Presentation Transcript

1. Air Deccan

   Source: Red Herring Prospectus for SEBI Prepared by: Kshitij Kulkarni
2. Indian Aviation Industry Domestic airlines, which operate scheduled flights within India and to select international destinations, International airlines, which operate scheduled flights to and from India, Charter air operators, which include charter operators and air taxi operators and Air cargo services, which includes air transportation of cargo and mail.
3. Competitive Landscape in 2006
4. Key Industry Characteristics Under penetrated market an average Indian making 0.02 trips per annum which is one of the lowest in the world, compared to an average of 2.02 trips per person per year in the United States for the same period High fixed cost operating environment high input costs in terms of government charges levied on fuel and airport related charges Regulatory constraints The Route Dispersal Guidelines to provide a minimum number of ASKMs on routes that service certain rural or smaller urban destinations results in lower average passenger load factors and yield for many airlines
5. Key Industry Characteristics Infrastructure constraints shortage of enabling infrastructure, such as airport facilities, parking bays, air traffic control facilities and takeoff and landing slots Relatively less reach across the country Of the approximately 450 airports in India less than 100 airports have a daily flight
6. Demand Drivers High economic growth Increasing consumerism and affordability Growth in tourism The emergence of low-cost carriers
7. Operating Areas Scheduled airline operations (Air Deccan) Charter service (Deccan Aviation)
8. Air Deccan Vision Our airline operation, Air Deccan, strives to provide a cost-effective and commercially successful alternative to the traditional means of domestic travel used by the Indian mass consumer market. It is our aim that Air Deccan become the preferred airline of the “common man” of India, by providing a no-frills service that is safe, on-time and low-cost serve the most destinations across India than any airline and achieve business success while offering low fares, by increasing aircraft utilization, seeking to optimize load factors and yields and reducing operating costs.
9. Business Model for Air Deccan No Frills Low-Cost Offering low fares to stimulate demand Air Deccan targets leisure, small business and corporate customers, and seeks passengers from the Indian middle class as well as from the cost-conscious segments of more well off classes Selecting routes to stimulate demand As at March 31, 2006, it is the only carrier providing service to 12 of its destinations and one of only two carriers providing service to seven of its destinations
10. Business Model for Air Deccan Reducing costs, increasing utilization Reduce cost of operation Provide no frills service seek high aircraft utilization Providing a safe and on-time service Increasing ancillary revenues Food drinks Advertisements
11. Competitive Advantages First Mover Advantage Air Deccan retains the advantage of being known the longest as a no-frills, low-cost carrier and having had the longest time to adopt and refine its low cost carrier strategies. By moving earlier, Air Deccan has also had an easier time getting desirable flight slots and building its operations in other ways Simplifly! Simplification steps include such strategies as flying only point-to-point routes without seeking to facilitate onward connections, outsourcing services such as in-flight food and drink and moving to a manual, rather than computerised, flight check-in system
12. Competitive Advantages Strong management team, with leading low-cost carrier expertise The Air Deccan team is bolstered by a Chief Operating Officer who worked as Head of UK and Europe Operations at Ryanair and by others with extensive experience at Ryanair and JetBlue Airways Load factor and yield management through dynamic pricing Air Deccan seeks to maximize revenue from ticket sales by attempting to achieve the best possible ticket price by filling as many seats as possible Air Deccan uses dynamic pricing to help optimize its load factors and yields