This PPT presents Indian Aviation Industry in the light of Oligopoly. It is meant for educational purpose only.
Saga of Indian Aviation Industry Unfolding
Welingkar Bangalore Team
Anuraag Atal Ishaque Mulla Priya Singh Rohan 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
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 2008Source: Economic Times 09 Rs.10,000 Cr
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
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 !!!