A PROJECT REPORT ON AIRLINE FARES

GUIDED BY MRS. PRIYANKA SHARMA KURUKSHETRA INSTITUTE OF TECHNOLOGY AND MANAGEMENT

SUBMITTED TO:-

SUBMITTED BY:PRIYA BBA 5TH SEM

ABSTRACT:Our first experience of project has been success. Thanks o the support of many friends and colleagues with gratitude. We wish to acknowledge all of them. However we may make special mention of the followingFirst of all, we are thankful to our project guide (Name) under whose guidance we were able to complete our project. We were whole heartedly thankful to him for giving us his valuable time and attention and for providing us a systematic way for completing our project on time. We must make special mention of (Name) our project in charge for their cooperation and assistance in solving problems. We would thank to our HOD (Name) for providing us assistance during course of our project. We are also very thankful to respective Director (Name), TPO (Name) who gave us opportunity

About the Company

Invimind technologies are an organization with solid methodology. Here we believe in innovation and implementing with right approach and plan. We have passion for work and we provide a very healthy environment to work with. We clearly focus on the needs of the clients and always provide them with the best possible solution. We are people who have passion to help. We follow the highest standards in the industry for engineering process, product quality, delivery and support. Not just technical brilliance but we bring to the table creative prowess. We work in domains like software development, iphone and android application development, business consulting and industrial training.
Service Description

SOFTWARE SOLUTIONS We provide software solutions according to the needs of our clients. We expertise in all web based applications from a simple website to complex web applications. We expertise in ERP and packed ERP solutions. Our ERP software is perfect for the automation of universities, colleges and schools. We cover all the aspects from admission, attendance, automated time-table, examination, reception, visitor tracker etc. This results in reducing the work load of the institution and thus making it fully automated and up-to-date.

INTRODUCTION TO FINANCE :Finance is the art of managing money. It is how people allocate their assets over time under conditions of certainty and uncertainty. A key point in finance, which affects decisions, is the time value of money, which states that a unit of currency today is worth more than the same unit of currency tomorrow. Finance aims to price assets based on their risk level, and expected rate of return. Finance is the science of funds management, or the allocation of assets and liabilities over time under conditions of certainty and uncertainty. A key point in finance is the time value of money, which states that a unit of currency today is worth more than the same unit of currency tomorrow. Finance aims to price assets based on their risk level, and expected rate of return. Finance can be broken into three different sub categories: public finance, corporate finance and personal finance.

1. The most essential requirement of any organized business or activity. 2. The process of procuring and judicious use of resources with a view to maximize the value of a firm.

FINANCE INVOLVES : Cash flow Balance sheet Assets Liabilities Capital Budget

ASSETS :- Property with a cash value that is owned by a business or individual. LIABILITIES :- A claim against the assets or legal obligation of a person or organization arising
out of past or current transactions or actions.

Various types of liabilities

1. Any type of borrowing from person or banks for improving a business or person income that is payable during short and long time. BUDGET:-

It is a plan of money from where it comes and go. 1) 2) 3) 4) It is a financial information. We can understand exactly the cost and plans. Monitor expenditure. It is prepared to avoid waste.

IMPORTANT FACTORS IN BUDGET:1) It should be based on proper plan. 2) The cost in the budget should be based on previous year statement. 3) The budget should be realistic.

EXPECTED CATEGORIES IN BUDGET:1) Capital cost e.g. scooter ,computer ,power 2) Running cost e.g. rent, electricity, hiring, telephone bills 3) Staff cost e.g. salary, staff benefits. 4) Project cost or operational cost e.g. raw material, machines.

EXPECTED INCOME:1.) 2.) 3.) 4.) Donors Donations Sales and services Membership fees

MEANING OF BUDGET:-

An important instrument of the financial management used as aid in planning, programming and controlling. A budget may be defined as a financial and quantitative statement, prepared and approved prior to define period of time. ADVANTAGES OF BUDGET:1.) 2.) 3.) 4.) 5.) It is a tool for quantitative expression of the planning. Evaluation of financial performance in accordance with plans. Controlling cost. Optimizing the use of resources. Directing the total efforts into the most profitable channels.

PLANNING AND PREPARING A BUDGET:1.) Well in advance. 2.) An opportunity to plan expansion or improving services. Hence involve staff in all departments. 3.) Budget should be realistic or plan should be realistic.

TYPES OF BUDGET:1.) PROJECT BUDGET:It is probable expenditure and likely revenue for a specific project. 2.) DEPARTMENTAL BUDGET:It is a budget linked to a particular department. 3.) OPERATING REVENUE BUDGET:It is related to volume of work anticipated. 4.) OPERATING EXPENDITURE BUDGET:Recurring expenses for operation and maintainence of services. e.g. salaries and wages, supplies, support utilities , maintainence. 5.) CAPIAL BUDGET:Mean for growth .i.e. new facilities, replacement of obsolete. 6.) CASH BUDGET:Provision for anticipated cash expenditure for planning the cash flow. E.g. salaries, bills etc.

ACCOUNTING:Process of recording, classifying, summarizing data in a significant manner and interpreating the results is known as accounting. Data mainly in form of money, transactions and events which are impart at least of a financial character. TYPES OF ACCOUNTING:1.) FINANCIAL ACCOUNTING:It is documentation of facts and daily transactions. 2.) COST ACCOUNTING:It is expenditure for a particular service. 3.) MANAGEMENT ACCOUNTING:Analysis and interpreatation of financial information for management purposes.

COSTING:Costing is to find out money spent on a service. COST CENTRE:It is an alloyed group of activities like in a hospital. E.g. laboratory, immunization, laundary service.

COST OBJECT:Anything for which separate measurement of cost is desired.e.g. I.C.U equipment. COST UNIT:It is a measurable detail of service rended. E.g. linun, laboratory, investigations. CATEGORIES OF EXPENDITURE:1.) CAPITAL V/S RECCURING CAPITAL EXPENDITURE:-

Capital expenditures are expenditures creating future benefits.

RECCURING EXPENDITURERecurrent expenditures is the cost that a business incures to ensure efficient and smooth operation of business.

2.) FIXED V/S VARIABLE FIXED EXPENDITUREFixed expenditures are expenditures that remains unchanged despite changes in related level or volume of activity.e.g salary of permanent staff. VARIABLE EXPENDITUREIt is volume dependent, varies in proportion to changes in level of activity. E.g. medicines, consumables and power cost. 3.) DIRECT V/S INDIRECT EXPENDITURE DIRECT EXPENDITUREThe expenditure which is clearly linked to a service. INDIRECT EXPENDITUREIt cannot be clearly linked to a particular cost object. E.g. administrarion cost, security cost.

OBJECTIVES AND ADVANTAGES OF COSTING:1.) 2.) 3.) 4.) 5.) 6.) To get clear picture of financial situation. Identifying profitable and non profitable segments and taking action accordingly. To decide pricing and services and discount. To decide for outsourcing of services. Helps in identifying wastages. Helps in budgeting and planning.

EFFECTIVE COST ACCOUNTING:1.) 2.) 3.) 4.) Proper maintainence of records. Proper sementation of costs. Sound accounting practices regularity. Record and utilization of equipment and material.

5.) Record and analysis of manpower utilization.

DIFFICULTIES IN COST ACCOUNTING:1.) Many inputs have to be considered. E.g. labour, material, depreciation. 2.) Every transaction has to carry a price tag. 3.) Variation in quality of service.i.e. e.g. from product to product, consultant to consultant.

BREAK EVEN ANALYSIS:Volume of activity at which total income just equals total variable and fixed cost. Lower break even point is more desirable.

ADVANTAGES OF BREAK EVEN ANALYSIS: Purchase decisions or formulating price policy.

COST BENEFFITING ANALYSIS:An economic technique and formulized way of comparing the cost and benefits of undertaking an activity and project. Expenditure containment and cost cutting:1.) Sound economic sense 2.) It does not mean that we should compromise quality. How It Is Done? 1.) Promote awareness among staff 2.) Practice cost monitoring : Analyze actual expenditure against budget and standards find reasons for variation. 3.) Cost management : Establish systems with responsibility and accountability. Strategies for expenditure control:1.) Decrease the cost of inputs relative to outputs : Material, man power. 2.) Increase output relative to input : scheduling of procedures, automation, remove bottle neck in the flow of services and output should always help in expenditure control.

Cost Saving Areas:1.) Stream lining of services. 2.) Purchasing : planning, budgeting, bargaining, group purchasing. 3.) Preventive maintainence AMCs , Backup. 4.) Planning stage: quality, manpower and machines, planned recruitment upgradations. 5.) Good accounting practices : automation, internal audit. 6.) Energy audit. INVESTMENTS:Investment is putting money into something with the expectation of gain usually over a longer term. This may or may not be back by research and analysis. Most or all forms of investment involves some form of risk such as investment in equities, properties and even fixed interest securities which are subject to inflation risk. In contrast putting money into something with a hope of short term gain, with or without thorow analysis is gambling or speculation. This category would include most forms of derivatives which incorporate a risk element without being long term homes for money, and bedding on horses. It would also include. E.g. a company share in the hope of short term gain without any intention for holding it for the long term. Under the efficient market hypothesis, all investments with equal risk should have the same expected rate of return: i.e. to say there is a trade of between risk and expected return. But that does not prevent one from investing in risky assets over the long term in the hope of benefiting from the trade off. The common uses of investments describe speculation has had an effect in real life as well it reduced investor awareness of risk associated with speculation, increased capital available to speculation and decreased capital available to investment. Speculation is the practice of engaging in a risky financial transactions in an attempt to profit from short or medium term fluctuations in the market value of a trade able good such as a financial instrument rather than attempting to profit from the underlying financial attributes embodied in the instrument such as capital gains, interest or dividend. Many speculators pay little attention to the fundamental value of a security instead of focusing purely on the price movements.

TYPES OF INVESTMENTS:1.) TRADITIONAL INVESTMENTS: Traditional investments refers to the investing stocks, bonds, cash or real estate. 2.) ALTERNATIVE INVESTMENTS: Alternative investments is an investment product other than the traditional investment of stocks, bonds, cash and real estate. The term is a relatively loose one and includes tangible assets such as precious metals, art, wine, coins or stamps and some financial assets such as commodities carbon credits, venture capital, forests/ timber, film production and hedge funds. Various Investment Awareness For A Common Person:1.) Real estate 2.) Gold and jewellery 3.) Government securities 4.) Mutual funds 5.) Bank and company FDs 6.) Shares MANAGERIAL FINANCE Managerial finance is the branch of finance that concerns itself with managerial significance of finance techniques. It is focused on assessment rather than technique. -Managing finance -Assessment The purpose of managerial approach is to understand what the figures mean. Someone using such an approach might compare the returns to other business in their industry and ask are we performing better or worse than our peers? If we are performing worse what is the source of problem? Do we have the same expenses? Are we paying more for something than our peers?

They might look at changes in asset balances or red flags that indicate problems with bill collection and bad debit. They will analyze working capital to anticipate future cash flow problems. ROLE OF MANAGERIAL ACCOUNTING:1.) To interpret financial results in proper manner. 2.) Managers also need to work at how resources are allocated within an organization. They need to know what easy activity costs and why? 3.) Managers also need to anticipate future expenses. ROLE OF MANAGERIAL FINANCE:Managerial finance is also interested in determining the best way to use money for future opportunities to earn money and minimize the fact of financial shocks.

Corporate finance Corporate finance is the area of finance dealing with the sources of funding and the capital structure of corporations and the actions that managers take to increase the value of the firm to the shareholders, as well as the tools and analysis used to allocate financial resources.

Although it is in principle different from managerial finance which studies the financial management of all firms, rather than corporations alone, the main concepts in the study of corporate finance are applicable to the financial problems of all kinds of firms. Corporate finance generally involves balancing risk and profitability, while attempting to maximize an entity's wealth and the value of its stock, and generically entails three primary areas of capital resource allocation. In the first, "capital budgeting", management must choose which "projects" (if any) to undertake. The discipline of capital budgeting may employ standard business valuation techniques or even extend to real options valuation; see Financial modeling. The second, "sources of capital" relates to how these investments are to be funded: investment capital can be provided through different sources, such as by shareholders, in the form of equity (privately or via an initial public offering), creditors, often in the form of bonds, and the firm's operations (cash flow). Short-term funding or working capital is mostly provided by banks extending a line of credit. The balance between these elements forms the company's capital structure. The third, "the dividend policy", requires management to determine whether any unappropriated profit (excess cash) is to be retained for future investment / operational requirements, or instead to be distributed to shareholders, and if so in what form. Short term financial management is often termed "working capital management", and relates to cash-, inventory- and debtors management. Corporate finance also includes within its scope business valuation, stock investing, or investment management. An investment is an acquisition of an asset in the hope that it will maintain or increase its value over time. In investment management in choosing a portfolio one has to use financial analysis to determine what, how much and when to invest. To do this, a company must:

Identify relevant objectives and constraints: institution or individual goals, time horizon, risk aversion and tax considerations; Identify the appropriate strategy: active versus passive hedging strategy Measure the portfolio performance

Financial management overlaps with the financial function of the Accounting profession. However, financial accounting is the reporting of historical financial information, while financial management is concerned with the allocation of capital resources to increase a firm's value to the shareholders. Financial risk management, an element of corporate finance, is the practice of creating and protecting economic value in a firm by using financial instruments to manage exposure to risk, particularly credit riskand market risk. (Other risk types include Foreign exchange, Shape, Volatility, Sector, Liquidity, Inflation risks, etc.) It focuses on when and how

to hedge using financial instruments; in this sense it overlaps with financial. Similar to general risk management, financial risk management requires identifying its sources, measuring it (see: Risk measure: Well known risk measures), and formulating plans to address these, and can be qualitative and quantitative. In the banking sector worldwide, the Basel Accords are generally adopted by internationally active banks for tracking, reporting and exposing operational, credit and market risks. Financial services

An entity whose income exceeds its expenditure can lend or invest the excess income. Though on the other hand, an entity whose income is less than its expenditure can raise capital by borrowing or selling equity claims, decreasing its expenses, or increasing its income. The lender can find a borrower, a financial intermediary such as a bank, or buy notes or bonds in the bond market. The lender receives interest, the borrower pays a higher interest than the lender receives, and the financial intermediary earns the difference for arranging the loan. A bank aggregates the activities of many borrowers and lenders. A bank accepts deposits from lenders, on which it pays interest. The bank then lends these deposits to borrowers. Banks allow borrowers and lenders, of different sizes, to coordinate their activity. Finance is used by individuals (personal finance), by governments (public finance), by businesses (corporate finance) and by a wide variety of other organizations, including schools and non-profit organizations. In general, the goals of each of the above activities are achieved through the use of appropriate financial instruments and methodologies, with consideration to their institutional setting. Finance is one of the most important aspects of business management and includes analysis related to the use and acquisition of funds for the enterprise. In corporate finance, a company's capital structure is the total mix of financing methods it uses to raise funds. One method is debt financing, which includes bank loans and bond sales. Another method is equity financing - the sale of stock by a company to investors, the original shareholders of a share. Ownership of a share gives the shareholder certain contractual rights and powers, which typically include the right to receive declared dividends and to vote the proxy on important matters (e.g., board elections). The owners of both bonds and stock, may be institutional investors - financial institutions such as investment banks and pension funds or private individuals, called private investors or retail investors. Public finance Public finance describes finance as related to sovereign states and sub-national entities (states/provinces, counties, municipalities, etc.) and related public entities (e.g. school districts) or agencies. It is concerned with:

Identification of required expenditure of a public sector entity Source(s) of that entity's revenue

The budgeting process Debt issuance (municipal bonds) for public works projects

Central banks, such as the Federal Reserve System banks in the United States and Bank of England in the United Kingdom, are strong players in public finance, acting as lenders of last resort as well as strong influences on monetary and credit conditions in the economy. Capital Capital, in the financial sense, is the money that gives the business the power to buy goods to be used in the production of other goods or the offering of a service. (The capital has two types of resources Equity and Debt) The deployment of capital is decided by the budget. This may include the objective of business, targets set, and results in financial terms, e.g., the target set for sale, resulting cost, growth, required investment to achieve the planned sales, and financing source for the investment. A budget may be long term or short term. Long term budgets have a time horizon of 5 10 years giving a vision to the company; short term is an annual budget which is drawn to control and operate in that particular year. Budgets will include proposed fixed asset requirements and how these expenditures will be financed. Capital budgets are often adjusted annually and should be part of a longer-term Capital Improvements Plan. A cash budget is also required. The working capital requirements of a business are monitored at all times to ensure that there are sufficient funds available to meet short-term expenses. The cash budget is basically a detailed plan that shows all expected sources and uses of cash. The cash budget has the following six main sections: 1. Beginning Cash Balance - contains the last period's closing cash balance. 2. Cash collections - includes all expected cash receipts (all sources of cash for the period considered, mainly sales) 3. Cash disbursements - lists all planned cash outflows for the period, excluding interest payments on short-term loans, which appear in the financing section. All expenses that do not affect cash flow are excluded from this list (e.g. depreciation, amortization, etc.) 4. Cash excess or deficiency - a function of the cash needs and cash available. Cash needs are determined by the total cash disbursements plus the minimum cash balance required by company policy. If total cash available is less than cash needs, a deficiency exists. 5. Financing - discloses the planned borrowings and repayments, including interest. `

Financial economics Financial economics is the branch of economics studying the interrelation of financial variables, such as prices, interest rates and shares, as opposed to those concerning the real economy. Financial economics concentrates on influences of real economic variables on financial ones, in contrast to pure finance. It centres on managing risk in the context of the financial markets, and the resultant economic andfinancial models. It essentially explores how rational investors would apply risk and return to the problem of an investment policy. Here, the twin assumptions of rationality and market efficiency lead to modern portfolio theory (the CAPM), and to the BlackScholes theory for option valuation; it further studies phenomena and models where these assumptions do not hold, or are extended. "Financial economics", at least formally, also considers investment under "certainty" (Fisher separation theorem, "theory of investment value", Modigliani-Miller theorem) and hence also contributes to corporate finance theory. Financial econometrics is the branch of financial economics that uses econometric techniques to parameterize the relationships suggested. Although closely related, the disciplines of economics and finance are distinctive. The economy is a social institution that organizes a societys production, distribution, and consumption of goods and services, all of which must be financed. Economists make a number of abstract assumptions for purposes of their analyses and predictions. They generally regard financial markets that function for the financial system as an efficient mechanism (Efficient-market hypothesis). Instead, financial markets are subject to human error and emotion. New research discloses the mischaracterization of investment safety and measures of financial products and markets so complex that their effects, especially under conditions of uncertainty, are impossible to predict. The study of finance is subsumed under economics as financial economics, but the scope, speed, power relations and practices of the financial system can uplift or cripple whole economies and the well-being of households, businesses and governing bodies within themsometimes in a single day. Financial mathematics Financial mathematics is a field of applied mathematics, concerned with financial markets. The subject has a close relationship with the discipline of financial economics, which is concerned with much of the underlying theory. Generally, mathematical finance will derive, and extend, the mathematical or numerical models suggested by financial economics. In terms of practice, mathematical finance also overlaps heavily with the field of computational finance (also known as financial engineering). Arguably, these are largely synonymous, although the latter focuses on application, while the former focuses on modeling and derivation (see: Quantitative analyst). The field is largely focused on the modelling of derivatives, although other important subfields include insurance mathematics and quantitative portfolio problems. SeeOutline of finance: Mathematical tools; Outline of finance: Derivatives pricing. Experimental finance Experimental finance aims to establish different market settings and environments to observe experimentally and provide a lens through which science can analyze agents' behavior and the resulting characteristics of trading flows, information diffusion and aggregation, price setting

mechanisms, and returns processes. Researchers in experimental finance can study to what extent existing financial economics theory makes valid predictions, and attempt to discover new principles on which such theory can be extended. Research may proceed by conducting trading simulations or by establishing and studying the behaviour of people in artificial competitive market-like settings. Behavioral finance Behavioral Finance studies how the psychology of investors or managers affects financial decisions and markets. Behavioral finance has grown over the last few decades to become central to finance. Behavioral finance includes such topics as: 1. 2. 3. 4. Empirical studies that demonstrate significant deviations from classical theories. Models of how psychology affects trading and prices Forecasting based on these methods. Studies of experimental asset markets and use of models to forecast experiments.

A strand of behavioral finance has been dubbed Quantitative Behavioral Finance, which uses mathematical and statistical methodology to understand behavioral biases in conjunction with valuation.. Studies by Jeff Madura, Ray Sturm and others have demonstrated significant behavioral effects in stocks and exchange traded funds. Among other topics, quantitative behavioral finance studies behavioral effects together with the non-classical assumption of the finiteness of assets. Intangible asset finance Intangible asset finance is the area of finance that deals with intangible assets such as patents, trademarks, goodwill, reputation, etc.

PERSONAL FINANCE Personal finance refers to the financial management of which an individual or a family unit is required to maintain, to obtain, budget save and spend monetary resources overtime taking into account various financial risks and future life events, when planning personal finances the individual would consider the suitability to his or her needs of a range of banking products i.e. checking, saving accounts, credit cards and consumer loans or investment i.e. stock market, bonds, mutual funds and insurance i.e. life insurance or participation and monitoring of individual

or employers sponsored retirement plans, social security benefits and income tax management. Questions in personal finance revolve around

How can people protect themselves against unforeseen personal events, as well as those in the external economy? How can family assets best be transferred across generations (bequests and inheritance)? How does tax policy (tax subsidies and/or penalties) affect personal financial management? How does credit affect an individual's financial standing? How can one plan for a secure financial future in an environment of economic instability?

Personal finance may involve paying for education, financing durable goods such as real estate and cars, buying insurance, e.g. health and property insurance, investing and saving for retirement. Personal finance may also involve paying for a loan, or debt obligations. The six key areas of personal financial planning, as suggested by the Financial Planning Standards Board, are: 1. Financial position: is concerned with understanding the personal resources available by examining net worth and household cash flow. Net worth is a person's balance sheet, calculated by adding up all assets under that person's control, minus all liabilities of the household, at one point in time. Household cash flow totals up all the expected sources of income within a year, minus all expected expenses within the same year. From this analysis, the financial planner can determine to what degree and in what time the personal goals can be accomplished. 2. Adequate protection: the analysis of how to protect a household from unforeseen risks. These risks can be divided into liability, property, death, disability, health and long term care. Some of these risks may be self-insurable, while most will require the purchase of an insurance contract. Determining how much insurance to get, at the most cost effective terms requires knowledge of the market for personal insurance. Business owners, professionals, athletes and entertainers require specialized insurance professionals to adequately protect themselves. Since insurance also enjoys some tax

benefits, utilizing insurance investment products may be a critical piece of the overall investment planning. 3. Tax planning: typically the income tax is the single largest expense in a household. Managing taxes is not a question of if you will pay taxes, but when and how much. Government gives many incentives in the form of tax deductions and credits, which can be used to reduce the lifetime tax burden. Most modern governments use a progressive tax. Typically, as one's income grows, a higher marginal rate of tax must be paid. Understanding how to take advantage of the myriad tax breaks when planning one's personal finances can make a significant impact. 4. Investment and accumulation goals: planning how to accumulate enough money for large purchases, and life events is what most people consider to be financial planning. Major reasons to accumulate assets include, purchasing a house or car, starting a business, paying for education expenses, and saving for retirement. Achieving these goals requires projecting what they will cost, and when you need to withdraw funds. A major risk to the household in achieving their accumulation goal is the rate of price increases over time, or inflation. Using net present value calculators, the financial planner will suggest a combination of asset earmarking and regular savings to be invested in a variety of investments. In order to overcome the rate of inflation, the investment portfolio has to get a higher rate of return, which typically will subject the portfolio to a number of risks. Managing these portfolio risks is most often accomplished using asset allocation, which seeks to diversify investment risk and opportunity. This asset allocation will prescribe a percentage allocation to be invested in stocks, bonds, cash and alternative investments. The allocation should also take into consideration the personal risk profile of every investor, since risk attitudes vary from person to person. 5. Retirement planning is the process of understanding how much it costs to live at retirement, and coming up with a plan to distribute assets to meet any income shortfall. Methods for retirement plan include taking advantage of government allowed structures to manage tax liability including: individual (IRA) structures, or employer sponsored retirement plans. 6. Estate planning involves planning for the disposition of one's assets after death. Typically, there is a tax due to the state or federal government at one's death. Avoiding these taxes means that more of one's assets will be distributed to one's heirs. One can leave one's assets to family, friends or charitable groups.

PERSONAL FINANCE PLANNING PROCESS:1.) ACCESSMENT:A persons financial situation is accessed by compoiling simplified versions of financial statement including balance sheet and income statements. A personal balance sheet lists the values of personal assets. E.g. car, house, clothes, stocks, bank accounts along with personal liabilities .e.g. credit card debit, bank loan. A personal income statement lists personal income and expenses. 2.) GOAL SETTING:Having multiple goals is common including the mix of short term and long term goals. For e.g. a long term goal would be retire at age 65 with a net worth Rs 10 crore while a short term goal would be to save up for a new laptop for next month. Setting financial goals helps to direct financial planning. Goal setting is done with an objective to meet certain financial requirements. 3.) CREATING A PLAN:The financial plan details how to accomplish the goals. It could include for e.g. necessary expenses, increasing the employment income or investing in the stock market. 4.) EXECUTION:Execution of a financial plan often requires discipline and preservance. Many people obtain assistance from professionals such as accountants, financial planner, investment advisor and lawyer. 5.) MONITORING AND REASSESSMENT:As time passes the financial plan must be monitored for possible adjustments or reassessments. Typical goals most adults and young adults have are paying of credit cared or student loan debit, investing for retirement, investing for college costs for childrens, pay medical expenses and planning for passing on theirs property to their heirs. AREAS OF FINANCIAL PLANNING:1.) FINANCIAL POSITIONIt is concerned with understanding the personal resources available by examining net worth and household cash flow. Net worth is a persons balance

sheet calculated by adding up all assets under the persons control minus all liabilities of household at one point in time. Household cash flow totals up all the expected sources of income within the year. From this analysis the financial plan can determine to what degree and in what time the goals can be accomplished.

ADEQUATE PROTECTION:The analysis of how to protect a household from unforeseen risks is called adequate protection. These risks can be divided into liability, property, death, health and long term care. Some of these risks can be self insurable while most will require the insurance. Determining how much insurance to get add the most effective terms requires knowledge of the market for personal insurance. Business owners, professionals, atheletes and entertainers require specialized insurance professionals to adequately protect themselves. Since insurance also enjoys some tax benefits utilizing insurance investment products may be critical piece of the overall investment planning.

2.)

Introduction to airline industry The international airline industry provides service to virtually every corner of the globe, and has been an integral part of the creation of a global economy. The airline industry itself is a major economic force, both in terms of its own operations and its impacts on related industries such as aircraft manufacturing and tourism, to name but two. Few other industries generate the amount and intensity of attention given to airlines, not only among its participants but from government policy makers, the media, and almost anyone who has an anecdote about a particular air travel experience. During much of its development, the global airline industry dealt with major technological innovations such as the introduction of jet airplanes for commercial use in the 1950s, followed by the development of wide-body jumbo jets in the 1970s. At the same time, airlines were heavily regulated throughout the world, creating an environment in which technological advances and government policy took precedence over profitability and competition. It has only been in the period since the economic deregulation of airlines in the United States in 1978 that questions of cost efficiency, operating profitability and competitive behavior have become the dominant issues facing airline management. With the US leading the way, airline deregulation or at least liberalization has now spread to much of the industrialized world, affecting both domestic air travel within each country and, perhaps more importantly, the continuing evolution of a highly competitive international airline industry.

Today, the global airline industry consists of over 2000 airlines operating more than 23,000 aircraft, providing service to over 3700 airports. In 2006, the worlds airlines flew almost 28 million scheduled flight departures and carried over 2 billion passengers [1]. The growth of world air travel has averaged approximately 5% per year over the past 30 years, with substantial yearly variations due both to changing economic conditions and differences in economic growth in different regions of the world. Historically, the annual growth in air travel has been about twice the annual growth in GDP. Even with relatively conservative expectations of economic growth over the next 10-15 years, a continued 4-5% annual growth in global air travel will lead to a doubling of total air travel during this period. In the US airline industry, approximately 100 certificated passenger airlines operate over 11 million flight departures per year, and carry over one-third of the worlds total air traffic US airlines enplaned 745 million passengers in 2006. US airlines reported over $160 billion in total revenues, with approximately 545,000 employees and over 8,000 aircraft operating 31,000 flights per day [2]. The economic impacts of the airline industry range from its direct effects on airline employment, company profitability and net worth to the less direct but very important effects on the aircraft manufacturing industry, airports, and tourism industries, not to mention the economic impact on virtually every other industry that the ability to travel by air generates. Commercial aviation contributes 8 percent of the US Gross Domestic Product, according to recent estimates [3]. The economic importance of the airline industry and, in turn, its repercussions for aircraft manufacturers, makes the volatility of airline profits and their dependence on good economic conditions a serious concern for both industries. This concern has grown dramatically since airline deregulation, as stable profits and/or government assistance were the rule rather than the exception for most international airlines prior to the 1980s. As shown in Figure 1, the total net profits of world airlines have shown tremendous volatility over the past 15 years. After the world airline industry posted 4 consecutive years of losses totaling over $22 billion from 1990 to 1993, as a result of the Gulf War and subsequent economic recession, it returned to record profitability in the late 1990s, with total net profits in excess of $25 billion being reported by world airlines from 1995 to 1999. Even more dramatic was the industrys plunge into record

operating losses and a financial crisis between 2000 and 2005, with cumulative net losses of $40 billion. FIGURE 1: WORLD AIRLINE NET PROFITS 1989-2006

Deregulation and Liberalization Worldwide Since the deregulation of US airlines in 1978, the pressure on governments to reduce their involvement in the economics of airline competition has spread to most of the rest of the world. The US experience with airline deregulation is perceived to be a success by other countries, as the overall benefits to the vast majority of air travelers have been clearly demonstrated. While US domestic air travel grew at rates significantly greater than prior to deregulation, average real fares declined since deregulation and today remain at less than half of 1978 levels [2]. Several successful new entrant and low-fare airlines had a great impact both on airline pricing practices and on the publics expectations of low-priced air travel. And, despite worries at the time of deregulation that competitive cost pressures might lead to reduced maintenance standards, there is no statistical evidence that airline safety deteriorated. At the same time, the US deregulation experience had some potentially more negative impacts. The pressure to cut costs, combined with increased profit volatility, mergers and bankruptcies of several airlines led to periodic job losses, reduced wages and airline labor unions with less power than they previously enjoyed. Furthermore, the benefits of deregulation were not enjoyed equally by all travelers. Residents of small US cities saw changes in the pattern of air service to their communities, as smaller regional airlines replaced previously subsidized jet services. And, despite a substantial decrease in the average real fare paid for air travel in US

domestic markets, the disparity between the lowest and highest fares offered by airlines increased, aggravating business travelers forced to pay the higher fares. The development of large connecting hubs by virtually all US major airlines also raised concerns about the pricing power of dominant airlines at their hub cities. The management strategies and practices of airlines were fundamentally changed by deregulation, liberalization and, very simply, competition. Cost management and productivity improvement became a major focus of US airlines for much of the past twenty years, and nonUS airlines have more recently been forced by competitive realities to face up to this challenge as well. A by-product of the quest for lower costs and increased productivity has been the pursuit of economies of scale by both US and non-US airlines. In the past, internal growth and/or mergers were the primary ways in which airlines hoped to take advantage of scale economies. With growing government concerns about industry consolidation, further mergers have become less likely. The response of airlines has been to expand their networks and to achieve at least some economies of scale through partnerships and global alliances designed to offer a standardized set of products and to project a unified marketing image to consumers. Recent Industry Evolution 2000-2005 On a global scale and especially in the United States, the airline industry has been in a financial crisis for much of this new century. The problems that began with the economic downturn at the beginning of 2001 reached almost catastrophic proportions after the terror attacks of September 11, 2001. In the United States alone, the industry posted cumulative net losses of over $40 billion from 2001 to 2005, and only in 2006 was it able to return to the black with a total net profit of just over $3 billion [2]. The industry crisis was most certainly exacerbated by the events of 9/11, which resulted in immediate layoffs and cutbacks of almost 20% in total system capacity, in anticipation of the inevitable decline in passenger traffic due to concerns about the safety of air travel. However, the airlines were in serious trouble well before 9/11, as the start of an economic downturn already had negatively affected the volume of business travel and average fares. At the same time, airline labor costs and fuel prices were increasing yearly. To make matters worse, airlines were faced with deteriorating labor/management relations, aviation infrastructure constraints

that led to increasing congestion and flight delays, and dissatisfied customers due to perceptions of poor service in general. Thus, we cannot attribute the recent poor performance of the airline industry solely to the impacts of 9/11. In fact, the events of 9/11 actually provided a temporary reprieve from some of the industry's fundamental problems: Reductions in flight schedules alleviated some of the pressure on the aviation infrastructure, resulting in fewer flight delays; faced with massive layoffs and tremendous uncertainty about the financial futures of the airlines, labor unions moved towards a more conciliatory position, and passengers became more willing to lower their service expectations in exchange for improved security. In the period after 9/11, passenger traffic made a slow recovery, and returned to pre-9/11 levels by mid-2004. With total US domestic airline capacity substantially lower than before 9/11, average load factors soared to historical record levels. Yet, despite operating flights that were quite full, the large network airlines were still losing money. The ability of the network airlines to generate adequate revenues to cover their operating costs was severely impacted by major shifts in passenger choice behavior, particularly on the part of business travelers. The overall volume of business air travel demand decreased in early 2001 due to the overall economic downturn. Business air travel was further affected by the increased hassle factor and greater uncertainty in passenger processing times caused by increased security requirements. The combination of reduced business travel budgets and substantial cutbacks in airline passenger service quality led more business travelers to look for alternatives to paying premium air fares teleconferencing and other travel substitutes, alternative travel modes, and especially, low-fare airlines for business travel. As a result, total US airline industry passenger revenues dropped by over 20% between 2000 and 2002, and were still 10% below 2000 levels in 2004, as shown in Figure 2. FIGURE 2: US AIRLINE INDUSTRY PASSENGER REVENUES 1999-2004

The recent growth of low-fare air travel options combined with a reduced willingness on the part of business travelers to pay the higher air fares charged by network carriers played a major role in contributing to the poor financial performance of traditional network airlines, both in the US and in many other countries. In the US, low-fare airlines (also known as Low Cost Carriers or LCCs) exhibited slow but steady growth since deregulation, but low-fare carriers accounted for less than 7% of US domestic air passengers in 1991. As shown in Figure 3, LCCs grew more rapidly in the US since the mid-1990s, to the point that they carried 25% of all US domestic traffic as a group in 2005 [4]. The largest low-fare airlines in the US industry include Southwest, JetBlue, AirTran, and Frontier. While it is true that the network airlines encountered a serious revenue problem in the several years after 2001, it also became clear that they also had fundamental operating cost and productivity problems, when compared to their low-fare challengers. The differences in the cost structures between network airlines and low-fare carriers reflected substantial differences in the productivity of both aircraft and employees. Low-fare carriers typically operate point-topoint networks in which they can minimize aircraft ground times, in contrast to the hub -andspoke networks of the largest legacy airlines. Shorter ground times translate directly into higher aircraft utilization rates. In 2004, JetBlue operated its Airbus 320 aircraft on average for 13.6 block hours per day, an aircraft utilization rate 46% higher than Northwest for the same aircraft type, and highest of all US Major airlines. At the same time, JetBlue's unit aircraft operating cost for this aircraft fleet was 3.2 cents per available seat mile (ASM), less than two-thirds of that reported by Northwest [4]. FIGURE 3: LOW COST CARRIERS US DOMESTIC TRAFFIC

Perhaps the most critical element of the successful low-fare airline business model is significantly higher labor productivity than traditional network carriers. The differences lie in labor productivity, not in unionization or even wage rates. Southwest is the most heavily unionized US airline and its salary rates are considered to be at or above average compared to the US airline industry. The low-fare carrier labor advantage is in much more flexible work rules that allow cross-utilization of virtually all employees (except where disallowed by licensing and safety standards). Such cross-utilization and a long-standing culture of cooperation among labor groups translate into lower unit labor costs. At Southwest in 2004, total labor expense per ASM was 25% below that of Delta [4]. Carriers like Southwest have a tremendous cost advantage over network airlines simply because their workforce generates more output per employee. In 2004, Southwest produced 3.2 million available seat-miles per employee, as compared to 2.2 million at American. By this measure, the productivity of Southwest employees was 45% higher than at American, despite the substantially longer flight lengths and larger average aircraft size of the network carrier. Re-Structuring and a Return to Profitability in 2006 The challenges described above led four out of the six US Legacy carriers (US Airways, United, Delta and Northwest) into Chapter 11 bankruptcy between 2001 and 2005. Under bankruptcy protection, these carriers were able to focus on down-sizing, cutting operating costs and improving productivity as part of their re-structuring efforts. And, the other two Legacy carriers, American and Continental, used the threat of bankruptcy filing to do the same. Much of their cost-cutting strategy focused on labor: Legacy airline employment was reduced by 30% in just

five years, representing over 100,000 jobs lost while average wage rates were also cut by 7% [4]. At the same time, the Legacy airlines sought productivity gains not only by reducing headcount, but also by introducing new technologies (e.g., internet ticket distribution, web check-in) and by moving capacity from domestic to international routes in an effort to improve aircraft utilization with increased stage lengths. Legacy carriers also attempted to mimic several strategies of the Low Cost Carriers (LCCs), for example, by eliminating meals and pillows to reduce costs and by reducing aircraft turn-around times to improve aircraft productivity. LCCs in many respects took advantage of the weaknesses of the Legacy carriers during their financial crisis and re-structuring. Most LCCs were able to rapidly expand their networks and captured significant market share. They expanded into new markets with new aircraft, more flights and, of course, lower fares. However, during this same period the LCCs began to face increasing operating costs, driven by aging fleets and personnel with increasingly more seniority. And, the LCCs could not escape the impacts of more than a doubling in fuel costs between 2003 and 2005 even the successful fuel hedging strategy of Southwest provided only a temporary reprieve from increasing fuel costs. In fact, the concerted cost-cutting efforts of both Legacy and LCC airlines were not enough to offset the increased fuel prices, resulting in growing total unit costs for both airline groups (Figure 4) from 2001 to 2006. However, while total unit costs continued to increase due primarily to the impact of higher fuel prices, labor unit costs showed a very different trend they have decreased dramatically for Legacy airlines, while they continue to increase among LCCs. As shown in Figure 5, there has been a clear labor cost convergence between both groups and the historical advantage that LCCs have had in this category was effectively eliminated by 2006. Indeed for the first time in 2006, LCC employees had on average a higher total compensation and benefits than their Legacy counterparts. Amazingly, the carrier with the highest labor expense per employee among Legacy and LCC airline in 2006 was Southwest [5]. FIGURE 4: UNIT COSTS (excluding Transport-related payments to regional carriers)

FIGURE 5: LABOR UNIT COSTS

In terms of aircraft productivity, the Legacy carriers also made big gains, stemming in large part from the shift of larger and longer-range aircraft to international routes. Domestically, they tried to replicate the productivity strategies of LCCs, by eliminating fixed connecting banks at many hubs and moving to continuous or rolling banks that shortened aircraft ground times. Still, despite all of their efforts to improve aircraft productivity, the Legacy carriers have not been able to match the utilization rates (block hours per day of aircraft operation) that LCCs have been achieving (Figure 6). For example, Southwest and Jet Blue continue to hold a clear advantage in this measure of productivity [5] FIGURE 6: AIRCRAFT UTILIZATION RATES (Block Hours per Aircraft per day)

In summary, the cost and productivity improvements by Legacy airlines have changed the competitive environment of the US airline industry yet again there is much evidence of recent cost and productivity convergence between the Legacy and LCC airlines. Passenger traffic rebounded to exceed pre-9/11 levels by over 14% in 2006. The profitability results for 2006 were positive for most Legacy airlines, while several LCCs struggled financially. The US industry as a whole posted an aggregate net profit of $3 billion (excluding restructuring and bankruptcy costs). The painstaking restructuring efforts and cost-reductions of the Legacy airlines appear to be paying off, as the US industry is expected to post a $4 billion net profit in 2007 [6]. The industry has also benefited from an improving revenue environment and from little or no growth in available capacity (ASMs), particularly in US domestic markets. Looking Ahead: Industry Challenges The airline industry is in the midst of a dramatic restructuring that involves even more fundamental changes than those experienced following its deregulation in 1978. Yet, nearly three decades after deregulation and after multiple cycles of financial successes and failures the industry remains fragile. Competitive pressure from low-cost carriers, the loss of consumer confidence in the air transportation systems reliability and operating performance, and the transparency of pricing facilitated by the internet and online travel distribution channels have all contributed to a precipitous decline in average fares and a significant impact on airline revenues. And since 2006, fuel has emerged as the single largest industry expense, surpassing labor costs for the first time [4]. The industry still is recovering from its latest cycle of financial struggles,

but faces substantial challenges. The belief that a few quarters of profits equate to full recovery is more wishful thinking than reality. The next round of labor negotiations may be the most important milestone in the US airline industry since deregulation. The recent round of labor negotiations and restructurings many under Chapter 11 led to significant changes in labor costs and productivity. With those changes, airline employees helped contribute to the short-term recovery of the industry. Finding a new model for compensation that is durable and works to address the cyclicality of the industry will be critical. Just as important will be the efforts of management to identify nonlabor cost savings that can be sustained as networks and operating models are reconfigured. While there has been much progress on issues of aviation safety and security since 9/11, with the federalization of airport passenger screeners and movement towards explosives screening for all checked baggage, the questions are we doing enough? and are we d oing the right things? remain unanswered. Demand for air travel, particularly in short -haul markets, has been suppressed by passenger perception of the hassle factor of increased security and the uncertainty of passenger processing times at the airport. For the airlines, the new security procedures have increased operating costs and induced more security-related flight disruptions and delays. The Director-General of IATA, the world-wide airline industry trade association, has said our passengers have been hassled for 6 yearsthats far too much *7+. Some experts, however, have expressed concern that cutbacks in existing security measures could increase the risk of future terrorist acts that could devastate the industry. The temporary reprieve from congestion and flight delays experienced immediately after 9/11 has effectively ended at the nation's busiest airports. The number of delayed flights reached record levels in July 2007, and media reports of chronic and excessive airline passenger delays have again become commonplace. Several factors, including the lack of coordination of airline flight schedules at some of the most congested airports; an outdated air traffic control system; finely-tuned airline flight schedules with little slack to dampen delay propagation; and recordhigh load factors preventing timely re-accommodation of passengers who misconnect or whose flights are canceled, all combine to create passenger disruptions and lengthy passenger delays that exceed even the record-high levels of flight delays. Solutions to the problem will require a

mix of improved management of airspace and airport demand, and an increase in airport capacity brought about primarily by improved management and utilization of existing capacity. The lack of adequate infrastructure capacity airports and airspace and the rapidly growing costs of maintaining and expanding this infrastructure are two of the most critical problems for the future of air transportation, nationally and internationally. The prospects for substantial relief on the capacity front are not good at least in the medium term (next 10 years). While the FAA and other air navigation service providers around the world have been working, with some success, toward increasing the capacity of the en route airspace, the real bottlenecks of the air transportation system are the runway systems of the major commercial airports in North America, Europe and Asia and the terminal airspace around them. The only clear way to increase the runway system capacity at these airports substantially, i.e., at rates similar to those at which demand is growing, is through the construction of new runways at existing airports or additional airports in the same metropolitan areas. But obtaining approval for and eventually opening additional runways and new airports is an extremely difficult and time-consuming proposition in most developed countries. Barring these, airports and national civil aviation authorities may have to resort to increasingly stringent demand management measures, such as slot restrictions, congestion pricing, and even the auctioning of access to major airports. On the cost side, the enormous investments required in order to expand and maintain the capacity of existing airports or to build new ones has been one of the main reasons for the airport privatization trend that has been in evidence in much of the world (but, for statutory reasons, not in the United States) since the late 1980s. A growing tendency to tax directly airline passengers and cargo is another consequence of the rapidly increasing costs of aviation infrastructure (airports and air traffic control). Various taxes and fees for infrastructure support and security currently increase the cost of the average domestic airline ticket in the United States by about 16%. The situation in the European Union is roughly the same. These important challenges sustaining airline profitability, ensuring safety and security, and developing adequate air transportation infrastructure are not limited to the United States or to US airlines. Airlines around the world are encountering a growing wave of liberalization if not outright deregulation, and as a result are facing competitive pressures, both from new entrant low-cost airlines and re-structured legacy carriers. The rapid growth of the global airline

industry and the continued threat of terrorist attacks make safety and security issues critical to every airline, and every airline passenger. And, the need for expanded aviation infrastructure, both airports and air traffic control, is of particular importance to emerging economies of the world such as India, China, Africa and the Middle East, where much greater rates of demand growth are forecast for both passenger and cargo air transportation. Types of Airlines Not all airlines are created equal. As in most businesses, there is a sort of stratification of airlines, at least within the United States. U.S. airlines are either publicly or privately owned -however, in many countries, the government owns the airlines. A U.S. airline's rank is determined by the amount of revenue it generates. It is then classified by the U.S. federal government and placed in one of three categories: major, national or regional. If you've flown before, it may be easy for you to tell the difference between the three categories. Each of the three types of airlines has distinguishable routes. Typically, the larger airlines offer more destinations and longer routes. Let's take a closer look at these airline categories.

Major airlines - These are the heavyweights of the airline industry, and you will often hear about them in the news. A major airline is defined as an airline that generates more than $1billion in revenue annually. There were 12 major airlines as of 2000: Alaska, America West, American, American Eagle, American Trans Air, Continental, Delta, Northwest, Southwest, Trans World, United and US Airways. Typically, these are also the largest employers among airlines. For instance, United Airlines employed more than 97,000 people in 2000. American employed 93,000, and Delta employed more than 77,000. However, there are also some major airlines that don't employ large numbers, such as Alaska, which employs only 9,600 people. National airlines - Just one step down from the major airlines, these are scheduled airlines with annual operating revenues between $100-million and $1-billion. These airlines might serve certain regions of the country, but may also provide long-distance routes and some international destinations. They operate medium- and large-sized jets. Examples of national airlines include Aloha, Atlas Air, Airtran, Emery Worldwide, Evergreen, Hawaiian and Midwest Express. Because these are smaller airlines, you can expect them to have a smaller number of employees. For example, Airtran employs just more than 3,700 people, and Midwest Express employs about 2,500. Regional airlines - As the name suggests, these airlines service particular regions of the United States, filling the niche markets that the major and national airlines may overlook. This is the fastest growing segment of the airline industry, according to the Air Transport Association of America (ATA). Regionals are divided into three subgroups: Large regionals - These are scheduled carriers with $20-million to $100-million in annual revenue. They operate aircraft that can accommodate more than 60 passengers. Medium regionals - These airlines operate on

a smaller scale, with operating revenues of under $20-million, and often use only small aircraft. Small regionals - These airlines don't have a set revenue definition, but are usually referred to as "commuter airlines." They use small aircraft with less than 61 seats. The airline industry is just like any other business, meaning that there are numerous types of airlines because their customers have different needs. If you are going overseas, you're likely to use a major airline because it has more destinations overseas. A business person travelling between two small cities is likely to fly on a regional airline, because he doesn't want to have to stop at a major-airline hub for a layover. You'll learn more about hubs later.

While the operations of each specific airline may differ, there is a certain amount of similarity among each airline's structure. An airline's most important assets are its airplanes and its people. An airline can have the best planes in the world, but without the employees, an airline can't do anything. Airlines are most often represented in public by those employees who have the most contact with travelers, such as pilots and flight attendants, but there are many more airline employees working behind the scenes. Larger airlines may employ more people, but the employee categories are generally the same no matter what the size of the airline. Here are the various types of employees in an airline:

Line personnel - This is the group of people you most often see during a flight, and they form 85 percent of an airline's labor force. Line personnel include pilots and flight attendants, reservation clerks, airport check-in and gate personnel and security guards. Operations - If line personnel form the heart of an airline, operations keeps it's blood pumping. These people are responsible for scheduling aircraft and flight crews to man the aircraft. Operations personnel maintain guidelines to meet FAA standards, and they train the flight crews. Included in operations are thedispatchers, who track all of the airline's flights. Maintenance - Airplanes are multi-million-dollar vehicles that must be maintained in order to prevent the airline from losing money. Aircraft only make money for the airline when they are transporting passengers. About 10 percent of an airline's work force is dedicated to aircraft maintenance. Sales and marketing - If you wonder who sets your prices, you can usually find them in the sales and marketing divisions of an airline. These people are also tasked with advertising, cargo sales, reservations, customer service and food service. In addition to the personnel listed above, who make up the majority of airline's payroll, the airline also employs specialists and subcontractors to perform particular duties. This specialized staff includes people like lawyers, accountants, and employee- and public-relations specialists. It is their role to support the work of line personnel. Typically, these people work at the airline's headquarters. Subcontractors are people whom airlines farm work out to, and may perform the such tasks as cleaning, fueling, security, food services and sometimes maintenance

Hubs and Spokes Most of the 12 major U.S. passenger airlines in operation as of 2001 use a hub-andspokenetwork to route their plane traffic. The words "hub" and "spoke" create a pretty vivid image of how this system works. A hub is a central airport that flights are routed through, and spokes are the routes that planes take out of the hub airport. Most major airlines have multiple hubs. They claim that hubs allow them to offer more flights for passengers. The hub-and-spoke system became the norm for most major airlines after the U.S. federal government deregulated the airlines in 1978. Under the direct-route, or point-to-point, system used prior to deregulation, airlines were forced by the federal government to fly directly between two small markets. This resulted in many flights that were routinely half empty, which resulted in airlines losing money. Today, most airlines have at least one central airport that their flights have to go through. From that hub, the spoke flights take passengers to select destinations. A good example of a hub-and-spoke system is that of Delta Airlines, which has its hub at Hartsfield Atlanta International Airport. Let's say you are in Charleston, SC, and want to go to Memphis, TN. There's probably not a lot of demand for a Charleston-to-Memphis flight, so the airline flies you from Charleston to Atlanta, and then from Atlanta to Memphis via a connecting flight. The purpose of the hub-and-spoke system is to save airlines money and give passengers better routes to destinations. Airplanes are an airline's most valuable commodity, and every flight has certain set costs. Each seat on the plane represents a portion of the total flight cost. For each seat that is filled by a passenger, an airline lowers its break-even price, which is the seat price at which an airline stops losing money and begins to show a profit on the flight. Not all airlines use the hub-and-spoke approach. For example, Southwest Airlines is one of the exceptions to the hub-and-spoke network system. It uses the old-fashioned point-to-point system, hauling people short distances with few connecting flights. However, Southwest offers very few non-stop flights on longer routes. At the end of 2000, Southwest served approximately 306 one-way, non-stop city pairs. It's point-to-point system provides a more direct route than a hub-and-spoke airline can offer.

Once you determine your destination, your next step is to call the airline and make a reservation on a flight. Airlines employ many people who process these reservations and your tickets. There are personnel who take care of travellers at the reservation desk and the check-in counter at the airport. There are two types of tickets:

Paper tickets - This is the conventional ticket that passengers have been using for decades.

Electronic tickets - Many travelers are starting to useelectronic tickets, or e-tickets, instead of paper tickets, according to Delta Airlines's document "The Plane Truth." Electronic tickets are typically purchased over theInternet. At the airport, passengers with e-tickets need only obtain their boarding pass by providing the gate agent with a confirmation number and proof of payment (sometimes, they only need to show a photo I.D.). For most people, ticket pricing can be the most confusing part of air travel. Fares are constantly changing. What your friend paid yesterday for a flight from New York to Chicago is probably not what you are going to pay today for the exact same flight. Even the people sitting in the same section of a flight likely paid very different prices for their tickets. Believe it or not, fares are cheaper today than in 1978, which is why more people are flying than ever before. Fares are tracked according to what a passenger pays (in cents) per mile. In 1978, passengers paid approximately 19 cents per mile. In 1997, passengers paid about 14 cents per mile.

There are several factors that contribute to the cost of a fare:

Purchase date - The earlier you buy a ticket, the cheaper it will be (most likely). For instance, Delta loads a flight into its reservation system about 332 days from the actual flight date. Someone who buys a ticket on the day the flight is entered is going to get a cheaper fare than someone who buys a seat on the day of the flight. Class - Put simply, first class is more expensive than coach. Destination - There are certain destinations that cost more, either because of the distance to the destination or the popularity of the destination. This is simple supply-and-demand economics. Flight date and time - Flights that depart earlier in the day tend to have lower fares because fewer people are flying then. Also, fares go up in the summer vacation season. Fuel costs - Fuel is an airline's second largest expense. Only labor costs more than fuel. In 2000, airlines paid about $5.4-billion in fuel costs, according to the Air Transport Association (ATA). Any increase in fuel costs is usually passed onto passengers in the ticket price. Competitors' fares - An airline has to be careful not to price their fares too much higher than their competitors. Sophisticated computer software is used to track the fares of competing airlines. Special factors - There are certain specialty fares given to senior citizens, government and military employees and corporate customers. Another factor that can affect ticket pricing is the hub system itself. If a large airline controls a lot of the gates at a particular airport, it may charge higher ticket prices. That large airline has the most flights coming into that airport, so consumers have to pay the higher fares if they want to fly into or out of that airport. Airlines often overbook flights, according to the ATA. Overbooking is the practice of selling more tickets for a flight than there are seats available. Airlines justify this practice by using

historical analysis of traveller behavior. Often, travelers don't show up for a flight that they have a reservation for, or they don't make it to the gate in time. There are also travelers who reserve seats on multiple airlines and flights to ensure their travel plans. The ATA reports that airlines take great care in selecting which flights to overbook. They look at a flight's history of no-shows and try to match the overbook number to that. Obviously, overbooking can sometimes cause problems, such as when more people show up for a flight than there are seats available. When that happens, airlines give special incentives to travelers who are willing to give up their seats. Usually, these volunteers are given free fare on another flight. If an airline is forced to bump a passenger involuntarily, the airline must compensate that person. When you board an airplane, you might not be aware of all of the gears that are turning behind the scenes. There are many people performing many functions to get you to your destination.

Factors Affecting the Price of International Air Tickets Factors Affecting the Price of International Air Tickets. Finding an airfare can feel like playing a slot machine: The price on a given day to destination X from origin Y can produce varying and seemingly random fares, all depending on mysterious factors. They fluctuate so much up and down,You can look at it one week and the next week it could be something completely different.But in spite of the randomness on the surface,there are some underlying factors that determine what fliers pay for tickets. 1. Fuel cost has one of the greatest influences on tickets. As the price of crude rises,so do the airline's costs. Airlines that negotiate fuel purchases well into the future can avoid sudden spikes, and pass on savings to the customer. Fact Sheet: Fuel

The global airline industrys fuel bill is forecast to total $207 billion in 2012 (accountin g for 33% of operating expenses at $110.0/barrel Brent of oil). This is an increase of $31 billion over 2011 and is almost 5 times 2003s fuel bill of $44 billion (that accounted for 14% of operating expenses at $28.8/barrel Brent). In 2011 the fuel bill is estimated at $176 billion (accounting for 30% of operating expenses at $111.2 per barrel Brent). Industry profits of $3.0 billion are forecast for 2012 and following profits of $7.9 billion in 2011.

Industry Fuel Costs and Net Profits

Updated: 06/2012 Next Update: 9/2012 Source: Industry Financial Forecast Table (IATA Economics)

Fuel Impact on Operating Costs Year % of Operating Costs 14% 17% 22% 26% 28% 33% Average Price per Barrel of Crude $28.8 $38.3 $54.5 $65.1 $73.0 $99.0 Break-even Price per Barrel $23.4 $34.5 $51.8 $68.3 $82.2 $82.5 Total Fuel Cost $44 billion $65 billion $91 billion $117 billion $135 billion $189 billion

2003 2004 2005 2006 2007 2008

2009 2010 2011 F 2012 F

26% 26% 30%

$62.0 $79.4 $111.2

$58.9 $89.6 $116.1

$125 billion $139 billion $176 billion

33%

$110.0

$111.9

$207 billion

Updated: 6/2012 Next Update: 9/2012 Source: Industry Financial Forecast Table (IATA Economics)

Impact of Refinery Margin on Fuel Costs

2. A weak economy causes people to cut back on non-essential travel. This encourages airlines to give discounts to lure fliers back. Conversely, when business is good, and planes are filled to capacity, there is little incentive to offer low price airline tickets. Changes in the economy have a big affect on the airline industry. The elasticity of demand, externalities, wage inequality, and monetary, fiscal, and federal policies all have an impact on

this industry. The airline industry is constantly changing due to todays market and today we will be looking at the reasons behind it.Price Elasticity of Supply and Demand Traveling by air is both elastic and inelastic depending on who it is that is traveling. If a family is planning a trip just to take a vacation and the price of an airline ticket is extremely high, more than likely they will decide to wait on the trip until the prices are lower. This shows that the airline industry in considered elastic. However, if a businessman needs to be at a seminar across the country by the next day, he will need an airline ticket regardless of the cost. In this example, the airline industry would be considered inelastic because it is a necessity. The current market has a big part in the supply and demand in the airline industry. For instance, with the price of oil rapidly increasing, the cost of an airline ticket is also increasing and the demand for leisure travel is decreasing. After 9/11, people were afraid there would be another terrorist attack involving a plane and the demand decreased. Another factor in the cost of an airline ticket is the date it is purchased. If there is an emergency and someone purchases a ticket close to the departure date, even though there are unsold seats available the cost will increase. Externalities There are quite a few negative externalities in the airline industry. A major one is the noise pollutionby major airports. People that live near the airports constantly hear airplanes departing and arriving. This has been linked to heart disease, breathing difficulties and cancer along with other health issues. The airplanes emission is composed of about 70% CO2. CO2 contributes greatly to the greenhouse effect which is the cause for global warming. There are a few positive externalities along with this industry. Hotels near an airport stay busy due to the amount of travelers needing a place to stay.Wage Inequality Wage inequality is common in the airline industry since there is a big variety of jobs available. In order to address this topic, many states have a living wage ordinance which they use to try to control wage inequality. For jobs involving customer service, you will not earn anywhere near some other positions but then again you do not even need experience. Flight attendants need to be trained in the main city where the headquarters are to the airline they are working for. Some might also need to learn foreign languages. Pilots on the other hand are required to take many hours of training and get a few different types of licenses as well as getting certified. The only way to earn a higher then average income in the airline industry is to have specialized training and experience. An airline pilot makes an average of $113,024 annually. A flight attendant makes an average of only $53,894 annually. Monetary and Fiscal Policies There are many issues in the airline industry regarding government policies. U.S. airlines informed president Bush of the problems that a $1.5 billion proposal in aviation security costs would have on jobs in the airline industry. After the attacks on September 11th occurred, a fee

was added to airfare. That of course decreased the overall demand and is the reason why many employees were out of jobs. If there is another increase in ticket prices, employees fear this will happen all over again. Another issue regarding airlines is safety. U.S. Airlines and government regulators are working together to become even safer. The Federal Aviation Administration started a safety program, Commercial Aviation Safety Team (CAST), to identify and prioritize risks based on past accidents and find solutions to reduce anymore fatalities. The FAA also conducts any maintenance work performed on aircrafts at their own certified repair stations.Problems With Competing Airlines Another thing that the economy is affecting the airline industry is the competing airlines. The bigger airlines can afford lower fares which makes it hard for the smaller airlines to compete. Different airlines have plans to expand but will not be able to until the cost of fuel is under control. For the low far carriers who allow advanced booking, they will need to work on a plan to avoid bankruptcy. This will make the airline industry continue to boost prices due to the fact that oil prices are expected to continue rising due to the supply. The economy plays a big role in the success of the airline industry. If companies are doing great and have a lot of business, some of them will need to send employees by air to another destination whether it is to attend a meeting or supervise another location. People will take more vacations if their income is steady which again refers to the business of a company. If companies are not doing well, that is when you will see many employees getting laid off which leaves them unemployed with no money to do much of anything, much less travel. The fuel prices are becoming outrageous with no sight of slowing down which is highly going to affect airlines. Increased rates for tickets due to the cost of this is really hurting this industry. 3. Airport fees and Taxes are another part of ticket prices. Tax varies according to Airlines, Nationality of the traveler and transit. 4. Destination and Competition are the key factors. An airline that enjoys a virtual monopoly for a particular route can charge pretty much what they want. Those flying international routes have stiff competition from other countries, and have to keep prices in line with what they are offering. 5. Timing plays a role. If departure time is nearing, and a flight still has a lot of empty seats, the airline may offer them at a substantial reduction. If flying on a particular day isn't critical, it may worth holding out until the last minute. 6. Where the ticket is purchased can affect its cost. Travel agents get bargains from the carriers, but charge for their services. Choose the one who can provide you with lowest service charge. In this context you can always trust on AceTravels.com. 7. There are many factors which affect the cost of an airline ticket. How well the carrier manages these costs will determine their bottom line. Competition is the key,

airlines that most want your business will offer the best deals. Careful shopping will help find the cheapest flights.

MARKETING MIX VARIABLES

THE PROMOTION MIX: The formulation of an ideal promotion mix is essential to i n f o r m , s e n s e a n d persuade the users. The business magnets, business executives, politicians, cineartists, high spending tourists, business houses using expensive inputs and tradingthe same, the Department of Posts, domestic and international tourists are some of the users of the air services. The users appear to be more conscious, aware of theirrights and in a majority of the cases are found sophisticated. However, majority of the users are sophisticated and therefore the promotional efforts are required to bemore creative. The professionals engaged in the air services bear the responsibilityof blending the different components of promotion in such a way that the task of increasing the business is simplified. Since a number of airways and airlines havebeen facing problem of financial crunch, it is pertinent that they make possible anoptimal use of the different components of promotion. The various components of promotion used in the airlines industry are: Advertising: Ticket purchase at the airline counter or the ticketagency . Checking in. During boarding. During disembarkation As any other service, the air transportation service needs creative advertisementsto promote their business. This is the first component of the promotion mix, which isbased on professional excellence of the advertising agencies. In view of the risingcost of inputs and increasing the impact of world wide economic depression on theair transportation, there is a need to make the advertisement budget optimistic vis-a- vis optimal. This is essential to regulate the multi-dimensional expenses found of unproductive nature and instrumental in making the service expensive. The telecastmedia and the print media are found important while promoting the air business. While advertising through the telecast media, budgetary constraints and budgetaryprovisions should be considered. Also the quality and nature of target market andlevel of expectations should be kept in mind. The advertising professional need tomake the advertisement slogans, campaigns, message proactive to the generationof business. The airlines have also to make it sure that whatever the strategicdecisions they make to promote the business are in a position to establish an edgeover the promotional measures of the competitors. They are also required to assigndue weightage to the efforts made for the projection of a positive

image. The IndianA i r l i n e s a s w e l l a s A i r I n d i a h a v e b e e n f a c i n g t h e i m a g e p r o b l e m b u t t h e advertisement may be efficacious in transmitting the facts and removing the imageproblem. It is essential that while advertising one has to keep ion mind the image of the country, the natural scenes, the tourist attractions, rich cultural heritage or sowhich would energise the process of motivating the tourists. It is said that both thed o m e s t i c a s w e l l a s i n t e r n a t i o n a l f l i g h t s h a v e b e e n f a c i n g t h e p r o b l e m o f p o o r occupancy ratio and therefore nothing concrete or positive can be said about theproducts and service offerings or multi-dimensional attractions/ benefits given byt h e m . While advertising, it is impact generating that we select an o p p o r t u n e moment of flight, an attractive scene of take-off, high attractiveness of personnel ing e n e r a l a n d t h e a i r h o s t e s s i n p a r t i c u l a r , t h e l a n d s c a p e o f a n a t t r a c t i v e t o u r i s t center, wild life sanctuaries, lake, park and so on. The air transportation servicescan also use the broadcast media. Publicity: Publicity is a process of persuasive communication for which no payment is made.Strengthening public relations activities if found essential to promote the businessairlines or airways. The Public Relations Officer, Receptionists, Travel Agents, TravelGuides, Media people are some of the sensitive points of publicizing the business. T h e m o s t i m p o r t a n t p o i n t i n t h i s i s t h e c o - o p e r a t i o n o f media. The marketingprofessionals should have an idea of m a g a z i n e s , n e w s p a p e r s p r e f e r r e d b y t h e prospects or users and they develop rapport with the correspondents concerned. The Airlines need to recruit efficient personnel for that very purpose that should have professional excellence no doubt but in addition they are also required to havethe potentials of attracting the users, prospects.For e.g.: Indian Airlines helped the cancer patients and took them for a for a smallouting as a part of their public relation campaign. Similarly, Sahara linked up withClose- up by taking Hrithik Roshan. Here for Close -up it is a promotional strategywhile for Sahara a publicity, that a airline is linking up with FMCG by using an entity

Sales Promotion: A component of promotion adopted for a particular period to touch the target andwithdraw the measures when the time is over is known as sales promotion. The toolbased on incentives is found instrumental in sensitizing the users. The travel agentscontribute a lot to the promotion of air transport business and therefore we need to think in their favour on a priority basis. The tour operators also contribute to theprocess and therefore need to think in their favour. The front- line-staff in the officesof the airways and the receptionists working there also play the same role. Thismakes it significant that they are give n some incentives which are in the form of aholiday trip to a particular place, concessional services to their children or spouse orso. Also offering them with innovative gifts, which have not been offered

by theircompetitors, can be given. The nature and type of incentives would depend on thec o n t r i b u t i o n s o f p r o v i d e r s . I f t h e y m a k e i m m e n s e c o n t r i b u t i o n s , the incentivesw o u l d b e i n g o o d q u a l i t y a n d v o l u m e . T h e r e a r e i n c e n t i v e s g i v e n c a l l e d t h e promotional incentives on the basis of the frequency of using the services.F o r e . g : T h r o u g h J e t A i r w a ys , r e t u r n t i c k e t passengers on metro flights (botheconomy and business) can avail a d i s c o u n t a t a l l T a j a n d I T C h o t e l s i n S o u t h India. Also Sahara has a crazy assortment of gifts being handed out (its TakeOffer). Braun Mixer grinders, CTVs, cameras, handycams, mobile phones andeven free hol iday packages are up for grabs as a part of their sales promotion compaign. PERSONAL SELLING: The air transport organizations find personal selling w h i c h i s t h e s u b m i x o f promotion mix instrumental increasing the business. An art to influence, stimulate,s e n s i t i z e t h e i m p u l s e b u y i n g i s k n o w n a s personal selling. The air transport-marketing professionals are s u p p o s e d t o k n o w a b o u t t h e b e h a v i o r a l p r o f i l e o f persons who act as personal promoters. The travel agents, tour operators, transportoperators, travel guides, front-line staff on the booking counters, receptionistscontribute substantially to the process of promotion. If they stop selling, the officesof airways would find it difficult to sell. This makes it clear that even the quality services fail in attracting the users, if the channels are not co-operate. This makes itessential that we offer incentives to them so that they keep on moving the processof stimulation.In promoting business, the airlines industry must select persons, agencies having apositive image. The travel agencies having a well established business can helpsubstantially and therefore it is the prime responsibility that while selecting thetravel agents one must assign due weightage to the image of the agencies. The toura n d t r a n s p o r t o p e r a t o r s h e l p c o n s i d e r a b l y a n d o n e n e e d s t o t h i n k a b o u t t h e incentives to be offered to the promoters. In personal selling, the front-line staff orp e r s o n n e l a t t h e b o o k i n g o r r e s e r v a t i o n c o u n t e r o f a i r l i n e s o f f i c e p l a y i n g a n incremental role in promoting the business. Here, it is essential that one is aware of the credentials of persons supposed to discharge the business responsibility and tryhis best to brush up their faculties as and when opportunities come. As it is basedon the behavioral profile, in case of misbehavior of indecent behavior by the front-line staff, the task of getting the business is found much more complicated. Thus aperson working at the counters where face-to-face communication with the users isdone, the communication ability is high and high behavioral profile is essential too. Thus due weightage is given to the training programme for the front- line staff. Word-of-mouth Promotion: This happens to be an important constituent of promotion m i x i n w h i c h t h e promoters act as a hidden sales force. The air transport organization depends onthis type of promotion if they feel that the quality of services offered by them is of world class. In the Indian perspective, the Indian Airlines, Air India, Sahara India, JetA i r w a y s a n d o t h e r s m a y u s e t h i s c o m p o n e n t o f

p r o m o t i o n i f t h e y r e a l i z e t h a t providers have not been distorting the quality of services promised, Telemarketing: Telemarketing is playing an important role in promoting the b u s i n e s s . T h e telemarketers can serve multi-dimensional purposes. They can play an outstandingr o l e o f i n f o r m i n g , s e n s i n g a n d p e r s u a d i n g t h e u s e r s e v e n w i t h o u t m a k i n g a b i g investment. A telephonic instrument and a well trained telemarketer are foundessential. The queries and questions of the users/prospects can satisfactorily bea n s w e r e d a n d m i s u n d e r s t a n d i n g , c o n f u s i o n a n d c o m m u n i c a t i o n g a p c a n b e removed if telemarketers are professionally sound. The booking counters, t h e enquiries, the reception counters, the users complaints and grievances cell, theannouncers are found playing an incremental role in promoting the air business. Forthis the telemarketer must have high communicative ability, attractive personalityand microphonic sound. THE PRICE MIX: Pricing decisions play a decisive role in managing the business of air transportation. The increasing operational costs, the mounting competition, the falling occupancyratio, the imbalances in demand and supply, the increasing pressure of inflation aresome of the important factors influencing the strategic decisions for setting fare andfreight rates in the air transport business. The Ministry of Tourism and Civil Aviation,the Indian Airlines Corporation, the National Airports Authority, the International A i r p o r t s Authority of India, the Air India Corporation are the bodies directl y o r indirectly influencing the process of making the pricing decisions. The main problemi s to make the pricing decisions competitive because it is found that even t h e private air transport organizations are involved in the process too. It is seen that thefollowing are the features in price i.e.: 1.Flexibility; 2. Price Level; 3. Differentiation;4. Discounts and Allowances.While price is tactical, it has localized implementation, it is temporary in nature andtherefore price is flexible. The below is an article from the Business Standard issue of 1stOctober-02 whichshows how fares have lessened and what are the additional benefits which are being provided to customers. IA takes fare war to Jets turfDomestic carriers have been successful in increasing their load factors, following anincrease in takers for airline schemes that offer passengers huge discounts (nearly50 percent in certain sectors). Though the bottom lines of airlines have improved,this phase will last only till the end of th e lean season. (October) in most cases. There had been a decline in passenger load post-11 September, but these schemeshave been able to retain loads. With all major domestic airlines Indian Airlines (IA), Jet Airways and Sahara- announcing various schemes to lure passengers, itwould not just lead to displacement of passengers from each others airlines butalso encourage those traveling by rail or road top travel by air.More good news for air travelers. Indian Airlines (IA) has announced a revised apexfare scheme with effect from November 1 to March31 2003 thereby extending thee a r l y b i r d s c h e m e t o t h e p e a k s e a s o n . U n d e r t h e n e w s c h e m e c o v e r i n g 5 3 destinations, the

advance booking period has been reduced from 21 days to 15 days. Cancellation and refund rules have also been relaxed and the passengers cannow change their reservation plans or get refund at least 15 days prior to the dateof travel after paying a minimal charge of Rs.100 per ticket. The new fares, to be effective from November 1 of this year see a Rs.520 or 13.25percent drop on the Delhi-Mumbai sector. The new IA fare of Rs. 3,400 is 6 percentlower than a Delhi Mumbai Jet Airways ticket cost Rs.3,620. The gap between anAC first class Rajdhani ticket and an IA economy ticket on the Delhi-Mumbai routehad widened with the rail fare 19 percent costlier at Rs.4,180. the AC-II tier Rajdhaniticket at Rs.2,045 is, however nearly 30 percent cheaper. Till now, the airline has been offering around 12-13 per cent of the total economyclass seats under the apex fares scheme, the officials of IA added. Around 2,500 seats a day was being offered under the scheme out of 2000 economy class seats in50 destinations where the scheme is valid. We have managed to convert the firstc l a s s t r a i n t r a f f i c a n d c r e a t e a n e w s e g m e n t a l t o g e t h e r . W h i l e t h e s e a t f a c t o r s increase to 65-70 per cent during the peak season, the additional traffic would onlycontribute towards a higher seat factor without much effort, IA officials said. The airline has been flexible on the availability of seats under this category andbased on its analysis of the demand -supply, traffic profile of the route and cost benefit analysis, it has been varying the number of seats offered under the scheme.During the lean season (August-October), it has often offered close to 3,000 seats of the available 20,000 seats a day in the economy class. All categories and routest a k e n t o g e t h e r , I A h a s a c a p a c i t y o f a r o u n d 3 4 , 0 0 0 s e a t s a d a y. T h e a i r l i n e s revenue from business traffic is around 80 per cent, while that from leisure trafficaccounts for 20 per cent. Jet Airways has also decided to cut the number of seats offered under the Apex scheme. The airlines have slashed the number of seats offered per flight under thescheme from 15 per cent to 10 per cent. Senior Jet officials said the airline would offer 40 per cent lesser seats daily across its network, than what was offered duringthe August-September period. The airline was offering approximately 3,000-4,000seats on its Apex scheme during the last two months. T h e o t h e r s e v e n s e c t o r s o n w h i c h I A a n n o u n c e d a f a r e c u t i n c l u d e M u m b a i - Bangalore(now Rs.2,700 from Rs.2,480), Kolkata Guwahati (Rs.2000 from 2205),M u m b a i K o c h i ( R s . 3 2 0 0 f r o m R s . 3 2 5 0 ) , D e l h i B a n g a l o r e ( R s . 4 , 5 0 0 f r o m Rs.5,055).Delhi-Kochi(now Rs.6530) and Delhi- Trivandrum (now Rs.6.555).On an Airbus A-300s IA offers 25 seats out of 212 economy class seats available, while on Airbus A-320s and Boeing 737s it offers 15 seats out of 126 and 119 seatsavailable. IA officials said that on a daily basis the number of seats per flight woulddecrease or increase by five.A i r S a h a r a , t h e t h i r d a i r l i n e s i n t h e s e c t o r , w h i c h h a s e x t e n d e d S i x e r a n d S u p e r Sixer schemes to the peak season is observing the situation created by the Apexfare extension.Below is table which show the comparison of IA , Jet and Rajdhani train fare: sector IA jet AC-1 AC-II Delhi-mumbai 3400 3620 4180 2404 Delhi-banglore 4500 5053 6385 3470 Mumbai-bangore 2700 2839 2943 1954 THE PLACCE MIX:

This dimension of marketing mix focuses on processing of services andselecting the location points for airways and airlines offices keeping in viewthe comforts and conveniences of the end users. By the processing of services, our emphasis is on the involvement of channels, front-line-staff,travel agency offices; offices of the tour operators or so from where serviceflow and reach the ultimate users.1.The air transport needs to make sure that the prospects dont faceany difficulty in buying the tickets and make necessary arrangementsfor the confirmation of booking.2.It is also to be confirmed that the users booking their luggage are notto face inconvenience.3.The behavioral profile of the personnel working in offices of travelagents and in the offices of the airways and airlines require dueattention. It is almost clear that airhostess looking attractive, smart,well dressed are at your disposal to make available to you the definedservices.4.It is also to be sure that the information network of the offices of thetravel agents is technology-driven and user-friendly.5.The security checking, custom checking of passport, visa, income taxclearance or so. It is essential that all the windows or the countersoffer the services as per the provision and promises.6.Keeping in view the duration and nature of flights, the users aremade available lunch/ dinner, breakfast and drinks inside theaircrafts.7.If in course of the journey, you are supposed to change the aircraftsand the duration of stay is long, it is the responsibility of the airportauthorities and concerned airway and airlines to make available.Another dimension of place mix is related to location and management of the offices of the airways, travel agents, tour operates, transport operatorsor so. 1.The main thing in the selection of a place is easy accessibility. Theplace is required to be safe, well connected with all-weather proof roads where all the required infrastructural facilities are to beavailable.2.The technology-driven booking system is to be ensured.3.The water and sanitation facilities for the users and comfortableseating arrangements need due care of the travel agents or airwaysoffices. The lighting, ventilation facilities need to be made available.4.The interior decoration, furnishing, plantation need aesthetic senseso that the users from a positive opinion regarding the airwaysservices.5.The positioning of posters of airways and airlines which lookattractive and draw the attention of the users attending the officesfor chartered flights, packaged tour need due care.6.It is in this context that we find management of place an importantcomponent of the marketing mix. In view of the above, it is right to mention that air transportation businessis linked with a number of allied services offered by a number of agenciesand organizations. If we dont find cohesion and coordination the promised services would hardly reached to the end users. Eligibility and Suitability are relatively basic requirements, which must be met ina l l cases. Airlines then proceed to customise their person s p e c i f i c a t i o n s according to their own needs and standards. If for example an airline identifiest h a t a n i n c r e a s e i n t h e n u m b e r o f c r e w l a n g u a g e speakers is required, thenlanguage ability may be given precedence. S o m e a i r l i n e s s e e a b o v e a v e r a g e appearance/presentation as being crucial, whilst others prefer a higher degree of c h a r i s m a a n d p e r s o n a l i t y . A g o o d c u s t o m e r s e r v i c e b a c k g r o u n d , n u r s i n g experience, or educational qualifications may be more relevant to one airline thanto another. A new airline starting up may choose previous cabin crew experienceas a prime requisite. A prestigious and

well established airline can often afford tobe even more particular, and demand a combination of preferred attributes.S o m e a i r l i n e s p u t e m p h a s i s o n r e c r u i t i n g i n h o u s e ( p e o p l e w h o h a v e b e e n employed in ground jobs, whom they have already had a chance to observe), butmost open the job up for external candidates as well.I n d e c i d i n g u p o n t h e i r s p e c i f i c r e q u i r e m e n t s , a i r l i n e s h a v e t o t a k e i n t o consideration many factors. These include their current crew profiles, state of the jobs market, the number and quality of available candidates, the appeal/benefitsof their organisation, and of course the salary they are prepared to pay. They willa l s o t a k e i n t o a c c o u n t t h e airlines current place or niche in the market. Forairline managers i t i s a c a r e f u l b a l a n c i n g a c t , w h e r e t h e r u l e s o f s u p p l y a n d demand apply much like any other industry. They do have the advantage howevero f o f f e r i n g a job which is regarded as desirable (and in some countries e v e n prestigious).Once all the above considerations are taken into account, the person specificationwill be completed. The different emphasis helps to explain why some people aresuccessful with one airline, and yet get rejected by another (their performance atinterview is obviously another factor, and that is something we are about to go onto!). It is also true that candidates fail to be recruited by an airline at one attempt,then succeed at a later date. This is usually because the candidate has acquiredbetter interview technique, or (more likely) extra skills, experience or confidence.It can also be because the airline itself has revised its person specification.So how to answer Just exactly what are they looking for? Put simply, airlines arel o o k i n g f o r t h e r i g h t p e o p l e f o r t h e i r c u r r e n t c i r c u m s t a n c e s . D o n o t b e t o o disheartened if you do not get in at the first attempt. You can always try again - orapply to another airline!The Selection Process Includes: Application Form. Preliminary Selection (Administrative Formalities,Written Tests, Uniform Trial, Informal Talk, Presentation Exercise, Group Exercise).Final Selection - Conventional Interview. Common Interview Questions (BackgroundQuestions, General Motives and Perceptions, Perceptions About Customer Service,P e r c e p t i o n s A b o u t T e a m w o r k A n d W o r k i n g R e l a t i o n s h i p s , M a n a g i n g A d v e r s i t y , Hypothetical Situations, Technical Questions). Medical Check. Training Course andAssessment Airline Services Training In the airline industry, successful carriers are those, which respond quickly togrowth and changes. Effective, cost-efficient training ensures that employees areprepared to meet those challenges while providing quality customer service to anincreasing number of travelers.