AIR DECCAN

.revolutionizing the Indian Skies

GROUP MEMBERS
VIVEK CHAVAN..63 VATSAL MOHITE74 RANJIT THAKRE109 HEENA TONDE...113 VISHAL WAGHATE119 SUNNY JAINPG 6

AIR DECCAN
Low cost airline started in September, 2003 Begun with only 2 ATR turbo-prop aircrafts As on March, 2004 a fleet of 3 Airbus 320 and 7 ATR 42, operates 75 flights a day to 32 destinations. Annual revenue generated as on March, 2004 of US$120mn (Rs. 5520mn)

HUMBLE BEGINNINGS
G.R.Iyengar Gopinath born in Karnataka. Studied at Sainik School, Bijapur, graduated from National Defence Academy, Pune and later from India Military Academy, Dehradun Acquainted Capt K.J.Samuels who later became his business partner. Took retirement at the age of 28 from the Army.

SPREADING WINGS
On visiting Vietnam, the idea of venturing into Heli-charter industry cropped up Launched Deccan Aviation with Capt K.J.Samuels Catered to tourists, corporates, aerial photographers, mapping, power line surveyers, heli- tourism etc.

EFFORTS IN HELICOPTER BUSINESS

Started with 2 helicopters and capital of Rs.35 lacs Due to payments been made on time, enjoyed a reputation of high credibility organisation Best army pilots were hired as they were disciplined, good administrators and demonstrated strong leadership qualities

MARKETING STRATEGIES
On-call and Contract segments Harnessed Indias vast potential as a tourist destination for heritage, wildlife and pilgrimage spots. Tied up with hotels and temples for packaged deals. Customised holiday packages.

LIMITATIONS OF THE HELICOPTER BUSINESS

Significant infrastructure Socio-economic structure Not very scalable Relatively slow growth industry

BUSINESS MODEL
Fares

Target passengers No-frills, low-cost Business Model

AIR DECCAN WAS MODELLED ON

EVERY INDIAN CAN FLY

Capt Gopinath saw the potential of running an LCA Making it accessible and affordable to common man First flight operated on the Bangalore-Hubli route Convinced the government to re-commission the smaller airports and airstrips.

contd
Tied up with Citibank and ICICI to handle payment through credit card for tickets Provision of phone bookings with PNR no. Today the largest e-commerce site in the country

LEAN MEAN APPROACH

Narrower seats to increase seating capacity No seat reservation No frequent flyer programs or the likes No assurance of onward connections Simple boarding processes Reducing commission payable to agents No inter-line arrangements Meals and drinks provided for a price

INNOVATIONS IN BRINGING THE COST DOWN

Used a reservation system made by a Delhi based software company negotiated smartly with aircraft vendors such as ATR and Airbus Policy of pay and fly Lower turn around time of 15 minutes Tracks load factors and accordingly prices the fare Incurs 7%-8% costs on ticket sales

contd
Penalty on cancellation of ticket considerable Apex fare facility upto 90 days in advance Outsources all the non-core activities Fly by the hour Innovative ways of containing cost on maintenance etc.

POSITIONING
Targeted to middle class and lower middle class No-frills approach on all its flights Revenue optimisation Value proposition to the customer

CHALLENGES AHEAD
To enable any Indian who wants to fly, to be able to do so Per capita aircraft density to be increased Hangars at airport an issue New entrants in the existing market Getting right people in adequate numbers Policies related to civil aviation are archaic The escalating cost of oil Traffic control options for Air Traffic Controller

MARKET SHARE

COST STRUCTURE DIFFERENCES

INDIAN SKIES : A FARE TO REMEMBER (NORMAL ONE WAY FARE in Rs) JET AIRWAYS INDIAN AIRLINES AIR DECCAN RAIL II AC RAIL I AC

ROUTES

BANGALORE- 4700 HYDERABAD

MUMBAI GOA CHENNAIBANGALORE 3405

4705

2375

1211

2286

3410

2135

1232

2345

3235

2905

1755

747

1403

STRATEGIES ADAPTED BY AIR DECCAN

High aircraft utilization
Dynamic pricing

Cost reduction
Marketing and promotion Sales and distribution

STP ANALYSIS

SWOT ANALYSIS
STRENGTH -High load efficiency -Expanding operation in Sri Lanka WEAKNESS -Focus almost exclusively on South Indian Market -Lack of funds -Limited advertisement.

OPPORTUNITY -International Market -Expanding tourism industry

THREATS -Indigo Airline -Spicejet and other LCC -Fuel price hike

PORTERS 5 FORCES ANALYSIS

SUGGESTED SOLUTIONS
Make available flight services in north India

More friendlier and trained ground staff required

Slow check in should be removed by using automated check in

process
Strengthening of reservation system to handle overbooking

Venturing into cargo

Strengthening of its position in the industry

CURRENT SCENARIO : M&A

Motivation for Merger

Ever increasing cost Compromise on quality hits the brand Unviable pricing Competition Increasing costs Difficulty in maintaining brand image Competition from lowcost airlines Competition from International Airlines

POSSIBLE GAINS

Cash crunch Leveraging management and HR

Routes network License to fly internationally

Conclusion

The Industry has Witnessed tremendous growth in the Past Decade

Leading to intense Competition in the Industry & Setting the Stage for
Consolidation