Saga of Indian Aviation Industry

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This PPT presents Indian Aviation Industry in the light of Oligopoly. It is meant for educational purpose only.

Text of Saga of Indian Aviation Industry

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

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 !!!

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