Aviation Swot:

Strengths:

1. Growing tourism: Due to growth in tourism, there has been an increase in

number of the international and domestic passengers. The estimated growth of
domestic passenger segment is at 50% per annum and growth for international
passenger segment is 25%

2. Rising income levels: Due to the rise in income levels, the disposable income is
also higher which are expected to enhance the number of flyers.

Weaknesses:

1.Under penetrated Market : The total passenger traffic was only 50 million as on
31st Dec 2005 amounting to only 0.05 trips per annum as compared to developed
nations like United States have 2.02 trips per annum.

2.Untapped Air Cargo Market: Air cargo market has not yet been fully taped in the
Indian markets and is expected that in the coming years large number of players
will have dedicated fleets.

3. Infrastructural constraints: The infrastructure development has not kept pace

with the growth in aviation services sector leading to a bottleneck. Huge investment
requirement for physical infrastructure for airports.

Opportunities:

1.Expecting investments: investment of about US $30 billion will be made.

2.Expected Market Size: Average growth of aviation sector is about 25%-30% and
the expected market size is projected to grow upto100 million by 2010.

Threats Huge investments are expected to take place in aviation sector in near
future. It is estimated that by 2012.

1.Shortage of trained Pilots: There is a shortage of trained pilots, co-pilots and

ground staff which is severely limiting growth prospects.

2.Shortage of Airports: There is a shortage of airport facilities, parking bays,air

traffic control facilities and takeoff and landing slots.

3. High prices: Though enough number of low cost carriers are already existing in
the industry, majority of the population is still not able to fly to other destinations.
Strengths

• Cost advantage
• Innovation
• Market share leadership
• Strong management team
• Strong brand equity

Weaknesses

• Bad communication
• Low R&D
• No online presence
• Not innovative
• Not diversified

Opportunities

• Acquisitions
• Financial markets (raise money through debt, etc)
• Emerging markets and expansion abroad
• Product and services expansion
• Takeovers

Threats

• Competition
• Economic slowdown
• External changes (government, politics, taxes, etc)
• Lower cost competitors or imports
• Price wars
• Oil Price
• Outbreak of disease (Swine Flu)
• Terrorism

Porter’s 5 Forces:
 Threat of New Entrants. At first glance, you might think that the airline industry is pretty
tough to break into, but don't be fooled. You'll need to look at whether there are substantial costs
to access bank loans and credit. If borrowing is cheap, then the likelihood of more airliners
entering the industry is higher. The more new airlines that enter the market, the more saturated it
becomes for everyone. Brand name recognition and frequent fliers point also play a role in the
airline industry. An airline with a strong brand name and incentives can often lure a customer
even if its prices are higher.
 Power of Suppliers. The airline supply business is mainly dominated by Boeing and Airbus.
For this reason, there isn't a lot of cutthroat competition among suppliers. Also, the likelihood of
a supplier integrating vertically isn't very likely. In other words, you probably won't see suppliers
starting to offer flight service on top of building airlines.
 Power of Buyers. The bargaining power of buyers in the airline industry is quite low.
Obviously, there are high costs involved with switching airplanes, but also take a look at the
ability to compete on service. Is the seat in one airline more comfortable than another? Probably
not unless you are analyzing a luxury liner like the Concord Jet.
 Availability of Substitutes. What is the likelihood that someone will drive or take a train
to his or her destination? For regional airlines, the threat might be a little higher than
international carriers. When determining this you should consider time, money, personal
preference and convenience in the air travel industry.
 Competitive Rivalry. Highly competitive industries generally earn low returns because the
cost of competition is high. This can spell disaster when times get tough in the economy.