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Contents :
• Introduction
• Major Players
• Demand And Supply
• Kinked Demand Curve
• Market Structure
• Snob Effect
• Macro Environment Analysis
• SWOT Analysis
• Michel Porter’s Five Forces
• Comparison Between Low and High Cost
• Suggestions
History
• The birth of civil aviation in India began happened on Feb 18,
1911 when Henri Piquet flew a Humber biplane.
• 100 per cent tax exemption for airport projects for a period of
10 years.
Aviation Sector Outlook
• Air cargo traffic to grow at over 11.4 per cent p.a. over the
next 5 years to exceed 2.8 million tones by 2010.
Airport Infrastructure
• Of the 454 airports and airships in India, 16 are designated
international airports.
• Over 135 aircraft have been added in the past two year alone.
Ticket prices
# Purchasing power
# Frequency of services
# Safety
Government regulation
Technology
Kinked Demand Curve
Market Structure and Implications
• Political environment
• Economic environment
• Social environment
• Technological environment
• Demographic environment
• People tend to follow the crowd without examining the merits
of a particular thing.
• SNOB EFFECT
This rise in income levels along with introduction of no-frills flights will lead to
• Rise in no of travelers,
• More investments in aviation,
• More competition and
• Rise in industrialization leading to more need of air transport
SOCIO-CULTURAL ENVIRONMENT
Rise in Leisure travel :-Tourism industry grew 8.8 percentThere has been an increase in
leisure travel by tourists of 15% in 2006.
Technological Environment
Intense Competition amongst low cost airlines and the full service
airlines. Apex fares and promotional schemes offered by all the
full service carriers, offering prices at lower or similar to the low
cost ticket fares are a tremendous competitive force.
Entry of additional players
Mergers and acquisitions take place here too which increases
competitive rivalry between airlines
Low level of differentiation between the services offered by the
different airlines increases the risk of switching
High fixed costs and input constraints also add to the competitive
pressures in the industry
Recent News Of Aviation Industry
• Jet - Sahara acquisition
Low Cost (Spice Jet, Indigo) High Cost (Kingfisher, Jet Lite)
• Lower rate in return flights • --NA--
• Food and drink on demand • Free food and drink.
with consideration.
Low Cost High Cost
Refund Rules :
Date change Penalty. 750 750