The document outlines the aviation industry in India and the potential for low-cost airlines. It discusses how India's aviation market was previously a monopoly but was opened to private players in 1994. Low-cost carriers emerged promising lower fares but without extra services. Strategies of low-cost airlines included using secondary airports, outsourcing, and charging for extras. Air Deccan launched in 2003 as India's first low-cost carrier, aiming to make air travel affordable through strategies like high aircraft utilization and dynamic pricing. However, factors like rising costs, new entrant competition, and high risk perception have made it difficult for low-cost airlines to succeed in India.

2. OUTLINE
AVIATION IN INDIA
TARGET MARKET
STRATEGY OF LOW COST AIRLINES
INDIAN SCENARIO
POTENTIAL OF AIR TRAVEL IN INDIA
NEW ENTRANTS
SWOT ANALYSIS
CONCLUSION

3. INTRODUCTION
India air travel was perceived to be an elitist activity
In 1953, all airlines merged into Indian Airlines or
Air India
Monopoly perpetuated for next 40 years
Controlled by Directorate General of Civil Aviation
Later entrusted by Airport Authority of India

4. OPEN SKIES
Current policy restricts the access of foreign Airlines
Potential tourists are not offered choice when
travelling to India
Adopt open skies policy, in order to promote Travel
& Tourism
On 1 March, 1994, Government open the gates for
private entrants
Sensing a huge opportunity, a large number of players
jumped into the fray
Prominent among them, Jet Airways, Sahara,
Archana, East West, India International, Damania etc

5. LOW COST AVIATION
(WIND OF CHANGE)
Trade of low cost Aviation increased in recent past
Offers low fares eliminates all unnecessary services
Most consumers opt for low prices
Serious threat to traditional „full service‟ airlines
Force to rethink the strategies and restructure their
fairs to Government owned and private Airlines

6. NEED FOR LOW COST AIRLINES
Deregulation the demand for scheduled passenger
was driven by constraints and confines of its providers
Network carriers were able to avoid cost side
pressure, by focusing on revenue-side strategies
Price transparency-internet created, emergence of
new breed of low cost carriers
At the end of 2000 demand for business class and
other high end products fell dramatically
Low cost carriers offer real, lasting competition to
network rivals
Customers fall into segments with regard to demand
for products on offer

7. CUSTOMER SEGMENTATION

8. TARGET MARKET
To a large extent influenced the mass transportation
and domestic tourism industry
E.g., Country of Billion people, around12 Million
people travel by air
LCCs also geared towards:
 holiday trips
 business trips
Middle class people

9. Passenger and Cargo Traffic - India

10. Business Design for Low Cost Airlines

11. Strategy of Low Cost Airlines
Business Strategy
Keeping operating
costs to a minimum
Aggressive marketing
Utmost efficiency in
Using secondary operations and
airports maintenance
Outsourcing some
operations Increasing the aircraft
seat capacity
Charging for all additional

12. Indian Scenario: Air Sahara and Jet Airways
Jet Airways
 Took off with four Boeing 737-300‟s in April 1992 at
Mumbai
 100% Subsidiary of Tailwinds Ltd, situated in Cayman island
 Indian promoter, Naresh Goyal bought the entire stake,
became sole owner
Air Sahara
 Started operation in 1993, between new Delhi and Mumbai
sectors
 By 2001, it expanded its flying routes to 12 sectors
 Won many excellence award
 Turnover of Rs. 3.5 billion in 2001

13. Low cost Airlines
On 25th August 2003 Air Deccan, India‟s first
low cost carrier operated its first flight
Fares were half of those of the established
airlines
Others Alliance Air, GoAir, Air Arabia, Air
One and foreign airlines amongst others
Target customer whose basic need is to
commute at a cheap fare

14. Indian Aviation: Market Players
Kingfisher
IndiGo
Jet Airways
JetLite
Air India
Spicejet
GoAir

15. Air Deccan: First low cost Airline in India
Unit of Deccan Aviation Private Ltd
Formed in 1995
India‟s largest private heli - charter company
Got reputation for providing speedy and
reliable heli services
Vision to bridge divide with those who fly and
those who don‟t, by introducing low airfares
Leveraged the power of Internet to simplify the
entire process

16. Strategies planned by Air Deccan
Misson : Provide reliable, low cost and safe travel to the
common men
Strategies:
High Aircraft Utilization
Route planning
Aircraft fleet
Dynamic pricing
Additional revenues
Cost reduction
Marketing & promotion

17. Air Deccan: Fares and Reservation
The aim is to make air travel affordable to all
Introduced the concept of Dyna fares
Reservation systems:
• Internet(www.airdeccan.net)
• Call centre – through credit card
• Travel agents
• Airport counter

18. Different Low Cost Airlines

19. SWOT Analysis
Strength Weakness
 “Lean and Mean”  No frills such as „free”
approach in staffing food/drinks
 Rising income levels and  Lower safety standards
demographic profile followed
 Airlines for price conscious  Crippling “oil shock” so
customers difficult to survive at low
cost
 New Short-Haul air routes
are serviced  Absence of Institutionalized
funding
 Smaller countries can rely on
low cost airlines to service
them
 Give more choices to fly

20. Opportunities Threats
 Attract middle class  Rising cost
people  The threat of new entrants
 Extensive network to into (LCC) segment esp
exploit the booming Air GoAir, Spice Jet, Indigo
cargo business and Jagson Airlines
 Plenty of scope for  High risk perception
expansion of operations  New strategies of
 Could start “Contractual traditional airlines
Employment”
 Strengthen its position in
the Chartered Flight
segment

21. Why Low Cost Airlines are not so
successful in India ???

22. Reasons: Why Low Cost Airlines not so
successful in India?
Failed in effective administration
Poor services
Unable getting subsidies
Less interest of Government
Failed in building trust factor