2. Airlines As A Service Industry
•The Airline industry came into existence during the 17th
centuries.
•Origin of Indian aviation industry can be traced back to the
year 1912.
•Air travel remains a large and growing industry. It
facilitates economic growth, world trade, international
investment and tourism and is therefore central to the
globalization taking place in many other industries

3. Airline Industry in India
454 airports and airstrips
(includes Operational, Non Operational, Abandoned and Disused
Airports)
127 are owned & operated by AAI
16 - international, 7 custom airports, 28 civil enclaves
Scheduled domestic air services - available from 82 airports
May 2007- May 2008
25.5 million domestic & 22.4 million international passengers
20% growth – highest in the world
Growth Rate Projections (for next 5 yrs)
15% p.a (Passenger Traffic)
11.4% p.a (Cargo Traffic)

4. Entry
Of
Private
Players

5. Top 10 Airline Companies Of India
S.No Site
1. Indian Airways
2. Kingfisher
3. Air India
4. Air Deccan
5. Lufthansa India Airlines
6. Air Sahara
7. Indigo
8. Alliance Air
9. Paramount Airways
Private
10. Jet Airways

6. Types of Air Services
•Scheduled Air Transport Service
•Non-Scheduled Operation
•An air cargo service

7. Competitors
•International market - British Airways & South
West Airlines
•Domestic market - King fisher, Indian Airlines,
GoAir ,Spice jet & Indigo

8. Key characteristics of low cost airlines
• High seating density and load factors
• Uniform aircraft types (usually the 737-300)
• Direct booking (internet/call centre - no sales commissions)
• No frills such as “free” food/drinks, lounges or ‘air miles’
• Simple systems of yield management (pricing)
• Use of secondary airports to cut charges and turnaround
times

9. SWOT Analysis
•Strengths
-Market driver
-Experience exceeding 14 year
-Only private airline with
international operation
-Market leader
-Largest fleet size
•Weaknesses
-Loosing domestic market share
-Old fleet with average age
around 4.79 years
-Scope for improvement in
- in-flight service
-Weak brand promotion
• Opportunities
– Untapped air cargo
market
– Scope in international
service and tourism
• Threats
– Strong competitors
– Fuel price hike
– Overseas market
competition

10. Determinants Of Pricing
ATF
• ATF refers to air turbine fuel which is used by airlines in its
operations.
• ATF contributes to the 40 % of operation cost
• It includes freight charges from gulf to India ,
Customs Duty, Domestic Transportation and various taxes.
• India usually Pay higher ATF charges as compared to other
countries.

11. Airport Charges
• It is the basic fees that is charged by airports from airlines
• This include parking fees, landing fees , stop paging fees and
aero bridge expenses
• New airport charges more than established one to cover up all
the cost incurred.

12. Other Factors
• Advertising and Promotional Expenses
• Technology employed by the airlines
• Current Financial position
• Prices set by other airlines competing in the present
environment.
• Pilot fees
• Government regulation.

13. PEST Analysis
•Political Issue
-License issue for
international operation
-Infrastructural constraint
-ATF price policy
•Economic Effects
-Rising income level
-Reduced fare but yet not
enough
• Social Effects
– Sound Pollution
– Plane hijacking
– 9/11 Incident
• Technology Effects
– Modernization of
aircrafts
– Modern technology like
CAT3 and ILS

14. STP
Primary Segments (Geographic) - Domestic & International
Customer Segments
First class, Premiere(Business) class & Economy class
Target Segments
Premiere(Business) class Business travelers, contribute 48% of
passengers & 66% of revenues, ready to pay higher prices, last time
booking, don’t like transit
Economy class Leisure travelers, prefer low cost airlines, ready for
transit if there is cost advantage, large % of passengers

15. Seat Allocation – Yield Management Technique
Positioning – High value for High price
Unique Selling Price – Customer relationship and Punctuality

16. PRODUCT PRICE PLACE PROMOTION PEOPLE PROCESS PHYSICAL
EVIDENCE
RAINBOW OF SERVICE MARKETING MIX

17. Product
• Special Services
o Infant and child care, wheel chair assistance, expectant
mothers, unaccompanied minors, medical emergencies,
travelling with animals & carriage of stretchers
• Jet Mobile
• Jet Kids
• Jet Escapes
• Cargo

18. Price
Premium pricing:- Use a high price where there is a
uniqueness about the product or service. Such high prices are
charge for luxuries
Cheap-value pricing:- This approach is used where external
factors such as recession or increased competition force
companies to provide 'value' products and services to retain
sales
APEX fares:- Apex or advance purchase fares are special
fares valid on economy class on specified sectors. They are
much lower than the normal fares.

19. Place
• Online 24-hour reservation Systems.
• Tour Operator
• Travel Agent

20. Promotion
• Advertising- keep in mind the image of the country,
• tourist attraction, cultural heritage
• Publicity- Travel agent, PRO, media people
• Sales promotion- Tour operators, frontline staff

21. People
•Employees
•Pilot, Cabin Attendants, Engineers, Customer Service
Agents, Securities, Marketing, Sales & Reservation
employees
•Customers

22. Process
•People Processing
•People physically enter the service system to receive the
service. Aircraft is the service factory where service is
delivered.
•Possession Processing
•Cargo
•Luggage & Courier

23. Physical Evidence
Services cape
Services cape usage - Interpersonal
Complexity of Services cape - Elaborate
Flight
Offices - Org. & Ticket Booking Agents
Virtual Services cape

24. AirFare
WAR

25. Kingfisher
• Kingfisher is one of the
latest Airlines in INDIA.
• Overall growth in year
2006-07 is 37%.
• Kingfisher acquired 46%
share in Air Deccan.
• Domestic airlines poised
to go international flights
Jet Airways
• Jet Airways is the
experienced airline in
INDIA.
• Overall growth in year
2006-07 is 16%.
• Jet airways acquired Air
Sahara in 2006.
• Jet Airways already has
domestic as well as
international flights.

26. Kingfisher
• In a short span of 2 years its
market share has become
28% including Air Deccan.
• Personal in-flight
entertainment in every seat.
• It was awarded the ‘Best New
Airline Of the Year’ award.
• Already have training
academy
Jet Airways
• Jet Airways has its market
share 31% including Air
Sahara.
• Average entertainment
services.
• Jet Airways won Double
Honor Travel Trade Gazette
Travel award.
• They are plan to start training
academy.

27. Flower Of Services
Core -
Transport
Information
Consultation
Order Taking
Hospitality
Safe Keeping
Exceptions
Billing
Payment

28. • Information - Reg. the org., flight schedules, ticket fares, promotion
schemes etc.
Through website, call service, sms, employees etc.
• Consultation - Reg. the choices of class, routes to a destination & special
menus for frequent fliers
• Order taking - Booking - through phones, fax and internet
Ticket Office, Call Centres, Company Website & Agents
• Hospitality - Most important differentiating factor (from ticket booking
to post flight help)
• Safe keeping - Luggage & Children
• Exceptions - Special requests reg. meal preferences, special amenities
for elderly people or children, medical needs etc.
• Billing - Charges split, E-mail bills etc.
• Payment - Credit card, Travellers cheque, Special payment privileges
for frequent fliers

29. Challenges
• Initializing privatization in the airport activities
• Modernization of the airlines fleet to handle the pressure of
competition in the aviation industry
• Rapid expansion plans for the major airports for the increased
flow of air traffic
• Development for the growing Regional Airports
• Waving of Tax Exemption on leasing from government
• Costs pressures (ATF Prices & Staff Cost)

30. Indian Aviation
Full Service
Airlines
Air India,
Jet Airways etc.
Low Cost Airlines
Air Deccan,
Spice ,Jet etc.
Regional Airlines
Emric Air,
Air Dravida etc.
Charter
Airlines
Club One Air,
Deccan Aviation
etc.
Cargo
Airlines
Blue Dart,
Aryan Cargo
Express etc.

31. Conclusion
•The price cutting schemes will be feasible as long as external
factors for pricing are under control
•Government should encourage private participation
•The success of the “open sky” policy in the first phase of
economic reforms in the domestic aviation sector, international
cargo, airport infrastructure .
•The opening of the Airports sector with new ‘Green field
Airports ’to the private sector, has been a step forward.
•The Disinvestment of shareholding in the public sector airlines
still remains to be completed.
•Reforms like allowing foreign airlines to buy stake in domestic
carriers and rationalization of central and state levies on jet fuel
implemented for a sound sustained grow

32. THANK YOU