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 2008-



Source: 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 !!!


 Hope you enjoyed the

flight !!!