Group Presentation – MARKETING
AIR DECCAN
AIR DECCAN
The Story of India’s First Low Cost Airline
Aviation Industry in India
•
Before 1953 - The History
 Feb-1911 – – A distinct Start - First Flight by Aero plane piloted by French Pilot Mr. Picquet
Flewfrom Allahabad to Naini
 In Oct-1932 - Own Airlines– Tata Son’s Ltd.( later converted into Air India international)
 1933 – Indian National Airways and 1937 – Air Service of India
•
(1953-1990) – The era of Govt. Dominance
 Strict Interference by Govt. of India through Air Corporation Act, 1953
 Nine Existing AIR Company’s Assets transferred to TWO DOMINANT Players
 INDIAN AIRLINES, Primarily serving Domestic Sector
 AIR INDIA INTERNATIONAL – serving International Sector
•
(1990-1993) – Semi Liberalized Govt. Policy
 Private Sectors allowed to operate as Air Taxi Operator but not in Scheduled Services
 New Entrances – Jet, Air Sahara, Modiluft, Dalmiya Airways, AEPC Airlines, East West Airlines
•
(1994-2004) – Fully Liberalized Govt. Policy
➢ Air Corporation Act Repealed - Pvt. Carriers allowed to operate in Scheduled Services
➢ Only Two continued – Jet & Sahara
➢ August 2003 – AIR DECCAN Ventured into Scheduled Services
➢ 2005 – Four New entrances – Spice Jet, Go Air, Kingfisher and Paramount
Aviation Industry in India (Cont…)
•
•
Recent Development in Aviation Industry:

Naresh Chandra Committee Report – Road Map for Civil Aviation Sector

Domestic Air Lines being Allowed to Fly Overseas

Emergence of no Frills Airlines
Present Key Industry Characteristics

Highly under penetrated Market (Average Air Travel is 0.014 trips per person
per year against 2.02 trips per person per year in US)

High fixed cost operating environment (High fuel charges as compare to
International Airlines)

Regulatory and Infrastructure constrains

Relatively limited reach across the country
Aviation Industry in India (Cont…)
Air Cargo
What are the Sector operating in Industry?
What are the Key Demand Drivers?
•
•
•
NonScheduled
High Economic Growth
Increasing Consumerism and Affordability
Growth in Tourism
Domestic
International
What is the Growth in Domestic Sector over the last eight years?
Passnegers in Millions
20
19.9
15.7
15
10
11.2
11.55
12
12.7
13.7
12.8
13.9
5
0
7991
8991
9991
0002
1002
Year
2002
3002
4002
5002
Deccan’s Entry in Aviation Sector
•
Commenced operation as chartered aircraft service provider in 1997
•
Initially Helicopter service
•
2001 it added first fixed-wing aircraft
•
2003 got permission to operate in Scheduled sector
•
Currently operates in two segments:
Non-Scheduled Sector
No. of Helicopters
10
No. of Fixed-wing Aircraft
12
Scheduled Sector
Air Craft Type
ATR
Airbus
No. of
Passengers
Model
No. of Air Craft
Avg. Age in
years
48
42-320
5
12
48
42-500
9
8.56
72
72-500
4
3
180
A320-200
11
3
Competitive Landscape in Domestic Sector
Particulars
Year of Operation
AIR DECCAN
Jet
Airways
Air
Sahara
Indian
Airlines
Spice
Jet
Kingfishe
r
Go Air
Paramou
nt
2003
1995
1996
1953
2005
2005
2005
2005
Pvt. Low Cost
Airline
operates on
domestic
route
Pvt. Full
service
carrier
operates on
domestic
and selected
international
route
Pvt. Full
service
carrier
operates on
domestic
and
selected
internationa
l route
Govt.
Airline
operates
on
Domestic
as well as
Internatio
nal route
Pvt. Low
Cost
Airline
operates
on
domestic
route
Pvt. Airline
operates on
domestic
route
Pvt. Low
Cost
Airline
operates
on
domestic
route
Pvt. Airline
operates on
domestic
route
Fleet Size
29
53
27
70
5
9
2
1
Fleet type
ATR 42, 72
and Airbus
A320
Airbus
340,
Boeing
737 and
ATR 72
Boeing
737 and
CL – 600
Airbus
A300
A320
and
Dornier
D-228
Boeing
737
Airbus
A320
Airbus
A320
Embraer
No. of Domestic
Destination
52
43
24
58
11
15
15
6
No. of Domestic
Flights
226
306
134
294
67
88
28
17
Description
Competitive Strength
• New Business Model:
• “No Frills, low-cost” Business Model. It includes
• Low Fares
• More choice for selecting Routes
• Reduced cost
• High air-craft utilization
• Ancillary services
• Strength
• First Mover Advantage
• “Simplyfly!”
• Strong Management Team
• Load Factor and Yield Management by Dynamic Pricing
Consumer Behaviour
Targeting and Positioning
• Targeting
• Targeted Three Market segment
• Leisure Travelers
• Business Travelers
• Corporate Travelers
• Positioning as a “low cost carrier”
• Offers no in-flight service
• Single class aircraft configuration
• Internet booking and cheap fares
Marketing Strategy & Branding
• Strong focus on “Low Fare”
• Communicates value proposition through public relations,
advertising, direct marketing, internet.
• Emphasis on “fly made possible” and “better lifestyle
through Air travel”
• To convey messages it used R.K.Laxman’s Celebrated
Indian Mascot the ‘Common Man’ as its Brand Ambassador
• Offers ticket package called ‘Value Flier’ to the Leisure
Customers
• Advertised through Print, Radio and billboards and to the
lesser extent Television
Marketing Strategy & Branding
• Advertising Agreement with Bennet, Coleman & Co. Ltd. to
advertise through print media for four years.
• In-flight Magazine for revenue generating.
• In-flight Shopping Scheme called “Brand for Less” - AVA
Merchandising
• In-flight Advertising – Cutting Edge Media
• Tie-up with Cafe Coffee Day
Flight Fare Comparison
Place
Deccan Air
Spice Jet
Go Air
Air India
Economy Class
Economy Class
Economy Class
Economy Class
Mumbai-Bangalore
2224
2399
3100
2962
Mumbai-Delhi
2024
2599
3400
3171
Mumbai-Chennai
1724
2799
3600
3335
Delhi-Bangalore
7274
7399
N.A.
N.A.
Delhi-Mumbai
2024
2899
3200
N.A.
Delhi-Chennai
4749
5799
5900
N.A.
Chennai-Bangalore
824
1399
N.A.
1481
Chennai-Mumbai
3278
3199
N.A.
N.A.
Chennai-Delhi
3224
4499
3900
N.A.
Bangalore-Chennai
1249
1199
N.A.
2962
Bangalore-Mumbai
1524
2699
N.A.
3171
Bangalore-Delhi
5424
6499
N.A.
3335
Selling and Distribution Strategy
• Centralized Reservation System (CRS)
• Direct Selling:
• Internet Booking System (approx. 31% of the ticket Booking)
• 24/7 Call centre (approx. 9% of the ticket Booking)
• Airport Desk (approx. 11% of the ticket Booking)
• Indirect selling: (approx. 47% of the ticket Booking)
• Conventional & Non-Conventional Travel Agents
• ICICI-Air Deccan-travel agent purchase card
• Tie-ups with the HPCL and Reliance Web World
Result
• Carried Aprox. 4.1 million passengers
• Expanded its fleet to 29 aircraft
• 226 Flights daily
•
Flight Route for 52 Airports
•
Market Share of 14.2% (present 21%, Second Largest airlines)
•
Lowest EPA of 76
Air Sahara, 9.7
Air Deccan, 14.2
Spice Jet, 6.1
Kingfisher, 7.8
Jet Airways, 36.1
Go Air, 1.8
Paramount, 0.3
Indian Airlines,
23.9
Thanks
“If it’s on the map, we will get you there”---Air Deccan