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    The Indian Airlines Industry: Gurpreet Singh

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    The Indian airline industry has undergone significant changes since liberalization in the 1990s. Prior to liberalization, air travel was limited to the elite due to high costs and government control over the industry. Liberalization led to an open skies policy for domestic carriers in 1991 and the introduction of private airlines. This resulted in declining airfares and the emergence of low-cost and full-service carriers. While the industry has grown significantly since, challenges remain around infrastructure development, rising fuel costs, and competition from low-cost carriers.

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    The Indian Airlines Industry: Gurpreet Singh

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    gurpreet06
    22 views6 pages
    The Indian airline industry has undergone significant changes since liberalization in the 1990s. Prior to liberalization, air travel was limited to the elite due to high costs and government control over the industry. Liberalization led to an open skies policy for domestic carriers in 1991 and the introduction of private airlines. This resulted in declining airfares and the emergence of low-cost and full-service carriers. While the industry has grown significantly since, challenges remain around infrastructure development, rising fuel costs, and competition from low-cost carriers.

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    Airlines

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    Airlines

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    The Indian airline industry has undergone significant changes since liberalization in the 1990s. Prior to liberalization, air travel was limited to the elite due to high costs and government control over the industry. Liberalization led to an open skies policy for domestic carriers in 1991 and the introduction of private airlines. This resulted in declining airfares and the emergence of low-cost and full-service carriers. While the industry has grown significantly since, challenges remain around infrastructure development, rising fuel costs, and competition from low-cost carriers.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    22 views6 pages

    The Indian Airlines Industry: Gurpreet Singh

    Uploaded by

    gurpreet06
    The Indian airline industry has undergone significant changes since liberalization in the 1990s. Prior to liberalization, air travel was limited to the elite due to high costs and government control over the industry. Liberalization led to an open skies policy for domestic carriers in 1991 and the introduction of private airlines. This resulted in declining airfares and the emergence of low-cost and full-service carriers. While the industry has grown significantly since, challenges remain around infrastructure development, rising fuel costs, and competition from low-cost carriers.

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    The Indian Airlines Industry

    Gurpreet Singh
    The Rise & Fall of Maharaja
    Maharaja Syndrome Post Maharaja (Liberalization)
     Air travel: an elitist activity  Open skies policy for domestic
    players in 1991
     Prohibitive cost of air travel
     Air Corporation Act repealed
     Air Corporations Act, 1953  Private airlines reintroduced
    – Air India nationalized in 1953  Partial open sky policy for
    – all airlines merged into either international players only in
    Indian Airlines or Air India November 2004
    – The Directorate General of Civil  Full cost carriers, low cost carriers
    Aviation controlled every aspect (LCC), start-up airlines (total 21
    of flying today!!)
    – Airports Authority of  Nose- diving prices
    administering every aspect of  Privatization of Delhi and Mumbai
    air transport operation through airports
    the Air Traffic Control.
    Players 2006
    Taking Indians To Places

     State owned domestic airline  Set up by J.R.D. Tata


     Formerly known as Indian Airlines  Nationalised in 1953
     Company rebranded as Indian in  National flag carrier
    Dec 05 to revamp image in  44 world-wide destinations
    preparation for an IPO  Profitable in most years since its
     GoI’s plan to merge Air India and inception
    Indian into one giant airline  Net profit of Rs.97 m for 2005-06
    consisting of 130-140 aircraft
     Could take place anytime from  Growth of almost 15% over the
    the end 06 to mid 07 previous year.

     Began on 3 Dec 1993with two  “Regular” airline offering normal


    Boeing 737-200 aircrafts as economy and business class
    Sahara Airlines seats.
     Initially services concentrated in  300 flights, 43 Indian destinations
    northern India  Indian market share 32%
     Rebranded as Air Sahara on 2  Does not own its brand. Brand
    October 2000. owned by Jetair Enterprises Ltd.
     Uncertainty over the airline's fare a separate company substantially
    caused domestic markey share to owned by Naresh Goyal
    slide from 11% in Jan 06 to 8.5%  Prevents possible ‘hostile’
    in April takeover bid
    Players 2006
    Taking Indians Across India

     Low-cost airline (LCC)  GoAir – The People’s Airline


     Began in May 2005  established in June 2004
     Entered with Rs. 99 fares for first 99  LCC promoted by The Wadia Group
    days  GoAir FreeFares
     “Offering low everyday spicey fares”  Relatively small player as compared
     Aim: Compete with Indian Railways to other LCCs
    AC sgment  Initial flights in southern & western
     fleet of 6 Boeing 737-800 with 189 India with the first nine A320s
    seats.  Remaining 11 aircrafts being added in
    2nd yr

     India's first low-cost carrier  Services started in May 05


     Started air operations in 2003  Initially operates only on domestic
    routes.
     Despite a disastrous maiden flight
    which caught fire, Deccan continues  Owned by United Beverages Group
    to grow under the leadership of Vijay Mallya
     Connects 55 cities within India  Pushing for amendment of rule which
    requires an airline to fly a min of five
     Planning a secondary hub at Chennai years on domestic routes before it
    International Airport. Due to stock can start flying overseas
    market downturn Air Deccan's IPO
    barely managed to scrape through  Barring such an amendment, first
    international flights planned to start in
    2010
    Global v/s Indian Scenario
     At the macro-economic level Asia Pacific growth is impressive. India
    and China are growing between 8 and 10% each year
     International passenger traffic grew 7.6% where as Asian airlines were
    slower—at 6.3%
     Asian freight traffic grew by only 4.2% in comparison to global growth
    of 3.2%
     Globally airlines lost US$6 billion in 2005 and in Asia it is a mixed
    picture. Some carriers are among the most profitable. Others however
    are struggling but still the best performance in the world
     India has moved from 2 state-run airlines to a vibrant industry with
    more than 10 players. Indian carriers stole the show in Paris with
    US$12 billion of orders
     Huge potential still to be tapped in Indian markets. Only 40 million
    people travel by air—4% of the population
    Path forward
    Things to Look Forward
    Technology Vision 2020
    Global airlines traffic to increase in lieu of the good performance
    Allowing of Private Participation & FDIs in construction & maintenance of
    air traffic infrastructure
    Air transport supports US$3 trillion of global economic activity. That is
    8% of global GDP and 29 million jobs

    Challenges
    Infrastructure
    Avian Flu
    Tackling the rise in Fuel Price
    Waving of Tax Exemption on leasing from government
    With the advent of LCC, other airlines too reducing their price
    significantly
    Costs pressures (ATF Prices & Staff Cost)

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