PEST Analysis: The Indian Airline Industry

A PEST analysis is an analysis of the external macro-environment that affects all firms. P.E.S.T. is
an acronym for the Political, Economic, Social, and Technological factors of the external macro-
environment. Such external factors usually are beyond the firm's control and sometimes present themselves
as threats. For this reason, some say that "pest" is an appropriate term for these factors. Let us look at the
PEST analysis of the Indian aviation sector:

Political Factors
In India, one can never over-look the political factors which influence each and every industry
existing in the country. Like it or not, the political interference has to be present everywhere. Given below
are a few of the political factors with respect to the airline industry:

o The airline industry is very susceptible to changes in the political environment as it has a great bearing
on the travel habits of its customers. An unstable political environment causes uncertainty in the minds
of the air travellers, regarding travelling to a particular country.
o Overall India’s recent political environment has been largely unstable due to international events &
continued tension with Pakistan.
o The recent Gujarat riots & the government’s inability to control the situation have also led to an
increase in the instability of the political arena.
o The most significant political event however has been September 11. The events occurring on
September had special significance for the airline industry since airplanes were involved. The
immediate results were a huge drop in air traffic due to safety & security concerns of the people.
o International airlines are greatly affected by trade relations that their country has with others. Unless
governments of the two countries trade with each other, there could be restrictions of flying into
particular area leading to a loss of potential air traffic (e.g. Pakistan & India)
o Another aspect is that in countries with high corruption levels like India, bribes have to be paid for
every permit & license required. Therefore constant liasoning with the minister & other government
official is necessary.

The state owned airlines suffer the maximum from this problem. These airlines have to make several
special considerations with respect to selection of routes, free seats to ministers, etc which a privately
owned airline need not do. The state owned airlines also suffers from archaic laws applying only to them
such as the retirement age of the pursers & hostesses, the labour regulations which make the management
less flexible in taking decision due to the presence of a strong union, & the heavy control &interference of
the government. This affects the quality of the service delivery & therefore these airlines shave to think of
innovative service marketing ideas to circumvent their problems & compete with the private operators.

Economic Factors
Business cycles have a wide reaching impact on the airline industry. During recession, airline is
considered a luxury & therefore spending on air travel is cut which leads to reduce prices. During
prosperity phase people indulge themselves in travel & prices increase.

After the September 11 incidents, the world economy plunged into global recession due to the
depressed sentiment of consumers. In India, even a company like Citibank was forced to cut costs to
increase profits for which even the top level managers were given first class railway tickets instead of
plane tickets.
The loss of income for airlines led to higher operational costs not only due to low demand but also
due to higher insurance costs, which increased after the WTC bombing. This prompted the industry to lay
off employees, which further fuelled the recession as spending decreased due to the rise in unemployment.

Even the SARS outbreak in the Far East was a major cause for slump in the airline industry. Even
the Indian carriers like Air India was deeply affected as many flights were cancelled due to internal
(employee relations) as well as external problems, which has been discussed later.

Social Factors

The changing travel habits of people have very wide implications for the airline industry. In a
country like India, there are people from varied income groups. The airlines have to recognize these
individuals and should serve them accordingly. Air India needs to focus on their clientele which are mostly
low income clients & their habits in order to keep them satisfied. The destination, kind of food etc all has to
be chosen carefully in accordance with the tastes of their major clientele.

Especially, since India is a land of extremes there are people from various religions and castes and
every individual travelling by the airline would expect customization to the greatest possible extent. For
e.g. A Jain would be satisfied with the service only if he is served jain food and it should be kept in mind
that the customers next to him are also jain or at least vegetarian.

Another good example would be the case of South West Airlines which occupies a solid position
in the minds of the US air travelers as a reliable and convenient, fun, low fare, and no frills airline. The
major element of its success was the augmented marketing mix which it used very effectively. What South
West did was it made the environment inside the plane very consumer friendly. The crew neither has any
uniform nor does it serve any lavish foods, which indirectly reduces the costs and makes the consumers feel
comfortable.

Technological Factors

The increasing use of the Internet has provided many opportunities to airlines. For e.g. Air Sahara
has introduced a service through the internet, wherein the unoccupied seats are auctioned one week prior to
the departure.

Air India also provides many internet based services to its customer such as online ticket booking,
updated flight information & handling of customer complaints.

USTDA (US trade & development association) is funding a feasibility study and workshops for
the Airports Authority of India as part of a long-term effort to promote Indian aviation infrastructure. The
Authority is developing modern communication, navigation, surveillance, and air traffic management
systems for India's aviation sector that will help the country meet the expected growth and demand for air
passenger and cargo service over the next decade.

A proposal for restructuring the existing airports at Delhi, Mumbai, Chennai and Kolkata through
long-term lease to make them world class is under consideration. This will help in attracting investments in
improving the infrastructure and services at these airports. Setting up of new international airports at
Bangalore, Hyderabad and Goa with private sector participation is also envisaged.

A good example of the impact of technology would be that of AAI, wherein with the help of
technology it has converted its obsolete and unused hangars into profit centers. AAI is now leasing these
hangars to international airlines and is earning huge profits out of it. AAI has also tried to utilize space that
was previously wasted installing a lamination machine to laminate the luggage of travelers. This activity
earns AAI a lot of revenue.

These technological changes in the environment have an impact on Air India as well. Better
airport infrastructure, means better handling of airplanes, which can help reduce maintenance cost. It also
facilitates more flights to such destinations.
 Segmentation: The Airline Industry

Most airlines use a very traditional segmentation strategy, dividing passengers into business
travelers and economy travelers (mostly leisure travelers). The common strategy is to squeeze as much
profit as possible from business class passengers who are attracted by superior services and corresponding
high prices and, at the same time, to try and fill the rest of the seats and ensure growth by attracting
economy class passengers with lower fares.

Business passengers
They are crucial for airlines' profitability. With less spare time and more cash in their pockets,
they agree to pay a premium price for a premium service.
Today business passengers account for approximately 48% of passengers, and these 48%
contribute 66% of airlines' revenue. The premium prices they pay provide wider and more comfortable
seats, better choice of meals and seats, luxurious lounges.
Airlines can choose from a multitude of premium services to offer to business travelers. Some of
these extras range from seats equipped with faxes and telephones, to gambling machines, showers, massage
services and suit ironing services in the recently introduced arrival lounges.
Business passengers believe it is worth extra money if they can save time and arrive looking fresh
for an important meeting. Business passengers will avoid transit flights even if a longer flight could save
them money. But amongst other perks, flexible reservation services are probably the most important to
them. Reservations for business trips are often made just a couple of days in advance. A no penalty
cancellation policy is also very important to business passengers.
The best way to reach business travelers is through printed advertising. Business news media, such
as "The Economist" or "The Wall Street Journal" are some of the best publications through which airlines
can reach business travelers. Many airlines design special promotional programs that target corporate
bookers and meeting planners, who are responsible for business trips reservations. Frequent flyer programs
are an added bonus for business passengers.
Leisure Travelers
They represent a totally different market. The most important consideration for most of them is the
price. The lower the airfare, the more people will fly the respective airline.
By and large, with the exception of wealthy travelers, this segment will not pay extra for premium
services and will agree to change several planes during their trip if this option costs less than a direct flight.
Despite lower margins provided by this segment, leisure travelers are very important to an airline's
bottom line. Part of the reason is that technological progress in the area of tele-conferencing and increased
use of the internet for business communications is expected to reduce the number of business travelers.
Thus, airlines are counting on the leisure segment to provide further growth.
How can airlines benefit from the growth opportunities in the leisure segment without losing
immediate profit opportunities in the business segment? This is a tough issue in airline marketing
management. By improving services and reducing prices for economy class passengers, airlines risk that
some business passengers will switch to economy class.
This has already happened with Japan Airlines, for example, which was forced to eliminate
business class seats on some of its flights. On the other hand, if an airline focuses on business class
passengers, it risks losing its economy class passengers to another airline.
Since business class passengers are not many, a company relying mostly on business travelers will
often end up flying half-empty planes, losing the potential revenue generated by lower priced economy
seats.
On the other hand, few airlines catering solely to economy class passengers can be successful
because a low fare carrier must fill the entire plane if it is to generate revenue from its low-margin
operations.
The allocation of business and economy class seats on a plane is determined through a process
called yield management. A good yield manager knows the approximate proportion of business and
leisure travelers for each flight in advance, based on sophisticated statistical models.
Thus he/she tries to sell early, the economy seats at a cheaper price, while keeping enough seats
reserved for business travelers, who usually book at the last minute. Keeping just the right amount of
business seats reserved is important: selling too few economy seats in advance may result in a less-than-full
plane while selling too many economy seats may result in a full plane, but with insufficient revenue to gain
a profit.
This kind of segmentation serves airlines well enough when implemented within one company. It
would be very difficult for any single airline to target just one of these two segments - business or leisure -
successfully.
There are exceptions - small regions that serve destinations where the majors do not fly, for
example, are in a better position to implement a low price policy. They can even get business travelers to
fly them despite the lack of premium services because no other airline would get them there. Southwest is a
classic example, proving that low cost carriers can thrive.
Major international carriers, however, need to target both the business and the leisure segments
they may also target different ethnic and geographical segments differently, depending on the markets from
which they draw the majority of their customers.
For example, even though Japan Airlines advertise extensively to the American public, their
message -"Your needs. Your Airline," seems to work best for the traditional Japanese audience.
Inside one country, two national carriers may also focus on different destinations, which is the
case with Canadian Airlines and Air Canada. Passengers' tastes determine airlines' strategies. While British
Airways focuses on comfort and luxury, valued by European passengers, Air Canada equips its business
class seats with plugs for laptops and telephones, appreciated by North American business travelers.

Overall, airlines seem to achieve best results when they subscribe to the segmentation theory,
supported by yield management techniques and a careful monitoring of the economic changes in
their geographical markets.

Product Mix

Getting the product right is the single most important activity of marketing. If the product isn't
what the market wants, no amount of price adjustment or brilliant promotion will encourage consumers to
buy it. The airline product is quite a complex one since it comprises of a service of incorporating the
temporary user of airline seat and certain tangible products such as free flight bags or a free bottle of duty
free spirit to encourage booking.

The airline product includes of two types of services:

1. on the ground services,
2. In-flight services.
The on-the-ground services include a convenient airport with car parking facilities, duty free' shopping
quick and efficient checking of baggage, efficient service at reservation counter, transport to the airport,
etc.
 The service provided inside is intangible and is highly variable. The airhostesses are trained to
provide polite, warm and courteous service. The courteous service that the representatives at the baggage
counter, reservation counter provide goes a long way in developing customer loyalty. The travel agents of
the airlines also need to be efficient and polite.

Differentiating the Product

It is important to recognize that what the consumers are demanding are not products, or features of
products but the benefits they offer. Producing added benefits thus helps the marketer to distinguish one
product from another. Good design or style of service can form the basis of differentiation. This enables the
company to create a personality for its service. The design and decor of the aircraft provides opportunities
to personalize their product as well as periodically to update them when differentiation under IATA
regulations was virtually excluded, nonetheless, certain airlines were able to develop distinct personalities.
Eagle Airlines created an entirely new market between New I York and Bermuda, for e.g. by developing an
image of a friendly airline distinctive from other airline serving the route. A similar style was evident in
Richard Branson's Virgin Airways.

CORE PRODUCT AND SUPPLEMENTARY SERVICES

Many services products consist of a bundle that includes a variety of service elements and even
some physical goods. It is important to distinguish between the core product that the customer buys and the
supplementary services that accompany that product.

THE FLOWER OF SERVICE

Core product surrounded by clusters of supplementary services
Source: Christopher Lovelock pg. 233
The core service of an airline is the service of transport. The supplementary services are classified
into eight clusters & each one is analyzed with respect to the airline industry:

Information
This aspect of supplementary service is common for every person that needs information about the
organization. In case of airline industry, upto date information regarding flight schedules, ticket fares,
information about promotion schemes etc available to customers.

Customers can avail of this information literally at their fingertips today with every airline starting
its own website which gives complete details to the customer & also entertains queries.
 It also includes providing information to employees regarding new policies affecting the airline &
equipping them with enough information, which the customers might demand. Extensive training is
provided to in-flight attendants regarding handling customer queries, knowledge about the airplane itself,
knowledge about cuisine etc.

Consultation
This aspect of supplementary services can be customized according to the needs of the customer.
It is more in the case of people processing and high personnel-contact services.

Airlines are moving more actively into the role of consultant today. They are doing away with the
travel agents & designing & selling packaged tours to consumers directly. In this aspect they often act as
consultants to the customer, by giving him advice & suggestions regarding the type of plan he can choose,
the benefits he will get the mode of travel he should choose etc.

Another aspect to consultation at airlines is when the customer approaches the airline regarding
traveling to particular destination, the airline gives him a variety of choices of routes that he can take.

In some cases airline may also design special menus & benefits in consultation with its frequent
fliers by keeping in constant touch with them & asking them for suggestion as to what they want in their
airline which will make their experience more comfortable.

Order taking
The order taking procedure is essentially the booking procedure of the airlines. The important
aspect to be noted here is that the procedure is smooth, easily understood & fast. Reservation of airline
tickets is now easy and reliable since it is fully computerized. There are 24 hours reservations. Passengers
can specify their seat preferences at the time of reservation.

Most airlines use the telephone, fax, and email methods of booking. The emphasis here is on fast
booking & at the same time getting the required information form the customer. This is done by
establishing a standard reservation procedure & format thus reducing the risk of inconsistent service
delivery. The online booking system also facilitates better order taking & processing.
The scheduling aspect assumes importance as reservations on the wrong flight to the wrong place
are likely to be unpopular.

Hospitality & Caretaking

 With the increased competition today in the airline industry & the increasing similarity of services
offered by each airline, hospitality has emerged as a key-differentiating factor between one airline & the
other.

The hospitality aspect of an airline is tested right form the time of the reservation (courtesy of the
booking official) to the airline’s desk at the airport to the actual in-flight travel (the attitude of the flight
attendants) to the post flight help extended.

Safekeeping
In airlines the safekeeping issue is that of safeguarding the customer’s baggage.
Baggage allowances are offered about 30 kgs of check-in baggage is allowed. Passengers carrying
international tickets are given further allowance of around an added 3Okgs Priority baggage delivery is
offered to members. The customers entrust his baggage o the airline & it is the airline’s responsibility to
keep it in a proper condition.

Children and infants usually travel along with their parents and guardian. In case of
unaccompanied minors, customer service staff renders all assistance like checking in and escorting up to
the aircraft and handing over to the senior-most cabin attendant on board the flight. He is looked after on
board the flight right upto the point flight reaches the destination and he is received by his guardian.

Exceptions
Special requests – airline very often receive special requests form customers with regards to meal
preferences, special amenities for elderly people or children., medical needs etc. these needs have to
considered & acceded to wherever possible

Handling of customer suggestions / complaints – every airline today has a customer service center
which entertains customer suggestions & complaints. On the flight, customers are often asked for their
opinion regarding service equality. Many corporate frequent travelers are consulted when the airline
decides to make any new change.

Billing & payment

The billing procedure in airlines is simple. The options available to the customer are plenty
including credit card & travelers cheque. Airlines use the open account system with their corporate clients.
Frequent fliers are also given special payment privileges.
 LEVELS OF PRODUCT

FIVE PRODUCT LEVELS

The Core Service

The core service of the airlines industry is to transport goods and services to various destinations.
As the needs of the people increased the entire system became more organized and formal. After this stage
comes the various supplementary services.

The Supplementary Services

The airline industry has many players they had a brand name like ‘Air India’,’ Jet Airways’,’
British Airways’. All of them had some common services to offer like connecting flights, through check-in,
tele check in, food on board, and complementary gifts etc.
Different classes like economy class, business class were introduced. Air concessions are given to
school students, old people etc. Singapore airlines was the first to introduce small 8”television screen for
every passenger. The freebies are actually win-win deals between airlines and other services.
Sahara, for example, offers its passengers a ‘business-plan’ on two-way economy class ticket,
which includes a night’s stay with breakfast, STD facility for 3 minutes and boardroom facility at the Park
Hotel, New Delhi. To Delhi based fliers to Mumbai, it offers a night’s stay with breakfast, airport transfers
and VIP amenities at The Orchid, Mumbai. For business class, the plan includes a stay at The Leela, with
buffet breakfast and late checkout.
All these added service helps the customer to decide upon which airlines he wants to travel. As
competition increased and the customers wanted more the next phase evolved and that is the augmented
service.

The Augmented Service

This phase is where the customer’s expectations are met; the service providers kept working on
new methods to meet the ever-changing customers’ demands. The players introduced online booking,
which was very convenient for the service users.

British Airways business class has showers; it’s more spacious and comfortable. Sahara airlines
offer its passengers six different types of cuisine like vegetarian, fat free, diabetic etc. They also have
auction going on board. Virgin airlines have gambling on board, they also have body massage to offer to
their passengers. Air Emirates has something called cab service, they have customized pick up and drop
cab service.

This phase is the most crucial one; with increased competition service will become the final differentiation.
Future Service
As mentioned above the customer needs keep changing, the future is unknown. The customers
may be looking in for more frequent inexpensive air travel, something like air taxis, super sonic speed. This
decreases the time thus reducing the cost.

The diagrammatical representation of the core and supplementary services in the airline industry is
shown below:

COMFORT/ SPACE

TICKETS

CONNECTIN FOOD
G FLIGHTS
Core MULTI-
AUCTION TRANSPORT CUISINE
BRAND NAME
(Air India, Jet CONCESSION
Airways) S

COMPLEMENTAR
Y GFITS

CAB SERVICE
 Price Mix

Price plays as much a tool of marketing as promotion plays a critical role in the marketing mix.
The concept of 'fair price' is paramount. Buyers judge whether a product is fairly priced by seeing whether
it represents value for money. Pricing can be classified in three ways.

DIVISION OF FARES:
The final fares charged to the passengers include the following components:
 Basic fares
 Insurance
 Inland Aviation Travel Tax (IATT).
 Passenger Service Fee (PSF)
The basic fares include the operating cost incurred by the airlines and the profit margin. The major
constituents of the operating cost in respect of domestic airlines in India are the Aviation Turbine Fuel
(ATF) the basic raw material for this service industry, varies 30-40 % depending on aircraft utilization;
Navigation, Landing & Parking costs 7-10%; Repair and Maintenance 13%, Manpower 12%; Acquisition/
Depreciation & Insurance 13% and balance other expenses.

How are fares arrived at?

When Airlines put in capacity (seats) and frequency (flights) between any two points, they market
research the route in order to arrive at the total potential for that segment. In other words, the capacity and
frequency is tailored to the size of the market. Accordingly, the pricing structure is also arrived at. Pricing
or fare levels are arrived at after taking into consideration various factors; type of aircraft, configuration of
aircraft (number of seats), density of route, competitor activity, and minimum breakeven cost.

In order to achieve the breakeven seat factor and thereafter maximize loads, the airline embarks
upon a serious of marketing activities. These will vary from a publicity campaign highlighting various
facets of the Product, to sales, service, punctuality, ideal departure and arrival timings, connections and so
on. In short, the entire focus is to increase the yield and load factor (seat factor). The yield or the bottom
line is the income generated from ticket sales less costs incurred on the route.

Why do fares fall?

 When the yield drops or the seat factor falls, the airline is immediately alerted to enquire into the
causes for this. This leads to a fare war wherein the airline either tries to protect its market share or
responds to another airline which tries to increase its own market share. The reasons for these can be
multifarious.

1. It could be that the route is not profitable due to intrinsic reasons such as a very short haul route, or the
potential or total size of the market for this route is too small to sustain a profitable flight or there is too
much capacity deployed by various airlines on the route

2. Yields may also fall due to increase in costs. Then the airline has two options; increase fares to
compensate for the increased costs. The second option is, to drop fares in order to increase the seat
factor. (Increase in volume number with low fares can achieve breakeven cost)

3. It could be that the type of aircraft deployed on the route is not suitable and hence is making cash
loses.

4. Extraneous reasons also contribute to non-profitability of routes. The event of September 11, 2001 is
an instant example wherein passengers simply stopped flying and several airlines went into
bankruptcy. Also poor economic conditions lead to shrinkage of market. Prices of fuel also fluctuate
and can result in sudden increase in basic costs. Insurance premiums have recently increased
considerably, further adding to the burden.

5. Apart from the above. Competitor activities can also lead to a drop in market share or drop in yields.
For example, the most common cause is a reduction in fares by one airline forces the other to reduce
fares. This reduction in fares could be due to any of the above three reasons enumerated above.

Reduction in fares, apart from the above reasons is also due to introduction of a more suitable aircraft,
which is fuel efficient, modern, and with greater seating capacity at lower cost. In other words reduction in
fares is not always due to negative factors but can be due to modernization.

Pricing Strategies

Premium Pricing:
 The airlines may set prices above the market price either to reflect the image of quality or the
unique status of the product. The product features are not shared by its competitors or the company itself
may enjoy a strong reputation that the 'brand image' alone is sufficient to merit a premium price.

Value for Money Pricing:

The intention here is to charge the average price for the product and emphasize that it represents
excellent value for money at this price. This enables the airline to achieve good levels of profit on the basis
of established reputation.

Cheap Value Pricing:

The objective here is to undercut the competition and price is used to trigger the purchase
immediately. Unit profits are low, but overall profits are achieved. Air India and Indian Airlines have
slashed their prices to meet the competition of private airlines so that they can consolidate their position in
the market.

Airlines usually practice differential pricing. There are three classes: The First Class, The Executive
or Business Class and The Economy Class. Fares for each class are different since the facilities provided
and the comfort and luxury level is different in each class. Seasonal fares are also fixed, fares rise during
the peak holiday times.

Low-cost Pricing:

With the advent of the low-cost airlines in the Indian aviation industry, a different low-cost flying
concept has come up. Since these low-cost airlines are trying to woo the customers by providing air travel
in exceptionally low prices, a price-band kind of pricing has to be designed.

In low-pricing strategies, the airlines provide very low prices for the flight tickets. Also, they
prices are made cheaper by booking the tickets long before the flight date.

APEX Fares:

In this scheme, people are given very cheap rates only if tickets are booked atleast before the
specified time period. But the draw-back here is that if the booking is cancelled, a substantial amount of
money is not returned.

Union Budget Analysis 2004

Aviation
 In the previous budget, two new international airports, one at Bangalore and the other at
Hyderabad were proposed to be developed through private participation. The Bangalore airport recently
signed a concession agreement and is expected to start its operations by 2007. The scale of the Hyderabad
airport has been reduced from 10 million-passenger capacity to 5 million. Also, the project cost has been
trimmed to Rs.12 billion in the first phase. Bids for privatisation of the Mumbai and Delhi airports have
been invited. However, the AAI staff has come out strongly against the privatisation move. We expect the
privatisation to be on track soon.

Other infrastructure
The AAI has earmarked Rs.54 billion for upgradation of airports, which would provide a major
fillip to the aviation industry. Air traffic in the domestic sector has increased by 9.3 per cent for the nine
months ended December 2003 against the same period last year, on account of lower airfare and higher
connectivity. The government’s commitment to provide equity and debt support to PSEs in select
infrastructure sectors, including aviation, will also benefit the sector. The aviation sector will also benefit
from the rise in FDI levels from 40 per cent to 49 per cent. The imposition of service tax on airport service
would not impact the airfares, as the impact on cost for airlines would be less than 0.5 per cent (airport
services contribute less than 5 per cent of the overall cost of an airline). The withdrawal of exemption on
payments made by an Indian company to acquire an aircraft, or an aircraft engine, on lease from a foreign
state, or a foreign enterprise, will negatively impact airline companies, as most of the aircraft and aircraft
engines used by airlines are leased. These exemptions will cease prospectively from September 1, 2004.

Conclusion

Marketing of airlines may not be on the same lines of those of other services, but it surely has
borrowed in a lot from them and refined itself over the years and has become the point of study of many-a-
marketers.

Today marketers of airlines in India have got a wake-up call. They need to be very pro-active and
act effectively & efficiently today if they want to survive even till the near future. The Indian aviation
industry is totally shaken-up and is certainly in the lime-light. With the advent of a new kind of airline
structure in India, they existing players have taken notice and are taking utmost measures possible to cut-
out the competition even before it comes into being.

The Government in India has to take many positive steps to make the industry much stronger than
it is today. There are many issues with need to be studied and corrected. Foremost, the existing airports
need to be modernized. The non-used airports need to have an increase in air traffic. More money needs to
 be pumped into the airport infrastructure. There has to be massive reduction in the air turbine fuel
charges. The airport charges too are among the highest in the world and have to be normalized. Apart
from all this, the government should allow the industry to be as de-regulated as possible, so that the
industry becomes strong on its own and has the competitive global advantage which is required today.

Air Sahara launches family fare scheme

Our Corporate Bureau
3 March 2005

New Delhi: As a part of its strategy to attract more air travellers, Air Sahara yesterday launched a new
scheme linked with its bulk ticketing programmes like the 'Sixer and Square Drive to encourage families to
travel with frequent flyers.

As a part of this scheme, along with the Sixer and Square Drive schemes, passengers can buy additional
tickets for family members for as little as Rs2,500.

"Almost all the schemes so far have focused on the individual flier. This time we have come out with the
fly-your-family scheme to attract family members," Rono Dutta, chief executive, Air Sahara, said here.

With the new programme, Air Sahara expects to target both individual and business travellers. Under the
Sixer scheme, a passenger has to buy six tickets for Rs36,000 or four tickets under Square Drive for Rs
26,500.

As per the new scheme, one can avail of tickets for family members by paying an additional Rs15,000 for
six coupons or Rs10,000 for four coupons, along with the two schemes.

"So a ticket for a family member costs only Rs2,500 for a domestic destination. The only condition is that
they will have to travel together," Dutta said.

A maximum of three family members plus the original traveller under the two schemes will be allowed to
fly under the new scheme, named Sixer-in-the-Air.

Low cost, frills chic

Mohini Bhatnagar
1 February 2005

Kingfisher Airlines promises a new 'high' — economy fares on

frills-filled flights.

Kingfisher Airlines (KAL), promoted by maverick liquor baron, Vijay Mallya, chairman,
United Breweries, is taxiing on the runway. Scheduled to take off on May 7, 2005, the birthday
of Mallya's 18-year old son, Siddharth, KAL has already signed contracts with Airbus
Industries, to acquire 10 A-320 aircraft on firm order with options to buy another 20 until 2008.
Apart from these aircraft, which come at a combined price tag of up to $1.8 billion or Rs 8,100
crore, the airline will lease four A-320 aircraft.

The acquisition of the new aircraft is over and above the four leased aircrafts for which the company has
already signed agreement. Deliveries of the leased aircraft are due to begin in April this year, while those of
the ordered aircraft will start in September 05. All the aircraft will be powered by International Aero
Engines' V2500s.
In that sense, KAL has taken a lead over low-cost airline Air Deccan, whose A 320 aircraft are arriving
later. However, KAL promises to be different from Air Deccan in many ways. For starters it will not
compete with Air Deccan in fares.

Mallya promises to offer fares that are about 25 per cent lower than those of Jet Airways, but with some
frills. Thus the airline will not have the traditional first, business or economy class seating. Instead, the
entire aircraft will comprise a single cabin, dubbed Funliners. Each of the A320s will seat 174 passengers
in the single cabin and, for the first time in the country, personal video screens will be fitted in the back of
each seat. The seats will also be an inch wider than the economy class seats in other airlines.

Airbus' A320 family is the acknowledged technological leader in the single-aisle class, with advanced
features such as fuel-saving wingtip fences, weight-saving composites, and the reliability that comes from
its modern design and ease of maintenance. It also consistently leads in independent passenger and operator
surveys.

Says Mallya, "We are offering our passengers more than just value-based fares, we will offer a complete
lifestyle experience."

According to him, Kingfisher's low cost translates into a cost efficient airline with the lowest seat mile cost
in the industry, expected to to be achieved through online reservations and outsourcing of services without
compromising quality and safety.

For KAL, low costs mean no elaborate meals on board and no paper tickets, though the interiors will be
aesthetic and classy and, if Mallya is to be believed, the airline would have fashion models as in-flight
attendants to make flying Kingfisher a more memorable experience.

In the past few years, stiff competition in the marketplace has led to a number of companies in the US and
Europe offering upmarket products and services at no frill prices also called 'masstige' or 'no frills chic'
products. US airlines like JetBlue and Song are cases in point as they provide wide, all-leather seats, free
TV with 24 channels, 100 audio channels and pay-per-view movies.

According to Mallya, JetBlue and Song are the inspirations behind KAL more than the low cost, no frills
Ryan Air and UK's Virgin Air.

Though Mallya is reasonably upbeat about the future of Kingfisher Airlines and plans to offer flights to
Singapore and Malaysia, the government has allowed only airlines with five years' flying experience to fly
abroad, which may be detrimental to the airline in the long run.

Also, the fact that Kingfisher Airlines will not be significantly cheaper than Indian Airlines or Jet Airways
may not exactly work in its favour, notwithstanding fashion models and individual videos.

However, what will work for it is the fact that air travel in India is growing at 25 per cent per annum and
there is place in the domestic market for at least two more carriers. Moreover, since the airline is going in
for only new aircraft, Kingfisher will have the youngest fleet in the world till mid-2007,
which could work in its favour later.

Airlines get fancy-free

Mohini Bhatnagar
5 August 2004
Thanks to Air Deccan, other airlines find that it pays to drop fares
 At the rate at which airlines are slashing fares, a time may soon come
when Lalu Yadav's railway ministry won't matter much.

The credit for triggering this price offensive goes to Air Deccan, which
commenced operations less than a year ago with two 48-seater aircraft,
obtained on dry lease from the French-based aviation major ATR.
Inspired by the Irish carrier Ryan Air, Air Deccan offers airfares as low as Rs 500 plus taxes on the
Mumbai-Delhi sector.

While one has to book a seat three months in advance to avail of this rock-bottom fare, Air Deccan's
normal fares are much lower than what passengers are used to paying for air travel on Jet Airways,
Indian Airlines or Air Sahara. All this is possible on Air Deccan because it is a 'no frills airline', meaning
that the airline has cut out all the add-on costs of travel and focuses on getting people from one location
to another safely. Thus frills like meals, attendants and airport lounges among others have been done
away with.

Instead, additional seats to carry as many extra passengers as possible, have been added. For instance, by
not serving warm meals, the space occupied by the aircrafts' pantry area and inflight service trolleys is
used for seating additional passengers. The best part of it is that all this is not at the cost of safety. The
carrier uses the standard Airbus aircraft currently being used by Indian
Airlines and Jet Airways.

Air Deccan has already taken three state-of-the-art 180-seater Airbus-320

jets on dry lease of which one has already landed.

What is making things easier for Air Deccan is that states like Andhra
Pradesh and Karnataka have announced a reduction in sales tax for no frills
regional airlines to improve air connectivity in those states. While Andhra
has completely abolished sales tax, Karnataka has reduced it from 25 per
cent to just 4 per cent.

'Following the enthusiastic response to Air Deccan's announcement from the traveling public a number
of other low cost airlines have applied for licences. These include Yamuna Airways, Indus Air, UB
group's Kingfisher Airline, Nusli Wadia's (of Bombay Dyeing) no frills airline, and Arab Express. The
last will operate between India and the Gulf region only.

UB for instance has signed a deal with the European aircraft maker Airbus Industrie to purchase four
planes and an option to buy eight more to boost the Kingfisher Airline fleet.

All this seems to have sent the leading domestic carriers — Indian Airlines, Jet Airways and Air Sahara
into a tizzy and each airline is now going all out to ensure they it doesn't lose out to the new low-cost
airlines — or to each other. Now it seems a lot depends on who gets there first.

Indian Airlines has announced that passengers flying between two metros need pay only an extra
Rs1,000 to take a connecting flight to a smaller city. Indian Airlines' officials say the scheme is aimed at
tapping air travel demand among those living in smaller towns and cities, who usually opt for road or
railway travel.

Air Sahara now plans to increase the frequency of its flights to the interiors of the country by 50 to 60
per cent this year. The airline will also introduce the hub-and-spoke system, with metros as hubs.
Passengers traveling from one metro to another and then on to a small town could pay the standard fare
on the metro leg of the journey, but a lower fare to the small town.
The airlines are also working on upgrading their frequent fliers programmes (FFP). Jet Airways has
upgraded its FFP and is focusing on its yield-management strategy. The airline is seeking to lure
passengers who fly less frequently. Under this scheme, seats that are not occupied on a flight, will be
offered at lower rates.

Indian Airlines has revised its frequent flier programme to enable those
with even a single boarding pass with a single boarding pass. Indian
Airlines' frequent flyer club earlier had a Rs1,000 enrollment fee which
gave way to the three boarding pass norm and now just a single boarding
pass qualifies travelers to enter the frequent flyer club.
The Indian Airlines FFP has been merged with Air-India's programme, which will allow international
passengers to earn mileage points. If you fly Indian Airlines, you'll get Air-India mileage points, though
the offer is valid only till September, this year.

Air Sahara is also planning to launch a 'dynamic fare' model. Under this model, fares will be based on
the daily market demand. In short, Air Sahara, too, will sell vacant seats at lower fares.
The established airlines knowing they can't fight the low-cost carriers in terms of price are emphasising
the coverage and service part of flying.

The price war

However, Air Sahara, which has always been quick to react on the fare front, last week, announced its
surprise fare package. The airline announced a reduction in fares by 59 to 69 per cent on the busy
revenue-earning metro routes linking Mumbai, New Delhi, Kolkata and Bangalore with the return air
fare between Delhi and Mumbai being brought down 69 per cent to Rs 4,444 — compared to Rs 4,420
for air-conditioned rail travel along the same route.

However, the prices are subject to the tickets being purchased at least 30 days in advance. "This initiative
would give an opportunity to the train traveller to opt for air travel," said Air Sahara president Rono J
Dutta.

The airline is also planning to launch a 'dynamic fare' model that would fix fares between various
domestic destinations based on daily market demand.

Indian Airlines has announced a new apex fare slab for purchase of tickets in eight sectors, 28 days in
advance — two days less than those offered by Air Sahara and Jet Airways.

The new D-28 segment would be valid for travel on the Delhi-Mumbai, Delhi-Kolkata, Delhi-
Hyderabad, Delhi-Bangalore, Delhi-Chennai, Kolkata-Mumbai, Kolkata-Bangalore and Chennai-
Kolkata sectors.

IA earlier had only two segments, D-7 (one week advance) and D-21 (three weeks advance), under the
'smart apex' scheme. The D-28 fares would be available for sale on one way or round trips as against
round trip fares offered by Air Sahara. However, the 30-day advance fare offered by Air Sahara is valid
throughout the year, while IA's D-28 fare is valid till October 15.

Not to be left behind, Jet Airways has announced the 'super apex monsoon' fares and 'special monsoon'
point-to-point economy class fares and return excursion fares which are available on 56 and 26 sectors
respectively.

A passenger availing himself of the Jet Airways point-to-point economy class fares can travel on the
Hyderabad-Delhi-Chandigarh route (or in the return direction) for Rs9,900 or between the Chennai-
Delhi-Patna sector (or in the return direction) for Rs11,940. Similarly, a passenger travelling under the
special monsoon economy class return excursion fare of Jet Airways on the Chennai-Delhi-Varanasi can
fly for Rs22,100. Under this scheme, the Hyderabad-Delhi-Jammu sector (or return) can be covered for
Rs18,200.

The biggest 'P' of marketing

Industry experts say price remains the biggest part of travel and even though Air Deccan offers no frills
it does offer television shows and recorded music to make the journey pleasant. Also in a two-hour
journey most travellers don't need more.

Air Deccan's fares are 30 per cent lower than those of the established carriers. So far most of the airline's
operations are restricted to flights between big metros and smaller cities, but the carrier plans to take on
the major players soon with new aircraft on the main routes connecting the ig metros.

The airline has recently taken three Airbus 320 planes on lease to complement its fleet of seven French-
made ATR 48-seater aircraft with which it plans to start operations on metros.

Air Deccan's, GR Gopinath has said he plans to keep cutting fares as the number of passengers for his
airline rises.

It seems certain that IA Jet and Air Sahara would have to come up with their own low-cost tickets and
not just seasonal schemes to remain competitive. At present the three airlines together command the
largest share of the domestic aviation market but Air Deccan promises to start snipping away at their
long held bastion.

For Indian travellers, no frills airlines are a bonanza as flights to destinations abroad are often cheaper on
foreign carriers than those within the country on domestic airlines.

  industry > aviation

Economics of low-cost air travel

Shubha Madhukar
16 July 2004
Operating on low-cost flying models, airlines can
provide air travel at 40 to 45 per cent of the existing
economy airfare

Travelling by air is no longer a dream for many. Not after Air

Deccan's blockbuster announcement to offer Rs 500 air ticket for
the one hour 55 minutes flight between Delhi and Mumbai. Sounds
incredible? Pinch yourself. Low cost, no frills air travel has arrived
in India.
In practical terms, this too good to be true offer may not last in perpetuity, but air tickets at 40 to
45 per cent of the existing economy airfare is not just feasible but realistic too as proved by Air
Deccan. Its attractive pricing has succeeded in broadening the air travellers segment also.

Low cost, no-frills air travel emerged in the US in the 1970s and spread to Europe in 1990s. In
Asia, it made inroads some three years ago led by Malaysia's AirAsia. In India, the low-cost
business model happened with Air Deccan opening operations in south India.

Already half a dozen business houses encouraged by Air Deccan's apparent success and the
government's policies to liberalise its aviation policy are all geared up to set the Indian airspace
buzzing with activity. Among the low cost carriers waiting to take off are Vijay Mallya's
Kingfisher Airlines, Modiluft's Royal airlines and Air India's AirIndia Express. AirOne and Visa
to be run by groups of former Indian airlines pilots are also in the offing. The latest entrant to the
growing number of private investors is the Rs 2500 crore GMR Group.

Low cost carriers have been possible with a different set of economics. Unarguably, the major cost
of flying is attributed to fuel, maintenance and salaries. In addition there are parking and landing
charges as well, which are quite high. So how does Air Deccan in India, RyanAir in Europe and
Southwest Airlines in US manage to sustain low cost carriers? How does a low cost model work?

Low cost carriers generally operate with only one kind of aircraft in their fleet, such as Airbus
320s or Boeing 737s, to lower the maintenance costs. There is no business class just economy
class; this increases the number of seats per flight.

Typically, they have quick turn around time, which means higher aircraft utilisation, online ticket
reservation to save costs on commission to agents, reduction in flight services — no free meals, no
newspapers and no frequent flier programmes either. There are no aerobridges or bus services to
ply passengers to the aircraft. What's more, many of them do not even promise seat allocation.
Usually the crew size is also small: Air Deccan operates with just one air hostess on board.

Low cost carriers manage to wring more by lowering their fixed costs. Shorter hauls with smaller
crew means not just each aircraft being airborne longer but also spending less on hangerage along
with savings on hotel and layover allowances for the crew. Trimming down the frills like no hot
meals means no extra storage space for food trolleys, which again is utilised to add more seats to
the aircraft. Another source to manage low airfares is to sell advertising space within. Air Deccan
for instance, has the head rest space open for advertising.

Globally, low-cost airlines operate from secondary airports where landing and parking charges are
much lower. So in London, a low cost carrier uses Luton airport instead of the Heathrow. In India
however, there are no secondary airports and no cost advantage thereof.

Nonetheless, to be on board a no-frills aircraft you need to brace

yourself with minimal expectation and a high degree of patience.
Above all, one needs to come out of the concept of maharaja style
luxury associated with air travel. No-frills for the traveller translates
to lesser leg space, no free meals and no smiling air hostesses.

But the 'value for money' air traveller is not complaining. In addition,
it is also attracting to its fold many of the AC II rail travellers who save hugely on time and don't
mind paying the premium for the time thus saved.

For full service airlines though, it is a time to worry as the no frills airlines are certainly making a
dent into their markets and profits. To take up the impending challenge, the full service airlines are
also harnessing themselves. Air-India is set to launch a new subsidiary airline with 25 per cent
 lower fares to gulf and south east Asian countries in April 2005. Air Sahara also plans to
restructure and cut down on its operational costs so as to offer full service at cheaper tickets to
domestic destinations and SAARC and ASEAN countries. Media reports also say Air Arabia, a
middle east based international carrier is keen to begin low-cost flights to India.

The abundance of private investors keen to set up low-cost airlines is a positive signal. Hopefully,
the government would relax the bundle of taxes and liberalise the air space to actually make flying
inexpensive in India as it is in the US and Europe.

Globally, no-frills airlines hold 25 per cent of the market share. What per cent will it hold within
India is still arguable and premature to predict but it certainly will win the hearts of travellers with
more choice and better prices

The LCC Invasion-Part II

Bhisham Mansukhani - Mumbai

After the first phase of the Low Cost Invasion by Air Deccan, Kingfisher, Air-India Express, Air Arabia
and SpiceJet, the second phase is just about to take off. The line up of new entrants includes IndiGo
Airlines, Go Airlines, Tiger Airways, Magic Air, Paramount Airways, East West
Airlines and many more. Express Travel & Tourism brings you an exclusive tete-a-
tete with Rahul Bhatia (IndiGo), Jeh Wadia (Go Airlines) and Tony Davis (Tiger
Airways) who share their vision for this segment in India...

We will adopt a travel agent first approach, followed by a web-based distribution

model

Rahul Bhatia,
How would you position IndiGo against other new LCCs in the Indian market?
MD, InterGlobe
Enterprises,
IndiGo aims at becoming the next Southwest. It is distinguished by the fact that its promoter of
parentage has a very strong aviation and services background. IndiGo Airlines

Is the order of a 100 aircraft a confirmed deal with Airbus? What is the structure of the aircraft
delivery?

We have committed a firm order of 100 aircraft to Airbus. We are expecting between 15 and 19 aircraft in
the first two years, and thereafter, an average of one aircraft every month.

How does IndiGo plan to fund its US$ six billion order for aircraft?

The start-up capital investment for this project will be in the range of Rs 350-400 crore. The purchase will
be through the debt-financing route.

What is the rationale behind setting up IndiGo?

Firstly, the Indian market dynamics are strong. As a country, we are doing extremely well economically
and the political will to open up the aviation sector and upgrade infrastructure makes a great business
climate to operate within. Secondly, India has one of the least explored aviation markets in the world. We
make 0.01 trips per capita as against 0.12 trips made in China, 2.20 trips made in USA and 3.20 trips made
in Singapore. Given the geographic size of the country, our population, economic growth projections,
increased consumer spending and traffic projections on all modes of transport, it makes perfect sense for a
successful low cost model to emerge. Given our background in aviation services, we have what it takes to
succeed.

Could you elaborate on the proposed distribution network for IndiGo?

We are currently studying various options for distribution. We will adopt a travel agent first, followed by a
web-based distribution model.

What would the business model be with regards to both the trade and the consumer?

IndiGo is being positioned to fill the fast emerging need for reliable, efficient and economical air travel. All
elements of our strategy- be it product, marketing, distribution, operations or customer service - will be to
cater to this positioning.

We recognise the importance of the trade and travel agents that will be an integral component of our
distribution strategy.

Why did you choose Rakesh Gangwal to promote IndiGo? Is he investing a significant amount into
the airline?

Rakesh Gangwal is an aviation expert, having spent over 20 years at senior management positions at United
Airlines, Air France and US Airways. We feel that his endorsement of the project, coupled with a world-
class management team, will lead to a distinct differentiation in our product offering and business model.
While IndiGo is jointly promoted by InterGlobe Enterprises and Gangwal, InterGlobe will have the
majority stake.

Being an ex-US Airways employee, which is a full service carrier, what synergies could be formed
between his prior experience and your new business model?

The synergies are by way of his diverse experience in the airline industry in a mature market, which will
clearly help us achieve our objective of providing economical, efficient and reliable air travel. This is of
course over and above the excellent relationship that we have shared for the past two decades.

We Are Keen To Tap Southern And Eastern Indian Cities: Davis

Charmaine Fernz - Mumbai

With a host of carriers looking at the potential of Indian skies, is Tiger Airways
looking at venturing into India? If so, when and which destination would you be
looking at?

We will consider flying within a four-hour radius from our base so as to ensure
optimum utilisation of both - our aircraft and service crew. Within this radius are a Tony Davis, CEO,
number of Indian cities particularly the southern and the eastern cities. We have Tiger Airways
undertaken feasibility studies that show which city will best serve our potential Indian customers from the
10 cities we currently service.

What is your strategy for success?

Tiger Airways is a low-cost carrier (LCC) and we follow the basic LCC business model. We keep fares low
by maintaining our costs. We will maximise aircraft utilisation across our network of 10 cities in six
countries, and will maintain stringent cost controls throughout our operations while providing a reliable and
on-time service without compromising on safety and security. Increased air travel brings about mutual
socio-economic benefits to Singapore and the Asia-Pacific region by developing its tourism and hospitality
industry.

What are your plans for the coming year?

Tiger Airways will strive to maintain its top slot in the low-fares segment and will announce new
destinations in the coming months. We have also purchased eight new Airbus 320s bringing our fleet size
to a total of 12 aircraft. This will help us grow into a regional low-fare airline in the Asia-Pacific region.
We believe in sticking to our true low-cost model. Competition is about delivering the best possible product
at the lowest possible price and we are confident to be able to deliver efficient service for a long time.

In addition, we would like to see 'open-skies' policies among all countries in the future.

What according to you differentiates the LCC from the other airlines?

Tiger Airways has the largest network of low fare destinations served from Changi Airport, Singapore. We
will keep our fares consistently low; our lead-in fares are as much as 80 per cent lower then full service
airlines, and passengers who book early with us enjoy a host of discounts.

Indian Travellers Have Changed Their Mode Of Transportation: Wadia

Charmaine Fernz - Mumbai

A prudent financial investor and an aviation enthusiast, Jeh Wadia - MD of Go

Airlines - is passionate about the new airline. Citing a host of factors responsible for
the conception of the airline, Wadia's dream is to commodify air travel. In an exclusive
rendezvous with Express Travel & Tourism, Wadia talks about his strategy for his
dream airline.
Jeh Wadia, MD,
When every inch of the Indian skies is sprouting a new low cost airline every month, Go Airlines
one more launch seems like no surprise. So what would set this one more product apart
from all the others? A focussed strategy and a lot of passion. "With a population of one billion, India has a
huge middle class that still remains unexplored. And my primary aim is to get these people to travel," says
Wadia.

He says that travellers across the country have changed their mode of transportation with a definite incline
towards air travel. Lower prices have helped but what has also helped this shift is a change in their
mindsets. "It is all these factors and much more that has strengthened my belief in launching Go Airways,"
Wadia adds.

The Travelling Pyramid

Reminiscing about the past, Wadia says that he had actually worked on an airline executive summary in
2000, which for some reason did not work out. "It was only in 2004 that I re-opened this summary and
decided to put my thought into action," he adds.

Elaborating on the strategy of his airline, Wadia says, "One only has to look at the travelling public
pyramid and realise the vast opportunity that it offers. The customer base that we plan to target lies at the
bottom of this pyramid that has a huge untapped base." The primary focus for Go Airways would therefore
add up to railway passengers travelling in I/II/III-tier AC and Volvo bus passengers.

But they are still working out the cost structure and supply strategy for the airline. "Since low cost aviation
is a high volume but low margin business, it is tricky to sustain a profitable business module," Wadia
informs. Although it plans to begin operations by September-October this year, it is still in talks with
aircraft leasing companies. "We have a two-pronged strategy. Initially, we will lease about 20 used A320
aircraft but go on to place 20 firm orders for new aircraft by 2008," he divulges.

Quality is Important

Low cost carriers, without dispute, stimulate the market and help bring the price down. Go airways,
therefore, plan to follow the Ryan Air model with an all-economy configuration. Wadia says, "And as far
destination is concerned, we will begin with the western and southern regions followed by the north and the
east. But what we will really stress on is quality service and time efficiency. But we will let our actions and
delivery speak for it."

Apart from online bookings and web transactions, Wadia will also look at agents and tour operators since
the trade constitutes a big share of the market. But as far as its public presence goes, Go Airways has yet to
finalise on its tagline. "We have narrowed down three options: The People's Airline, A Value Choice or A
Smart Choice," Wadia concludes. It remains to be seen what will work for the buyer.

SpiceJet Airlines and Castrol have tied up with Interactive Television, a well-known movie marketing
company, for their promotions.

SpiceJet Airlines, for the uninitiated, is an about-to-be-launched low-fare, no-frills airline brand from the
erstwhile airline company Modiluft.

As part of the airline's launch campaign, large replicas of aeroplanes bearing the SpiceJet logo will be hung
from the ceilings of select malls/multiplexes across SpiceJet's key destinations. Interactive will be also
arranging for various promotions centered around the displays.

Nures Sayeed, vice president - corporate communications, SpiceJet, says,

"With this promotion, we hope to occupy a 24X7.top-of-mind of our
consumers. We selected shopping malls because our TG is based here. Our
objective is to take flying to the masses and the masses are taking to malls and
multiplexes. Therefore, malls for us are a great meeting place."

For the record, SpiceJet is being launched by Royal Airways, which is the
reincarnation of Modiluft. Modiluft was among the first private companies that
stepped into the Indian aviation sector before it ceased its operations in 1996.

As for Castrol, the lubricants major has tied up with Broadmind Entertainment, a Group M company, and
Interactive to conduct rural film festivals in Punjab, Haryana and Uttar Pradesh for the promotion of CRB
Plus, a lubricant for tractors. The festival begins in the first week of May.

The movie list includes Gadar, Bandhan, Awara Pagal Deewana and four other titles. The festival is being
organised with the primary purpose of gaining visibility and reaching out to Castrol's TG – the farmers.
This promotion would cover 25-35 villages in each of the states.

Ajay Mehta, CEO, Interactive Television, says, "Movies are a passion for us, Indians. It is Interactive's
constant endeavour to use movies and create clutter-breaking media properties for our clients to reach out
to and connect to their target audience."

Interactive is an important player in the fast growing market of movies and cinema-based activation. With
offices across the country, Interactive has the width to execute marketing programmes for corporates in
cities as well as in villages with a population of as little as 2,000.

Interactive has been responsible for immense value-adds to promotions for corporates such as Samsung,
HLL, Maruti, Hero Honda, Reckitt Benckiser, Seagram, Hutch, Motorola, Coca-Cola, Nestle, ITC Foods,
Dabur, BPL, Perfetti Van Melle, Hewlett Packard, Bacardi, UB, Eveready, Reebok, and ICICI.

The services offered to clients range from sponsorship of films, film festivals (urban & rural), ticketed film
promotions, in-film branding, in-theatre branding, special screenings and premieres. © 2005 agencyfaqs!