marketing mgt

Facts and Figures

Source: Air Transport Action Group (https://www.atag.org/facts-figures.html)

Key Players & Market share ( in India)

Source: by DGCA for FY 2017-18.

The Directorate General of Civil Aviation (DGCA) is the Indian governmental regulatory body for civil aviation under the Ministry of Civil Aviation

Market Size and Growth Rate

• India’s passenger* traffic grew at 16.52 per cent year on year to reach 308.75 million in FY18.
• As of March 2019, India has 103 operational airports. India has envisaged increasing the number of operational airports to 190-200 by FY40.
• As of July 2018, there were nearly 620 aircraft being operated by scheduled airline operators in India.

• The number is expected to grow to 1,100 planes by 2027.

Source: www.ibef.org

(India Brand Equity Foundation)

Market Size and Growth Rate

• Domestic passenger traffic grew YoY by 18.28 per cent to reach 243 million in FY18 and is expected to become 293.28 million in FY20E. International passenger grew YoY by 10.43 per cent to reach 65.48 million in FY18 and traffic is expected to become 76 million in FY20E.
• India’s domestic and international aircraft movements grew 7.93 per cent YoY and 6.36 per cent YoY to 2,153 thousand and 453.61 thousand during 2018-19, respectively.

Source: www.ibef.org (India Brand Equity Foundation)

Growth drivers

Source: www.ibef.org (India Brand Equity Foundation)

Source: AAI

Market segments

From left to right:

• Non-business consumers that are frequent travelers via airlines.They would seek some comforts of travel and probably would not choose an airline simply based on price.

• They are highly brand loyal to a particular airline wherever possible. The prime motivation for their strong loyalty is to accumulate frequent-flier and/or loyalty points, which they can generally redeem for free flights in the future.
• Given their need to travel almost immediately, they are more concerned flight availability and destination requirements, rather than any consideration of price or airline brand.
• brand loyal to an airline and is quite price insensitive.
• aim for the cheapest price

SWOT Analysis

STRENGTHS

WEAKNESS

• Lack of infrastructure
• fixed revenue
• tickets are still quite expensive
• Untapped Air Cargo market

• Strength of product
• increased propensity to fly
• changing lifestyle
• Low cost service
• Low labor cost & highly trained staff

OPPORTUNITIES

THREATS

• Economic downturn
• increasing cost of fuel
• Shortage of skilled manpower

• Improvement in investment
• technological advancement
• Improved service

Source : research by Ajay Kr. Dhamija,∗Computer Scientist, Defence R&D Org., Min of Defence

Innovations in the Airline Industry

• Biometrics: for faster movement of airlines passengers (transit passengers) through check-in, baggage self-drop, security and immigration etc

• Augmented and Virtual Reality: These technologies are being utilized to further enhance passenger experience, promote offers and improve training for employees. KLM has integrated augmented reality on their app, which enables hand baggage check by indicating the visual representation of bag dimensions permitted on-board. Japan Airlines is training their maintenance staff using augmented reality; creating an environment that they are actually working on an engine or aircraft part

• Cloud Computing: Cloud computing enables airlines to store and share a vast amount of programs and data at lower costs. Popular application of cloud computing includes the resource management system.

• Artificial Intelligence: In 2017, Jet Blue launched a venture capital subsidiary. JetBlue Technology Ventures, dedicated to investing in travel technology start-ups to foster innovation in the airline. Jet Blue partnered with Utrip, a Seattle based startup which uses artificial intelligence to plan travel itineraries

Innovations in the Airline Industry

• Block chain: This technology has gained popularity and is being used in passenger management, baggage tracking and aircraft safety. Its potential is yet to be entirely leveraged.

• Drones: Drones have the potential to drastically reduce the commercial aircraft inspection time while also lowering costs and boosting accuracy. EasyJet has implemented the use of drones for fuselage inspection. Developments are being made to automate aircraft inspections by using visual processing algorithms coupled with enterprise IT systems to send work orders to the maintenance crew as identified.

• Remote Air Navigation Services and GAGAN: This will help airlines access remote and low traffic airports without incurring the high cost of ANS infrastructure and manpower. The satellite based ANS system - GAGAN - will help airlines mount more flights on the same route with reduced separation, greater accuracy and higher safety standards.

Eight Disruptive Waves of change

Eight interconnected waves of change are set to profoundly impact air travelers and travel businesses between now and 2025:

1. Macroeconomic turbulence: Factors beyond the industry’s control, such as geopolitics and terrorism, can severely impact revenues. Companies with a ready plan to respond with agility and speed will gain competitive advantage.

2. Disruptive new sources of travel services: New entrants are poised to expand their services – and threaten traditional businesses.

3. New business models: Traditional providers will need to seek new ways to deliver value, such as subscription-based models, service bundling and cross-industry offers.

Eight Disruptive Waves of change

4. Alternate modes of transport: A new generation of travel options will fuel fierce competition while opening new opportunities in a hyper-connected world.

5. Frictionless travel experiences: Airport experiences will become more seamless and convenient, thanks to a network of IOT devices, cloud-based biometrics and risk-based screening.

6. Next-generation travellers: Travel providers will need to develop new offerings to meet the preferences and needs of emerging demographics

7. Immersive experiences: Virtual and augmented reality will transform the way consumers plan, purchase and experience travel.

8. The potency of hyper-personalization: One-to-one segmentation and communication with travellers will soon be possible, raising data privacy questions.

Oil Prices And Airline Industry

Political

• Overall India’s recent political environment has been largely unstable due to international events & continued tension with Pakistan.

• The recent Gujarat riots & the government’s inability to control the situation have also led to an increase in the instability of the political arena.

• 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)

• 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.

Economic

• The recent economic recession made the travel market see its lowest point. Economy and premium travelling declined largely.

• Additionally airline was also under the pressure to cope up with the increase in fuel prices. These factors made it difficult to generate profit.

• Airlines also struggled with increasing labor demands from employees

• These economic factors also led to the increased banckruptcy of major airline companies like Kingfisher.

Social

• The culture of travelling for holidays is getting popular around the globe and people are getting aware of different tourists attraction through media that is resulting in growing demand of holiday packages.

• growing income of middle class in different parts of the worlds with decreased costs of air travel with the time that has increased affordability of people.

• As result tourism is becoming larger and more diverse customer market

Technological

• Passengers prefer to access ticketing and checking service through hand held devices instead of standing in lines or booking manually

• Aviation industry also conducts advertising campaigns on social platforms for attracting more clients. Being tech savvy to stay relevant.

• Aircrafts are lighter and provide fuel economy

• advanced technology offers better safety and services

Legal

• Many countries had introduced different rules, regulation, and quality standards for airlines in order to ensure safety and security of passengers.

• The compliance to these rules and regulations is compulsory for any airline travelling to and from these countries. This has increased the costs for many airlines and they have to maintain certain level of services and standards.

• The different types of law suits against airlines has increased in last few years that means customers has very higher expectations and law is becoming more strict against these airlines.

• It is difficult for new airlines to get operating licence in some countries due to different legal restriction and requirements

Environmental

• Airline industry is responsible for 3.5% of weather change that may grow up to 15% in future. (Eurocontrol.int, 2012)

• Heavy rain, fog, forest fires etc disrupt travel schedules

World's largest Aviation Markets