1. Domestic Airlines in India :
Leveraging Price
1

2. Airlines History
Air India
• Started by JRD Tata on 15th Oct 1932
Jet Airways
• Incorporated on 1st April 1992 as Private
Company
Sahara Airlines
• Began operations on 3rd Dec 1993 with 1
aircraft
2

3. About The Case Study
 PRICING WARS
• IA announced 3-15% cut in fares in June 2002.
• Next day JA reduced prices by Rs 635 for
economy class
• APEX fares scheme
• Sahara’s Strategy
 INDIAN AIRLINES Schemes
• ‘Wings Of Freedom’
• ‘Bharat Darshan’
3

4. About The Case Study
 SAHARAS Various Schemes
• Wings & Wheels scheme in March 2002.
• ‘Sixer’ Offer scheme during July –August.
• ‘Steal a Seat’ online bid scheme in August 2002.
• Steal Buys scheme
4

5. Monopoly
• Up to 1990 Indian Airlines.
• IA and AI retained monopoly over Civil Aviation.
• Single service provider and many users of service.
• Service provider had low elasticity with no close
substitute.
• The firm faces the market demand curve for its
product.
5

6. Oligopoly
• The period after 1990, Monopoly ended
• An industry dominated by a small number of large
firms
• Firms provide either identical or differentiated
services
• The industry has significant barriers to entry with
respect to capital and regulations
6

7. Factors Affecting Cost
• Labor
• Fuel Price
• Capital
• Ownership & Control
• Airline Acquisition/Leasing Cost
• Operating Costs
7

8. Conclusion
• Remarkable growth in recent years in
Indian aviation industry
• Bright future of Aviation industry in India
• Infrastructure Constraint
• Liberalise rules & regulations governing civil
aviation
• Reduction in prices and lease rentals.
8

9. Thank You !
9

10. Thank You !
9