TEAM ACHILLES

MARKOVID
AVIATION, INDIA
 June 2019 (Pre Covid- 19 ) June 2020 (Covid- 19)

2,55,170 Mil 36,510 Mil

Revenue Airlines Airlines
57,450 Mil 8,940 Mil
Airport operators Airport operators
India has 91 international passenger carriers comprising of 5
Indian carriers and 86 foreign carriers and only 1 domestic
cargo-only airline
Customer 12 Mil 1.98 Mil
India’s passenger* traffic stood at 341.05 million in FY20. It
grew at a compound annual growth rate (CAGR) of 11.13 %
during FY16-FY20.

More than 18,000 jobs have been lost in India’s aviation

Manpower
Freight traffic grew at a CAGR of 5.32 % during FY16-FY20
from 2.70 million tonnes (MT) to 3.33 MT. sector over a four-month period due to the COVID-19

Post Covid-19 Trend 31-Mar 31-Jul

Layoffs
Global aviation Indian aviation Indian aviation 8538
CARGO
activity industry – daily industry ,Q1
FY2020 9555
AIRPORT 67760 64514

74887 69589
66
AIRLINE

.8 % ₹ 90 Cr. $ 3.6 bil

GROUND HANDLING 37720 29254

According to CAPA India According to ICRA

 Marketing Spend and Budget
There’s a rule of thumb in the advertising industry that
• PWC’s financial performance analysis of the world’s largest and most profitable ad spend follows any rise or fall in GDP
airlines shows that they enjoy mostly higher profits when they spend between 4.5
percent and 5 percent of their operating costs on sales and marketing Coronavirus has led to an immediate drop in advertising
spending
• We Analyzed Indigo and SpiceJet's Financial reports of Q1 FY2021. Due to overall
reduction in marketing, barring a small increase in digital spends – We estimate the Current Airline Marketing Environment
ideal % to be between 3.5% and 4 %
❖ For Indigo, Out of their total operating cost of INR 39,864 million (a decrease of To find out the current state of Aviation Industry’s
51.8% over the same quarter last year), an ideal marketing spend would be about
Marketing Environment, we have used PEST model
3.5-4 % - INR 1400 million
❖ Similarly, For SpiceJet – Out of their total operating cost of INR 13,031 million, an
Political Factors − Deregulation of government policies
ideal marketing spend would be 3.5-4 % - INR 450 million

Medium Of Campaign Economic Factors − Low economic growth and instability

• As per our PEST model, There is an urgent need to transform to a digital in the country
approach
• Digital marketing is forecasted to increase from 44 percent of marketing budgets
to 54 percent by 2024
• Globally, marketers allocate 8.9 percent of their budgets to digital display ads and Social Factors − Uncertain labor
5.3 percent to paid search advertising and Email Marketing
• Despite the smaller portion of investment, According to research from Magna,
the three channels with the highest ad revenue growth are:
Technological Factors - digital and interactive approach
to customer engagement

27% 18% Airline Customers :

38%
Urgent Travelers shifting to the lower end of the funnel, and focus on
• More organizations are realizing the substantial benefits of analytics and machine
loyalists, using cost-efficient methods (eg, email) to maintain
learning as tools to augment their paid, display and content marketing strategies
excitement and interest
Tagline/ Slogan : Go IndiGo Tagline/ Slogan : Red. Hot. Spicy Tagline/ Slogan : Fly the new feeling

USP : Indigo Airlines gives on time performance USP : Lowest price air tickets by SpiceJet with USP : Vistara offers affordable and Comfortable
at the lowest prices efficient services Flights with focus on in-flight experience

Airlines Segmentation :
Airlines Segmentation : Cost Conscious Airlines Segmentation : Cost Conscious
Corporate/Executive/Families (Upper Class and
Passengers Passengers
Middle Class)

Tagline/ Slogan : Your Palace in the Sky Tagline/ Slogan : Fly Smart Tagline/ Slogan : Now Everyone Can Fly

USP : Air India is the oldest Indian international USP : Lowest Price
USP : Lowest Price Good service airlines
airline

Airlines Segmentation : Indian International Airlines Segmentation : Cost Conscious

Airlines Segmentation : Budget
Travellers Passengers
 LIKEABILITY/ BRAND RECALL
Air Asia Air India Go Air Indigo SpiceJet Vistara

The elements of the brand communication of Indigo, from the website, to airport
hoardings & kiosks, the recruitment ads in their inflight magazine, the box of snacks,
there is an element of consistency in all of them.
2% 7%
The light touch of humour and the puns have an effect – they make the brand
3%
24% likeable.

5%

59%

We Surveyed a total of 180 people between the age of 25-60.

On the basis of the above survey, Indigo was the most preferred
airlines followed by Vistara.

Indigo : Value for Money, Punctuality , Good Connectivity and

Hospitality were some key reasons why people chose Indigo.

Vistara : Premium feel at Low price and Customer Service were some
key reasons why people chose Vistara.
Brand Pyramid, Indigo
 Q1 FY2021 Net Sales
Market Share by (unaudited Financials)
Number of Indigo Spicejet
Passengers
1,00,000
Carried Bluedart is the only domestic- Just
Cargo Airline in India
90,000

2015
80,000 Indian airlines operated over 1400
cargo flights during the lockdown

2016 70,000

SpiceJet operates three Boeing 737

60,000 freighters under the name
2017 SpiceXpress

50,000 SpiceJet will be introducing its first

Airbus A340 cargo aircraft in its
2018 freighters fleet
40,000
During COVID -19, SpiceJet now
has 10 aircrafts completely
2019 30,000 devoted to Cargo

Q1 FY2021
20,000
2020 No. of
Airline Cargo(Tons)
Flights
10,000 SpiceJet 775 5617
0% 10% 20% 30% 40% 50% 60% 70% BlueDart 256 4405
Indigo 88 442
Go Air Air Asia Vistara Air India Spicejet Indigo 0 Vistara 20 139
2017 2018 2019 2020 2021
 Flex pay option to secure
bookings by paying only
10% of total fare amount
and defer their payment
on IndiGo domestic flight

Introduces new
operating procedures to
minimise touchpoints
▪ Most airlines sent mailers of human contact on
to customers from their board by up to 80%. It
CEOs, addressing various also Launched its first
safety concerns in-flight safety video
and ensuring them a safe
and hygienic flight amidst
this pandemic. They also
Released videos
showcasing sanitation ▪ Zero Cancellation The Fly porter service
measures, safety service for passengers for safe door to door
and protocols ▪ Made in India: baggage service to its
▪ Indigo targets its Collaborates with an passengers
customers through
Indian start-up to develop
clickbait Emails.
Domestic airlines started a Twitter thread ▪ Both Indigo and SpiceJet innovative technology
using each other's marketing slogans. offered an option to book ▪ Option to passengers to
The end result; these airlines got a boost multiple seats per buy insurance cover for
over a weekend where the tweets spread individual to ensure extra COVID-16
like wildfires across living rooms in India. safety hospitalization.
• operated numerous relief and evacuation flights worldwide rescuing thousands of stranded
• Ude Desh Ka Aam Naagrik (UDAN) was launched as a regional connectivity scheme under the Ministry of Civil Aviation in
2016.
• In April 2020, the Government introduced ‘Lifeline Udan’ flights to transport essential medical cargo to remote parts of the
country to support India’s war against COVID-19. Under this scheme, 465 flights were operated by Air India, Alliance Air, IAF
and private carriers as of May 05, 2020.
• Under Union Budget 2020-21, Government introduced Krishi Udan scheme on both domestic and international routes to
help farmers in transporting agricultural products and improve the product value.
• Pawan Hans Limited helicopters transported critical medical cargo and patients, carrying 2.88 tonnes of cargo to Jammu
and Kashmir, Ladakh, and the North East region.

• Marked 100 days of flying by enabling India’s first ever blood plasma transport in Cargo
• Launched Tough Cookie campaign to thank medical frontline warriors
• Supported Indian Meteorological Dept. with crucial data for weather forecasting amid COVID-19
• Brought in medical Cargo to support the nation’s fight against COVID-19 - operated an international Cargo flight, on the
Kolkata – Guangzhou – Kolkata route, carried Cargo consisting of medical supplies like face masks and GCRs
• Operated relief flights at own cost in the service of the nation
• Offered to support the government of India to ferry vital supply to battle coronavirus

• Introduced ingeniously developed, non-invasive, portable ventilators in its fight against COVID-19
• Carried more than 550 kg of essential cancer medicines free of cost
• Carried a record 20 lakh kg of shrimp & farm produce during lockdown period to boost Indian farmers
• Operated its first cargo freighter to bring critical medical equipment to India
• Carried 14 tons of medical supplies from Guangzhou to Delhi
The problem at hand
• Restrictions on capacity deployment due to COVID

• Reduced turn-around time due to airplane sanitisation.

• The flow of travel is primarily unidirectional and limited to largely essential travel

• Lower demand on most routes and border closure.

Future trends and Predictions

• Passenger demand will contract 49% in 2020 as compared to 2019.
• Indian carriers will see revenues decline by $11.61 billion in 2020
• Indian aviation will shrink to 2-3 players without funding.
• According to Ajay Awtaney, Founder, LiveFromALounge.com, only IndiGo, Vistara and Air
India will be able to survive this storm
• Aviation sector will not be seeing any M&A action now as all airlines are in a very sad state
with surplus capacity and employees, shrunk net worth and fewer passengers. (Jitendra
Bhargava, Former ED of Air India)
• Many airlines might go the low-cost carrier way and charge for everything, from seat
preferences to meals to baggage; despite having an ‘all-inclusive fare trend’.
• Domestic Demand expected to increase in Q3 and Q4 due to the festive season.
• Indian carriers are expected to log operating losses this fiscal despite lower crude prices. A
revival to pre-pandemic levels appears unlikely even in the next fiscal.

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 Robust Screening and testing infrastructure
• Pre-travel authorisation and screening – by using electronic
authorizations submitted by passengers to identify riskier
arrivals and screen them appropriately
• Ensure contactless travel – by authenticating e-Boarding
passes, e-Tags for luggage, implementing touchless kiosks
• Kiosks can be made touchless by using barcode scanning,
biometrics, and voice commands
• Ensure fast and accurate testing: automated temperature
checks need to be conducted like the Elenium Sensor Array,
which detects temperature using a combination of near-
infrared camera and a thermal sensor.
• Long term commitment to health screening - Most of the
patients are asymptomatic, temperature checks are not
enough. monitoring key vital signs – temperature, respiration
and heart rate – can predict if a patient has a respiratory
disease like influenza or COVID-19 with 93% accuracy,
compared to just doing temperature screening which only has
a 65% correlation.
Driving Sales
• Focus on driving in-flight merchandise sales - e-Commerce,
both inflight and on-ground, is a great opportunity for airlines
to realize a new ancillary revenue stream. However, the flight
has a very limited product storage capacity, to resolve this
issue, the airlines can incorporate home-delivery of the
products which would allow the customers to browse through
a limitless product range.
• Emphasis on freight/cargo services – Freight services and
cargo operations was the only source of income for the airlines
during lockdown. So leveraging this revenue stream might
help to take the burden off the airlines a little.
Marketing Strategy
• Revive marketing strategy: the entire marketing strategy of aviation sector
should be based on ensuring customers that flying is 100% safe. All campaigns,
advertisements, messages should be directed towards safe and hygienic flying
and addressing the anxiety and concerns of the customers.
• Rework messaging and creative to be in line with current times; e.g.,
relevant calls to action, copy that takes an appropriate tone
• Revive social media marketing – Airlines can connect with customers on
social media and leverage the power of influencers and spark an interest in
passengers’ minds.
• Expand customer engagement - offer Loyalty Programs to retain existing
customers and build the trust among new customers
• Customer Care –introduce self-service tools and automation for contactless
customer enquiries through chat bots; help lower costs and enable faster
responses. Empower customers to build their own itinerary using smarter
digital tools. Make bookings, reservations and cancellations flexible
• Creating seamless customer experience: emphasize on making travel better
and safer by giving passengers more control, offering greater authenticity and
personalization, and taking an agile approach and keeping their needs first.
• Identify customer pain points that existed before COVID and try to eliminate
them such as high-anxiety purchase journey for flights and lodging, purchases
that often cannot be returned etc.
• Effective communication - communication should be focused on what a
company is doing for the passenger, rather than delivering superficial
platitudes like mass CEO mails. Frontline staff can be powerful messengers.
• Connect with the customers on a more personal level, conduct quick, one-on-
one customer interviews and surveys (in the hotel lobby or boarding area) to
build low cost solutions using metrics like adoption rate and rapid-fire
feedback to course correct
• Offer distinctive in-flight perks
 Post COVID to succeed in the new normal
• Determining the optimal size and dimensions of their
networks and fleet. They should make big decisions—
including which fleet types to recommission first and which
routes are most likely to recover—on the basis of several
demand and market structure scenarios
• Airlines should consider M&A and consolidation
opportunities. We expect that leading airline groups will be
reviewing options, including potential divestitures and the
sale or purchase of minority equity stakes. Virus Progression Demand recovery Market structure
• The next step is to resize and restructure the operating and government scenarios scenarios
model and organization using a zero-based approach, response
which can be done in a matter of weeks
• Finance teams will need to be closely involved to protect National government Consumer sentiment • Financial health of
cash levels, capture revenues as soon as possible, and action for citizens and behaviour: airlines at onset
delay cash-outs as much as possible. Airlines should with specific impact • Overall and by and actions taken
establish a project management office to manage cash on travel: segments to manage through
until the environment stabilizes and regular financial • Virus security and (business vs. crisis (for example,
processes and routines can be implemented once again. spread leisure and short- liquidity
• Specific travel haul vs. long-haul) management)
• Airlines should also prepare for ramping up, once airports restrictions and by market • Level and type of
and countries reopen. Our work with several leading • Announced or • Impact of COVID- financial support by
carriers reveals that the period of ramping up will be even expected duration 19 on governments,
more challenging and dynamic than the one for ramping of restrictions megatrends, such banks, and
down. as ways of insecurities
working and
Operational Efficiency sustainability

Improve operational efficiency - The aircrafts are Airlines actions to influence

sanitised after each flight which in turn increase the turn-
around time. Hence, focussing on improving operational
efficiency and reducing turn-around time while ensuring
proper fumigation of aircrafts is the need of the hour. Source: BCG analysis
 Our Team
• Akshaya Prakash

• Gautham Raj Damisetti

• Lovely Smita Mishra

• Sruthi Kallivalapil Surendran

THANK
YOU
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