Deccan Project

7/30/2019 Deccan Project

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Group PresentationMARKETING

AIR DECCAN


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AIR DECCANThe Story of Indias First Low Cost Airline
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Aviation Industry in India

Before 1953 - The History

Feb-1911A distinct Start - First Flight by Aero plane piloted by French Pilot Mr. Picquet

Flewfrom Allahabad to Naini

In Oct-1932 - Own AirlinesTata Sons Ltd.( later converted into Air India international)

1933Indian National Airways and 1937Air Service of India

(1953-1990)The era of Govt. Dominance

Strict Interference by Govt. of India through Air Corporation Act, 1953

Nine Existing AIR Companys Assets transferred to TWO DOMINANT Players

INDIAN AIRLINES, Primarily serving Domestic Sector

AIR INDIA INTERNATIONALserving International Sector

(1990-1993)Semi Liberalized Govt. Policy

Private Sectors allowed to operate as Air Taxi Operator but not in Scheduled Services

New EntrancesJet, 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Air Corporation Act Repealed - Pvt.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 continuedJ et & Sahara

August 2003AIR DECCAN Ventured into Scheduled Services

2005Four New entrancesSpice J et, Go Air, Kingfisher and Paramount


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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


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Aviation Industry in India (Cont)

11.2 11.5512

12.713.7

12.813.9

15.7

19.9

0

5

10

15

20

7991 8991 9991 0002 1002 2002 3002 4002 5002

Year

PassnegersinMillions

What are the Sector operating in Industry?

Domestic

International

Non-

Scheduled

Air Cargo

What is the Growth in Domestic Sector over the last eight years?

What are the Key Demand Drivers?

High Economic Growth Increasing Consumerism and Affordability

Growth in Tourism


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Deccans 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:

311A320-200180Airbus

3472-50072

8.56942-50048

12542-32048ATR

Avg. Age in

years

No. of Air CraftModelNo. of

Passengers

Air Craft Type

Non-Scheduled Sector

Scheduled Sector

12No. of Fixed-wing Aircraft

10No. of Helicopters


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Competitive Landscape in Domestic Sector

EmbraerAirbus

A320

Airbus

A320

Boeing

737

Airbus

A300A320

and

Dornier

D-228

Boeing

737 andCL600

Airbus

340,Boeing

737 and

ATR 72

ATR 42, 72

and AirbusA320

Fleet type

Pvt. Airline

operates on

domestic

route

Pvt. Low

Cost

Airline

operates

on

domesticroute

Pvt. Airline

operates on

domestic

route

Pvt. Low

Cost

Airline

operates

on

domesticroute

Govt.

Airline

operates

on

Domestic

as well asInternatio

nal route

Pvt. Full

service

carrier

operates on

domestic

andselected

internationa

l route

Pvt. Full

service

carrier

operates on

domestic

and selectedinternational

route

Pvt. Low Cost

Airline

operates on

domestic

route

Description

17288867294134306226No. of DomesticFlights

615151158244352No. of Domestic

Destination

129570275329Fleet Size

20052005200520051953199619952003Year of Operation

ParamountGo AirKingfisherSpiceJetIndianAirlinesAirSaharaJetAirways

AIR DECCAN

Particulars


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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


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Consumer Behaviour


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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


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Marketing Strategy & Branding

Strong focus on Low Fare

Communicates value proposition through public relations,

advertising, direct marketing, internet.

Emphasis on fly made possibleand better lifestylethrough Air travel

To convey messages it used R.K.Laxmans Celebrated

Indian Mascot the Common Manas its Brand Ambassador

Offers ticket package called Value Flierto the LeisureCustomers

Advertised through Print, Radio and billboards and to the

lesser extent Television


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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 - AVAMerchandising

In-flight AdvertisingCutting Edge Media

Tie-up with Cafe Coffee Day


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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


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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


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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 Deccan, 14.2

Spice Jet, 6.1

Kingfisher, 7.8

Go Air, 1.8Paramount, 0.3

Indian Airl ines,

23.9

Jet Airways, 36.1

Air Sahara, 9.7


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Area of Improvement

In-flight Infrastructure should be upgraded.

Proper seat allocation to the passengers.

Proper training and education should be providedto the existing employees.

Need to increase number of pilots.

Need to arrange for more departure gate.


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ThanksIf its on the map, we will get you there---Air Deccan

Deccan Project

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