Indian Aviation Industry
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The document discusses the Indian aviation industry. It provides a brief history of the industry from 1912 to the present. It outlines the major players and their current market shares. Key factors affecting the industry are also examined, including aviation fuel prices, exchange rates, government policies, and taxes. A SWOT analysis is presented. The future prospects and recommendations suggest reforms are needed, such as reducing taxes and airport fees, and allowing more foreign investment to increase efficiency in the industry.
Indian Aviation Industry
- 1. Submitted by : Shrikant Gupta FATP Nov 19th Batch Submitted To: RVM FInishing School & Consultancy www.rvmfinishingschool.com
- 2. AGENDA Introduction. Industry Evolution. Major players. Factors affecting to industry. SWOT analysis. Future prospects. Submitted To: RVM FInishing School & Consultancy www.rvmfinishingschool.com
- 3. INTRODUCTION Aviation sector contributes INR 330 billion (0.5%) to Indian GDP. It creates 1.7 million jobs in India, and it acts as a catalyst for tourism Industry and creates 7.1 million more jobs. Aviation sector pays over INR 87.5 billion in Tax. Submitted To: RVM FInishing School & Consultancy www.rvmfinishingschool.com Source-DGCA government of india
- 4. INDUSTRY EVOLUTION Year Major milestones 1912 First airline route started by Indian state air service in collaboration with Imperial airways of UK. 1912 Country’s first air mail service started by Tata Airlines, which later renamed as Air India. 1953 Nine airline existed Including Indian airline and Air India. 1953 Nationalization of all private airlines through air corporation act. 1986 Private players are permitted to operate as a taxi operator. 1997 4 out of 6 operators shut down with capital loss of approx INR 10 billion. Jet and Sahara airline survive. Submitted To: RVM FInishing School & Consultancy www.rvmfinishingschool.com
- 5. INDUSTRY EVOLUTION Year Major milestones 2001 Aviation turbine fuel (ATF) price decontrolled. 2007 Industry consolidates, Jet acquired Sahara & Kingfisher acquired Air Deccan. 2012 Government allows direct ATF imports, 2012 Government allowed FDI up to 49%. Submitted To: RVM FInishing School & Consultancy www.rvmfinishingschool.com
- 6. Market share of scheduled domestic airlines Go air, 7.6 Kingfisher, 3.5 IndiGo IndiGo, 27.2 Jet airway+ jet lite Spicejet, 18.5 Air india Spicejet Jet airway+ jet Go air Air india , 19.3 lite, 23.8 Kingfisher Source-DGCA government of india Submitted To: RVM FInishing School & Consultancy www.rvmfinishingschool.com
- 7. FACTORS AFFECTING AVIATION INDUSTRY Weather. ATF prices. Manpower. Foreign Exchange rate. Government policies. Submitted To: RVM FInishing School & Consultancy www.rvmfinishingschool.com
- 8. ATF price trend Delhi, Rs/K liters price 80000 70000 60000 50000 40000 30000 price 20000 10000 0 Submitted To: RVM FInishing School & Consultancy www.rvmfinishingschool.com Source.-Indian oil corporation
- 9. ATF Tax structure Particulars Tax rates Excise duty 8% Average sales tax levied by state 23-24% Margin of oil marketing companies 15-18% Submitted To: RVM FInishing School & Source- ICRA Consultancy www.rvmfinishingschool.com
- 10. Exchange rate fluctuation INR/USD 56 55 54 53 52 51 50 49 48 USD 47 46 45 44 Oct-10 Oct-11 Apr-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-12 Feb-10 Jun-10 Aug-10 Dec-10 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Dec-12 Submitted To: RVM FInishing School & Consultancy www.rvmfinishingschool.com SOURCE- RBI,GOVERNMENT OF INDIA
- 11. SWOT ANALYSIS STRENGTHS WEAKNESS •Fastest transportation service •High maintenance cost. •Highly trained staff. • 45% of operating costs depends on ATF while •Ticket pricing is on the hand of players. it is 33% world wide. •No substitute for international travelers as •Labor intensive industry efficient as airlines. •Directly dependent on some other industry •Concentration on customer satisfaction. like tourism and corporate travelers. •High entry barriers to new player. • High wages paid to the staff. OPPURTUNITES THREATS •Percentage of people travelling in airlines is •Raising fuel costs. increasing gradually. •Exchange rate fluctuations. •Increase in per capita income will generate •Taxes imposed by the government. more passengers to airlines. •High competitive industry because of large •Air lines can be used for cargo . number of players. •Large Untapped Indian market . To: RVM FInishing School & Submitted •FDI’s in Indian airline industry. Consultancy www.rvmfinishingschool.com
- 12. FUTURE PROSPECTS & RECOMMENDATIONS Aviation industry in India is not profitable space as of now and need strong reforms in government policies. Reduction in Tax and airport fees may help the industry to break even. Entry of foreign players may increase efficiency of industry. Submitted To: RVM FInishing School & Consultancy www.rvmfinishingschool.com
- 13. THANK YOU Submitted To: RVM FInishing School & Consultancy www.rvmfinishingschool.com