Saga of Indian Aviation IndustryUnfolding …

Welingkar Bangalore Team

Anuraag AtalIshaque Mulla

Priya SinghRohan Desai

Sameer Sanghavi

The First bird to land in India!!!

How it started …

• When 1912

• Route Karachi to Delhi

• Airline Indian State Air Services + Imperial Airways UK

Birth of Indian Aviation

• When 1932• Airline TATA Airline by JRD Tata• First Indian to get “A” license• In 1946, Tata Airlines Air India• At the dawn of Independence, India had

9 Air transport companies providing Cargo and Passenger services

Rising of the Titan…

• Rise of the Monopoly• In 1953, Nationalization of all airlines assets Indian Airlines Corporation Domestic Air India International International• 38 years of undisputed control over Indian sky

…but only till 1991

The turning point…

• Open Sky policy• Repeal of Air Corporation Act• Private players got entry

Statistics as on 1996 • 7- Scheduled Private operators• 22- Non-scheduled operators• 34 – Private operators holding NOC

Story continues …

• 2003, Air Deccan introduced concept of “No –Frill Budget Flying” – fares 17 % lower than

others• Flooding of new players like Spice Jet, Go

Airways … and many more

Turbulent sky …

• Rising competition: Many foreign carriers• Rising cost: Rising ATF prices• Fall in demand: Recession• Cheaper alternatives: Railway, Road transport• Bargaining suppliers: Airbus & Boeing• Bargaining consumers: No loyalty

Combined loss - All airlines in 2008-09 Rs.10,000 Cr

Source: Economic Times

No ground clearance …

• Over demanding Staff unions– Agitations, Stop work, Mass leaves etc.

• Stubborn Airport authorities– Heavy runway fees– Heavy license fees

Finding way through storms…

• Attract consumers: Value added services• Flight route rationalization• Newer technologies• Pressurized govt. to bring ATF under OGL• Employee retrenchment• Leasing out Aircrafts• Merger & Acquisitions

Current scenario

Source: DGCA

Is it Oligopoly ???

Kingfisher + Jet

• Market share of = 49 %• Code Sharing Agreement• Cartelization• Price influencing• HHI value – 19.87 %

Future take-offs

• Very difficult to sustain• Need severe cost cutting• Expecting Mergers and Acquisitions

Started with Monopoly …. Landed into Oligopoly….. May again take-off as a ………………………..….Monopoly

Thank you !!!

Hope you enjoyed the flight !!!