Conference paper - Abstract

New Dimensions to Competitiveness in India’s Airline Industry

[Dr. K. Elangchezhian & Dr. D. Ashok]

Abstract

India’s Civil Aviation sector was poised to grow at 12.5 % and touch a whopping 400 million by 2020. The projected growth of Indian aviation sector is far ahead of China and economic power houses like France and Australia. India occupies an eminent position in the global civil aviation scenario with a large fleet of aircrafts. In all, 56 airlines are operating scheduled air services to and through India and 22 foreign airlines are flying over Indian air space. There are over 450 airports and 1091 registered aircrafts in the country. The rising disposable income among Indian citizens and a growing middle class has triggered a never before opportunity for the Airline operators.

Global financial turmoil and economic reality in India are re shaping the fortunes of India’s airline industry. High cost of fuel coupled with infrastructure bottlenecks, increased competition and wage inflation have left the low cost and other full service carriers high and dry. In the name of consolidation a few have desperately opted to merge with the bigger carriers. The turbulence is likely to continue, as new carriers enter the fray to fill the gaps created by consolidations. In spite of all these economic and industrial sorrows a few airline companies have come out unscathed. Strategic moves with respect to choice of aero planes, routes and target customers have enabled them to play safe.

The primary objective of this paper is to come out with an appropriate business model for an airline company operating both within and out side India to enhance its competitiveness in the industry. The authors of this paper by reviewing the existing literature have conducted a detailed investigation of the aviation scenario across the globe and in India to understand the functioning of various airline companies. Appropriate officials in various Airline companies and in Airports Authority of India were contacted in person to draw meaningful insights into the airline industry. A careful review of the literature and an analysis of the Indian aviation market enabled the authors to diagnose the problem areas and to critically evaluate the reasons behind the fall-out of the existing business models. The authors had also made a detailed study on the various infra structural facilities available for an airline company at Indian airports [both metro & non metro]. They were successful in zeroing in on the specific strategies emulated by leading airline companies to draw meaningful insights into their day to day functioning and their ability to develop competitive advantage over their competitors. Accordingly, keeping in mind the uniqueness of Indian customers and the market at large an appropriate business model has been evolved to enhance the competitiveness of an airline company. In addition, innovation strategies in services offering have also been identified as a means to win over the competition.

Key words: Airline, Competitiveness, Innovation, Strategies

[The full paper was presented in the conference jointly conducted by IIM, Kozhikode and IIM, Indore on May 21-23, 2009 at IIM, Kozhikode campus.]