the same period, the domestic market size will cross 60 million and

international traffic 20 million. Airbus pegs Indias demand for airliners at 1100 aircraft,

worth US $105 billion, over the next 20 years. According to Civil Aviation Minister Praful

Patel, the country will need 1,500 to 2,000 passenger planes in 10 years, up from 260 now.

Investments, revenues, jobs: All set to take off

Indias civil aviation passenger growth stands at 20 per centamong the highest in

the world. More diverse businesses in non-metropolitan regions are creating new demand for

air services. Airlines are bulking up on capacityten Indian carriers placed orders for 400

aircraft worth US $15 billion. Two of Indias largest airportsMumbai and New Delhi

were privatized recently. Investments are pouring into almost all aspects of the industry,

including aircraft maintenance, pilot training and air cargo services.

With airport infrastructure being upgraded, non-aeronautical revenues will contribute

almost 50 per cent to revenue of airports. Here, private players are planning malls, hospitality

chains, book shops, duty-free shops, internet cafes, lounges and entertainment centres.

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The years, 2003-04, 2004-05 and 2005-06, have been years of record growth in air

traffic in India. During the period April-September, 2005, international and domestic

passengers recorded growth of 15.8 per cent and 44.6 per cent, respectively, leading to an

overall growth of 35.5 per cent. During the same period, international and domestic cargo

recorded growth of 13.8 per cent and 8.7 per cent, respectively, resulting in an overall growth

of 12.0 per cent.

International Domestic Total

No. inmillions

Percentagegrowth

No. inmillions

Percentagegrowth

No. inmillions

Percentagegrowth

1999-00 13.29 2.90% 25.74 6.90% 39.04 5.5%

2000-01 14 5.40% 28.01 8.80% 42.02 7.70%

2001-02 13.63 (-)2.7% 26.36 (-) 5.9% 39.98 (-)4.9%

2002-03 14.82 8.80% 28.9 9.60% 43.72 9.40%

2003-04 16.65 12.30% 32.04 10.09% 48.69 11.40%

2004-05 19.45 17.00% 40.1 25.00% 59.54 22.30%

2005-06 22.36 15.10% 50.98 27.90% 73.34 23.70%

With the sector expanding at a fast pace, the number of aircrafts being used is on the

rise and so is the need for pilots. Not surprisingly, aviation school is the latest buzzword

among students as India would require 7,5008,000 pilots and an equal number or more air

cabin crew by 2010. Heavy pay packets are awaiting pilots with a commercial pilot license

(CPL).

Reasons for Boom in Aviation Industry

1. Foreign equity allowed: Foreign equity up to 49 per cent and NRI (Non-Resident Indian)

investment up to 100 per cent is permissible in domestic airlines without any govt. approval.

However, the govt. policy bars foreign airlines from taking a stake in a domestic airline

company.

:

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2. Low entry barriers: Nowadays, venture capital of $10 million or less is enough to launch

an airline. Private airlines are known to hire foreign pilots, get expatriates or retired personnel

from the Air Force or PSU airlines in senior management positions. Further, they outsource

such functions as ground handling, check-in, reservation, aircraft maintenance, catering,

training, revenue accounting, IT infrastructure, loyalty and programme management.

3. Attraction of foreign shores: Jet and Sahara have gone international by starting

operations, first to SAARC countries, and then to South-East Asia, the UK, and the US. After

five years of domestic operations, many domestic airlines too will be entitled to fly overseas

by using unutilized bilateral entitlements to Indian carriers.

4. Rising income levels and demographic profile: Though India's GDP (per capita) at

$3,100 is still very low as compared to the developed country standards, India is shining, at

least in metro cities and urban centres, where IT and BPO industries have made the young

generation prosperous. Demographically, India has the highest percentage of people in age

group of 20-50 among its 50 million strong middle class, with high earning potential. All this

contributes for the boost in domestic air travel, particularly from a low base of 18 million

passengers.

5. Untapped potential of India's tourism: Currently India attracts 3.2 million tourists every

year, while China gets 10 times the number. Tourist arrivals in India are expected to grow

exponentially, especially due to the open sky policy between India and the SAARC countries

and the increase in bilateral entitlements with European countries and US.

6. Glamour of the airlines: No industry other than film-making industry is as glamorous as

the airlines. Airline tycoons from the last century, like J. R. D. Tata and Howard Hughes, and

Sir Richard Branson and Dr. Vijaya Mallya today, have been idolized. Airlines have an aura

of glamour around them, and high net worth individuals can always toy with the idea of

owning an airline. All the above factors seem to have resulted in a "me too" rush to launch

domestic airlines in India.

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India's aviation pie gets bigger, goes global

The countrys aviation 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.

Boeing announced a US $1.5 billion order for 10 aircrafts from Jet Airways, India's

largest private airline, which has 60 aircraft and will increase that number to 90 in two years.

Manufacturers like Boeing and Airbus are filling their order books fast with such rapidly

growing airlines in India. According to a survey by the Airports Council International (ACI),

Asia will be the fastest-growing region with an annual 9 per cent growth. The two fastest-

growing markets are set to be India (10.4 per cent) and China (8.1 per cent) in the next 20

years.

Future scenario

:

The aviation industry is expected to grow at a compounded annual growth rate of 25%

till 2010. Also, by 2010 Indian airports will be handling between 90 and 100 millionpassengers per year, as against the current 34 million passengers. It is expected that nearly

80% of this growth will be driven by the low cost carrier segment (LCC). By 2008, the LCCs

would capture 65% of the direct on-line air ticket market from 61% in 2005.

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SWOT ANALYSIS

:

Strengths:

1. Growing tourism: Due to growth in tourism, there has been an increase in number of theinternational and domestic passengers. The estimated growth of domestic passenger segmentis at 50% per annum and growth for international passenger segment is 25%.

2. Rising income levels:

Due to the rise in income levels, the disposable income is alsohigher which are expected to enhance the number of flyers.

Weaknesses:

1. Under penetrated Market: The total passenger traffic was only 50 million as on 31st Dec2005 amounting to only 0.05 trips per annum as compared to developed nations like UnitedStates having 2.02 trips per annum.

2. Untapped Air Cargo Market: Air cargo market has not yet been fully tapped and isexpected that in the coming years large number of players will have dedicated fleets.

3. Infrastructural constraints:

The infrastructure development has not kept pace with thegrowth in aviation services sector leading to a bottleneck. Huge investment required forphysical infrastructure for airports.

Opportunities:

1. Expecting investments: Investments of about US $30 billion will be made.

2. Expected Market Size: Average growth of aviation sector is about 25%-30% and theexpected market size is projected to grow upto100 million by 2010.

Threats:

1. Shortage of trained Pilots: There is a severe shortage of trained pilots, co-pilots andground staff which is severely limiting growth prospects.

2. Shortage of Airports: There is a massive shortage of airport facilities, parking bays,air traffic control (ATC) facilities and takeoff and landing slots.

3. High prices:

Though enough number of low cost carriers are already existing in theindustry, majority of the population is still not able to fly to other destinations because ofhigh prices.

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Key Players in the Domestic Market

:

Jet Airways & JetLite (Previously Air Sahara)

Jet Airways is an airline based in Mumbai, India. It is the country's second-largest

international airline after Air India and the largest domestic airline. It operates over 400

daily flights to 62 destinations. Its primary base is Mumbai's Chhatrapati Shivaji Airport with

secondary hubs at Bangalore, Brussels, Chennai, Delhi, Hyderabad, Kolkata and Pune.

In July 2008, it was voted as the world's best long-haul airline after Singapore

Airlines. Jet Airways has also won an award for the quality of its catering. According to

March 2008 figures, Jet Airways share of India's domestic aviation market stood at 29.8%,

including its low-cost subsidiary JetLite's share of 7.1%, making it the largest airline in India.

However, the airline faces competition from other domestic carriers like Kingfisher Airlines,

SpiceJet and IndiGo Airlines.

Jet Airways and Air Sahara were the only private airlines to survive the Indian

business downturn of the late 1990s. On 12 April 2007, Jet Airways agreed to buy out Air

Sahara for 14.5 billion rupees ($340 million). Air Sahara was renamed JetLite, and was

marketed between a low-cost carrier and a full service airline.

USP: largest domestic airline with a very large network providing connectivity

across various destinations, best-in-class service quality.

http://en.wikipedia.org/wiki/Airlinehttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Air_Indiahttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Chhatrapati_Shivaji_Airporthttp://en.wikipedia.org/wiki/Bangalore_Airporthttp://en.wikipedia.org/wiki/Brussels_Airporthttp://en.wikipedia.org/wiki/Meenambakkam_Airporthttp://en.wikipedia.org/wiki/Indira_Gandhi_Airporthttp://en.wikipedia.org/wiki/Shamshabad_Airporthttp://en.wikipedia.org/wiki/Subhash_Chandra_Bose_Airporthttp://en.wikipedia.org/wiki/Lohegaon_Airporthttp://en.wikipedia.org/wiki/Singapore_Airlineshttp://en.wikipedia.org/wiki/Singapore_Airlineshttp://en.wikipedia.org/wiki/JetLitehttp://en.wikipedia.org/wiki/Kingfisher_Airlineshttp://en.wikipedia.org/wiki/SpiceJethttp://en.wikipedia.org/wiki/IndiGo_Airlineshttp://en.wikipedia.org/wiki/Air_Saharahttp://en.wikipedia.org/wiki/Rupeeshttp://en.wikipedia.org/wiki/JetLitehttp://en.wikipedia.org/wiki/JetLitehttp://en.wikipedia.org/wiki/JetLitehttp://en.wikipedia.org/wiki/Rupeeshttp://en.wikipedia.org/wiki/Air_Saharahttp://en.wikipedia.org/wiki/IndiGo_Airlineshttp://en.wikipedia.org/wiki/SpiceJethttp://en.wikipedia.org/wiki/Kingfisher_Airlineshttp://en.wikipedia.org/wiki/JetLitehttp://en.wikipedia.org/wiki/Singapore_Airlineshttp://en.wikipedia.org/wiki/Singapore_Airlineshttp://en.wikipedia.org/wiki/Singapore_Airlineshttp://en.wikipedia.org/wiki/Lohegaon_Airporthttp://en.wikipedia.org/wiki/Subhash_Chandra_Bose_Airporthttp://en.wikipedia.org/wiki/Shamshabad_Airporthttp://en.wikipedia.org/wiki/Indira_Gandhi_Airporthttp://en.wikipedia.org/wiki/Meenambakkam_Airporthttp://en.wikipedia.org/wiki/Brussels_Airporthttp://en.wikipedia.org/wiki/Bangalore_Airporthttp://en.wikipedia.org/wiki/Chhatrapati_Shivaji_Airporthttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Air_Indiahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Airline

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Kingfisher & Kingfisher Red (Previously Air Deccan)

Kingfisher Airlines Limited is an airline based in Bangalore,India. It operates 218

flights a day and has a network of 38 destinations, with plans for regional and long-haul

international services. Its main bases are Bengaluru International Airport, Chhatrapati Shivaji

International Airport, Rajiv Gandhi International Airport and Indira Gandhi International

Airport. Kingfisher Airlines, through one of its holding companies United Breweries Group,

has 50% stake in low-cost carrier Kingfisher Red, formerly known as Air Deccan.

Kingfisher is one of six airlines in the world to have a five-star rating from Skytrax,

and according to some estimates, is the second largest airline in India in terms of

passengers flown. In July 2008, Kingfisher's share of Indian aviation market stood at 14.3%

while its sister carrier Air Deccan's share stood at 13.5%.

The airline started operations on 9 May 2005, following the lease of four Airbus

A320-200 aircraft. It has announced plans to start flights to the USA with Airbus A340-500

and Airbus A380-800 aircraft. The airline is owned by the United Breweries Group. In

October 2007, the airline announced Deepika Padukone as its brand ambassador. In

September 2008, Kingfisher announced its plans to raise US $400 million through equity.

USP: finest in-flight catering services, highly trained personnel.

http://en.wikipedia.org/wiki/Airlinehttp://en.wikipedia.org/wiki/Bangalorehttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Bengaluru_International_Airporthttp://en.wikipedia.org/wiki/Chhatrapati_Shivaji_International_Airporthttp://en.wikipedia.org/wiki/Chhatrapati_Shivaji_International_Airporthttp://en.wikipedia.org/wiki/Rajiv_Gandhi_International_Airporthttp://en.wikipedia.org/wiki/Indira_Gandhi_International_Airporthttp://en.wikipedia.org/wiki/Indira_Gandhi_International_Airporthttp://en.wikipedia.org/wiki/United_Breweries_Grouphttp://en.wikipedia.org/wiki/Low-cost_carrierhttp://en.wikipedia.org/wiki/Kingfisher_Redhttp://en.wikipedia.org/wiki/Skytraxhttp://en.wikipedia.org/wiki/Skytraxhttp://en.wikipedia.org/wiki/May_9http://en.wikipedia.org/wiki/2005http://en.wikipedia.org/wiki/Airbus_A320http://en.wikipedia.org/wiki/Airbus_A320http://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Airbus_A340http://en.wikipedia.org/wiki/Airbus_A380http://en.wikipedia.org/wiki/United_Breweries_Grouphttp://en.wikipedia.org/wiki/United_Breweries_Grouphttp://en.wikipedia.org/wiki/Deepika_Padukonehttp://en.wikipedia.org/wiki/Deepika_Padukonehttp://en.wikipedia.org/wiki/September_2008http://en.wikipedia.org/wiki/US$http://en.wikipedia.org/wiki/US$http://en.wikipedia.org/wiki/September_2008http://en.wikipedia.org/wiki/Deepika_Padukonehttp://en.wikipedia.org/wiki/United_Breweries_Grouphttp://en.wikipedia.org/wiki/Airbus_A380http://en.wikipedia.org/wiki/Airbus_A340http://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Airbus_A320http://en.wikipedia.org/wiki/Airbus_A320http://en.wikipedia.org/wiki/Airbus_A320http://en.wikipedia.org/wiki/2005http://en.wikipedia.org/wiki/May_9http://en.wikipedia.org/wiki/Skytraxhttp://en.wikipedia.org/wiki/Kingfisher_Redhttp://en.wikipedia.org/wiki/Low-cost_carrierhttp://en.wikipedia.org/wiki/United_Breweries_Grouphttp://en.wikipedia.org/wiki/Indira_Gandhi_International_Airporthttp://en.wikipedia.org/wiki/Indira_Gandhi_International_Airporthttp://en.wikipedia.org/wiki/Indira_Gandhi_International_Airporthttp://en.wikipedia.org/wiki/Rajiv_Gandhi_International_Airporthttp://en.wikipedia.org/wiki/Chhatrapati_Shivaji_International_Airporthttp://en.wikipedia.org/wiki/Chhatrapati_Shivaji_International_Airporthttp://en.wikipedia.org/wiki/Chhatrapati_Shivaji_International_Airporthttp://en.wikipedia.org/wiki/Bengaluru_International_Airporthttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Bangalorehttp://en.wikipedia.org/wiki/Airline

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Air India & Indian

Air India Limited is the national airline of India with a worldwide network of

passenger and cargo services. Air India is state-owned, and administered as part of the

National Aviation Company of India Limited - which was created in 2007 to facilitate Air

India's merger with Indian Airlines. Together with Code Sharing Agreements with other

International airlines, the airline connects over 130 destinations worldwide and includestwelve gateways in India.

Air India is wholly-owned by the government of India. However, it plans to sell 10-

15% of its stake in the airline by 2008 to fund Air India's global expansion plans. After

dominating Indian skies for years, Air India is now the third largest airline in India in terms

of passengers carried after Jet Airways and Kingfisher Airlines. Air India is expected to

formally join the Star Alliance in March 2009.

USP: oldest airline of India, worldwide network of passenger and cargo services.

IndiGo

IndiGo Airlines is a private domesticlow-cost airlinebased in Gurgaon, India. It

operates domestic services linking 14 destinations. Its main base is Indira Gandhi

International Airport, Delhi.

The airline commenced operations on 4th August 2006 with a service from Delhi to

Imphal via Guwahati. The airline is owned by InterGlobe Enterprises. It took delivery of its

first Airbus A320 aircraft on 28 July 2006 and received six aircraft during 2006. Nine more

aircraft were delivered in 2007 taking the total to 15.

USP: no-frills, low-cost carrier.

http://en.wikipedia.org/wiki/National_airlinehttp://en.wikipedia.org/wiki/National_airlinehttp://en.wikipedia.org/wiki/Airlinehttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/National_Aviation_Company_of_India_Limitedhttp://en.wikipedia.org/wiki/Indian_Airlineshttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Jet_Airwayshttp://en.wikipedia.org/wiki/Kingfisher_Airlineshttp://en.wikipedia.org/wiki/Star_Alliancehttp://en.wikipedia.org/wiki/Low-cost_carrierhttp://en.wikipedia.org/wiki/Low-cost_carrierhttp://en.wikipedia.org/wiki/Low-cost_carrierhttp://en.wikipedia.org/wiki/Gurgaonhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Indira_Gandhi_International_Airporthttp://en.wikipedia.org/wiki/Indira_Gandhi_International_Airporthttp://en.wikipedia.org/wiki/Delhihttp://en.wikipedia.org/wiki/August_4http://en.wikipedia.org/wiki/2006http://en.wikipedia.org/wiki/Imphalhttp://en.wikipedia.org/wiki/Guwahatihttp://en.wikipedia.org/wiki/Airbus_A320http://en.wikipedia.org/wiki/July_28http://en.wikipedia.org/wiki/2006http://en.wikipedia.org/wiki/2007http://en.wikipedia.org/wiki/2007http://en.wikipedia.org/wiki/2006http://en.wikipedia.org/wiki/July_28http://en.wikipedia.org/wiki/Airbus_A320http://en.wikipedia.org/wiki/Guwahatihttp://en.wikipedia.org/wiki/Imphalhttp://en.wikipedia.org/wiki/2006http://en.wikipedia.org/wiki/August_4http://en.wikipedia.org/wiki/Delhihttp://en.wikipedia.org/wiki/Indira_Gandhi_International_Airporthttp://en.wikipedia.org/wiki/Indira_Gandhi_International_Airporthttp://en.wikipedia.org/wiki/Indira_Gandhi_International_Airporthttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Gurgaonhttp://en.wikipedia.org/wiki/Low-cost_carrierhttp://en.wikipedia.org/wiki/Star_Alliancehttp://en.wikipedia.org/wiki/Kingfisher_Airlineshttp://en.wikipedia.org/wiki/Jet_Airwayshttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Indian_Airlineshttp://en.wikipedia.org/wiki/National_Aviation_Company_of_India_Limitedhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Airlinehttp://en.wikipedia.org/wiki/National_airline

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SpiceJet

SpiceJet is a low-cost airline based in New Delhi, India. It began service in May

2005. It marked its entry in service with Rs. 99 fares for the first 99 days, with 9000 seats

available at this rate. This deal was followed it up with a Rs. 999 promotional scheme on

select routes. Their marketing theme offering low 'everyday spicy fares' and great guest

services to price conscious travelers. Their aim is to compete with the Indian Railways

passengers travelling in AC coaches.

USP: no-frills, low-cost carrier, voted as the best low-cost airline in South Asia and

Central Asia region by Skytrax in 2007

Current market share of Indian carriers in the

domestic aviation market

31%

30%20%

9%5% 5%

Jet Airways and Jet Lite

Kingfisher Airlines and

Kingfisher Red

Air India and Indian

IndiGo

SpiceJet

Others

Source: Directorate General of Civil Aviation (DGCA)

http://en.wikipedia.org/wiki/Low-cost_airlinehttp://en.wikipedia.org/wiki/New_Delhihttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/2005http://en.wikipedia.org/wiki/Rupeehttp://en.wikipedia.org/wiki/Indian_Railwayshttp://en.wikipedia.org/wiki/Indian_Railwayshttp://en.wikipedia.org/wiki/South_Asiahttp://en.wikipedia.org/wiki/Central_Asiahttp://en.wikipedia.org/wiki/Skytraxhttp://en.wikipedia.org/wiki/Skytraxhttp://en.wikipedia.org/wiki/Central_Asiahttp://en.wikipedia.org/wiki/South_Asiahttp://en.wikipedia.org/wiki/Indian_Railwayshttp://en.wikipedia.org/wiki/Rupeehttp://en.wikipedia.org/wiki/2005http://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/New_Delhihttp://en.wikipedia.org/wiki/Low-cost_airline

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SERVICES OFFERED

In-flight services::

Kingfisher Airlines

Kingfisher Airlines has introduced landscape camera system onboard its Airbus

aircrafts. This will enable passengers onboard to have a scenic

view of the ground on their personalised screens. The

landscape camera will be displayed on channel two of the

aircraft's in-flight entertainment systems. Kingfisher's

Executive Vice-President Hitesh Patel said, ''India is a country

with a beautiful landscape and I'm confident that our guests

will find this service of great interest''.

:

Kingfisher Airlines' in-flight product has been granted a 5-star rating from Skytrax.

It is also known for the glamourized look of its cabin crew.

Meal on Kingfisher

Jet Airways

With the arrival of its new

:

Boeing 777-300ER and Airbus A330-200 aircraft, Jet

Airways has introduced a new cabin with upgraded seats in all classes. It has three classes of

service: First, Premire (Business), and Economy. Jet Airways has a three-star rated

Business and First Class, and is in the top twenty-five business classes reviewed by Skytrax.

Economy class has been reviewed as a three-star product by Skytrax.

All seats convert to a fully-flat bed, have a 15-inch widescreen LCD monitor with

audio-video on-demand (AVOD), in seat power supply, and

First Class

USB ports etc. Jet Airways is the

world's second airline to introduce private first class suites. It is the ninth-best first class in

the world as conducted by Skytrax.

http://en.wikipedia.org/wiki/Boeing_777-300ERhttp://en.wikipedia.org/wiki/Airbus_A330-200http://en.wikipedia.org/wiki/USBhttp://en.wikipedia.org/wiki/USBhttp://en.wikipedia.org/wiki/First_classhttp://en.wikipedia.org/wiki/First_classhttp://en.wikipedia.org/wiki/USBhttp://en.wikipedia.org/wiki/Airbus_A330-200http://en.wikipedia.org/wiki/Boeing_777-300ER

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Premire Class (Business Class) on the Airbus A330-

200 and Boeing 777-300ER international fleet has a fully-flat

bed with AVOD entertainment. Seats are configured in a

Premire Class

herringbone pattern with each seat offering direct access to the

aisle. USB ports and in-seat laptop power are provided. Mood

lighting is installed with light schemes corresponding to the

time of day and flight position.

Air India:

Air India offers three classes of service First Class, Executive Class and Economy

Class. Flat bed seats are offered for First and Executive Class passengers.

Air India's newly ordered fleet features Air India's brand new interiors. First class is a

completely lie flat bed, with an 22 inch PTV with AVOD. The seat features in seat massage,

USB ports and laptop power supply. Business class is the "shell" type and also converts into a

flat seat. It also features an 18 inch PTV with laptop power supply and USB ports. Air India'snew economy class features 33 inch seat pitch and a 10.6 inch PTV with AVOD.

First Class seats Executive class cabin

http://en.wikipedia.org/wiki/Herringbonehttp://en.wikipedia.org/wiki/Business_classhttp://en.wikipedia.org/wiki/Business_classhttp://en.wikipedia.org/wiki/Herringbone

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On-the-ground services:

Maharajah Lounge means "Emperor's Lounge", and is

offered to First and Executive class passengers. Air India shares

lounges with other airlines at airports that do not have a

Maharajah Lounge available. There are 5 Maharajah Lounges,

each at one of the five major destinations of Air India.

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PROMOTION

:

Kingfisher Airlines Ltd. led with 44% share of Domestic Airlines ad pie in Printfollowed by Jet Airways (I) Pvt Ltd and SpiceJet Ltd with 24% and 16% share respectively

during Jan - May '08.

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News channels had the maximum share of 49 per cent of Airline sector

advertising, followed by Sports and Infotainment channels with 15 per cent and 12 per

cent share respectively during 2007.

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During Jan - May '08, maximum ads of Domestic Airlines were based on 'Contest

Promotion' i.e. with 46% followed by 'Discount Promotion' and 'Multiple Promotion' with

26% and 14% share respectively.

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TV advertising of Domestic Airlines saw a drop of 21 per cent during 2007compared to same period in 2006.

During 2007, TV advertising of Domestic Airlines was more during the second halfcompared to the first half of same year.

In the year 2006, the first and last quarter had an equal advertising share ofDomestic Airlines on TV.

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FUTURE CHALLENGES

:

India has the world's fastest growing airline industry. However, the growth in the

aviation sector and capacity expansion by carriers have posed challenges to aviation industry

on several fronts. These include shortage of workers and professionals, safety concerns,

declining returns and the lack of accompanying capacity and infrastructure. Moreover, stiff

competition and rising fuel costs are also negatively impacting the industry.

There is clearly a shortage of trained and skilled manpower in the aviation sector as a

consequence of which there is cut-throat competition for employees which, in turn, is drivingwages to unsustainable levels. Moreover, the industry is unable to retain talented employees.

1. Employee shortage:

2. Regional connectivity:

One of the biggest challenges facing the aviation sector is to be able to provide

regional connectivity. What is hampering the growth of regional connectivity is the lack of

airports.

As fuel prices have climbed, the inverse relationship between fuel prices and airline

stock prices has been demonstrated. Moreover, rising fuel prices have led to increase in

airfares.

3. Rising fuel prices:

4. Declining yields:

LCCs and other entrants together now command a market share of around 46%.

Legacy carriers are being forced to match LCC fares, during a time of escalating costs.

Increasing growth prospects have attracted & are likely to attract more players, which will

lead to more competition. All this has resulted in lower returns for all operators.

5. Gaps in infrastructure:

Airport and air traffic control infrastructure is inadequate to support growth. While a

start has been made to upgrade the infrastructure, results will be visible only after 2 - 3 years.

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6. Trunk routes:

It is also a matter of concern that the trunk routes, at present, are not fully exploited.

One of the reasons for inability to realize the full potential of the trunk routes is the lack of

genuine competition. The entry of new players would ensure that air fares are brought to

realistic levels, as it will lead to better cost and revenue management, increased productivity

and better services. This in turn would stimulate demand and lead to growth.

CONCLUSION

:

Flying is going to become expensive in the coming few months (Because of thegrowing crude oil prices, the oil companies have raised the price of jet fuel by 10%)

Domestic airlines too have announced an increase in fuel surcharge by Rs. 150 to Rs.350 (Following the rise in the price of jet fuel)

Increase in tourism (World travel & tourism council ranks India, the 3rd fastestgrowing travel & tourism economy in the world)

Budget passengers will be badly hit (Those who considered flying by low fare carrierswill consider other modes of travel including Railways.)

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BIBLIOGRAPHYhttp://en.wikipedia.org

http://www.thehindubusinessline.com

http://www.bestindiansites.com

http://www.zenithoptimediaindia.com

http://www.indiantelevision.co.in

http://www.naukrihub.com

http://www.exchange4media.com

http://www.indiantelevision.co.in