AirAsia_India Interim Report

8/13/2019 AirAsia_India Interim Report

1/20

AirAsia India:Next 3 Years

Presented By:

Apoorva Kulshreshtha (1003)

Vipul Aurange (1005)

Bhaswati Chakraborty (1007)Vishal Dhangar (1010)

Paul Anto (1027)

1


2/20

Indian Aviation Industry overview

India is currently the 9th largest aviation

market

Handling 121 million domestic and 41 million

international passengers

More than 85 international airlines operate to

India and 5 Indian carriers connect over 40

countries.

2


3/20

Market Size

Domestic passengers in January and May

2013 were 25.998 million, registering a growth

of 0.74 %.

India has attracted foreign direct investment

(FDI) worth US$ 456.84 million from April

2000 to July 2013

Indian aviation market is poised to become

the third largest across the globe by 2020.

3


4/20

Market

Share

4


5/20

About AirAsia India

Indian-Malaysian low cost carrier

Announced on 19 February 2013,

The airline would be operated as a jointventure between AirAsia holding 49% , Tata

Sons holding 30% and Amit Bhatia taking up

the remaining 21% in the airline.

5


6/20

Objectives

To study what is actually bringing AirAsia toIndian markets and why it can sustain.

To formulate strategies; which will help AirAsia

(i) to get an edge over other Indian low costairlines like Indigo, SpiceJet etc. and (ii) serveun-catered market segment.

To assess what challenges are gleaning atAirAsia and what missteps can make theairliner a thing of the past.

6


7/20

Methodology

The methodology used for this study is

Descriptive/Qualitative . Using this

methodology specific points pertaining to theobjective will be discerned with the help of

observations, document reviews and

interviews.

7


8/20

Sales & Marketing

Promotion Challenges:

Spreading awareness in untapped market.

Reaching to first time fliers and educating them.

Strategy: Initially costly advertising

Following competitors.

Strategies to educate and attract first fliers.

Execution: Movies & Music, football, tourism

Billboards near railway and bus stations

Tie ups with banks & hotels, social networking , mails & SMS

8


9/20

Branding Challenges:

Low cost already boasted by airlines like Indigo,SpiceJet.

Hence creating a POD is necessary as well as difficult.

Failing to keep promise will harm the brand image.

Targeting untapped market would require educatingthe customer and hence cost escalating.

Segmentation:

Demographic & Geographic

9


10/20

Targeting:

Income groups of 150000 to 600000 Small & medium businessmen, migratory workforce,

tourists

South India

Needful of traveling and not so cautious about extraservices

price oriented and safety conscious

Positioning:

Positioning only on low cost will not be sufficient. On-time and service: hygiene factors

Pricing and Connectivity: differentiator ormotivational factors

10


11/20

11


12/20

Sales Challenges:

Higher sales, higher occupancy rate. To gain more first time fliers per year.

To gain more market share to be the market leader.

To choose cost effective yet profitable channels to sell.

Strategies: Contracts with travel agents Tie ups with tourism agencies

Contracts with organizations

Price reduction by 25% to 30% than competitors

Execution: Distribution of sales targets

Sales focus on tier II cities

Separate targets to various channels according

12


13/20

Finance

Financial Problems with Air Asia

1.Fuel hedging

2. Working capital cycle3. Rupee depreciation

4. Price tiffs

13


14/20

Financial perspective

Revenue per mile

Available seat per mile

Load factor

14


15/20

Human development

Provide stock option

Provide dividend

Provide to the employees provident fund

15


16/20

Operations Challenges

Low operating cost

Fuel hedging policy

Airbus A320 equipped with Sharklets

The hub-and-spoke network model

Less turnaround time

No-frills

16


17/20

Operations challenges

Competitive advantage

with the LOW cost

Courteous, but limitedpassenger service (e.g.

no free meals)

Hub & Spoke Modeloften to secondary

airports

Frequent, reliableschedules

Standardized fleet of

aircraft

High aircraft utilization

Reach distributionnetwork ,target on tier2

cities

17


18/20

HR Perspective : Challenges and

Solutions

Maintaining Lean Structure

To remain non unionized in India too

Attraction of right talent in right time To push staff to work more and improve

productivity

18


19/20

Contd

To keep employees motivated

To foster a culture that promotes trust

between management and employees Training Vs. cost

19


20/20

20

AirAsia_India Interim Report

Documents

Transcript of AirAsia_India Interim Report