marketing strategy of aviation industry in india

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INTRODUCTION

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.

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.

By 2020, Indian airports are expected to handle more than 100 million passengers including 60million domestic passengers and around 3.4 million tones of cargo per annum.



H ISTORY

The history of civil aviation in India started with its first commercial flight on February 18, 1911.It was a journey from Allahabad to Naini (u.p.) made by a French pilot Monseigneur Piguetcovering a distance of about 10 km. Since then efforts were on to improve the health of India'sCivil Aviation Industry. The first domestic air route between Karachi and Delhi was opened inDecember 1912 by the Indian State Air Services in collaboration with the Imperial Airways,UK as an extension of London-Karachi flight of the Imperial Airways.

The aviation industry in India gathered momentum after three years with the opening of a regular airmail service between Karachi and Madras by the first Indian airline, Tata Sons Ltd. However this service failed to receive any backing from the Indian Government.

At the time of independence nine Air Transport Companies were operational in the IndianTerritory. Later the number reduced to eight when the Orient Airways shifted its base to Pakistan.The then operational airlines were Tata Airlines, Indian National Airways, Air service of India,Deccan Airways, Ambica Airways, Bharat Airways and Mistry Airways.

With an attempt to farther strengthen the base of the aviation sector in India, the Government of India together with Air India (earlier Tata Airline) set up a joint sector company, Air IndiaInternational, in early 1948. With an initial investment of Rs. 2 crore and a fleet of three Lockheedconstellation aircrafts, Air India started its journey in the Indian aviation sector on June 8, 1948 inMumbai (Bombay)-London air route.



P RESENT SCENARIO

11 serious private players.

low fares offered by LCC (Low Cost Carriers) like Deccan, Spice jet, Go Air etc.

Numbers of Flights operating: 2500 per day

Handful cargo careers- increasing.

200 aircraft in operation. Avg. 12 on ground, due to pilot shortage.

Average 20 million domestic PAX (passengers) every year.

2500 pilots employed in schedule operations.

About 100 business aircrafts.

Pilot shortage. (about 450, immediate).

IGRUA (Indira Gandhi Rashtriya Uran Akademi) output 40 pilots every year.

Pilot license applications : 300 in 2005, 1045 in 2006



S.W.O.T ANALYSIS

STRENGT H S

Lower air fares Tourism in India Growing outbound travel in India Growth potential Liberalization of sector Modernization of non metro airports

Rising share of low cost carriers Fleet expansion by state owned carriers The opening up of new international routes by Indian government Establishment of new airports and restructuring of old airports

WEAKNESS

Poor infrastructure at airports. Acute shortage of trained pilots and technicians. Stiff rules and regulations for operation. High operational cost for airlines. High security threats in the subcontinent. Training infrastructure incompatible both in terms of quality and quantity. Shortage of qualified instructors due migration to schedule operation. Pressure on quality standard of inducted pilots. Infrastructural constraints



S.W.O.T ANALYSIS

O PP ORTUNITIES

The number of air travelers is about 0.8 per cent of the population India's civil aviation passenger growth, at 20 per cent, is among the highest in the world. India's civil aviation ministry expects 100 million passengers by 2020. India anticipates doubling of passenger traffic over the next decade. Economic Growth Vibrant middle class: Increasing Consumerism and Affordability ´common man´ Under-penetrated markets Growth in Tourism Currently domestic passenger market is growing at 50%

T H REATS

Government Regulations; Though the govt. is making changes in the regulations, it needs to move at a much

faster pace on this. Aviation in India is over regulated and needs to free itself from govt. shackles. Inadequate infrastructure. Acute shortage of Pilots and maintenance engineers. Security and safety. Low profit margins and high operating costs. Other faster means of transportation



STRATEGIC GROU P S

Full range carriers with medium price : Wide coverage of services provided and havegreatest potential to capture and can lead in market. But have less number of Internationaldestinations and the new comers can come up with low fares.

For Example; Jet, Indian Airlines, King Fisher

Low cost carriers with low price : Great facilities and technology but no service for economic class.

For Example ; Air Deccan, Spice Jet, Go Air, Indigo and other Low cost carriers.

Very high service with high price : Better service due to high fare and Attractive for thegrowing middle class. But less coverage within country.

For Example ; Taj airways, Club one airways

Good service with medium price : Low fare as compared to higher service provider. Better services than LCC. Targeting to the middle class customers.

For Example ; Kingfisher, Jet airways



Introduction

Jet Airways is an airline based in Mumbai, India. It is India's third largest airline after Air India

and Kingfisher Airlines. It operates over 400 daily flights to 65 destinations worldwide. Its

primary base is Mumbai's Chhatrapati Shivaji International Airport with secondary hubs at

Brussels, Chennai, Delhi and Ahmedabad, Bangalore, Hyderabad, Kolkata, Pune as focus cities.

Jet Airways serves 44 domestic destinations and 21 international destinations in 17 countries

across Asia, Europe and North America. It operates a scissors-hub at Brussels Airport.

Jet Airways in its typically 'trendsetter attitude' created India's first domestic full service and low

cost model by announcing the launch of Jetlite, which will be positioned between low cost and full-

service.

Jet Airways wins ³Most innovative product launch´ award. (Sept 2007)



STRATEGIES :

Maintain market leadership in the domestic market

Develop two equally strong pillars: domestic and international operations

Consistently provide a superior product to our passengers

Seamless connectivity spanning domestic and international routes

Improving cargo revenue potential -domestic and international

Reduce unit cost of operations ±Focus on reducing operating costs (specifically fuel) ±Reduction in selling and distribution cost (on-line bookings) ±Re-negotiation of agreements with various service providers

Best customer Service.

Serve both business and economic class.

Acquired Sahara airlines thus getting stronger hold in market.

Several Schemes to acquire and retain customers ;Regular customers enjoys discounted fare



Introduction

Formerly known as Air Deccan, the airline was previously operated by Deccan Aviation. It wasstarted by Captain G. R. Gopinath and its first flight took off on 23 August 2003 from Hyderabadto Vijaywada. It was known popularly as the common man's airline, with is logo showing twopalms joined together to signify a bird flying. The tagline of the airline was "Simpli-fly," signifyingthat it was now possible for the common man to fly. The dream of Captain Gopinath was toenable "every Indian to fly at least once in his/her lifetime." Air Deccan was the first airline inIndia to fly to second tier cities like Hubballi, Mangalore, Madurai and Visakhapatnam frommetropolitan areas like Bangalore and Chennai.

After the merger , Air Deccan is known as Kingfisher Red run by Kingfisher Airlines.

Air Deccan is positioning itself as a ³Low Cost Carrier ́.

Target market : Upper middle class in short term and lower middle class aggressively in long term.



STRATEGIES :

Advertisement through print, radio and billboards

In flight magazine for revenue generating

In flight shopping scheme called ³Brand for less´ ±AVA Merchandising

Tie-up with Café Coffee Day

ICICI-Travel agent purchase card

Tie-ups with HPCL and Reliance Web World

Offers no in-flight service

Single class aircraft configuration

Internet booking and cheap fares

Offering non-trunk short-haul routes and attracting high-end railway traffic through comparable fares



Introduction

SpiceJet was earlier known as Royal Airways, a reincarnation of ModiLuft. It is promoted by

Ajay Singh and the Kansagra family.

SpiceJet is a low-cost airline based in New Delhi. It began service in May 2005 and by 2008, it

was India's second-largest low-cost airline in terms of market share.

SpiceJet was voted as the best low-cost airline in South Asia and Central Asia region by Skytrax

in 2007.

SpiceJet marked its entry in service with Rs. 99 fares for the first 99 days, with 9,000 seats

available at this rate.



Marketing Str ategy

Entered with Rs. 99 fares for first 99 days offering µlow everyday spicey fares¶

Aims to compete with Indian Railway¶s AC segment

Aims at future fleet expansion to increase market share

Offering free tickets

Corporate deal offers

Concessional fares for students



Introduction

Kingfisher Airlines Limited, is a major Indian airline. Kingfisher operates more than 400 flights a day and has anetwork of 69 destinations, with regional and long-haul international services.

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

Airlines, Malaysia Airlines, Qatar Airways, Singapore Airlines and Cathay Pacific Airways.

It l ays stress upon

Full Service at True Value

Medium-cost operation

One single Kingfisher Class for all

Short flights and fast turnaround times (allowing maximum utilization of aircraft)



Kingfisher¶sMarketing Str ategy

Co-branding/Strategic partnerships with like-minded brands is an aggressive strategy of Kingfisher to promote its guest loyalty programme.

The company is used to spend close to Rs 40 crore on various media and below-the linemarketing activities every year.

The company has also launched Kingfisher First, which is a print campaign to promote its firstclass service.

The company is also planning a series of online promos to boost traffic in certain sectors such asMumbai-Kolkata. They are running online contests to boost traffic on these sectors and are alsolooking at partnering with premium hotels.

KINGFISHER Airlines has announced special fares for all personnel serving in the Indian Armed

Forces, the Union Government, State governments, and employees of all public sector units in thecountry.

The immediate families of these personnel - parents, spouses and dependent children are alsoeligible for these reduced and special fares.



Conclusion

Following are the insights that we derived , they are :

The Airlines industry is cyclical in nature due to uncertainties which are beyond its control. Due to this the brandshave to be built in such a manner that they survive the lean periods on their strength of being able to differentiatethemselves with others. This must be done by being clear as to what one¶s brand represents and sticking to itscore values and not by raging a price war all the time.

Through the study we have found out that the Low cost Airlines have positioned themselves in competition to

railways by making travel affordable. They are compared to railways and road transports on the pricing front. Butthe reality is that it's not possible for them to compete with railways on price front. Rather they should try tohighlight features such as lesser travel time and better in-flight facilities.

Price discounts need to be carefully done to attract customers and simultaneously ensure that it does not affect

the brand image or result in considerable reduction in revenue.

In-flight advertising is an effective promotion medium as the audience is hundred percent captive. They can helpairlines promote the brand image, promote new schemes, improve the brand recall and generate extra revenue if done without the passengers perceiving it as a forceful.

Pricing is the most sensitive issue in airline industry and is done depending on the demand of the market.Switching is more frequent in case of low fare airlines whereas business segments are more brands loyal.

From the market research we could infer that while deciding among low cost airlines fare acts as the decidingfactor while in case of choosing among full service providers the determine factors are flight schedule, reliability,quality and connections with not much emphasis on fare.



STE P S T H AT GOVERN M ENT S H OULD TAKE:

Implement code sharing i.e. selling seats on a flight operated by another carrier. This saves direct costs andincrease market presence.

Allow foreign carriers cabotage rights( carriage for passengers and freight simultaneously) to increase competition

Eliminate regulatory structure completely to boost new entrants and allow more profit for existing.

Eliminate the fuel tax

Eliminate category III restrictions i.e. operator needs to deploy on less popular routes as well.

Improve quality of and access to airports and hangars.

Reduce labor costs.

Simplify flight operations.

Offer more transparent pricing.

Get smart on fuel

Stop chasing market share



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marketing strategy of aviation industry in india

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