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2003- Background of India’s aviation industry

2003- Background of India’s aviation industry. 2003- Background of India’s aviation industry. Challenges faced by Low-cost Carriers. Pricing and Load factor * Achieving a proper balance of pricing and percentage of seats filled per flight

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2003- Background of India’s aviation industry

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  1. 2003- Background of India’s aviation industry

  2. 2003- Background of India’s aviation industry

  3. Challenges faced by Low-cost Carriers • Pricing and Load factor* • Achieving a proper balance of pricing and percentage of seats filled per flight • Price wars with existing players in the airline industry • Manpower • Shortage of trained personnel • Retaining existing employees • Infrastructure • Deficient airport system • Overutilization of top 5 airports • Inadequate facilities in secondary and tertiary airports *Load Factor: The percentage of seats available in an aircraft that are actually purchased by passengers

  4. Key statistics

  5. Key statistics

  6. Key statistics

  7. Key elements of Air Deccan’s Low-cost strategy • No Frills (Hot meals, frequent flyer programs, etc.) • No meals on board + No Business Class => More seats (20% increase) => Quick turnaround time for cleaning/ maintenance • One flight attendant – selling snacks/ non-alcoholic drinks • No paper ticket processing • Proprietary IT solutions • Point-to-point service, instead of hub-and-spoke • No toll-free lines for customer-service

  8. Air Deccan - IT solution Partnership withInterglobe Technology Quotient • Internet-based Customer Reservation System (CRS) • The entire IT solution was developed in 40 days • The CRS enabled Air Deccan to • Save approx. 20% in distribution costs • Monitor yield management through available seat occupancy data • Connect different geographies • Improve cash-flow via pre-payments • Reduce collection and administrative costs • Optimize booking levels • Sell tickets 24x7

  9. Air Deccan - IT solution Partnership withSheorey Digital systems • Developed an Airline Resource Management System (ARMS) to track • Logistics • Maintenance • Training • Crew Rotation

  10. Changes after the merger

  11. Air Deccan Value Chain The team could use this to summarize value chain aspects – I picked this template from one of the cases - Navin

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