Thesis - Finally

THE INDIAN INSTITUTE OF PLANNING & MANAGEMENT
Introduction
The mastery of the turn is the story of how aviation became practical as a means of transportation. It is the story of how the world became small. Aviation Industry in India is one of the fastest growing aviation industries in the world. With the liberalization of the Indian aviation sector, aviation industry in India has undergone a rapid transformation. From being primarily a government-owned industry, the Indian aviation industry is now dominated by privately owned full service airlines and low cost carriers. Private airlines account for around 75% share of the domestic aviation market. Earlier air travel was a privilege only a few could afford, but today air travel has become much cheaper and can be afforded by a large number of people.
History
Pre Independence Era
The origin of Indian civil aviation industry can be traced back to 1912, when the first air flight between Karachi and Delhi was started by the Indian State Air Services in collaboration with the UK based Imperial Airways. It was an extension of LondonKarachi flight of the Imperial Airways. In 1932, JRD Tata founded Tata Airline, the first Indian airline. At the time of independence, nine air transport companies were carrying both air cargo and passengers. These were Tata Airlines, Indian National Airways, Air service of India, Deccan Airways, Ambica Airways, Bharat Airways, Orient Airways and Mistry Airways. After partition Orient Airways shifted to Pakistan. Post Independence & Pre Liberalisation Era (1948 1990)
In the early 1948, Government of India established a joint sector company, Air India International Ltd in collaboration with Air India (earlier Tata Airline) with a capital of Rs 2 crores and a fleet of three Lockheed constellation aircraft. The inaugural flight of
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Air India International Ltd took off on June 8, 1948 on the Mumbai-London air route. The Government nationalized nine airline companies vide the Air Corporations Act, 1953. Accordingly it established the Indian Airlines Corporation (IAC) to cater to domestic air travel passengers and Air India International (AI) for international air travel passengers. The assets of the existing airline companies were transferred to these two corporations. This Act ensured that IAC and AI had a monopoly over the Indian skies. A third government-owned airline, Vayudoot, which provided feeder services between smaller cities, was merged with IAC in 1994. These governmentowned airlines dominated Indian aviation industry till the mid-1990s.
Post Liberalisation Era (1991 Present Date) In April 1990, the Government adopted open-sky policy and allowed air taxioperators to operate flights from any airport, both on a charter and a non charter basis and to decide their own flight schedules, cargo and passenger fares. In 1994, the Indian Government, as part of its open sky policy, ended the monopoly of IA and AI in the air transport services by repealing the Air Corporations Act of 1953 and replacing it with the Air Corporations (Transfer of Undertaking and Repeal) Act, 1994. Private operators were allowed to provide air transport services. Foreign direct investment (FDI) of up to 49 percent equity stake and NRI (Non Resident Indian) investment of up to 100 percent equity stake were permitted through the automatic FDI route in the domestic air transport services sector. However, no foreign airline could directly or indirectly hold equity in a domestic airline company.
By 1995, several private airlines had ventured into the aviation business and accounted for more than 10 percent of the domestic air traffic. These included Jet Airways, Sahara, NEPC Airlines, East West Airlines, ModiLuft Airlines, Jagsons Airlines, Continental Aviation, and Damania Airways. But only Jet Airways and Sahara managed to survive the competition. Meanwhile, Indian Airlines, which had dominated the Indian air travel industry, began to lose market share to Jet Airways and Sahara. Today, Indian aviation industry is dominated by private airlines and these include low cost carriers such as GoAir, SpiceJet etc, who have made air travel affordable.
An Overview of the Indian Aviation Industry in the 21st Century

The next big change in the industry came in late 2003 with the emergence of Indias first no-frill airlines, Air Deccan. It revolutionized the industry, offering fares as low as INR 500 (USD 10 roughly), compared with Full Service fares offered by the incumbents, averaging about INR 3000 or more. Since then, Spice Jet (restructured Royal Airways and ModiLuft), Go Airways and Kingfisher Air also entered the industry. Paramount Airways was another player, though it positioned itself on the other end of the spectrum, as an all business class airline. With the further advent of online ticket sales through companies such as makemytrip.com, prices have crashed and tickets are available for as little as INR 0.99. In fact, now many airline tickets can be bought for a price comparable to an upper class railway ticket for the same route.
In December 2004, Indian scheduled carriers with a minimum of 5 years of continuous operations and a minimum fleet size of 20 aircraft were permitted to operate scheduled services to internationals destinations. On January 11, 2005 the government designated four scheduled Indian carriers (Air India, Indian Airlines, Jet Airways and Air Sahara) to operate international services to and from Singapore, Malaysia, Thailand, Hong Kong, the UK and the USA. However, in mid-2006, many airline operators announced large losses. Analysts opined that a combination of factors such as high aviation turbine fuel (ATF) prices, rising labor costs and shortage of skilled labor, rapid fleet expansion, and intense price competition among the players were responsible for the losses in this sector. The problem was also compounded by new players entering the industry even before the existing players could stabilize their operations. It was estimated that the industry as a whole could face losses of over Rs. 22 billion in 2006-07. Some experts expect the industry to consolidate in the near future. The government also was keen to restrict the losses in this sector by closer scrutiny of the business plans of new entrants, conducting quarterly financial audits, etc. Aviation has undergone a change and aviation is now viewed in a different light as an essential link not only for international travel and trade but also for providing
connectivity to different parts of the country. Aviation is, by its very nature, a critical part of the infrastructure of the country and has important ramifications for the development of tourism and trade, the opening up of inaccessible areas of the country and for providing stimulus to business activity and economic growth. Until less than a decade ago, all aspects of aviation were firmly controlled by the Government.
Low Cost Carriers ( LCCs ) Revolution or Delusion

The low cost airline industry has changed the definition of airlines that air travel is a luxury and it is only for the upper segment of the population. The key objective of low cost carriers is to increase their reach and provide the services to a large segment. In India, low cost carriers came into existence in 2003 when Air Deccan launched its first low cost airline and that was the first move to open the doors of the airlines industry for middle class.
LCCs has not only ended the monopoly of the regular airlines, but it has also given the Indian Railways a run for their money. The middle class and the upper middle class are slowly getting inclined towards air travel as their preferred mode of travel. The increasing level of disposable income in this segment has also been an important contributor to the change in preference of the Indian consumers towards air travel. Another major driver is the booming tourism industry in India. However, the low cost airline segment is facing challenges of increasing competition, rising fuel prices and inadequate infrastructure.
However, the LCCs have regularly been questioned in regards to their sustainability in the long run. The LCC model started off very brightly but despite of its bright start, it has taken a beating in terms of profitability in the past few years. Even the LCC model is not recession proof was clearly proven during the dark slowdown periods. Low cost carriers have made heavy losses and many mergers and takeovers have taken place. These airlines also constantly complain of being over burdened by the tax levels and serious doubts have been cast over their future as the poor infrastructure in terms of airports is also not helping their cause.
Kingfisher Red (formerly Air Deccan) is the market leader, holding the maximum share in LCC market, followed by Jetlite, Air India Express, GoAir, and Indigo, who are making the competition stiffer. Kingfisher Red enjoys the first mover advantage in terms of access to a large number of overnight parking spaces and landing & take-off slots during the peak period.
The Players of the Indian LCC Market are as follows.

y y y y y y
Kingfisher Red Indigo Air Spice Jet Go Air Jet Lite Indian (formerly Indian Airlines) is also contemplating entry into the LCC segment.
Indian Aviation Story of the Survivor of the Fittest
THE JOURNEY SO FAR PRESENT INDIAN SCENARIO

The Indian economy has been booming over the past few years this is because of the rising foreign exchange reserves, increasing inflow from FDI and FII due to which the growth rate reached to almost 9 % a year for the last three years. However this buoyancy was curbed by rising oil and commodity prices which led to slowdown the growth rate with inflation touching at the sky height. Due to this the outlook has changed from overjoyed to caution. The aviation Industry has been mirroring the trends in the economy. Propelled by the growth of the economy, the sector has experienced an extraordinary growth in the last few years. The year 2007 can be considered as the good year for the sector as the growth was steady but the year 2008 numbers suggest the slowdown of the growth. The year 2009 was the year of consolidation for the aviation industry and hence things are looking up in 2010. The growth in the economy has led to rising passenger and cargo services however, underinvestment in the Indian airports network has resulted in massive infrastructure gaps, leaving several expectations unfulfilled. It is a phase of rapid growth in the industry due to huge build-up capacity in the LCC space, with capacity growing at approximately 55% annually. This has induced a phase of intense price competition with the incumbent full service carriers (Jet, Indian, and Air Sahara) discounting up to 60-70% for certain routes to match the new entrants ticket prices. This, coupled with costs pressures (a key cost element, ATF price, went up approximately 75% in last year, while staff costs are also rising on the back of shortage of trained personnel), is exerting bottom-line pressure. The growth in supply is overshadowed by the extremely strong demand growth, led primarily by the conversion of train/bus passengers to air travel, as well as by the fact that low fares have allowed passengers to fly more frequently. There has, therefore, been an increase in both the width and depth of consumption. However, the regulatory
environment, infrastructure and tax policy have not kept pace with the industrys growth. Enactment of the open sky policy between India and Saarc countries, increase in bilateral entitlements with the EU and the US, and aggressive promotion of India as an attractive tourism spot helped India attract 3.2 million tourists in 2004-05. This market is growing at 15% per annum and India is expected to attract 6 million tourists by 2010. Also, increasing per capita income has led to an increase in disposable incomes, leading to greater spend on leisure and holidays and business travel has risen sharply with increasing MNC presence. Smaller cities are also well connected now. Passenger traffic has increased and over 21 million seats have been sold, resulting in a growth of over 50%.
MAPPING THE DEVELOPMENT

Indian airports have come a long way since the Airports Authority of India (AAI) decided to liberalize the rules for private sector participation. The Airport infrastructure development has been undertaken via the Public Private
Partnership (PPP) route in some major metro cities such as Delhi, Mumbai, Bangalore and Hyderabad. Greenfield airports at Bengaluru and Hyderabad have been developed with increased passenger capacity and plans for further expansion. Existing airports such as Delhi and Mumbai are seeing an expansion in the passenger capacity to be able to better cope with the expected rise in volumes. Capacity creation is seen as a key focus area and work is underway at
several airports to achieve this as shown in the table. Efforts are also being made to improve the facilities at the airports, including the services delivery to passengers, beefed up security arrangements, larger numbers of check-in and immigration counters etc. Human resources initiatives such as employee communication and training have also proved to be helpful. Despite this there is still some way to go before Indian airports provide services at par with their global counterparts such as the Dubai airport and the Singapore airport. However, the airports are making efforts in the right direction. The Government controlled body AAI (Airports Authority of India) manages 127 airports in the country comprising 15 international airports, 7 restricted international airports, 80 domestic airports and 25 civil enclaves at defence airfields. The government of India has recognized the need to improve the aviation infrastructure in the country. Airports account for 40 per cent of India's trade by value and 95 per cent of international travel to and from India takes place through this mode. The ministry of civil aviation estimates that there is a need for an investment of Rs 260 - Rs 360 billion. The government has also decided to modernize 25 airports in non-metro cities. Improvement of another 55 airports is also on the anvil.
PASSENGER TRAFFIC
Air travel has now increasingly become a way of life rather than a luxury. The growth in passenger traffic figures so far has been driven by greater air connectivity, affordable air travel due to the emergence of low cost carriers and increased air capacity. However the industry has seen a few dark clouds looming over its growth story in recent times. Both full service and budget carriers have seen a dip in passenger growth. This slowdown in the recent period is attributed to the rise in ATF costs, which has led to a hike in the fuel surcharges being levied, thus increasing the air fare.
However it is expected that once the oil prices stabilize, in the long run the passenger traffic will continue to maintain its momentum. A decline in the footfalls at the airport shall hurt the airport developers' revenues. Domestic passenger traffic for the month of July 2008 stood at 3.1mn as against 3.5mn passenger that flew during July 2007, decline of 12.7% on year on year basis. Air India, Jet Airways, Deccan Aviation, Spice Jet and Paramount Airways Showed a decline in passenger carried in July on year on year basis. Even though the capacity in
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July has decreased by 12-15% over June, but is still higher than the July 2007 capacity because of additional capacity that was added post July 2007. Year 2009 data in the month of Jan and Feb shows that things on the domestic front are steadily improving. Domestic passenger traffic has gone up almost 20% in the same months in 2010 on a year on year basis. The year 2008 shows that about 7 crore passengers travelled the Indian skies, a number which increased to about 11 crore in 2009. Domestic Airlines are estimated to carry 20 crore domestic passengers by the year 2012.
AIR CARGO
Fuelled by a surging economy the share of air cargo traffic is on the rise. The advent of dedicated cargo aircrafts at international and domestic routes is projected to reduce the share of traffic transported by railways and ships. Also economic expansion, robust commercial activity and a rapidly growing food processing sector have helped drive the surge in cargo traffic. The government has further allowed foreign carriers to take up to 74 percent stake in cargo airlines. Despite the measures adopted to boost air cargo traffic, there still remain some obstacles to be overcome to give this sector the boost it requires. Some of these are: i. ii. iii. Lack of facilities for transshipment of imports and exports Absence of integrated cargo infrastructure Requirement of trained, knowledgeable and qualified staff
Air India is the market leader in the air cargo segment while Blue Dart is a dedicated private air cargo airline giving tough competition to AI. Players entering the air cargo environment include Safexpress, Quikjet, Aryan Cargo Express and Flyington Freighters. Kingfisher has launched its Cargo service Kingfisher Express which is one of the only Cargo services which promises a same day delivery service anywhere in India. Indian airports not only have the potential to place India as an important international air trade hub but also develop the domestic air freight market significantly.
LEADING PLAYERS
Most Indian airlines have reported healthy revenue growth over the years, but the high cost of fuel continued to eat into their bottom lines. As airlines struggled to keep cost check, some trimmed capacity, raised airfares, suspended less profitable routes and resorted to job cuts. In the past the Indian airline industry was dominated largely by Indian Airline and Air India, but the scenario what was earlier has completely changed with the entry of low cost carries into the industry. The low cost airline industry has changed the definition of airlines that air travel is a luxury and it is only for the upper segment of the population. The key objective of low cost carriers is to increase their reach and provide the services to a large segment. In India, low cost carriers came into existence in 2003 when Air Deccan (now Kingfisher Red) launched its first low cost airline and that was the first move to open the doors of the airlines industry for middle class. Kingfisher Red is the market leader, holding the maximum share in LCC market, followed by Indigo, SpiceJet, Air India Express, and Go Air, who are making the competition stiffer. Kingfisher Red (formerly Air Deccan) enjoys the first mover advantage in terms of access to a large number of overnight parking spaces and landing& take-off slots during the peak period.
MACRO ENVIRONMENT ANALYSIS

Macro environment analysis refers to study of those factors which affect an organization but are beyond the control of an organization. These factors are uncontrollable. Macro environment consist of following six broad areas: Political environment Economic environment Social environment Technological environment Demographic environment Natural environment
POLITICAL ENVIRONMENT :
Indian political scenario has, is and
will undergo various changes. Following are the various policy changes which might have an impact on aviation industry in coming years:
Open Sky Policy India had this agreement with 40 countries and lately it signed the policy with UK, USA and European Union. According to this policy, the signatories are allowed to fly over the skies of India. Under this arrangement, airlines from EU member nations will be allowed to operate flights to India from any of the 25 EU nations regardless of the carrier's country of origin.
Effect: Tourist arrivals in India are expected to grow exponentially, especially due to the open sky policy between India and the SAARC countries and the increase in bilateral entitlements with European countries, and the US. The increase in number of international tourists will percolate down to increase in domestic passengers.
Deregulation Prior to 1991, aviation was nationalized and heavily regulated. In 1953, the Air Corporation Act, 1953, changed the landscape of the airline industry in India. It was in 1994 that the Air Corporation Act was repealed and thus this allowed private operators to operate in the domestic airline and aviation industry. Requirements to become a scheduled operator air carrier in India have being reformed, the reduced restrictions on foreign direct investment is 49% for flights and 100% for airports. Effect: Entry into the air travel industry is not only cheaper, but also affordable to new operators.
Modernization of Airports: The Indian Cabinet had approved a proposal mandating the state-run airport operator to modernize 35 airports in second-tier cities within the next two years. The modernization process will cost the government between Rs. 70 to 80 billion. Delhi (Rs.8,700 cr) to GMR and Mumbai Airport Modernization (Rs.6,400 cr)to GVK are two biggest investment projects . Total investment on hand in airport infrastructure crossedRs.35,000 crore in the quarter ended January 2006.This investment was spread over 89 projects. Up gradation of Kolkata and Chennai airports is on anvil. Simultaneously, 20 non-metro airports will be developed. Two biggest active projects are the Bangalore International Airports Authority Ltd (Rs.1.5 crore) and GMR Hyderabad International Airport Ltd (Rs.1.5 crore). Effect: Improved infrastructure would lead to rise in the number of travellers and also would encourage more operators.
Abolishment of Taxes: Foreign Travel Tax (FTT) Rs500 and 15% inland air travel tax (IATT) charged on Basic airfare has been abolished by the government w.e.f from January 9, 2004 to reduce fares.
Reduction on Excise Duty: From January 9, 2004, the excise duty on ATF was reduced from 16 to 8 percent. The average domestic price of ATF is 99 per cent higher than prices in foreign countries and affects domestic airlines drastically as ATF accounts for 30 to 40 per cent of operating costs
Effect: It would lead to low fares thus giving a boost to air travel. The government has reduced the average age of aircraft being imported into India for commercial airline operations by five years. Effect: It would lead to increase in imports of aircraft thus can discourage more operators coming in and improve services.
Landing Charges Abolished:
Landing charges for aircraft with less than 80 seats were abolished and landing charges for larger aircraft have been reduced by 15% with effect from February 11, 2004.
ECONOMIC ENVIRONMENT
India, ranked tenth in the world in 2004, is expected to be holding eighth rank in the world by 2014 and fourth rank in next years with a GDP of $1.15-1.4 trillion and $2.1-3 trillion respectively, and a projected growth rate of 6-8%.
Effect: This rise in income levels along with introduction of no-frills flights will lead to Rise in no of travellers More investments in aviation More competition Rise in industrialization leading to more need of air transport
SOCIO-CULTURAL ENVIRONMENT
Change in Lifestyle Average income of middle class household is expected to rise to 194000 Rs by 2010 from 169000 Rs in 2001 -02.No of households projected to be 43.6million in 2010. Effect: So there is going to be change in lifestyle and spending of people Due to this change people will prefer Low cost airlines instead of Railways first air-conditioned thus rise in air traffic.
Rise in Leisure travel Tourism industry grew 8.8 per cent over 2003- highest growth rate in the world. 3.2 million Foreign tourists visited India last year. There has been an increase in leisure travel by tourists of 15% in 2004.
Effect: It will lead to a rise in no. of tourist passengers thus more encouragement for new operators.
TECHNOLOGICAL ENVIRONMENT
Introduction of Airbus A380 The double deck Airbus A380 is the most ambitious civil aircraft program yet was launched in December 2000. An all new design Superjumbo, the Airbus A380 is the worlds first twin-deck, twin-aisle airliner. It could be outfitted for special passenger uses such as sleeper cabins, business centres or even child care service. In a one-class configuration, the A380 could accommodate as many as 840 passengers advantages of the A380 include lower fuel burn per seat and lower operating costs per seat. Airbus states the A380 will use 20% less fuel and will fly quieter, cheaper and more environmentally friendly than the 747.
ILS-Instrument Landing System Instrument landing system (ILS) facilities are a highly accurate means of navigating to the runway under low visibility conditions various runway environment lighting systems serve as integral parts of the ILS system to aid the pilot in landing when using the ILS, the pilot determines aircraft position by instruments. ILS is classified according to capabilities of the ground equipment. Category I ILS provides guidance information down to a decision height (DH) of not less than 200 ft. Improved equipment (airborne and ground) provide for Category II ILS approaches. (DH of not less than 100feet)
DEMOGRAPHIC ENVIRONMENT
Changing Structure of Consumers
Middle class population of India was 300 million in 2005 and is projected to be 400 million for 2010.
Effect: For aviation, this growth is a remarkable achievement and a sign that the industry can only expand as more people gain the ability to purchase airline travel, supported by introduction of low-cost carriers.
High percentage of young population India has highest percentage of people in age group of 20-50, with high earning potential. Also younger segment has more mobility needs due to education or work, so it shows high probability of rise in Domestic air travel.
Higher number of literates Due to rise in education awareness, there has been rise in no. of graduates and those pursuing higher studies which translates into higher earning potential and higher spending on travel in future.
Nuclear Families Due to lesser number of joint families and increasing nuclear families, there would be rise in air travel by children to meet their grandparents.
NATURAL ENVIRONMENT
The average domestic price of ATF is 99 per cent higher than prices in foreign countries and affects domestic airlines drastically as ATF accounts for 30 to 40 per cent of operating costs after a fall in ATF in Nov and Dec by 2%, and 11%, for the 2nd consecutive month, ATF Price in February soared by 3.5% to the price prevailing in Jan 2006. (From Rs.35 a litre to Rs.36.2 a litre.) Earlier, under the fuel pricing mechanism the subsidy given to Kerosene/diesel was loaded onto ATF. While this has been phased out, States are now levying heavy Sales Tax on ATF which made it costly.
Effect: Due to high factor costs, short haul operations are rendered unviable. It would lead to low profits thus discouraging new operators.
AIRLINES ON INTERNATIONAL ROUTES

AIR INDIA is the national flag carrier airline of India with a network of passenger and cargo services worldwide. It is one of the two state-owned airlines in the country, the other being Indian Airlines. Air India has 44 worldwide destinations. The airline has been profitable in most years since its inception. In the financial year ending March 31, 2006, Air India has made a net profit of Rs.97 million; earned revenue of Rs.87, 480 million representing a growth of almost 15 per cent over the previous year.
INDIAN AIRLINES (Now Indian) is India's state owned primarily domestic airline, under the federal Union Ministry of Civil Aviation. The Company was formerly known as Indian Airlines. On December 7, 2005 the company was rebranded as Indian as a part of a program to revamp the company image in preparation for an IPO. Indian Civil Aviation Minister, Praful Patel, announced Government of India's plan to merge Air India and Indian into one giant airline consisting of 130-140 aircraft.
JET AIRWAYS a regular airline which offers normal economy and business class seats. Jet Airways, along with Air Sahara, is the only airline which survived the dismal period of 1990s when many private airlines in India were forced to close down. Jet Airways is an airline based in India serving domestic and international routes. The airline operates over 300 flights to 43 destinations across the. It currently controls about 32% of India's aviation market. Jet is India's large privately owned airline and has the highest market share of Indian domestic traffic. This domestic carriers market share in Aug 04 was over 43%. It has emerged as Indias largest private domestic airline and has been acclaimed by frequent travelers as the most preferred carrier offering the highest quality of comfort, courtesy, standards of in-flight and ground services and reliability of operations. The airline links 44 destinations, including two international cities, Colombo and Katmandu, with over 1,924 flights weekly.
KINGFISHER AIRLINES is an airline based in Bangalore, India. Services started on 9 May 2005, following the lease of 4 Airbus A320 aircraft. It initially operates only on domestic routes. The airline promises to suit the needs of air travelers and to provide reasonable air fares. Kingfisher were pushing for an amendment of the present Indian government rule which requires an airline to fly a minimum of five years on domestic routes before it can start flying overseas and hence it found an alternative route of doing so. It offered to buy out Air Deccan which had completed 5 years of operations but did not have the resources to fly overseas. Hence in the deal of the century in the aviation business, Kingfisher took over Air Deccan and renamed it Kingfisher Red. Today Kingfisher flies to an array of overseas destinations, London being the most prominent one.
AIRLINES ON DOMESTIC ROUTES

SPICE JET is a low-cost airline. There marketing theme offering low, everyday spicey fares and great guest services to price conscious travelers". Their aim is to compete with the Indian Railways passengers traveling in AC coaches. SpiceJet has been one of the most consistent LCCs in terms of solid market share. Currently it occupies second place in the LCC segment after Indigo with a 12% market share.
KINGFISHER RED (formerly AIR DECCAN) is an airline based in Bangalore, India. It was India's first low-cost carrier, and as of May 2006, connects 55 cities within India. Kingfisher Red has grown rapidly since it first started air operations in 2003, and despite its almost disastrous maiden inaugural flight (which caught fire), it continued to grow. The growing Indian economy and the increasing number of middle-class people in India have greatly helped its growth. India's first and leading discount operator, Kingfisher Red flies most large Indian cities and a number of small cities in the southern states of Karnataka, Tamil Nadu, Andhra Pradesh and Kerala. Kingfisher Red used to be a no-frills operator with free seating on the flights,
no drinks or refreshments on board, but now it serves a small meal in the flight to keep a high value proposition. It has first-come-first-served seating, neither business class nor frequent flier mileage bonuses. Air Deccan connects smaller towns, short-haul routes in the south Indian states of Tamil Nadu, Karnataka and Andhra Pradesh. Kingfisher Red passengers can print out their tickets and exchange them for a boarding pass when checking in. Air Deccan became the first private operator in India to fly Airbus aircraft in July 2004, when it received the first of five leased A320s. It currently flies three leased Airbus A320s on services among Indian cities. Two more leased A320s plus two ordered A320s are due to join its fleet in February and September 2005, respectively.
GO AIR - The Peoples Airline, a low cost carrier promoted by the Wadia Group is a domestic budget airline based in Mumbai, India established in June 2004. Its a relatively small player as compared to other low cost airlines. Still in its nascent stage, Go Air is quietly making a place for itself. It does not however cover all the sectors like all the other big airlines. But for a start they have covered quite a big sector.
JET LITE (formerly AIR SAHARA) - They have been in the business for over a decade and have made a secure place for themselves in the domestic airlines industry. Take a look at the number of fleet they have. If you want a career with them, find out what vacancies they have. You can easily view the facilities they provide for their flyers and also all the special offers that they give. Jet Lite are still trying to find competitiveness and are now starting to threaten the increasing dominance of the other established LCCs.
PARAMOUNT AIRWAYS - This domestic airline plies all over south India. So if you are traveling anywhere between Bangalore and Vishakapattanam dont forget to check out their flight details. It is a dominant player in the south. It claims to be the airline dedicated to Southern India, but now its share is being eaten into by Kingfisher Airlines.
Regular Domestic Airlines VS LCCs (Features, Services & Comparison)

Discount or no-frills airlines, low-cost carriers offer flights fraction of the price charged by more traditional airlines
Take the no-frills concept at its most literal sense and provide the most basic of amenities onboard flights - while charging passengers for anything extra they might require.
Fees for services can range from travelers having to pay for in flight meals if they don't want to take their own food onboard, to charges for seat reservations, baggage handling, check-in and other airport services. Budget airlines save money by using smaller airports with lower costs than the bigger hubs and offering one passenger class - i.e. economy - instead of two or three.
Low-cost flights are still snapped up by holidaymakers looking for the cheapest break possible. Low-cost airlines tend not to have the same agreements for making alternative travel arrangements via air for passengers when a flight needs to be re-routed as their full-price counterparts do.
Low-cost airline is likely to struggle with offering discounted transatlantic flights because the main carriers generally make their money on these routes through the people who choose to pay extra to fly business or first class.
Some airlines reportedly refuse to provide appropriate assistance and hotel accommodation, or even to refund passengers. Low-cost carriers, usually
operating from regional airports, often struggle with the obligation to provide assistance.
Budget airlines make their money somehow - one way of doing this is through fees and charges that are not always advertised along with the headline airfare on advertisements.
As low-cost carriers tend to choose out-of-the-way regional airports to take off from and land at due to the lower cost to the airline, these fares escalate more often with no-frills flights than with other types of services.
Some low-cost airlines are to charge a relatively low price for the outbound flight while hiking up the fare for the return flight. So the final cost of your seemingly bargain ticket may turn out to be significantly higher.
Low-cost airlines tend to offer a very limited range of options when it comes to flying long-haul. Short-haul services are plentiful, but the few long-haul discount airlines in existence tend to be based overseas and offer few choices compared with traditional carriers.
Traditional carriers have much to offer the traveler disillusioned with the world of no-frills flights. Clean, comfortable cabins, friendly staff, meals and often superb in-flight entertainment systems are all inclusive in the price of the ticket. Customer can also skip the dubious pleasure of racing to the plane to bag a prime seat and instead walk on at a leisurely pace, safe in the knowledge that the seat is fully reserved.
Major Happenings in 2010 in the Indian Airline Industry
y Jet Airways becomes No. 1

Domestic airlines carried 3.86 million passengers during February, Jet Airways (including JetLite) taking the top position with 26.1 percent market share, followed by Kingfisher Airlines at 22.7 per cent and national carrier Air India at 17.2 per cent.
The market share of low-cost carriers during January was IndiGo (14.9 per cent), SpiceJet (12 per cent) and GoAir (5.5 per cent). Airlines in India carried 4.08 million passengers during January and 4.48 million passengers during December 2009.
According to the civil aviation ministry, Jet Airways carried 1.08 million passengers during February 2010, Kingfisher 877,000, Air India 663,000, Paramount 62,000 while low-cost carriers IndiGo 577,000, SpiceJet 465,000 and GoAir 211,000. The overall on-time performance of scheduled domestic airlines for January was 71.3 per cent.
y Domestic airlines see 17% traffic growth in February
2010
Domestic air traffic continued to soar with airlines flying 39.15 lakh passengers in February, up 17% over the same period last year, suggesting a better financial outlook for the loss-ridden aviation industry. The two major low-cost carriers IndiGo and SpiceJet filled over 80% of their seats during this period, signaling passenger shift towards no-frill air travel, according to reports released by the DGCA.
While traffic numbers in February are below that of January, aviation industry experts claimed, the growth is more real and sustainable. The domestic airline industry had
seen nearly 23% jump in passenger numbers in January this year over the same month last year.
This growth seems to be real and brings rational amount of profit with it. Its better to have a 17% growth and a good yield rather than a profitless growth of 30%. Estimated growth is being targeted at 10-12% in air traffic this year. Airlines reported losses of about Rs 8,000 crore in 2008-09, which are expected to widen further in the current year. As per DGCA, domestic airlines carried 80.86 lakh passengers in the first two months of the calendar year against 67.61 lakh in the corresponding period last year, registering a growth of 19.2%. The domestic air traffic is estimated to grow to about 49 million in 2010 from 43 million last year.
y Flying to South-East Asia The LCC way

Its a new turf for low-cost carriers (LCCs) where they are setting the rules of the game offering never-before rates with a lot more flight options. South-East Asia is the second-largest market for airlines from India with 30% of the total international travel coming from this market is set to witness a shakeout of sorts with LCCs challenging the dominance of traditional full-service network carriers like Singapore Airlines, Cathay Pacific and Thai Airways.
A virtually non-existent LCC market had helped these carriers garner more than 50% of the market share from India till now. But with Malaysian and Singapore-based lowcost carriers eyeing the void in the Indian market, the dynamics are bound to change. And, its only natural that when players like Air Asia, with its budget long-haul service Air Asia X, announced flights from Mumbai to Kuala Lumpur at rock-bottom prices established players like Jet Airways, Cathay Pacific and Malaysian Airlines were forced a re-look at their Indian operations.
In fact, the below cost pricing offered by Malaysian carriers forced the Indian regulator to intervene and sternly warn airlines on the price war and that they cannot sell at the offered prices. For example, a ticket from Mumbai to South-East Asian destinations like Hong Kong, Singapore and Kuala Lumpur is between Rs 14,500 and Rs 18,000 on Cathay Pacific, Malaysian Airlines or Jet Airways. Air Asia has rattled the market with an offer price of Rs 9,000 to Kuala Lumpur. Air Asia and a lot of other south Asian LCCs are bullish about India. Air Asia plans to increase its flights to India from 78 to 140 per week. Indian low-cost carrier SpiceJet, which is soon to launch operations to the South East Asia region, is cautious to lay its cards on the offerings it has, but the budget carrier is not ruling out the impact of Air Asia on pricing. Almost 70% of domestic Indian passengers fly the low-cost product. There is rationale to pick that traffic up and Spice Jets focus is South-East Asia and the SAARC region. They are aware that Air Asia is adding lot of flights and they have factored that in Spice jets plans.
Currently, Indian carriers pick 25% traffic from here and with Kingfisher (flies 28 flights weekly to Southeast Asia) adding flights to Hong Kong and Bangkok and Air India Express (49 flights per week to the region) also watching how the fare wars unfold, it will be interesting what the offerings will be like for travelers. Kingfisher, which currently flies a wide body to the region, is likely to deploy narrow body lowcost product on the route. Aviation experts claim that the boom time for LCCs in the region is just around the corner as there are a host of Airlines waiting in the wings to launch operations to the region. Jetstar Airways, Tiger Airways (Singapore-based low-cost airline), Jetlite (low-cost subsidiary of Jet Airways) and also Ryanair (Irish low-cost carrier) will all launch flights to South-East Asia as 70% of the worlds population lives within the flying distance of four to five hours, most suitable to the aircraft type of budget carriers. But the LCCs are yet to ruffle feathers of seasoned players like Hong Kong-based Cathay Pacific, which flies 35 flights per week out of India.
y SpiceJet will take on AI, Jet with international
operations
Low-cost carrier SpiceJet will launch its international operations in June with flights to Kathmandu, Colombo and Dhaka, a move that could spark off a fare war in these lucrative sectors. The Delhi-based airline will take on full-service carriers Air India and Jet Airways along and the latters no-frills subsidiary JetLite that operates to these destinations.
The airline would serve its foreign network with its current fleet of B737s. Currently a return ticket on most of these flights costs upwards of Rs 12,000, but SpiceJets entry could be a game changer.
India receives nearly 15% of its about 5.4 million foreign tourists from Bangladesh and Sri Lanka. A good number of people from Nepal come to India for work. Increasing trade ties between the Saarc countries in recent years have seen a spurt in business travel as well. Air traffic in these routes has been growing at 13-14%. SpiceJet will complete five years of operations in May. As per rules, domestic carriers can fly overseas if it has completed five years of operations in the domestic market and have a fleet of at least 20 aircraft. Naresh Goyal controlled Jet Airways was the first private carrier to operate international routes after the government opened up international routes in 2003-04. Airlines usually offer attractive prices when they start operations on new routes.
y AI's passenger revenue surged to Rs 2,585 crore on
higher demand
National carrier Air India which is struggling to cash in on improved economic conditions even as it seeks a bailout from the government, has managed to increase the money it makes from its passengers by Rs 235 crore in the three months beginning November 2009.
The government-owned airline has managed to earn Rs 2,585 crore from fliers in the period November 2009 to January 2010, compared with Rs 2,350 crore in the same period last year, mainly due to a rise in demand as more people switch back to air travel in the wake of an economic upturn. It has also shown a surge in the so-called passenger yield - the average price at which tickets are sold - by about 10% in the same period. The airlines load factor passengers carried as compared to capacity has gone up by 10 percentage points to 74% in January. The national carrier, which racked up huge losses in the recent past due to lower air traffic and higher fuel charges is hardly out of the woods. It has an eye-popping cumulative loss of Rs 7,774 crore for the past two years, while the deficit for the current fiscal is estimated to be Rs 5,400 crore. It is likely to receive funding from the government, but with riders that stipulate better operational performance.
The company has also been able to reduce its operating deficit by about Rs 1,300 crore in the period between April 2009 and January 2010, mainly due to capacity rationalization and increased utilization of its planes. During the same period, the operating cash surplus on domestic routes was Rs 43 crore, while international routes have seen lower operating losses.
The trend for Air India is reflective of buoyancy in the sector and also of an uptrend in load factors and cash realization. For the industry as a whole, passenger traffic has grown by 25% in the past three months. The airline is also likely to increase its capacity by 10% on the domestic routes for the summer months, to meet an increased demand due to the Commonwealth Games in Delhi. For its summer schedule, Air India will add more direct flights from Delhi to Dehradun, Coimbatore, Calicut and Mangalore with smaller aircraft for optimum utilization. Flights will also be added from Delhi to metros such as Bangalore, Chennai and Kolkata. Air India, with a paid-up capital of just Rs 145 crore, has a debt burden of over Rs 14,000 crore. The losses for the current fiscal ending March 2010 are pegged at Rs 5,400 crore. The government has said it will pump in Rs 800 crore of fresh equity into the airline in two installments, but with riders.
Currently, Air India is being advised by consulting firm Booz & Allen on how to reduce its costs and by Accenture for merger-related issues. The government recently appointed four independent directors on the board of Air India, including Mahindra & Mahindra vice-chairman Anand Mahindra, as part of a programme to boost the company. Air India merged with Indian Airlines, its domestic arm, but the merger is widely regarded as having been unsuccessful. In its merged avatar, the company is referred to as Air India.
y 'Merger pushed AI, Kingfisher Airlines deeper into
red'
The merger of Air India with Indian Airlines and that of Kingfisher Airlines with Air Deccan has resulted in a massive increase in their losses, according to official figures. The losses for the National Aviation Company of India Ltd (NACIL), which runs Air India, more than doubled from Rs 2,226.16 crore in 2007-08 to Rs 5,548 crore in 2008-09.
Similarly, Kingfisher's losses rose almost four times from Rs 408.91 crore to Rs 1,602 crore during the same period, the figures have shown. The 2008-09 losses for liquor baron Vijay Mallya's airline were recorded after its merger with low-cost carrier Air Deccan. Likewise, the combined losses of Jet Airways and its fully-owned subsidiary JetLite or erstwhile Air Sahara rose from Rs 695.10 crore to Rs 1,032.7 crore.
Besides merger, very high fuel costs, the global economic downturn and comparatively low yields due to heightened competition also contributed to the rise in their losses, which have been estimated by the International Air Transport Association (IATA) to account for one-third of the losses of the global aviation industry.
But the government has defended its decision for merging the two state-owned carriers saying that the combining their critical mass or size would be a key factor in helping them survive and prosper amid a fierce global and domestic competition.
SWOT Analysis of the Indian Airline Industry

India's aviation industry presents some considerable opportunity, but has been dragged down by red tape and, more recently, excessive airline capacities amid the downturn in the global economy. Steps are being taken to address the shortcomings, but the industry does face a considerable test over the next 12-18 months.
Strengths
Liberal Environment: India's airlines operate in a liberal environment in both the domestic and international spheres. With three major airline groups and four smaller carriers all operating domestic routes, there is no shortage of competition, although this factor combined with excess capacity has tended to depress yields. Nevertheless, carriers are free to operate any domestic routes without seeking permission from the government, and without restriction on pricing. One condition that airlines find onerous however, is the requirement to operate a proportion of their operations to remote and underdeveloped regions of the country. On the international front, the Indian government has pursued an increasingly liberal approach to bilateral air services agreements with key overseas markets, resulting in greater access for foreign carriers.
Modern Fleet: In light of the fact that much of the growth in Indian aviation has occurred in the last five years, the country's airlines operate a relatively young and modern fleet, ensuring a high quality passenger experience, improved safety and good operational reliability.
High Quality: India's airlines offer a good quality product in each of the operating models in existence. Jet Airways and Kingfisher Airlines are competitive in terms of their in-flight service against the leading carriers in the world. Kingfisher for example is one just half a dozen global carriers such as
Singapore Airlines and Cathay Pacific, with a Skytrax 5 star rating. In fact it could be argued that the full service product on domestic routes is excessive for the sector lengths involved and results in a higher cost structure, which the passenger does not necessarily see value in paying for. The LCCs too, by and large, offer a comfortable, efficient and reliable service. Until a couple of years ago, Air Deccan was one carrier that had developed a reputation for poor on-time performance, flight cancellations and overbooking, however since being acquired by Kingfisher, most of these operational issues appear to have been resolved.
Economic Growth: Economic growth has historically been the primary driver of air traffic, and the relationship has generally been even stronger in developing countries. Between 2004 and 2007, India enjoyed four years averaging 9% per annum GDP growth. This slowed to 6.5% in 2008, however against the background of a global economic recession, this was a creditable performance. The increased business confidence following the general election result in May 2009 has eased concerns that growth may slow further. The stock market has soared 25% in the last month and the outlook for growth and consumption has improved, which is a positive for the aviation industry. Political Stability: The re-election of the Congress Party, with a stronger majority is expected to allow the new administration to push ahead with further economic reforms, which had to date been blocked by coalition partners. The prospect of a government which has the ability to last its full term and pursue its agenda is extremely encouraging. In addition, Minister Praful Patel, who was the architect of the dramatic transformation of the aviation sector, has retained the portfolio, which brings experience and stability to the aviation industry.
Weaknesses
Airport Infrastructure: The rapid growth in air traffic over the last few years exposed the deficiencies of airport infrastructure across the country. After decades of neglect, many of India's airports were forced to operate well above design capacity. The resulting congestion in the terminals and on the runways delivered a poor experience for the passenger and a costly, inefficient operating environment for the airlines. However, although a weakness today, it is also fair to say that it is becoming less so, as the airport modernization program starts to deliver results, with new airports in Bangalore and Hyderabad, and improving facilities at Delhi and Mumbai. The upgrade of non-metro airports remains behind schedule so it may be another 3-4 years before we see good quality facilities across the country, but there are tangible signs of improvement.
Airways Infrastructure: Although congestion on the ground is relatively visible, another current area of weakness is the limited investment that has taken place in improving infrastructure for air traffic management. This too results in expensive aircraft holding patterns, indirect flight paths and suboptimal use of runways.
National Carrier: The state-owned carrier, Air India, is in a dire situation. The carrier is estimated to have posted losses of close to USD1 billion in 2008/09, and morale within the bloated workforce is at a low. With no clear direction, management instability at the top and continuing issues with the integration of Air India and Indian Airlines, the carrier is in need of radical restructuring. It is imperative that the government develops a turnaround strategy for Air India as an urgent priority.
Deep Pockets: Over the last three years, India's carriers have accumulated billions of dollars in losses and debt. Ironically, a characteristic that would normally be considered strength - namely deep pockets - has resulted in carriers remaining afloat that would perhaps in other circumstances have
failed. With the backing of either the government or large corporations, several carriers have been able to access funding that they might have been denied on a strictly commercial basis as standalone airlines. As a result of the intense competition which has been perpetuated, airlines have struggled to raise fares to break-even levels.
High Cost Structure: India's airlines operate in a relatively high cost environment, primarily due to the punitive taxation structure. The greatest impact is felt in the area of sales taxation on fuel, which can increase the cost to 60% above the international benchmark. The limitations of airport infrastructure also increase costs due to the fact that carriers are unable to schedule fast turnarounds, resulting in reduced aircraft utilization. In addition, the fact that high quality ancillary services such as MRO and training are not currently available in India, which means that aircraft and personnel have to be sent overseas.
Skilled Resources: Domestic air traffic in India tripled in the five years to 2008, while international passengers doubled. This rate of growth far outstripped the capacity to develop skilled technical and management personnel. The gap was partly addressed by employing expatriates, particularly as pilots, and by learning on the fly. This means there is a lack of in-depth experience and knowledge at all levels. Furthermore, there is an absence of high quality training infrastructure in-country to deliver the resources to support future growth. This lack of personnel affects the government as well and the FAA has expressed its concern at the shortage of qualified safety inspectors within the Directorate General of Civil Aviation (DGCA). India has been put on notice that unless this issue is addressed, it may be relegated to a Category II nation, which would mean that Indian carriers would not be permitted to increase services to the US.
Opportunities
Market Growth: Despite the rapid expansion of recent years, India has only just scratched the surface of the potential for the aviation sector. Trips per capita remain low even by the standards of other developing countries. China's domestic market is more than four times the size of India's 40 million passengers. Even, Australia, a country with a population of just 21 million, compared with India's 1.1 billion, has a market 25% larger. Similarly on the international front, less than 1% of Indians travel overseas each year. Inbound visitor numbers at 5.4 million in 2008 for the entire country, were less than for Dubai or Singapore. It is not difficult to see the expansion potential from such a low base as economic growth continues apace. Geographic Location: India is ideally positioned as a major aviation hub at the crossroads between Europe, the Middle East and Asia Pacific. The fact that aviation was a neglected sector for so long has allowed airports such as Dubai and Singapore to effectively establish themselves as offshore hubs for Indian passengers, and they now have a significant head start. However, as India's airports improve, and its airlines receive international awards for their service, there may be an opportunity to leverage its huge home market to compete with these longer established hubs.
Lower Costs, Higher Quality: India has already managed to develop a dynamic aviation sector despite, and not because of, its environment. The improvements in airport and airspace infrastructure, the development of indigenous training and maintenance facilities and the potential for fiscal reform, all point to the potential for Indian aviation to increasingly operate in a lower cost, higher quality and more efficient manner. This could in due course lead to an opportunity for India to develop as a global outsourcing hub in areas such as aerospace manufacturing, MRO and training.
Threats
Middle East Aviation: The carriers of the Gulf are aggressively expanding in India, with high frequencies from multiple destinations to their hubs, from where passengers can access extensive global networks. The ability for a passenger for example to travel one-stop from Ahmedabad to Hamburg, or multiple daily frequencies from Mumbai to London, connecting at an attractive hub, is a strength which Indian carriers simply cannot match at present. It will take time and the question is how far ahead will the Middle East carriers be by that stage.
Terrorism: India has seen frequent terrorist activity in recent years. The country has shown great resilience in bouncing back after each attack, however inbound international traffic in particular is sensitive to such events. Similarly the potential for India to develop as a global traffic and services hub is contingent upon it being seen as a safe and attractive destination.
Mi
l Porters Fi e Force Anal sis
Michael Porters fi e forces model has been used as a framework to anal e the Indian airline industry and its attracti eness to new and existing players
1. TH EAT OF NE
not allowed to takeoff.
ENT ANT
of mi imum R 30C wit out whi h it i
Huge capital requirement: C it li ti
Expected retaliation: Market i concentrated in the hands of a few players thus any new player would to face stiff competition.
Legislation or government action: Along with the equity restrictions for floating an airline they also compel the airlines to operate on uneconomicalroutes.
Inadequate airport infrastructure: Difficult for the existing airlines to function smoothly and thus deters new ones. Shortage of pilots and high fuel costs Exit barriers
- 38 -
PGP/
PM/
/MUM/MKT/
2. BARGAINING POWER OF CUSTOMERS

General Indian traveller is extremely value conscious.
Growing awareness has increased expectations for punctuality, safety and service.
Minimal switching cost and alternatives are available. There is no differentiation among the players in the same segment e.g. the differences between Air Deccan and Spice Jet is minimal. Transparent Web based comparisons in fare structures are available which increases the power of the customer to choose the best deal.
Role of intermediaries like travel agents is diminishing.
3. BARGAINING POWER OF SUPPLIERS

High fuel costs - Fuel accounts for nearly 35% of the total cost and the cost of fuel is increasing rapidly posing a threat to the companys profits.
Aircraft suppliers enjoy in a duopoly and fiercely control their market shares. Acute shortage of pilots which makes the industry dependent on them
Forward integration: Airlines also face a threat of forward integration as the suppliers have or know about most or the technical aspects of the industry. Airbus and Boeing have two radically diverse views on the future needs of civil aviation and this is reflected in their new product developments. Boeing has focused on medium capacity long haul aircraft (expecting that demand will grow for smaller aircraft that can fly more frequently offering a wide choice of departures in flight schedules). Airbus has made huge investments in the A380 which is its new large
capacity-long range super jumbo (expecting that demand will grow for larger more fuel efficient and luxurious aircraft that can accommodate more people per flight).
4. THREAT OF SUBSTITUTES
Product for product substitution- Consumers have various options in terms of airlines to choose from. They may also switch to other modes of transport such as road and rail.
Substitution for need - With the advent of technology options such as video conferencing and conference calls reduces the need to travel thus the option of substitution of need in present but it is marginal as it is not possible to totally do away with travelling.
5. POWER OF COMPETITORS
Intense Competition amongst low cost airlines and the full service airlines, apex fares and promotional schemes offered by all the full service carriers, offering prices at lower or similar to the low cost ticket fares are a tremendous competitive force.
Entry of additional players. Mergers and acquisitions take place here too which increases competitive rivalry between airlines.
Low level of differentiation between the services offered by the different airlines increases the risk of switching.
High fixed costs and input constraints also add to the competitive pressures in the industry.
INDUSTRY OUTLOOK
LOW COST STRUCTURE SUITS INDIA

Air Deccan entered the Indian market in FY04 with its low cost strategy, and within a year of its operation took away market share from FSCs. Since then, there have been five low cost carriers in the country, with each of them clocking better load factor than FSCs. Clearly, there has been a shift in customer taste towards LCCs. However, many customers have been let down by some of these LCCs due to poor service. While the business class and the elite continue to prefer FSCs, the mass market in India is expected to favour LCCs that can deliver a requisite level of service. It can be clearly stated that FSC are losing their grip from the Indian aviation industry and the newly emerged LCCs are slowly and steady dominating the market in the country. Another major driver is the booming tourism industry in India. However, unlike FSC, the low cost airline segment is also facing challenges of increasing competition, rising fuel prices and inadequate infrastructure.
FLEET PURCHASES
Boeing and Airbus expect airline companies in India to purchase nearly 1,000 new planes over the next 20 years. Boeing has orders for a total of 100 planes from India to be delivered in the next six to seven years, according to the Economic Times, Indias leading business publication. The plane maker announced in April that it would deliver more long-range, wide-body 777 aircraft to India next year. In May, Indian start-up carrier Star Aviation confirmed an order for up to ten Embracer 170 regional jets, with the first to be delivered in 2009. Indias largest private carrier Jet Airways plans to expand its fleet by 40% to 117 planes over the next three years. The carrier is spending about US$2 billion on wide-body planes that it will use for its growing international operations. And last December, Jet Airways exercised an option to purchase five more Airbus A330-200s, as it replaces its fleet and add new routes. Low-cost airlines, too, have devoted billions of dollars to buying new aircraft, to
support their aggressive expansion plans. Indias Kingfisher Airlines was in talks this year with Airbus for 40 planes, worth approximately US$7.3 billion. Another Indian budget airline, Spice Jet, announced on January 22 that it would purchase ten Boeing 737-800s, for delivery from 2011 onwards. Orders placed with Airbus, Indian Airlines' order is intended at replacing its ageing fleet, while Indigo has ambitious plans to increase its fleet size to 100. Indian carriers have collectively ordered for approximately 380 aircrafts through 2012 against their current fleet size of 280 aircrafts. Over 135 aircrafts were added in the last two years alone for scheduled services, with another 50 being added for general aviation services. Over the next 12 months, Kingfisher Airlines is expected to be the most aggressive in terms of fleet expansion.
Orders placed by Indian carriers:
CUSTOMERS Air India Indian Airline Jet Airways Kingfisher Deccan aviation Go Air Indigo Air Sahara
AIRBUS 11 84 10 56 62 11 100 0
BOEING 8 0 22 0 0 0 0 10
TOTAL 19 84 32 56 62 11 100 10
CONDUCIVE POLICY ENVIRONMENT

The government is attempting to reform the domestic aviation industry, as it assumes increasing importance in a globally connected world. Aviation contributes to nearly 95% of all international arrivals and nearly 40% of EXIM trade by value. Increased air connectivity is therefore vital for trade, business and tourism. As per conservative estimate made by International Civil Aviation Organization (ICAO) planners, for every Rs100 spent on air transport, the expenditure triggers Rs300- 350 to be spent additionally in the economy. This presents ample opportunity for the aviation industry
to participate in Indias rapid economic progress. In view of such a possibility, the government has put in place certain policy framework, under which it has given ample leeway to airlines to grow. The current guidelines stipulate: 1. 100% FDI permissible for existing airports; FIPB approval required for FDI beyond 74% 2. 100% FDI under automatic route is permissible for Greenfield airports 3. 49% FDI is permissible in domestic airlines under the automatic route, but not by foreign airline operators 4. 100% equity ownership by Non-Resident Indians (NRIs) permitted 5. AAI Act amended to provide legal framework for airport privatization 6. 100% tax exemption for airport projects for 10 years 7. The government's 'open sky' policy and rapid growth in air traffic have resulted in the entry of several new privately-owned airlines and increased frequency/flights for international airlines.
INFRASTRUCTURE TRAVAILS WILL REDUCE

The ministry of civil aviation has decided to modernize and upgrade 35 non-metro airports across India. Leading airport developers are readying to participate in bids to win the right to construct and operate commercial property at these airports. Apart from this, the government is also planning to build Greenfield airports at Mumbai (Maharashtra), Kannur (Kerala), Hassan and Gulbarga (Karnataka), Ludhiana (Punjab), Greater Noida, Paykong (Sikkim), Cheithu (Nagaland) and Chaka (near Pune, Maharashtra). The government estimates that the country will need US$400m in private investment in these 35 non-metro airports, while the state-run Airports Authority of India (AAI) will also have to spend an equal amount. The move to modernize and the setting up of new airports would reduce congestion prevalent in existing airports. This would lead to reduction in operational cost of carriers (due to lesser fuel consumption) as well as on-time performance by players.
POLICY AND REGULATORY ENVIRONMENT
STATE REGULATIONS
The presence of an Independent Infrastructure Development Act enables a state to set up industrial areas, develop PPP (public private partnership) projects, fund initiatives at a state level and also leverage concession benefits to private development towards the provision of industrial infrastructure all over the state for planned and systematic industrial development. A few states have actively leveraged their state infrastructure acts to facilitate airport expansion. The Government of Karnataka aims to achieve a high growth in the infrastructure sector by encouraging private sector investment and upgrading technology. PPP are to be considered for both new infrastructure projects and in managing existing infrastructure projects. The exception can be projects in backward areas, or projects with high social relevance, but which are prima-facie not financially viable. The Orissa government recognizes the importance of the PPP approach for the development of infrastructure and has developed a policy to put an effective framework to facilitate PPPs in place. A High Level Clearance Authority (HLCA) under the chairmanship of Chief Minister shall be constituted for all infrastructure projects being undertaken via PPP. Other states which have shown a keen interest in involving the private sector for development of airport infrastructure include Andhra Pradesh, Gujarat, Punjab, Rajasthan, UP and Maharashtra. Looking at the growth of the sector the policies are also changing to promote the growth of the sector. Some of the key developments in the civil aviation are as followed: 1. 2. 3. Opening of India Gulf route Overseas route FDI
FINANCING OF AIRPORT
Modernization and development of airports through the PPP route and ancillary activities have seen significant interest from the private players. Various Brownfield and Greenfield airports are currently under various stages of consideration. The development of these airports requires a considerable amount of investment and private players seek these funds from several options at their disposal. The key financing trends that were observed in this sector are: 1. Over the last two years we have seen a number of infrastructure markets accessing foreign currency loans with the intention of accessing low interest rate funds. However, this could be a shortsighted approach as it exposes the project to significant foreign currency risk which in the current environment is cause of worry. Nonetheless, airports projects are better suited than other infrastructure projects to manage this risk given that a portion of their revenues is in foreign currency. Going forward the airport sector will continue to see a mix of domestic and foreign currency borrowing in its financing plans.
2. Future airport financing projects shall have to manage their return expectations arising from city side development programme. For the new projects expected to arise due to the 35 non-metro projects, a note of caution about the overall return projection is necessary for those being delivered through city side development. In line with the current downward movement in real estate prices across the board, this city side development plan will be under pressure and sponsors can find it to be limiting their fund raising exercise.
AIRPORT SEZ
In the context of a contemporary Greenfield airport, a SEZ plays a pivotal role. With the metamorphosis of an airport from a passenger hub to an integrated logistics hub, an airport-based SEZ can sometimes be a crucial value driver. Apart from an airport based SEZ, an SEZ near the airport can also create significant value. In a country like India where efficient locality connectivity is still a pipedream due to inadequate road and rail infrastructure, an airport, even though expensive, can act as a crucial connectivity bridge for the locality SEZs. SEZs by nature are duty free enclaves
designed to promote exports from India. In general, the SEZ law prescribes minimum area requirements for an area to be designated as an SEZ. For a comprehensive multiproduct SEZ that will encompass all products and services, the minimum area requirement is 1000 hectares. However, for airport based multiproduct SEZs (i.e. SEZs which are part of an airport), the area requirement has been relaxed to 100 hectares of contiguous land. By law, a multiproduct SEZ could encompass almost all products and services. However, given the fact that land today is a precious resource, allocation of the available land to different sectors (and therefore development of required facilities and infrastructure) is of paramount importance. Furthermore industries, which would not be impacted by air freight cost, should be planned in the SEZ. Given these airport-based SEZs could be most suitable for industries such as high value precision engineering, warehousing, perishable products' processing, import-export processing and packaging, airport services, high value knowledge based industries such as research and development etc. Key fiscal benefits and provisions: i. Income tax exemption for a period of ten years out of a block of 15 years for the developer of an airport based SEZ ii. Income tax exemption for a period of 15 years on a graded basis for the entrepreneurs ('units') setting up operations in the SEZ iii. Customs duty and excise duty exemption on capital equipments, raw materials and inputs brought into the SEZ iv. v. vi. vii. Service tax exemption on input services provided in respect of the SEZ Other state and local tax exemptions Units need to be net foreign exchange positive over a stipulated period Domestic sale from the SEZ in India treated as imports
Initiative of such kind taken by the government will surely boost the morale of the companies in the industry as they are already hit the financial recession, and secondly the ever fluctuating crude oil price , due to which their loss are not yet covered even though the price is below $40. A SEZ would help the industry to grow and also to recover from the losses which the industry players are facing in the present scenario.
TAXATION
The Income-tax Act, 1961 provides a tax holiday for the infrastructure facilities (including airports) for a period of ten year to attract investors in this space. The airport operators are also eligible to claim concessional rate of customs duty in case of selected items specified under the Customs Act. The term 'new infrastructure facility' would in common parlance refer to a Greenfield project. Therefore the issue for consideration is substantial modernization; up-gradation, redevelopment etc would be eligible for the deduction referred to above. This is especially relevant in the case of airports as substantial investments are being made towards up-gradation of these facilities. Clarity is needed regarding whether in the case of expansion of the infrastructure facility, the eligibility for claiming tax holiday period for the expanded portion should be combined with the existing facility or should it be looked on a standalone basis for claiming the tax holiday. The tax holiday is in respect of income derived by an undertaking from the business of developing and operating an airport. The term 'derived from' has been interpreted by the courts to mean a direct nexus with the eligible business. Typically, the revenue model of the airports comprises of a very substantial part of non-operational revenues comprising of real estate development and retail concessions. The Non operational income for tax holiday also needs to be clarified especially in light of the intense litigation on this issue in the context of various eligible businesses.
THE ROAD MAP AHEAD

Skyrocketing aviation turbine fuel (ATF or jet fuel) prices have hit the airline industry hard and they are now forced to find ways to cut costs, and also to increase ticket fares.
In fact, there has been a 20% drop in the weekly flight schedule - from 10,922 flights a week in March 2008 to 8,778 flights this month. Thats not all; Even the passenger growth witnessed a decline by 12% last month as compared to July 2007. According to reports, domestic airlines are facing an estimated loss of $2 billion in fiscal 2009, while international carriers may post a combined loss of $6.1 billion for the year.
Domestic airlines are trying to rationalize the capacity deployed on various routes. The reduction in the flight schedule is clear fallout of this exercise. Indias lossmaking aviation sector should be ready to accept rising ATF prices as a way of life at a time when global oil prices are touching record highs. Instead of exiting the sector, the carriers should get their act together and begin getting leaner so that they can rake in profits.
In fact, to counter this threat, airlines have kicked into survival mode. Deccan is cutting back on capacity induction, rationalizing routes and reviewing the need to deploy additional capacity on certain sectors. Another major player Kingfisher is canceling deliveries of new aircraft due this year. Spice Jet has cut 17 flights on various routes and plans to sub-lease its six Boeing aircraft due for delivery this year. Most airlines, which are suffering losses in millions of dollars every day, are now waking up to this reality and are trying different measures to counter the spiraling fuel prices. The airlines which will survive this period of high oil prices are those with fuel efficient aircraft, substantial cash balances, low net debt and capable management who can increase efficiency.
Globally, in the past couple of months alone, ATF has caused 24 carriers to go bankrupt. Over the past 60 years, the industry has made $11.5 trillion in revenues, but $32 billion in profits - a margin of just 0.3%. Since 2001, fuel efficiency improved 19% and non-fuel unit costs dropped 18%. The International Air Transport Association (IATA) has forecast a loss of $2.3 billion for the global airline industry in 2008 and warned that this years losses could even reach $6 billion. Owing to the large number of participants and the scale of investment involved airport development in India faces several challenges. The industry is striving to bring its facilities and standards at par with international benchmarks so that it can compete on a global platform. With consolidation in the domestic skies cheaper fares almost vanished being offered by budget airlines such as Spice Jet, IndiGo and Deccan almost vanished. Mounting losses mainly on account of high fuel price and excess capacity also forced airlines to keep tariff high. Air-carriers also started rationalizing their operations by reducing capacity.
Financial health of domestic carriers has, however, started improving now as fuel prices have come down nearly 54% since September last year. After initial resistance to bring down fare, airlines have now started passing on the benefits of lower fuel price to customers. National carrier Air India slashed its basic fare in the range of 35% to 82% across various domestic sectors. Other airlines such as Kingfisher, Spice Jet and IndiGo also followed suit later. But airlines are saying that people are not flying even though ticket prices have been cut drastically. Business sentiment is very down due to a downturn in the economy. Mumbai terror attack has also affected the traffic to some extent.
Aviation industry other then facing the problem of the fluctuating oil prices have many other challenges which the industry need to sort it out problem such as economic slowdown, skilled manpower shortage, development gap in infrastructure etc. This are the obstacle aviation industry is going to face in the near future.
The airport industry in India currently has significant potential as the development of airports opens new avenues for participation. Several opportunities exist for players to successfully participate in this development. In accordance with the policy of liberalization in the civil aviation sector and with a view to attract more foreign passengers, the Government has adopted as overall liberal approach in the matter of grant of traffic rights under bilateral agreements with various foreign countries. This would lead to more flights and better connectivity from foreign countries to India and also provide more commercial opportunities for all operating carriers. Up-gradation and modernization of the non-metro airports offers significant opportunity for participation by the private players and the interest of the bidders. Greenfield airports offer substantial scope for participation by the private players through the PPP route right from the development of the airports to its maintenance and operations. Players have shown a significant interest in being a part of these projects.
Indian aviation industry is going to have a better connectivity as many airports are expected to get on the air map and airlines plans to become full-fledged international carriers. New LCC startups are likely to dip the airfares. But, the soaring fuel prices and the airports, whose committed expansion projects have no time frame for
completion, might go against the growth. Meanwhile, the government is evaluating various options including dismantling the monopoly of public sector oil companies in the supply of turbine fuel to rationalize the fuel prices. It has also proposed a uniform sales tax at 4% across the states to bring down the aviation fuel cost in the domestic market.
Research Objective and Methodology

Research Objective:
To understand the change in peoples perception in travelling by air. To analyze the changing trends in air travel. To understand what people think of LCCs To compare regular and LCCs. To know which is the most preferred mode.
y y y y y
Hypothesis:
The advent of LCCs has changed the way air travel is perceived in India.
Need and Importance of the Study:
This topic needs to be studied because there is a changing trend in the way people are travelling in India. It is necessary to understand how people perceive travelling by low cost carriers.
Research methodology:
This research would be a Quantitative research and it would be studied through questionnaires and interviews. These questionnaires would be given to the people that travel by air and people at the airport will be interviewed.
Sampling: Samples are used in research projects for one or both of the objectives estimation and testing of hypothesis .It makes it easier to form inferences about a population on the basis of information from a sample .There are two basic requirements for the
sampling procedure to fulfil - a sample must be representative and it must be adequate.
Sample size: At the inception of this study, it was envisaged that about 200 300 individuals will be chosen would respond to the questionnaires and interviews. The sample size proved to be adequate for the research and respondents answered satisfactorily. Data- Collection Method: Data has been collected from primary sources via the questionnaire method. The questionnaire method has been selected for its versatility, objectivity, speed and lower cost. The questionnaire designed is structured and non-disguised type. In other words it has a formal list of questions that asks the respondent about the concerned issues directly. The questions are formulated to address the specific requirement of the research objectives. A combination of open-ended, multiple choice and dichotomous questions have been used.
ANAL
IS
Chart 1.
Analysis The Target audience was targeted in sync. All types of income groups were a part of research. It has been seen that professionals and people in the service category seem to travel more than the other categories.
- 53 -
PGP/
10
IIPM/
/08-10/MUM/MKT/ 1
Chart 2.
Analysis Research showed that on an average people travel every 3 months. But that is different for professionals and service class individuals who tend to travel more frequently than that.
- 54 -
PG P/SS/08-10
IIPM/SS/08-10/MUM/MKT/ 1
Chart 3.
Analysis Nearly one third of the individuals travel by economy class, as there is no option of Business class in a low cost carrier airline. The general mindset of traveling in luxury has not gripped the Indian publics mind.
- 55 -
PG P/SS/08-10
Chart 4.
Analysis Majority of the working individuals said they mostly travel for business reasons as well as personal reasons because of their high disposable income. The house wife and the students obviously traveled for personal reasons.
- 56 -
PG P/SS/08-10
Chart 5.
Analysis The Indian Traveler is clearly value driven and wants the most out of every rupee. Even the service class and the self employed individuals answered in favour of PRICE being the dominant factors when it comes to choice of various airline services. Brand loyalty was also one factor that the consumers considered.
- 57 PG P/SS/08-10 IIPM/SS/08-10/MUM/MKT/41
Chart 6.
Analysis There has clearly been a shift in the way people book their ticket now-adays. Gone are the days of the travel agent being flocked by customers. Online booking services and Phone booking are the preferred choice in todays world.
Chart 7.
Analysis Although all the people chosen were air travelers, some clearly drew a line as to when they opt to travel by air and when by rail. On the other hand many also said that the introduction of LCCs is a welcome break to them from the tiresome and lengthy journeys by rail.
Chart 8.
Analysis Although, respondents felt that the airline fares have gone up over the last 2 years, they did not seem to complain. They reali ed that cost of fuel has increased and the burden of taxation has also increased, but a fall in fares will be welcome d.
CONCLUSION
The Indian economy has been booming over the past few years this is because of the rising foreign exchange reserves, increasing inflow from FDI and FII due to which the growth rate reached to almost 9 % a year for the last three years. However this buoyancy was curbed by rising oil and commodity prices which led to slowdown the growth rate with inflation touching at the sky height. Due to this the outlook has changed from overjoyed to caution. The aviation Industry has been mirroring the trends in the economy. Propelled by the growth of the economy, the sector has experienced an extraordinary growth in the last few years. The year 2007 can be considered as the good year for the sector as the growth was steady but the year 2008 numbers suggest the slowdown of the growth. The growth in the economy has led to rising passenger and cargo services however, underinvestment in the Indian airports network has resulted in massive infrastructure gaps, leaving several expectations unfulfilled. Owing to the large number of participants and the scale of the investment involved airport development in India faces several challenges. The industry is striving to bring its facilities and standard at par with international benchmark. But the interference from different states hampers the growth; Numbers of state owned airports are not operational or are operational only for limited purposes. The next is the volatility of regulatory body, and the problem of economic slowdown. This is some of the challenges which the industry would face and affect the growth of the industry. Food and in-flight entertainment are irrelevant; on-time performance and flight safety are hygiene factors. Price and availability are thus the only factors that will induce travellers to fly with one carrier over the other. In sum, the player with the lowest costs and the strongest balance sheet will endure over the long term. Supply had created its own demand as fares were brought down to fill seats. However, with the substantial increase in fuel costs (from 1st Jan 2008, aviation turbine fuel has increased by 43%), airlines have increased fares. Airlines now face an impossible task to fill seats while increasing fares. Train fares have remained almost static while air fares have increased (on account of the fuel surcharge).Thus the differential between LCCs and rail fares have increased.
Paradox of higher fares and higher discount: The differentials between full service and low-cost carrier fares continue to narrow. Essentially, FSCs have cut base fares (and increased fuel surcharges) while LCCs have hiked surcharges. Amid this, there are some carriers that are now offering base fares as low as Rs 0 500 on certain routes. This is an attempt to buttress short-term cash flows, while sacrificing mediumterm profitability. Off the Frying Pan but into the Fire: The current state of affairs of the aviation industry can be best described as "out of the frying pan but into the fire" though the dwindling crude oil prices as 2008 draws to a close is a blessing indeed but the looming recession is another "headache" to deal with. Airlines are forecast to incur US$5bn in losses this year and thanks to the slide in crude oil prices as the losses are expected to decline to US$2.5bn next year. "Recession is now the biggest threat to airlines' profitability". Financial health of domestic carriers has, however, started improving now as fuel prices have come down nearly 54% since September last year. After initial resistance to bring down fare, airlines have now started passing on the benefits of lower fuel price to customers. National carrier like Air India and jet airways slashed its basic fare in the range of 35% to 82% across various domestic sectors. Other airlines such as Kingfisher, Spice Jet and IndiGo also followed suit later. In terms of the number of flights Jet Airways secures the top position with 8,168 flights operating till June 2008. Indian Airlines is in second position with 7,562 flights. Sahara (3,225 flights), Air Deccan (2,889 flights), Spice Jet (483 flights) and Kingfisher Airlines (267 flights) come thereafter in the list of domestic and national carrier operators. Indian aviation industry which is going through tough period firstly with the oil prices at the sky height and now when it has reduced by around 65% at that time now the industry is facing the problem of global recession. In this battle of survivor of the fittest, I think JET AIRWAYS would win this battle because of its earlier capacity to bear the crude oil prices and other reasons like their healthy balance sheet, expansion of their fleets, Introduction of the low cost carrier (Jetlite) and lastly their services.
RECOMMENDATIONS
Concrete actions towards long term sustainability should be taken. Unnecessary mergers and takeovers should be discouraged and the Government should not give its blessings to such moves as they have proven to be disastrous in the long run to both the parties. The Airlines should not be over burdened with high taxation, as they have to already bear the brunt of a volatile oil market. Air travel should be encouraged and better infrastructure should be provided not only to metro cities but also to Tier 2 & 3 cities. Air cargo seems to be an upcoming and profitable business and hence should be properly exploited. Indian carriers have to pay a hefty sum to foreign pilots who work for them. There are not many good pilot training academies in India. Hence the government with the joint efforts of the Airlines should create an alternative solution to produce more home grown talent. Crude oil price volatility is also one of the factors that deter smooth and profitable functioning of an airline, hence the government should hedge oil contracts when they are on a sustainable level t maintain stability. Code sharing should be encouraged between airlines to enable minimal wastage of seats on the not so sought after routes. Newer marketing schemes should develop to maximize revenue and encourage the public to divert from railways and roadways to airways as their preferred choice of travel.
LCC as a system of low frill travelling is proving to be an effective one. There are problems that they are facing, but the ministry should give special benefits to them to ensure that they can work with freedom and flexibility. Domestic airline do not operate on a full throttle basis in the night hours, special night fares should be encouraged so that a new segment is developed for those who prefer travel at odd timings but at highly affordable rates. Lastly, the long term sustainability of this industry depends on the joint efforts of the players and the ministry. They should work together to tackle the problems that this industry faces and work towards a better and sustainable system of working.
REFERENCES
Books and Journals
y y y y y
Open Sky Magazine The Sunday Indian Business & Economy Aviation Today Simply Fly Captain Gopinath
Websites
y y y y
Economictimes.com Dgca.gov Indianaviationnews.net Thirtythousandfeet.com
APPENDICES
Questionnaire
1. By profession you are
a) Self Employed b) Student c) Salaried d) If Other ______________
2. How frequently do you travel by air? a) Once a week b) Once a month c) Quarterly d) Once in six months e) Occasionally
3. Do you travel by air for personal or business reasons? Personal Work Both
4. Do you fly by economy or first class? Economy First
5. Which of these factors influence you the most to purchase a airline services (RANK the factors from 1-5. 1 being the best rank & 5 being the worst). Advertisements and hoardings Prices In-flight Service Brand loyalty to Airline Connectivity
6. How do you usually prefer to book your air tickets? Travel Agents Online Phone bookings
7. Has the introduction of Low Cost Carriers ever influence you to travel by air instead of the Railways? Yes No
8. Do you think that airfares have increased significantly in the last 2 3 years? Yes No
RESPONSE SHEETS
Response Sheet: 1 Name: Vinay Dingwaney
ID NO: IIPM/SS/08-10/MUM/MKT/41
Questionnaire: In progress, will be given in the next response.
Date when the Guide was consulted: 10th Jan 2010 The outcome of the discussion:
y y
Had a detailed discussion as to how things will have to gone around To collect articles and references and which sources have to be used
The Progress of the Thesis:
Collecting more articles relating to the topic and forming a questionnaire.
Response Sheet: 2 Name: Vinay Dingwaney
Questionnaire: Is roughly prepared, but some changes will have to be made Date when the Guide was consulted: 15th Jan 2010
The outcome of the discussion:
The changes that have to be made in the questionnaire.
Forming the final questionnaire.
Response Sheet No: 3 Name: Vinay Dingwaney
Questionnaire: 1. By profession you are
e) Self Employed f) Student g) Salaried h) Other
2. How frequently do you travel by air? f) Once a week g) Once a month h) Quarterly i) Once in six months
j) Occasionally
3. Do you travel by air for personal or business reasons? Personal Work Both 4. Do you fly by economy or first class? Economy First
5. Which of these factors influence you the most to purchase a airline services (RANK the factors from 1-5. 1 being the best rank & 5 being the worst). Advertisements and hoardings Prices In-flight Service Brand loyalty to Airline
Connectivity 6. How do you usually prefer to book your air tickets? Travel Agents Online Phone bookings
7. Has the introduction of Low Cost Carriers ever influence you to travel by air instead of the Railways? Yes No 8. Do you think that airfares have increased significantly in the last 2 3 years? Yes No
Date when the Guide was consulted: 1st Feb 2010
The final questionnaire was approved.
Will start talking to candidates and asking about their view on the topic.
Questionnaire: Ready and research is being carried out
Date when the Guide was consulted: 24th Feb 2010
y y
The final questionnaire is ready and approved. Questionnaire is given to various travellers and has also been taken to the domestic airport.
Collecting more articles on the topic and putting them all together.
Questionnaire: As given in the 3rd Response sheet.
Date when the Guide was consulted: 25th March 2010
y y
The Questionnaires are taken and the analysis has been started. Project is on track.
The final project report is in progress.
Questionnaire: As given in the 3rd Response sheet.
Date when the Guide was consulted: 7th April 2010
y y
The analysis is done. The final copy is ready and approved by madam.
The final project report printing is to be done.

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