Aviation Industry in India_Competitor Analysis

Aviation Industry –
Competitor Analysis
Services Marketing Assignment
Submitted By: Group 8
ABHINAV DUBEY (12103)
BHARAT RATHORE (12116)
GAURAV SINGH (12120
DEEPTI KAMATH (12119)
ROHAN HEGDE (12245)

1
Services Marketing - Group 8
Table of Contents
About this report....................................................................................................................................2
Key Service Parameters..........................................................................................................................3
Analysis of data based on factors:.....................................................................................................3
Graphical Analysis ..............................................................................................................................4
Jet Airways - 8P Analysis........................................................................................................................5
1. Price ............................................................................................................................................5
2. Product .......................................................................................................................................6
3. Place............................................................................................................................................6
4. Promotion...................................................................................................................................6
5. Process........................................................................................................................................8
6. Physical Environment.................................................................................................................8
7. People.......................................................................................................................................10
Spice Jet - 8P Analysis...........................................................................................................................11
1. Price ..........................................................................................................................................11
2. Product .....................................................................................................................................12
3. Promotion.................................................................................................................................12
4. Process......................................................................................................................................13
5. Physical Environment...............................................................................................................14
6. People.......................................................................................................................................15
7. Place..........................................................................................................................................16
Kingfisher Airlines - 8P Analysis...........................................................................................................17
1. Price ..........................................................................................................................................17
2. Product .....................................................................................................................................17
3. Promotion.................................................................................................................................18
4. Process......................................................................................................................................18
5. Physical Environment...............................................................................................................19
6. People.......................................................................................................................................20
7. Place..........................................................................................................................................21
References............................................................................................................................................22

2
Aviation Industry – Competitor analysis
About this report
In this report we evaluated 3 listed major airlines based on two major factors.
1. Key service parameters: This was given to us by faculty. Detailed analysis is done on the
basis given four factors.
2. 8P analysis: Apart from traditional 4Ps of marketing (Place, Price, Promotion, Product) we
extended it further to 4 more Ps (Process, people, productivity, and Physical environment) to
provide in-depth analysis of industry.
Also we tried to link our 8Ps analysis to Key service parameter i.e. linking of qualitative measure to
quantitative data.

3
Key Service Parameters
We analyzed competitors on the basis of four major parameters.
1) Available Seat Miles (ASM):
A measure of total guest capacity, calculated by multiplying the number of seats
available for guest use in an aircraft by stage length.
2) Cost Per Available Seat Mile (CASM):
Operating expenses divided by available seat miles
3) Break-Even Load Factor (BELF):
The percentage of capacity filled so that total costs incurred exactly equal the revenue
generated.
4) Revenue Per Available Seat Mile (RASM):
Total revenues divided by available seat miles.
Analysis of data based on factors:
Spice Jet ASM(in million) CASM BELF(miles) RASM
2012-13 16338 2.94 16562.7 3.5
2011-12 12702 2.92 15553.5 2.92
2010-11 10467 2.15 8194.55 2.75
2009-10 8770 1.93 8731.73 2.49
2008-09 7893 2.15 6702.9 2.34
Jet Airways ASM(in million) CASM BELF RASM
2012-13 37428 1.29 3878 4.64
2011-12 38643 1.06 4275 3.86
2010-11 34323 0.94 35920 3.64
2009-10 29242 1.03 3153 3.54
2008-09 31632 1.15 3050 4.4
Kingfisher ASM(in million) CASM BELF RASM
2012-13 - - - -
2011-12 15365 14.52 134043 3.72
2010-11 16166 14.98 230599 4.02
2009-10 14801 16.09 180953 4.43
2008-09 15755 15.45 146457 5.25
(*Data collected from various sources)
http://www.icra.in/Files/ticker/Indian%20Aviation%20Industry%20(NEW).pdf
http://www.dgca.nic.in/reports/rep-ind.htm
Company Annual Reports

4
Graphical Analysis
Due to faulty business model (Explained in 8P analysis), operative cost of kingfisher airlines was
significantly high but revenue was very less. This along with some other factors resulted in
bankruptcy for the company. Jet airways is operationally very strong, it has a very low operation cost
as compared to other airlines.
Against available seat miles, breakeven load factor is very less. This is key reason behind the negative
cash flow. In the later years Kingfisher tried to lower costs by downsizing its fleet.
0
2
4
6
8
10
12
14
16
18
CASM Vs RASM
CASM RASM
0
50000
100000
150000
200000
250000
ASM Vs BELF
ASM(mn) BELF(miles)

5
PFB financial summary of all domestic airlines.
Marketing Mix Comparisons
Jet Airways - 8P Analysis
1. Price
Jet Airways has presence in both LCC (Jet Konnect) and FSC (Jet airways). Jet Airways is the second of
India's two major airlines based in Abu Dhabi, both, in terms of market share and passengers carried.
So it provides various price options to customers.
 Discounted fare for Senior citizen and defence personnel
 Special offers for corporates and SMEs
 International holiday package for customers (Explore Australia)
(Source: http://www.jetairways.com/EN/IN/SpecialOffers/TourismAustralia.aspx)
 Special package for students (eduJetter program)
 JetViva is an exclusive forum for our JetPrivilege women travellers.
 Jet Privilege which is Jet’s customer loyalty program is also used to attract customers
 Apart from this Jet also comes with lot of short term offers
o Discounted fare
o Night saver fares

6
2. Product
Jet airways provide range of services to its customers.
 On Ground services
(Source: http://www.jetairways.com/EN/IN/ProductAndServices/OnGroundServices.aspx)
o Check-in Options
o Airport Lounges
o Coach services
o Bus Services
 Special Assistance
(Source: http://www.jetairways.com/EN/IN/ProductAndServices/SpecialServices.aspx)
o Infant and Child Care
o Expectant Mothers
o Unaccompanied Minors
o Guests with Disabilities
o Medical Case
o Extra Seat
o Traveling with Pets
 Various other services for customer convenience
o JetMobile
o JetKids
o Cargo services
 Full service carrier as well as Low cost carrier
o Detailed description is provided in process)
3. Place
 Place of Service – Aircraft
 Various Airports – Jet lounge
 Jet Cargo+  Jet Airways also provide international cargo delivery service
 Jet Airways has codeshare agreements with the following airlines (as of June 2013)
Air Canada Brussels Airlines Malaysia Airlines
Air France[46] Etihad Airways South African Airways[49]
All Nippon Airways Garuda Indonesia[47] Qantas
Alitalia Kenya Airways United Airlines
American Airlines KLM[48]
(Source: http://www.jetairways.com/EN/IN/AboutUs/CodeShare.aspx)
4. Promotion
In this section our group has tried to evaluate airline based on publicity, promotion, and advertising
and each one's ability to efficiently reach the chosen target audiences.
 Branding and advertisement
o Hoardings
o Sponsorship
o Event organization

7
o Some images
 Promotions
o Concessional fares
o Concession for students, corporates, SMEs etc.
 Special offers currently available in website

8
5. Process
 Booking services – Standard and most of the competitors also provide similar services
o Online Direct (Jet Airways website)
o Online travel agent (Yatra, makemytrip etc.)
o Travel agent
o Call centre
o Airline office
o Apart from this Web Check-in and redeem JPMiles options are also available
 Standards business model adapted as per brand perception.
JetKonnect brand replaces JetLite as a low cost carrier. Process followed by Jetkonnect:
Jet Airways brand is known for its high class services and there process is aligned with it
 Other processes to provide services to customer
o Infant and child care
o Guest with disabilities
o Medical case
o Extra seat
o Travelling with pets
o Fast track immigration services
o Airport Lounges
6. Physical Environment
In our study we evaluated company on the basis of
 Kind of aircraft (Health of asset)
 Environment where services are delivered
Jet airways have total 100 aircrafts and they are known as one of the youngest fleets in the world.
This count in including wet leased / dry leased to other airlines. This information we got from Het
Airways website and fleet count includes fleets for Jet Konnect as well.
Operating on
non-primary
routes
Usage of
Secondary airport
Less cost
(Savings)
Operating on
primary/internati
onal routes
Usage of Primary
airport
Premium
charge

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Aircraft
In
Service
Orders
Passengers
Remarks
F J Y Total
Airbus A330-
200
10 —
0 30 196 226
Airbus A330-
300
4
1
0 34 259 293
ATR 72-500
16 —
0 0 62 62
0 0 68 68
ATR 72-600 1 3 0 0 68 68 Operated for JetKonnect
Boeing 737-
700
7 — 0 16 102 118 Operated for JetKonnect
Boeing 737-
800
48 22
0 16 138 154
6 operated for JetKonnect
0 8 162 170
Boeing 737-
900
4 — 0 28 138 166 2 operated for JetKonnect
Boeing 737
MAX 8
—
50
— — — — Entering service in 2017
Boeing 777-
300ER
10 —
8 30 274 312
3 Wet Leased to Turkish Airlines8 30 312 350
Boeing 787-9 — 10 TBA Deliveries starting 2015
Total 100 86
*Source: http://www.jetairways.com/EN/IN/AboutUs/FleetInformation.aspx#
Apart from this following services are provided by Jet Airways for its customers.
 In- flight experience
o Cuisines –
 Medical meal – various options available like Diabetic Meal, Low Protien
Meal etc.
 Vegetarian Meals
 Children Meals - Child meal, baby meal.
 Religious Meals - Vegetarían Jain Meal, Moslem Meal etc.
 Other Meals - Fruit Platter Meal, Sea food meal etc.
o Entertainment
 JetScreen – Movies, music albums, TV shows etc.
(High class, award winning service)
 Also special assistance to JetPrivilege members by providing Airport Lounge services

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 Service experience
7. People
This our group has evaluated on two factors.
 Internal: How well company is treating their internal staff. This we checked based on
attrition rate for the company and compared it with industry standard.
o We didn’t find any official data for attrition rate, but company has rating of 3.6
in glassdoor and 75% of employees have recommended this company to work.
 External: An important marketing task is to set standards to improve quality of services
provided by employees and monitor their performance. Front-line staff strongly impact the
perceptions and experiences of customers. Here we evaluated how well company managed
its external customers.
o After Jet-Etihad deal, Etihad is ready to change the way Jet operates. One of the key
strategy is careful nurturing of loyal customers. Jet is already doing well in this
department. Jet Airways wins prestigious 6th loyalty award 2013.
(Source: http://www.jetairways.com/EN/IN/AboutUs/Awards2013-2014.aspx)
o Company has setup a Training Academy to increase the customer satisfaction. Due
to such measures company has
i. Highly trained cabin crew
ii. High responsiveness
iii. High quality service
iv. Special services for customers
1. Airport lounge
2. Fast track Immigration
3. In flight services (Mentioned above in Physical environment)

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Spice Jet - 8P Analysis
1. Price
Spice Jet is known for its low cost services.
• Spice Jet is India's 'best low cost airline', delivering the lowest air fares with the highest
consumer value
• They have intelligently mixed low-priced ticket prices with decent on-board services to
satisfy frequent travellers.
• Innovative pricing has also been central to the company's success.
• It also offers everyday “spicy fares”, which is very cheap and you can buy your ticket at
extremely low fares.
• Also spicy codes and various promotional offers which give discounts to the travellers are
provided
• Spice Jet started off its services with a revolutionary pricing of Rs. 99 for the first 99 days.
This was followed by air tickets priced at Rs. 500 and Rs. 999 - a pricing strategy that
continues. As a result, the airline's prices compete with first-class Indian railway fares.
(Source: Spice jet official website and facebook page)

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2. Product
Spice jet is low cost carrier and its primary service is transportation. Apart from this it has branded
itself as best value for money for middle class of India. So there are various Supplementary services
are provided to customers.
 Check in services
o Tele check in
o Web check in
 In-flight refreshment:
Its pay and use service. Provides snacks and beverages in selected longer duration flights.
Drinking Water is available for free to all passengers on Spice Jet fights.
 In-flight entertainment:
Spice Jet is a low cost airline and there is no electronic in-flight entertainment on the flight.
Spice Jet has an entertaining in-flight magazine called Spice Route.
 Luggage services
Standard services, as provided by all the carriers.
 Special assistance
upon reservation we will make every effort to ensure that any special services you may
require such as wheelchairs from the airport check-in to the aircraft are available for your
use. Spice Jet charges Rs 500 per guest for offering this service.
 Spice jet provide special discount to students, defence personnel, SBI card holders as to
show their closeness to Indian middle class.
3. Promotion
Like other airlines Spice Jet has also used traditional channels to promote its brand. Major tools for
branding and advertisements are
 Print ads in newspaper and magazines
 Promotion through internet
o Social media
o Channel partner
o Various travel website
 Word of mouth promotion through social media
 Hoardings at strategic locations
o Railway station, airports, shopping complex and malls.

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 Brand Campaign
o Its low cost airline and tag line justifies that “flying for everyone”
o To showcase their services they use appropriate tools to reach out to target
audience
o "Get more when you fly Spice Jet” It positions the brand as one that delivers value
beyond the price point. In addition to providing a safe, modern and young fleet with
efficient, warm, friendly and on time service, Spice Jet also listens to its consumers
and offers experiences that they value.
o Website continues to be a key channel of distribution and information for our
customers. We wish to enhance our online presence to build our brand, understand
our customers and drive more traffic to our site.
 Snapshot of few Spice Jet campaigns
4. Process
As mentioned above SpiceJet has established itself as a lowest price carrier by targeting middle class
segment of India. As its brand name suggests, fly for everyone so Spice Jet is covering all kind of
routes
1. Trunk routes: Routes with the heaviest traffic, TIER I cities of Mumbai (west) , Delhi (north)
,Kolkata (East) and Bangalore, Hyderabad and Chennai (south)
2. Auxiliary routes: These routes connect Tier I airports to other smaller airports e.g. Delhi-
Chandigarh
3. Regional routes: These are the routes connecting smaller airports (e.g. Raipur-Bhubneshwar)
For domestic airports Spice Jet has followed Hybrid approach for route management as with trunk
routes following taxi slotting and one main central hub with couple of regional hubs to ease pressure
of the central hub and utilize the airport.

14
We found t Hybrid after analysing the route map of Spice Jet where mostly flights were connected
than direct for regional hubs.
(Source: http://www.spicejet.com/schedules.aspx)
 Booking services – Standard process similar to other competitors
o Online Direct (Spice Jet website)
o Travel agent
o Call centre
o Airline office
In our study we evaluated company on the basis of
 Kind of aircraft (Health of asset)
 Environment where services are delivered
Aircrafts: SpiceJet has opted for the new-generation Boeing 737-800s with winglets and Boeing 737-
900ER. These aircraft allow for safe, comfortable and efficient flying and are ideally suited for short
to medium-haul flights in Indian conditions. Bombardier Q400 designed for short haul routes, these
aircrafts are known for their fuel efficiency and comfort. These new turboprop airliners are the next
step in the continuing evolution of Indian aviation. The Q400 aircraft is the most technologically
advance turboprop airliner.
(Source: http://www.spicejet.com/Fleet.aspx)
Aircraft
In
Service
Orders
Passengers
Notes
(Economy)
Boeing 737-800 37 13 189 19 dry leased
Boeing 737MAX — 42 — —
Boeing 737-900ER 6 — 212 —
Bombardier Dash 8
Q400
15 15 78 1 dry leased
Total 58 70
Apart from this services provided by SpiceJet in aircrafts are:
As compare to Jet Airways, Spice Jet has less number of inflight services which is aligned with their
business model (Low cost carrier)
Unlike Jet, they don’t have any in-flight entertainment services for passengers.

15
(Source: Spice Jet official facebook page)
6. People
o We didn’t find any official data for attrition rate, but company has rating of 3.2
and 6.1 in SkyTrax.
its external customers.
o Though Spice Jet has targeted itself as low cost carrier and known for budget airlines
still People” is the most important ‘p’ for spice jet. Passenger complain is below the
industry standard.
(*Source- http://www.dgca.nic.in/reports/mar-ind.htm)
o Also they provide range of services as mentioned above.
o Have been awarded India’s Best Low Cost Airline by Outlook Traveller, Hindustan
times etc, services are according to brand perception but way less than Jet airways
and Kingfisher.

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7. Place
Spice Jet is low cost airline so apart from trunk routes it operates in most of the regional routes.
PFA snapshot of SpiceJet coverage.
(Source: http://www.spicejet.com/Destinations.aspx)

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Kingfisher Airlines - 8P Analysis
1. Price
Started Kingfisher red as low cost carrier but it didn’t work. Overall in a short career span of KFA
below are our observation on their pricing strategy
 The price segment which KFA targets was
o Upper middle class
o Higher income group
 Majority of youth and high life style segments (Group observation)
 The low cost option (KFA Red) had complementary meals on board positioning KFA red as
value for money airline
 Had loyalty programs for customers and after some points they can book tickets through
their king miles as well
 Some of the services offered by KFA were for those segment why are ready to pay for
comfort and luxury
2. Product
We found that kingfisher has maximum range of product and services for its customers as compared
to other domestic players.
Kingfisher has created its service differentiation by providing quality service and delivering value to
the passengers by creating a lavish and luxurious experience.
Also it provided secondary services like
 King Mobile
o Kingfisher Airlines became the first Indian Airline to launch a range of services on the
mobile platform. Now one can check for flight updates, buy tickets through SMS or
access a world of services through a simple mobile application - anytime anywhere
 Little Wings
o Kingfisher Airlines, provides on-board experience which promises to be full of
delightful & unforgettable moments. The airlines call its passengers as ‟guests‟ and
as soon as the flight takes off, they’ll soon be absorbed in the thrill of stretching
their own little wings.
 Kingfisher Holidays
o This scheme provides its passengers with King Miles which one can redeem for stay
in hotels, car rentals etc.
 Kingfisher Elite
o In today’s competitive business environment, the pressure on productivity, cost and
efficiency are greater than ever before. Kingfisher Elite offers exclusive travel
solutions. One can Fly at one’s own convenience anywhere, anytime and choose
who flies along with them in the utmost comfort, safety and privacy. Be it business
or leisure, one can select from the range of business jets and provide the most
exquisite service complimented with the highest safety standards, allowing one to
arrive to their destination relaxed and refreshed.

18
3. Promotion
KFA also followed traditional channels
 Advertisement
 Hoardings
 Magazines
 Internet and social media
But they have two unique promotional tools which were directly targeting their segment was
 Kingfisher Calendar
 Contract with celebrities like Katrina Kaif and Yana Gupta
We also observed that their promotion strategy was not synced with their brand perception:
 Premium flights and discount
 KFA red running on premium hubs
 Lack of clear positioning
o Kept switching between low frills and full service models
o Indian customer more price sensitive than brand conscious
4. Process
 Booking services – Standard and most of the competitors also provide similar services
o Online Direct (Jet Airways website)
o Travel agent
o Call centre (Tele booking)
o Airline office
o Group Booking / corporate booking

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2. Here we found Kingfisher confused. Kingfisher and Jet has almost similar business model but
wrong process implementation for their low cost carries (KFA Red) backfired them.
Kingfisher continued to use central hub airports for its low cost carriers, which increase the cost for
them. Unlike other carriers who use hub and spoke model to decrease traffic on trunk routes and to
pass on benefit to end customers, KFA decreased the cost without optimizing its process. This
resulted in huge loss to them.
Kingfisher was known for its style, quality and comfort. They had one of the best fleet available at
the market.
Aircraft Total Orders Options
Passengers
Notes
P Y Total
Airbus A319-100 3 — — 0 144 144 All dry-leased
Airbus A320-200
10
67 —
20 114 134 11 dry-leased
3 0 174 174 DEAL cancelled
8 0 180 180
Airbus A321-200
6
— —
32 119 151
2 dry leased
2 0 199 199
Airbus A350-800 — 5 — TBA
Deliveries were planned:
2015
Airbus A380-800 — 5 5 0 0 800
Deliveries were planned:
2016
ATR 42–500 2 — — 0 48 48 All dry leased
ATR 72–500
17
— 20
0 66 66
8 0 72 72
Boeing 727-044 1 VIP — — VIP for UB Group
Total 64 77 25
(*Source: http://www.flykingfisher.com/about-us/our-fleet.aspx)
Out of 66, 44 were dry leased. So instead of being fixed Asset, they become operational Asset for the
company which has negatively impacted the cash flow of the company.
KFA was known for its in-flight experiences. They had range of services to cater customers:
 Custom-designed luxurious interiors (for Elite customers)
 State-of-the-art technology features (for Elite customers
 Exclusive Check-in counters (for Elite customers)
Non Primary
Routes (KF red)
Operating in
prime routes
Loss

20
Some of the images of KFA:
6. People
o Due to consistent negative cash flow KFA didn’t pay to its staff. KFA was
consistently in news for negative reasons
o Layoff of employees
o HPCL case of non-payment
o Strike by staff
o Constant change in the top management
o Giving operation of such complex industry to inexperience son
its external customers. Till the time kingfisher was in business it was known for its world
class services.
o Extensive training to staff – Kingfisher training academy
o Air-hostess handpicked by Vijay Mallaya
o Numerous awards for best customer service
i. Best Customer Service (Freddie Awards 2008)
ii. Named Best Airline In India / Central Asia; Best Cabin Crew – Central Asia
(Skytrax World Airline Awards 2010)
iii. '5-STAR AIRLINE' award by Skytrax for 3rd consecutive year, 2010
(Source: http://www.flykingfisher.com/about-us/achievements.aspx)

21
o One of the value of kingfisher is Service
“We are all in the hospitality business; we must always seek to serve our guests and
gain their trust, goodwill and loyalty.”
(Source: http://www.flykingfisher.com/about-us/vision-values.aspx)
As per our analysis we found Kingfisher taking best care of people.
7. Place
It was the largest Domestic Airline with a fleet of 60+ aircraft.
 Connecting 61 Cities in India including 8 International Destination.
Flight Bookings
 Book in Person
 Travel Agents
 Online
 Please refer Process for detailed report

22
References
 http://www.spicejet.com/schedules.aspx
 http://www.icra.in/Files/ticker/Indian%20Aviation%20Industry%20(NEW).pdf
 http://www.dgca.nic.in/reports/rep-ind.htm
 http://www.jetairways.com/EN/IN/SpecialOffers/TourismAustralia.aspxhttp://www.jetairwa
ys.com/EN/IN/ProductAndServices/OnGroundServices.aspx)
 http://www.jetairways.com/EN/IN/ProductAndServices/SpecialServices.aspx
 http://www.jetairways.com/EN/IN/AboutUs/CodeShare.aspx
 http://www.jetairways.com/EN/IN/AboutUs/FleetInformation.aspx#
 http://www.jetairways.com/EN/IN/AboutUs/Awards2013-2014.aspx
 http://www.spicejet.com/schedules.aspx
 http://www.spicejet.com/Fleet.aspx
 http://www.dgca.nic.in/reports/mar-ind.htm
 http://www.spicejet.com/Destinations.aspx
 http://www.flykingfisher.com/about-us/our-fleet.aspx
 http://www.flykingfisher.com/about-us/achievements.aspx
 http://www.flykingfisher.com/about-us/vision-values.aspx
 Company Annual Reports

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