Aviation Economics
Aviation Economics
Aviation Economics
Project in Micro-Economics
Under Prof. H. Panda
Presented By: Shanker Mohan (PGP27380) ShiwangiSahu (PGP27381) Shreeya Roy (PGP27382) ShreyaGarodia (PGP27383) Soumo Deep Saha (PGP27384) Subhrajit Chakraborty (PGP27385) Sumit Singhal (PGP27386) Suraj Shidaganal (PGP27387) Sushant Singh (PGP27388)
Table of Contents
Introduction .................................................................................................................................................. 3 Major players in the Indian aviation industry ............................................................................................... 3 Kingfisher Airlines ..................................................................................................................................... 3 Jet Airways ................................................................................................................................................ 4 Market Structure and Implications ............................................................................................................... 6 Indian Aviation Market a differentiated Oligopoly .................................................................................... 6 Pricing Mechanisms ...................................................................................................................................... 7 Market Equilibrium through the Cournot Model ......................................................................................... 8 Factors determining market demand ........................................................................................................... 8 The Potential Market in India ................................................................................................................... 8 Elasticity of Demand ................................................................................................................................. 9 The Pricing Factor ................................................................................................................................... 10 How the prices are derived in a highly competitive market ............................................................... 10 Advertising .............................................................................................................................................. 13 In-flight Services ...................................................................................................................................... 16 Punctuality .............................................................................................................................................. 18 Market Demand and Supply (Charts).......................................................................................................... 21 CONCLUSION............................................................................................................................................... 22 REFERENCES ................................................................................................................................................ 23
Introduction
India is one of the fastest growing aviation markets in the world. The Airport Authority of India (AAI) manages a total of 127 airports in the country, which include 13 international airports, 7 custom airports, 80 domestic airports and 28 civil enclaves. There are over 450 airports and 1091 registered aircrafts in the country. The genesis of civil aviation in India goes back to December 1912 when the first domestic air route between Karachi and Delhi became operational. In the early fifties, all airlines operating in the country were merged into either Indian Airlines or Air India. And, by virtue of the Air Corporations Act 1953, this monopoly continued for the next forty years. The Directorate General of Civil Aviation(DGCA) controlled every aspect of aviation, including granting flying licenses, pilots, certifying aircrafts for flight and issuing all rules and procedures governing Indian airports and airspace. Finally, the Airports Authority of India (AAI) was assigned the responsibility of managing all national and international airports and administering every aspect of air transport operation through the Air Traffic Control. In 1990s, aviation industry in India saw some important changes. The Air Corporations Act was abolished to end the monopoly of the public sector and private airlines were reintroduced. With the liberalization of the Indian aviation sector, the industry has witnessed a transformation with the entry of the privately owned full service airlines and low cost carriers. In 2006, the private carriers accounted for around 75% share of the domestic aviation market. The sector has also seen a significant increase in the number of domestic air travel passengers. Some of the factors that have resulted in higher demand for air transport in India include the growing middle class and their purchasing power, low airfares offered by low cost carriers like Air Deccan, the growth of the tourism industry in India, increasing outbound travel from India, etc. Increasing liberalization and deregulation has led to an increase in the number of private players. The aviation industry comprises of three types of players: Full cost carriers Low cost carriers (LCC) Other start-up airlines
It is a phase of rapid growth in the industry with estimated growth of domestic passenger segment at 50% per annum. This has led to intense price competition due to which full service carriers like Jet Airways, Air India are giving discounts of up to 60-70% for certain routes to match the new entrants' ticket prices. The customer has thus gained enormously as a result of liberalization of the sector.
Launched Kingfisher Express to tap into Low Cost Carrier sector of domestic airlines Provided best service through world class interiors, and in-flight entertainment systems Came up with only one class to combine Business class experience into economy class fares. This also helped in freeing up more space as compared to other low cost carriers Increased comforts through more leg room and bigger seats.
Kingfisher Airlines low cost class on domestic routes is flown under the name of Kingfisher Red. It was formerly owned by Air Deccan but after the merger with Kingfisher was renamed to Kingfisher Red. Kingfisher Red operates flights to about 64 varied destinations across India. Important destinations covered by the airline include Delhi, Jaipur, Mumbai, Bangalore, Srinagar, Ahmedabad, Ranchi, Kolkata, Guwahati, Bhopal, Hyderabad, Goa, Chennai, Coimbatore, and Port Blair. Operating about 337 flights daily, Kingfisher Red is gaining popularity owing to its scheduled flights; reach to important destinations, and classy but cheap in-flight services. In spite of being a budget airline, Kingfisher Red ensures customer satisfaction and comfort. Snacks and beverages are served aboard the airline as part of affordable in-flight meal services. Reading materials are also available, which includes a special edition of Cine Blitz published exclusively for the carrier and a fun-filled magazine from Disney. The airlines strategy of cutting into the market share includes providing more services by increasing the number of routes covered. They intend to add single cabin aircrafts to the fleet in order to invest in a lesser amount of initial fixed cost to enable more passengers converting to Kingfisher Red. As compared to other services Kingfisher provides more in-flight services including the in-flight entertainment and free meals. Kingfishers strategies to balance the financial decrease caused by low cost services are as below: Quick Turnaround: Aircrafts are utilized more often by not using the hangar for too long. This helped reduce the capital and crew costs involved. High Frequency: Routes which had the maximum number of demand were flown in higher frequency. This helped in targeting the high demand in these areas as well as promoting loyalty to Kingfisher brand. Lean Staffing: In order to keep costs down and ticket prices low, they followed a policy of maintaining a low aircraft to employee ratio. Reduced Expenses on Cabin crew: Inspections and cleaning stuff were kept minimal. Utilization of aircrafts: The smaller models were maintained for the regional routes while the airbuses were used for the routes with higher demand.
In all by cutting down rates on all domestic sectors, Kingfisher Red is a preferred and accepted option for air travel because of their luxurious on-board facilities and their services on ground.
Jet Airways
Jet Airways is India's largest airline and the market leader in the domestic sector. It operates over 400 flights daily to 67 destinations including 15 international destinations.The first private Indian carrier to fly to international destinations, Jet Airways operates daily international flights to Kathmandu, Singapore, Kuala Lumpur and London (Heathrow) among others.It has interline agreements with 126 international airlines which allow passengers to use interline documents on Jet Airways for their travel. Buyout of Air Sahara by Jet Airways: Jet Airways attempted to takeover Air Sahara on 19 January 2006, offering US$500 million in cash. Market reaction to the deal was mixed, with many analysts
suggesting that Jet Airways was paying too much for Air Sahara. The Indian Civil Aviation Ministry gave approval in principle, but the deal was eventually called off over disagreements over price and the appointment of Jet chairman Naresh Goyal to the Air Sahara board. Following the failure of the deal, the companies filed lawsuits seeking damages from each other. A second, eventually successful attempt was made on 12 April 2007 with Jet Airways agreeing to pay $340 million. The deal gave Jet a combined domestic market share of about 32%. On 16 April 2007 Jet Airways announced that Air Sahara will be renamed as JetLite. The takeover was officially completed on 20 April, when Jet Airways paid 400 crore. In October 2008 Jet Airways and rival Kingfisher Airlines announced an alliance which primarily includes an agreement on code-sharing on both domestic and international flights, joint fuel management to reduce expenses, common ground handling, and joint utilization of crew and sharing of similar frequent flier programs. On 8 May 2009 Jet Airways launched its low-cost brand, JetKonnect. The decision to launch a new brand instead of expanding the JetLite network was taken after considering the regulatory delays involved in transferring aircraft from Jet Airways to JetLite, as the two have different operator codes. The brand was launched on sectors that had 50% or less load factor with the aim of increasing it to 70% and above. Jet officials said that the brand would cease to exist once the demand for the regular Jet Airways increases.
Each seller in an imperfectly competitive market faces a negatively sloped demand curve for his product, permitting him some control of the price of his product. In an oligopoly, a few firms produce the same product, while in monopolistic competition, many firms produce
differentiatedbut similar products. In a differentiated oligopoly, a few firms produce products different enough for each firm to have its own downward sloping demand curve. As with a perfectly competitive firm or a monopoly, the differentiated oligopoly firm produces at a profit maximizing level of output where marginal cost equals marginal revenue. The firm finds the price it will charge customers at the profit maximizing level of output (Qm) from the demand curve, and sets price to Pm. As we can see, the firm is earning economic profits since price exceeds average total cost at the profit maximizing level of output.
Pricing Mechanisms
Price and quantity are determined by the interaction of demand and supply in the market. However, given the large number of buyers, firms can decide prices at which they will sell tickets. In fact, in the airlines sector, firms go in for third degree price discrimination and segment the market, charging a higher price to the market with a relatively inelastic demand (such as fares between business and economy class travelers, or between emergency travel and leisure travel by providing apex fares). The low cost airlines follow this different pricing strategy. Customers booking early with carriers such as Air Deccan will normally find much lower prices if they are prepared to commit themselves to a flight by booking early, on the justification that consumers demand for a particular flight becomes more inelastic the nearer to the time of the service. The term revenue management is commonly used to describe most aspects of airlines pricing and seat-inventory control decisions; but in reality, revenue managers primarily practice seat-inventory control. Formally, revenue management describes a process of setting fares for each route (origin and destination pair) and each set of restrictions (nonstop, time-of-day, day-of-week, refundable, advance purchase, first class or coach, and Saturday-night stay over) and limiting the number of seats available at each fare. In the language of economics, revenue management increases airlines profits in three ways Implements peak-load pricing. Implements third-degree price discrimination. That is, fare restrictions screen customers and segment them by their sensitivity to price and potentially by their demand uncertainty. For instance, Indian Airlines apex fares (for booking one week or three weeks in advance). Implements an inventory control system for coping with uncertain demand.
Limited Entry
Virgin Group founder Richard Branson once famously said: "The safest way to become a millionaire is to start as a billionaire and invest in the airline industry."
The mortality rate in the airline business is very high. That's equally true for any low-cost airline model. It requires adequate staying power to buy aircraft and take losses in the initial years. Experts say it takes nearly $60 million-70 million (Rs 270 crore-315 crore) to float a full-service airline.Entry costs are not recoverable and incumbents have the ability to respond quickly to entry of a new competitor. Capacity constraints, absence of freedoms to compete on a route, investment constraints, and restrictions on codesharing can all be important barriers to entry.
and white collar labor will tantamount to accepting a second class economic citizenship in the comity of nations. The demand drivers of the airline industry: Ticket prices Passenger income levels Access to and suitability of other modes of transportation Frequency of services Safety Random factors such as terror threat The supply drivers of the aviation industry Behaviour of competition Government regulation Cost of resources (fuel, labour, maintenance, technology) SWOT Analysis: Strengths: 1. 2. 3. 4. 5. Creation of new airports, revamp of older ones and modernization of major International airports Low fares due to immense competition Large number of Low cost Carriers in the market and their increasing share Growing Tourism market in India Airlines flying to new destinations
Weaknesses: 1. 2. 3. 4. Shortage of trained personnel including Pilots and trainers High Operational Costs for the Airlines Security threat from anti social elements and terrorists Infrastructural constraints and lack of proper infrastructure at many airports
Opportunities: 1. 2. 3. 4. 5. Civil aviation passenger growth at 20% is one of the highest in the world Anticipation of doubling the number of passengers in the next decade High disposable income for the first time flyers and Indian Middle Class in general Under penetrated markets; huge potential for expansion Growth in Tourism
Threats: 1. Low Profit margins and high operational costs 2. Over regulated market with a lot of intervention from the Government 3. Shortfall in infrastructure with high time for construction and revamp activities
Elasticity of Demand
The airline industry is an extremely unstable industry because it is highly dependent upon current market conditions. Events such as inflation, terrorist attacks, and the price of oil have greatly influenced the
demand for airline tickets throughout the years. Competition consistently affects the price of airline tickets because it gives the customer other options. Substitutes that are existence is traveling by train, car, or avoiding travel whenever possible. Customers have resorted to all named substitutes during turbulent times in our economy. The elasticity of demand is greatly affected by the customer's purpose for travel. Airline customers typically fly for business or pleasure. With the wave of technology, a large percentage of business travel has been eliminated to conserve spending.
Traditional ways of setting prices:The legacy carriers have long had an exotic, almost incomprehensible
pricing system. However, these days, with the Internet allowing travelers to shop for the cheapest tickets easily, and low-cost airlines offering uncomplicated set prices, traditional carriers have to follow suit or risk losing more and more passengers.Ticket prices are also determined by prices of fuel which consists of 75% of the operational costs of an airline.
Dynamic Pricing
JetLite tries to sell maximum number of tickets through dynamic pricing. The tickets are priced according to the availability and demand of tickets. In airline industry, the marginal cost of flying an additional customer is very low. Thus, JetLite tries to maximize its revenue by selling the maximum number of tickets possible. It earns its revenues not only from the sale of tickets but also from the sale of food items and any other service for which it charges over and above the price of the ticket.
Airlines use a formula of combining their yield and inventory costs to determine ticket prices. While it is imperative to focus on the idea of being profitable, the focus is to maximize the cost of the flight revenue.
One huge factor that encourages an increase in the cost of tickets relates to a customer ordering a ticket close to the departing date, define this as a risk factor because they need to make up for all unsold seats. A high percentage of the revenue is dedicated to overhead costs such as fuel and labor. When a ticket price is higher with one airline than the other, the customer interprets this as being an excessive cost. The demand is greatly affected by the external market conditions that are in existences such as taxes; by law it is legal to add taxes to airline tickets since they are considered a luxury good.
maintain profitability and must exit. After Upstart's exit, Incumbent's fares and service offerings quickly move back toward pre-entry levels, much to the chagrin of passengers. The claims of predation that we find most credible involve not only price cuts, but also significant capacity expansion by incumbents. Our starting presumption is that Incumbent's pre-entry schedules are optimal for efficiently operating its network. And if the existing network is optimal, the added cost of carrying an additional passenger on the existing network can be quite small. Entry by Incumbent into a route it was not currently serving would seldom be a normal competitive response to a rival. If the route were not profitable for Incumbent before Upstart entered, why would it be profitable afterwards? On the other hand, expansion of capacity by Incumbent on a route it already serves might be a normal response if the new entrant forced prices down enough to greatly increase demand. It is quite evident that the low cost airlines have gained in terms of market share which substantiates the above analysis. Untapped opportunities Under penetrated Market :Total Passenger Traffic 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 High Level of potential demand with growth in Indian economy Untapped Air Cargo Market Air Cargo has not yet been fully taped in the Indian markets and is expected that in the coming years large no of players would have dedicated fleets.
Break up of costs for any airline The following pie charts shows us the breakup of the costs faced by any airline under particular heads like food, advertising & promotion, labor, etc. As can be seen from this the highest cost faced by the airlines comes due to labor. Advertising and Promotion has only a small percentage of 1.6% of the total expenses.
Indian Aviation industry is cyclical. Brands must be structured in such a manner so that they can withstand the lean period and this cyclical nature. Maintaining core values are important.
Advertising
Advertisement for the Indian Aviation Sector is done across various mediums. Television is not used that frequently for the promotion in this industry but there are some exceptional advertisements that come up in this space, the latest being the hot meals ad for Spice Jet on the TV. Primarily the ads are sent across in the form of mailers or shown as part of space bought on the web pages. The promotions are generally to bring out the new features being introduced by the airlines, new routes being introduced, promotional fares, new routes being operated, etc. Some of the advertisements have been included below
This Air India promo was done to attract the customers to the low air fares on a particular International Route. Indian customers are some of the most price conscious passengers in this world and promotion for low fares attracts the customers a lot more than other features. Similar to the Air India advertisement about low fare on International route, the above advertisement from Spice Jet pulled in a lot of customers. This pricing strategy was specifically followed by Spice Jet when it entered the market. It offered 9000 seats for 99 INR for the first 99 days. The result is obvious with SpiceJet being one of the leaders in the LCC (Low Cost Carrier) category in the present scenario. The focus on the fares is quite evident for the airlines in the LCC category, as this segment has been trying to position itself as an alternative for people presently travelling in the Indian Railways AC segment. By trying to focus on the fares Spice Jet did itself a world of good. The advertisements are also based on the point of differences that the airline has when compared to the rest of the industry. Specifically these ads are brought out as comparative study and try to show the airline in a higher category than its peers. One such advertisement by Spice Jet follows.
The advertisements can also be based on the special deals/ packages offered to certain category of passengers. Spice jet often promotes the free air tickets that it offers from time to time. Air Deccan (previous avatar of Kingfisher Red) promoted its fares of Re.1, which was successful to generate huge volumes for the airlines. Spice Jet has corporate deals and also has concessional fare strategy for students. Jet Airways had a similar promotion for a student which has been given in the following advertisement. For the Full Service category the ads are positioned on the service features and the added benefits. The above ad from Jet Airways tries to show it in a different light from the competitors focusing on the fact that what the others are going to do in future it is implementing it presently.
Kingfisher used the following ad when it was about to introduce the Airbus A380 fleet in the country. This not only brought to the notice of the customer that Kingfisher was the only player in India to use the new jumbo jet but also attracted them to try it out as it was part of a contest.
Finally some advertisements can take a direct dig at the competition and bring out some hilarious results as shown below.
The airlines to boost their sales have also come out with some other promotional strategies. LCCs generally have these promotional sales of merchandise as a part of in flight service (Indigo sells these merchandise tagging them as lowest priced in the air). Airlines are also having tie ups with banking institutions to issue co-branded credit cards, which offer added benefits to the customer in the terms of ticket purchase and entertainment expense. Additionally there can be cash back options that can be linked with these cards. Airlines also have frequent flyer numbers for their most frequently flying clients and offer flying miles which can be redeemed when a certain number of flights/miles have been flown by the client. All this is part of the advertisement and promotional strategy of any airline to increase sales and market share in the long and short run of the business.
In-flight Services
A crucial factor which governs the choice of one flight over another is the value a passenger gets for his money. For two companies offering the same route using the same airplane the distinguishing factor becomes the in-flight services involved. Since all these are included in the cost of flight, customers see these services as added features for which they are paying for. Thus they consider the effective cost of the actual flight to be relatively cheaper. Thus a twofold method of capturing the market is seen with more comfort associated with cheaper effective prices. Full service airlines provide their passenger with many attendant services like hot meals, frequent flyer programs, spacious legroom etc. While low cost carriers do not provide all these facilities and work with the minimum number of air hostesses on the flight. Removing business class, storage space for the meals and limited seat pitch (maximum inclination of the seat) makes space for additional seats which can increase the seat capacity of the plane by 20%. All the same the increasing competition in the airlines industry has caused operators to add their flight services so as to attract the passengers to choose one service over the other. In-flight services can be broadly classified into three: 1. Generic services 2. In-flight catering 3. In-flight entertainment
Generic Services
Airline industry is more than just a transportation service. Unlike other normal modes such as trains and buses, customers tend to attach a lot of the importance on services rendered to them by the service provider. This does not just limit to the services provided within the flight. It begins right from ease of booking a ticket till the customer checks out of the airport. Smoothness of check-in process, efficiency and accuracy of baggage handover, personal services provided at the airport all play an important role in enhancing these services. Understanding the need to woo customers as early as possible, many airline services have offered pick-up shuttles from locations to the airport for their customers. Online check -in services are also offered to passengers so that they can reduce the delay spent on domestic travel. Since most of these services are accounted as fixed costs, the fare charged to passengers can be distributed and minimized. All these enhance the flying experience offered to the customers by low cost airlines.
In-Flight Catering
In-flight meals are the meals provided to on board customers prepared by the Airlines catering services. The quantity and type of meal provided depends largely on the airline service, the time of the day and the flight route. Recognizing that the time involved for domestic travel is less, most flight operators have managed cost effectiveness by offering only optional meals which can be bought on the flight. In-flight meals used to be provided to all customers for most airline services but considering the increasingly
competitive slashing of prices, operators have reduced the number of flights which actually provide inflight meals for free. Passengers can now choose from a variety of items given in a menu on the flight. These are generally priced at a premium and do not form a part of the actual ticket. The cost of using domestic airlines to fly between cities has thus decreased.
In-flight Entertainment
Another in-flight service provided to attract customers is the entertainments provided on-board. These include gift packets to passengers, on-board movie or radio services etc. Certain services provide television screens attached to the seats which air a certain number of channels which the passenger can individually choose. Kingfisher airlines provide portable earphones to all its passengers so that they can enjoy this service. It leads the way to in-flight entertainment among Indian domestic airlines. At the same time other services such as Indigo maintain the low cost by providing no in-flight entertainment. The different levels of services as perceived by a customer are shown through a scale as represented below:
In-flight services of some major operators are as below: Air India Express and Indian Airlines: Despite being a low-cost airline, Air India Express offers in-flight services like free standardized meals and limited on-board entertainment facilities. Indian Airlines offers a wide variety in its in-flight meal menus, with a multi-cuisine approach to cater to the predilections of the range of passengers. GoAir: GoAir offers travel in two classes, namely Economy Class and Business Class. Passengers travelling in Business Class are served meals on-board, while Economy Class travelers can purchase meals on-board. Mineral water is served complimentary to passengers travelling in both classes. Indigo:To keep fares always affordable, Indio has designed a clean, comfortable and reliable airline without costly frills that put upward pressure on fares. Indigo offers an assortment of vegetarian/nonvegetarian sandwiches, flavored cashew nuts, cookies, soft drinks and juices for sale onboard. Drinking water is provided free of charge on all its flights to all customers. Food can also be carried on board, and the allowed food items include: cold snacks, non-alcoholic drinks, snack bars and biscuits. Jet Airways: JetScreen is Jet Airways' award-wining in-flight Entertainment system. JetScreen offers a virtual feast of entertainment for passengers with options like movies, latest music albums, award-winning TV shows and games. Jet airways offer the in-flight magazine JetWings with an in-flight shopping catalogue called JetBoutique. Kingfisher: The airline offers several unique services to its customers. These include: personal valet at the airport to assist in baggage handling and boarding, exclusive lounges with private space,
accompanied with refreshments and music at the airport, audio and video on-demand, with extra-wide personalized screens in the aircraft, sleeper seats with extendable footrests, and three-course gourmet cuisine.
Punctuality
The first factor that a consumer experiences when he goes in a flight is the on-time performance of the airlines he has chosen. Punctuality is one of the major competitive factors between airlines as it directly affects consumer preferences. The main objective of using a domestic flight instead of a train in India is to save time. People generally take flights for urgent work like seminars, meetings, etc. And if a flight gets late, it upsets the whole agenda of the travellers. Punctuality depends on the following factors Network planning and control Aircraft availability Ground operations and departure process
Few years back, the government of India had announced plans for allowing domestic airlines to expand their international operations to more destinations. For past few months, there have been positive developments in air transport volumes. International passenger load factors rebounded by 0.8 percentage points to75.8%. Freight volumes improved by 1.2% and passenger volumes were up by 1.8%. These
might help to alleviate some of the pressure on profits from continued high fuel prices. But there are risks associated with political unrest in the Middle East and the European currency crisis. Such happenings in foreign countries affect the earnings of airlines in India, thereby affecting their market share in the industry. The International Air Transport Association announced traffic results for May 2011 which showed an 8% increase in international traffic and a 4.8% increase in domestic traffic for a consolidated increase of 6.8% in passenger traffic over May 2010. This is 4% higher than the beginning of the year. Freight traffic showed a drop of 4% against the post-recession peak of the re-stocking cycle in May 2010. However, recent months show a renewed upward trend with freight volumes 2% higher than the start of the year.
CONCLUSION
The purpose of this project was to study the domestic market for operators in the Indian aviation industry and understand the factors that drive their market share. The market share is dependent on many factors such as the ticket pricing considering the income level of passengers, frequency of service and accessibility/ suitability over other modes of transport as well as the brand of the product. But after studying all these factors, the underlying influence seems to be only one the airline operators main focus area being not only in providing transportation but also varied in-flight services which is the differentiating aspect for the experience that a customer takes back for the service that each operator provides.
In the Indian airlines industry, Kingfisher and Indigo are the market leaders holding 20% of the market each. Following close behind is Jet airways with 18.5%. The key differentiating factor for Kingfisher is the type of services provided (for e.g., live TV) as well as the brand image that they have created (so that the common man associates flying with Kingfisher airlines). For Indigo, the key factors have been the punctuality and frequency of service. Indigo is a favorite, mostly, among corporate customers as it values their time through completely non existent delays. The market share that Kingfisher enjoys has fairly remained constant over a period of time and it has been on a rise for Indigo. However, for Jet Airways this share has been on a slight decline. Jet airways had been one of the first players in this industry because of which it holds a high market share. But with the introduction of more LCC operators in the market, it has been losing its share. Similarly, Indian Airlines has also been losing out on its market share because of high ticket prices and relatively lower value delivery. Jet Lite maintains a relatively smaller but constant share of 7.6% whereas it has been on the rise for Spice Jet and Go Air. The domestic sector is growing at a rapid pace and is expected to increase over the next 20 years at 1214% rate. The players are primarily targeting to acquire a major share of this market in order to remain dominant in long term and that is a reason in spite of being oligopolistic in nature some airlines have registered losses over the last few years.
REFERENCES
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