ROLE OF INDIAN AIRLINES IN TOURISM SUBMITTED BY: CERTIFICATE This is to certify that of BBA has accomplished the project report title’ THE ROLE OF INDIAN AIRLINES IN TOURISM’ under my guidance and provision. She has submitted this project in the partial fulfillment of requirement as per the GURU GOBIND SINGH INDTRAPRASTHA UNIVERSITY. I further certify that this is an original work. All sources of information and help have been duly mentioned and acknowledged. ACKNOWLEDGEMENT
This project has been possible through the direct and indirect cooperation of various people who bear the imprints of their efforts for my work. I take this opportunity to acknowledge the invaluable assistance of the people who helped me in the completion of this project report. I humbly convey my sincerest gratitude to my internal guide Ms. Monika Tushir for her guidance, suggestions and unintended support, without which the project would not have been possible. I would also like to thank the faculty members who provided me all the necessary information in the completion of the project report.
Last but not the least; I would like to place a word of thanks for all those who directly or indirectly helped me in the successful completion of the project. DECLARATION I hereby declare that project work titled “The Role of Indian Airlines in Tourism” is an authentic work carried out by me under the guidance of (project guide) for the partial fulfillment of degree of BBA (TTM). And this has not been submitted anywhere else for the award of any other degree or diploma. INDEX TABLE OF CONTENTS Chapter No.
Topic Page no. 1. INTRODUCTION 1-11 ? PREFACE ? OBJECTIVE ? METHODOLOGY ? LIMITATIONS 2. PROFILE 12-19 3. ANALAYSIS OF PASSENGER 20-36 SURVEY MARKETING STRATERGY OF IA 4. CONCLUSIONS 37-43 RECOMMENDATIONS BIBLOGRAPHY [pic] [pic] 1 CHAPTER . 1 INTRODUCTION 2 PREFACE
This project is all about the “Marketing Initiatives taken by Indian airlines” with rapidly changing technological, social and economic, political-legal, trends towards globalization of business and industry, emerging of various private airlines, effective marketing management has become very challenging job. In his project I have analyzed the different promotional fares implemented by Indian Airlines and given feedback regarding their effectiveness and weather they should be continued o discontinued in different sectors. 3 OBJECTIVES OF THE STUDY ) To know how Indian Airlines can improve its overall performance b) The specific objectives are to improve service quality of Indian Airlines c) To have a better marketing strategy d) Market image of Indian Airlines as compared to its counterparts e) Its area of operation 4 RESEARCH METHODOLOGY Data collection- primary and secondary data: – Data would be collected through both primary and secondary data for carrying out the research project. Primary Data: – Primary data relates to data which has been collected first hand and which has been collected for the purpose of analysis.
It is undertaken, when data needed by the researcher does not exist, or are dated inaccurate, incomplete or unreliable, the researcher has to collect primary data. The primary data was collected through questionnaires. Sources of Primary Data: – Primary data was collected through • Corporate travellers. • Professional’s • Students. Secondary Data Secondary research invariably precedes primary research. Secondary data are data that were collected for another purpose and already exists somewhere. Sources of Secondary Data • Travel Magazine. Business Travel Journals. • Brochures, • Libraries • Annual Report. 5 LIMITATIONS OF STUDY • The study could have been more comprehensive and more representative of the universe, had the sample-size been larger, but it was not possible mainly due to lack of time and some other constraints. • The areas covered were restricted to Delhi city only and as such the results of questionnaires are valid for Delhi city only. • All this report has been an individual attempt and also it involves the human process of interpretation and analysis, so there are chances of human rror. • The marketing research is done on the basis of certain assumptions as regards to the future of the industry, but due to environmental changes, research results may not be valid. • Despite repeated proof-reading, there is a possibility of spelling error of otherwise, which may have been overlooked. 6 ABOUT AIRLINE Indian Airlines or Indian is an airline based in Delhi, India and focuses primarily on domestic routes, along with several international services to neighboring countries in Asia.
Indian Airlines is state-owned, and is administered by the Though the company that owns and operates the airline continues to be named Indian Airlines Limited, on 7 December 2005, the airline was rebranded as Indian for advertising purposes as a part of a program to revamp its image in preparation for an initial public offering (IPO). The airline operates closely with Air India, India’s national carrier. Alliance Air, a fully-owned subsidiary of Indian Airlines, was renamed Air India Regional. In February 2007, the Government of India approved plans to merge Indian Airlines with Air India.
In May 2007, India’s Ministry of Civil Aviation announced that Air India Limited (AI), India’s national flag carrier and Indian Airlines Limited (IA), the government owned domestic airline, would merge with effect from July 15, 2007. The new airline formed by the merger was to be called “Air India”, and would operate in both the domestic and international sectors. ACHIVEMENTS Air Cooperation Act, 1953, repealed on March 1st, 1994, ending the state’s monopoly of the skies. • Air Taxi Operation allowed in 1994 to seek scheduled airline status if they have at least 3 aircrafts. Vayudoot, the third public sector airline, is merged with Indian Airlines and its infrastructure offered to private airlines. • No restrictions imposed by the government, of pricing by the private airlines and air cargo operators. 7 • Most restrictions on types and imports of aircraft and operating routes relaxed in 1994. HISTORY The airline is set up under the Air Corporations Act, 1953 with an initial capital of Rs. 32 million and started operations on 1 August 1953. It was established after legislation came into force to nationalise the entire airline industry in India.
Two new national airlines were to be formed along the same lines as happened in the United Kingdom with British Overseas Airways Corporation (BOAC) and British European Airways (BEA). Air India took over international routes and Indian Airlines Corporation (IAC) took over the domestic and regional routes. Seven former freedom domestic airlines, Deccan Airways, Airways India, Bharat Airways, Himalayan Aviation, Kalinga Airlines, Indian National Airways and Air Services of India, were merged to form the new domestic national carrier.
Indian Airlines Corporation inherited a fleet of 99 aircraft including 74 Douglas DC-3 Dakotas, 12 Vickers Vikings, 3 Douglas DC-4s and various smaller types from the seven airlines that made it up. Vickers Viscounts were introduced in 1957 with Fokker F27 Friendships being delivered from 1961. The 1960s also saw Hawker Siddeley HS 748s, manufactured in India by Hindustan Aeronautics Limited, join the fleet. The jet age began for IAC with the introduction of the pure-jet Sud Aviation Caravelle airliner in 1964, followed by Boeing 737-200s in the early 1970s. April 1976 saw the first three Airbus A300 wide-body jets being introduced.
The regional airline, Vayudoot, which had been established in 1981, was later reintegrated. By 1990, Airbus A320-200s were introduced. The economic liberalisation process initiated by the Government of India in the early 1990s ended Indian Airlines’ dominance of India’s domestic air transport industry. Indian Airlines faced tough competition from Jet Airways, Air Sahara (now Jet Lite), East-West Airlines, Skyline NEPC, and ModiLuft. As of 2005, Indian Airlines was the second largest airline in India after Jet Airways while Air Sahara controlled 17% of the Indian aviation industry.
East-West Airlines, Skyline NEPC and ModiLuft discontinued flight operations but the entry of several low-cost airlines in India, such as Air Deccan, SpiceJet, Indigo Airlines and others like Kingfisher Airlines continue to give competition in its market, forcing Indian to cut down air-fares. However, as of 2006, Indian Airlines was still a profit making airline. Indian Airlines Limited is wholly owned by the Government of India through a holding company and has 19,300 employees as of March 2007. Its annual turn-over, together with that of its subsidiary Alliance Air, is well over Rs. 4000 crores (around US$ 1 billion).
Together with its subsidiary, Alliance Air, Indian Airlines carries a total of over 7. 5 million passengers annually. On 22 February 2007, the Group of Ministers (GoM) approved the merger of state-owned carriers, Air India and Indian Airlines. Operating under the name Air India, the two airlines formally became one entity on 15 July 2007 upon receiving the new Boeing 777-200LR with the new livery of the merged airline. [5][6] The new airline’s headquarters will remain in Mumbai, and will have a fleet of over 130 aircraft. In December 2007, Air India was invited to join the Star Alliance.
Since Indian Airlines is in the midst of merging with Air India, it too will effectively be a member. 9 Incidents and accidents • On 15 November 1961, Vickers Viscount VT-DIH was damaged beyond economic repair when the co-pilot retracted the undercarriage during landing at Ratmalana Airport, Colombo, Ceylon. • On 11 September 1963, Vickers Viscount VT-DIO crashed 51 kilometres south of Agra, killing all 18 people on board. • On 29 August 1970: a Fokker F27 flew into high terrain near Silchar shortly after takeoff, killing the five crew members and 34 passengers. On 30 January 1971: a Fokker F27 on a scheduled flight from Srinagar to Jammu was hijacked to Lahore by Ashraf and Hashim Qureshi, self-proclaimed Kashmiri Separatists. Passengers were returned to India on 2 February, but the hijackers destroyed the aircraft. India and Pakistan, blaming each other’s intelligence services, each ban the other country’s overflights and India-Pakistan flights until 1976. • On 12 October 1976: a Sud Aviation SE 210 Caravelle had its right engine catch fire shortly after takeoff from Mumbai. The crew attempted to return, but fuel flow to the engine was not stopped.
When the fire spread through the fuselage and the hydraulic system failed, the aircraft controls failed before landing. All six crew members and their 89 passengers were killed. • On 4 August 1979: a Hawker Siddeley HS 748 aircraft was approaching Mumbai airport at night and in poor weather when it flew into high terrain approximately 6 mi (9. 7 km) from the airport, killing the four crew and their 41 passengers. • On 10 May 1980: a Boeing 737-2A8, en route near Rampurhat experienced severe turbulence that killed two of the 132 passengers. On 24 December 1999: Flight 814, an Airbus A300B2-101 (registered VT-EDW) was hijacked just after taking off from Kathmandu, Nepal to Delhi. The plane flew around different points in the Subcontinent and finally landed in Kandahar, Afghanistan, as officials of the government of India and the Taliban negotiated. One passenger was killed and some were released. On 31 December 1999, the rest of the hostages on Flight 814 were freed. IndianAirlinesOperations Indian Airlines operates regular flights to 76 destinations, 58 within India and 18 abroad.
The airlines flies regularly to all key cities of India that include Delhi, Bangalore, Mumbai, Kolkata, Lucknow, Hyderabad, Pune, Goa, Chennai along with many regional destinations like Ahmedabad, Gorakhpur, Allahabad, Bhubaneshwar, Ranchi and others. Offering cheap and great airfare deals, Indian also operate flights to almost all popular sectors of the country that include New Delhi-Bangalore-New Delhi, Mumbai-Bangalore-Mumbai, New Delhi-Mumbai-New Delhi, Bangalore-New Delhi-Bangalore, Mumbai-Goa-Mumbai, Delhi-Goa-Delhi, Bangalore-Hyderabad-Bangalore and more.
Indian Airlines is planning to expand its network with in the country and abroad in coming years. Check- in Time: check in time for domestic flight 90 minutes before the departure and closes 30 minutes before scheduled departure. checkin time for international flights 3 hours before departure and closes one hour before scheduled departure. Identification: A valid photo identification card is required at check-in. Baggage: Indian Airlines allows customers to check-in free of charge up to 30 kg of checked baggage.
Meals: Indian Airlines offers Salt Free / Fat Free Meal,Sugar Free Diet Meal, Vegetarian Meal, Non – Vegetarian Meal, Continental Meal. CHAPTER . 2 POFILE & SWOT ANALYSIS 12 Company Profile The saga of Indian Airlines began by the amalgamation of 8 private airlines, with the passing of Air Corporation Act to nationalise the air transport industry. The journey began with a modest fleet as well as high aspirations and over the years, Indian Airlines innovated and upgraded its fleet to emerge as one of the largest domestic airlines in the world.
Today Indian Airlines, along with its subsidiary Alliance Air, provides an extensive network which encompasses the whole of India – a geographical area equivalent to Western Europe, besides reaching out to 17 international stations. In the last four decades, Indian Airlines has progressed by leaps and bounds and has built an excellent track record of manpower and infrastructural development. It has thus emerged as a proud symbol of modern India. Some of the highlights of this glorious period of evolution include – • Increase in passenger carriage from 0. million in 1954-55 to 8. 4 million in 1997-98. • Spread of network from 23,000 kms in 1953 to 1,18,000 kms in 1998-99. • Growth of assets from Rs. 21 million to Rs. 30,000 million in 1998-99. • A manifold increase in system seat capacity from 3070 seats per day in 1955 to 35,700 seats per day. THE HUMAN COMPONENT Indian Airline’s success could not have been possible without its 21,990 personnel (as on 31st March 1999). Everyone from pilots, cabin crew and engineers to commercial and administrative staff.
Moral building communication initiatives have helped at Indian Airlines to play their part in the turn around. Productivity linked incentives and greater transparency in recruitment, promotion and transfer policies have greatly contributed to major improvements in the efficiency of the company’s service. 13 The diverse programmes offered by the Central Training Establishment, Hyderabad virtually a university of the air, it trains personnel in all aspects of airlines operations. Effective refresher training programmes have helped to further enhance the skills learned at Central Training Establishment.
The company also continues to provide various welfare measures to employees, such as medical facilities, subsidised canteens, educational scholarships, holiday homes, sports clubs, festival advance etc. CONTINUED FLEET EXPANSION AND MODERNISATION. On its inception in 1953, Indian Airlines took to the sky with the fleet that included: – ( 74 DC-3 (Dakota)( 3 Sky Master( 12 Viking( 5 Sentinel ( 1 Twin Beach( 1 Single Beach( 1 Auro xix( 1 D. H. Dove ( 1 Saab Safir Aircraft A phased fleet modernisation programme was started by Indian Airlines with the introduction of Viscounts in 1957, followed by Fokker Friendship Aircraft in 1961.
With the arrival of the pilot friendly Caravelle turbo jet in 1963, Indian Airlines took domestic aviation in to the jet age. In the 60’s, the first Indian built aircraft HS- 748 (Avro) was induced into Indian Airlines and the year 1971 saw the induction of Boeing 737’s. In 1976, Indian Airlines, became the first domestic airline in the world to induct wide-bodied 273 seater Airbus A- 300 aircraft, thus setting new standards in passenger comfort. With the introduction of the state of the art Airbus A-320 in 1989 and its fly by wire technology, Indian Airlines acquired the latest in aviation equipment. 1.
Indian Airlines has an extensive fleet of 52 aircrafts comprising AIRPLANES – fleet Model No. of Planes Airbus A300 10 Airbus A320 30 Boeing 73712 Total52 2. Indian Airlines flies 25000 passengers on 210 flights to 59 cities in India and 17 international destinations. Indian Airlines has the largest domestic reach in the country with the network that stretches from Leh and Srinagar to Port Blair and Dibru Garh. 3. Indian Airlines bases are situated at the 4 metros. No. of bases 4 – Delhi, Mumbai, Calcutta and Chennai. CONTRIBUTION TO NATIONAL EXCHEQUER.
The company has contributed Rs. 169. 88 crores to the Govt. Exchequer by way of customs duty, sales tax, excise duty etc. , during the year. Joint Venture & Hub and Spoke Operations. Arrangements with Air India Ltd. for joint venture operations on the Indo- Gulf sector and the Hub and Spoke operations continued during the year. The hours flown during the year vis-a-vis the hours previous year were as follows: – 1998-991997-98 Joint Venture46874812 Hub and Spoke538600 Jet Engine Overhaul Complex. 15 The JEOC, functioning as a separate profit centre since May 1996, has saved the company expenditure to the tune of Rs. . 70 crores, besides saving precious foreign exchange. Cargo Promotion:- With a carefully planned marketing strategy the company was able to generate substantially high revenue of Rs 156. 83 crores on carriage as compared to Rs126. 73 crores in the previous year. This is due to the success of it’s new door-to-door cargo service with M/S Gati Cargo. Capacity Production and Utilisation:- The performance of the company in terms of Capacity Production -`Available Tonne Kilometers’ (ATKms) and Capacity Utilization -`Revenue Tonne Kilometers’ (RTKms) improved significantly.
Similarly, the number of passengers also registered a growth, despite recession in the economy and sluggish market conditions, as results below indicate. | |1998-99 |1997-98 | |ATKms (Millions) |1296. 157 |1170. 767 | |RTKms (Millions) |827. 553 |765. 209 | |Passengers Carried |8. 8 |8. 17 | |(Including Alliance Air) | | | 16 Airline Code:- IC – Indian Airlines CD – Alliance Air Aircraft acquisition:- A 300 – Wide Bodied Airbus A300 A 320 – Fly-By-Wire Airbus A320 737 – Boeing 737 ATR – ATR 42 228 – Domier 228 154 – TU 154 62 – IL 62 Class:- C – Business J – Executive
Y – Economy Days:- 1 – Monday 2 – Tuesday 3 – Wednesday 4 – Thursday 5 – Friday 6 – Saturday 7 – Sunday 17 REVENUE FOR INDIAN AIRLINES Today nearly 80% of the customers are provided with travel agents to the Indian Airlines and these travel agents are 2000 in number spanning the whole country. Indian Airlines provide 5% and 7% commission on domestic and international fares respectively to the travel agents. SWOT ANALYSIS FOR IA STRENGTH ? Large Fleet ? Experienced Staff Connectivity with the reservation centers and agents is good ? Adequate Infrastructure and large network ? People are loyal towards notational carrier WEAKNESS ? Preconceived Image Of PSU’s ? High Overheads and huge workforce resulting in lower output ? Political/Bureaucratic interference ? On the spot decision making flexibility not there OPPORTUNITIES ? Tourism industry is gaining momentum ? Response to some of the promotional fares is encouraging ? Corporates are showing interest in Indian Airlines ? Weakening of dollar rate in comparison to rupee
THREATS ? Perception of better product in comparison to that of the competitor ? Recent world events hitting the tourism industry badly ? Expectation of people from IA is high, even some of them are unrealistic ? Increase in capacity of various airlines CHAPTER . 3 MARKETINFG STRATERGY OF IA & ANALYSIS OF PASSENGER SURVEY 20 MARKATING STRTERGY OF INDIAN AIRLINES The product that IA sells is ‘SPACE’ it may be its seats or cargo space. This product is highly perishable and costly . Airlines earns revenue by selling this space.
This means higher the higher the seats sold higher he revenue generated. Thus if the plane goes in the air with empty space, this means that much space has perished. Thus the life cycle of the airlines product begins and ends with each flight. The marketing concept of building an organization around the profitable satisfaction of customer needs has helped firm to achieve success in high growth, moderately competitive market. However, to be successful in markets in which economic growth has leveled and in which their exists many competitors who follow the marketing concept, a well developed marketing strategy is required. AFTER MATH
To rectify the remedy that has been surely creeping, resulting in crippling results and damaging reputations. IA took resort to the turn around strategy which constiues the following:- 1. HRD Initiative As a first step free and frank discussion with a cross section of the employees were held. Top management undertook extensive ours of all stations to communicate the details and division behind all major policy initiatives and to get their response from them. Focus of training was enhanced to increase effectiveness. A greater transparency was built into recruitment and transfer policies with a view to boosting their trust and confidence.
In interaction with unions and associations a firm but fair attitude was taken. 2. Increased Utilization of Aircraft With a view increased in aircraft utilization, pilots needed to be made to put in more flying hours and steps had to be taken to increase the number of Commanders. Productivity of Engineers also had to be linked to the daily availability of aircraft i Enhanced productivity and Availability of pilots The agreement signed between ICPA in 1996 resulted in the increase in monthly utilization of pilots from 50-63 hours. With the promotion of 80 pilots into the executive cadre monthly utilization went upto 75 hours.
Certain rationalization and changes in training patterns of Commanders, due to the signing of landmark with pilot’s association resulted in increased out turn of commanders. ii. Increased productivity of Engineers Productivity of engineers has also significantly increased as a result of other productivity thereby increasing daily availability of aircrafts as follows:- A-300 7-8 aircraft per day from 4-5 A-320 25-26 aircraft per day from 20 3. Increased International Operations (a) Indian Airlines went in for increasing the number of destinations to neighboring countries.
In 1997 Indian Airlines operated 12 international operations, which went up to 17 stations in 1999. The new stations added are Doha, Kuala Lumpur, Kuwait, Bahrain and Yangon. (b) On the domestic front- IA is planning to start shuttle type’s flight on major metro routes like Mumbai-Bangalore, Mumbai-Chennai and Delhi-Bangalore. It has stared launching shuttles on the heavy Mumbai-Delhi routes. 4. Creation of Profit Centers While on one hand, IA size is strength It is also a major disadvantage when it comes to operating in a fast changing and competitive environment.
It is not possible to take decisions specific to small groups of employee’s with reference to 22003 strong work forces. Also a more direct linkage between productivity and employments has been created and thereby reducing problems of industrial relations. IA has also set up a subsidiary airline, Alliance Air. This airline has helped in increased utilization of the Boeing aircraft by inducting Commanders from the open market and focusing on regional routes. It has also enabled the Commanders in IA to be utilized more optimally on A-300 and A-320. 5. Marketing Initiatives
Indian Airlines took a number of economic initiatives and bought about significant improvements in its product. Sustained and meaningful campaign was launched to disseminate information about these improvements. The marketing initiatives taken were:- 1. Product improvement 1999-00 EXTRA SAET PITCH: Extra seat pith in B-737 and economy class of airbus A-300 WIDER SEATS: Wider seats provided in executive class of airbus A-320 aircraft. 23 CHOICE OF MEALS: Introduction of choice of meals bread/fruit baskets, soups, table cloth and napkins, hot and cold towels. FREQUENT FLIER PROGRAMME:
IA has further strengthened its frequent flyers programme (FFP) , by entering into a reciprocal arrangement with Air France and launching joint promotions with American Express, Hertz Rent-a-car and the welcome group. SENIOR CITIZEN DISCOUNT: Persons who have attained the age of 65 years on the date of travel land . who are resident citizens of India are entitled to 50% discount on the normal rupee adult fee. WAVING OF CANCELLATION CHARGES: IA has waived of cancellation charges, provided the reservation is cancelled is one hour before the scheduled departure of the flight.
There will be normal refund fee of Rs. 100/- Only in case ticket is refunded / reissued. FESTIVAL FOODS: Passengers are served with special sweets on Diwali, Bengali Food on Durga Puja, Avadhi food on Holi and Plum Cake on X’mas REPORTING TIME: It is reduced from 75 minutes to 60 minutes at all the airports except Delhi, & Srinagar 24 2. Reservation Facilities • To facilitate reservation between two stations of Indian Airlines network, the instant reservation facility has been extended to a total number of 69 stations. • Of the 53 domestic stations where Indian
Airlines flights are being operated presently, 52 stations are equipped with computerized reservation system • Computerized reservation facilities extended to about 750 agents spread over 38 stations. • Indian Airlines and Air India jointly under National Marketing Division (NMD) are distributing System Interface for Travel Agents Reservation (SITAR), which is the state-of the art technology from SABRE. 6. Incentive Scheme IA has realized that unless he distribution network is rejuvenated with generous doses of incentives, agents, who account for two-thirds of the airlines sales, will just not respond.
The airline has introduced a three percent sector-linked incentive-commission, which can be deducted by agents as source. 7. Price In the year 1999, IA stared a “make up strategy” i. e. slash in price for the make up of losses. It has been followed up by many airlines as a quick penetrating strategy to draw in big crowds. The General Managers in four regions have been authorized to extend a 15% bulk discount to passenger groups depending on market conditions, point to point fares have been renationalized. 8. Customer Contact Programme The airline is finally laying more emphasis on customer contact programs.
In order to design an idle flight schedule IA has hired IMRB to meet sample group of 10000 frequent flyers at Delhi, Mumbai, Chennai and Calcutta . 25 ANALYSIS analysis OF PASSENGER SURVEY ON COLLECTION OF ALL THE COMPLETED QUESTIONNAIRE FROM PASSENGERS AND TRAVEL AGENTS, THE DATA WAS AGGREGATED AND METHODS OF ITS ANALYSIS APPLIED SO AS TO INTERPRET THE REQUIRED INFORMATION AND MEANING. 1) Purchasing decision of tickets for the passengers:- Out of the 150 respondents surveyed, it was found most of the passengers, purchased their tickets from a travel agent.
Primarily because travel agents offered discounts and provided better options. 2) As, air travel is more convenient and less time consuming than other modes of travelling, people with now increased purchasing power as well as due to better services in air travel are flying more often. The results show that [pic] 3) Which of the following domestic airline have you travelled by? Out of the 150 passengers surveyed, all had traveled by Indian Airlines, as it is the oldest and has better connections than rest of the airlines and it still is the leader. These results indicate the following: –
In accordance to the survey, the passengers are seeking better levels of service and quality than ever before. Out of the 150 respondents surveyed the results are indicating a growing preference for private airlines over Indian Airlines. But, passengers also feel, Indian Airlines is improving after being bitten in the knee. Indian Airlines – 42% Jet Airways – 44% Sahara Airlines – 16% [pic] Out of the 150 travelers, who prefer Indian Airlines for domestic travelling say that they prefer Indian Airlines because of the following reasons: – 5) Purpose Of Travel The purpose of this question No. is to deter mine the trend of the new age traveller. Does he use the airline’s just for business/work, as was the case in 70’s and 80’s due to high tariff and low purchasing power. The results indicate that 74% of the passengers surveyed travel both for work as well as leisure/holiday. 20% of the passengers only travel by air for work purposes and remaining 6% travel by air only for leisure/holiday. [pic] 6) Frequent Flier Programme Frequent flier programmes were started first by Indian Airlines, to promote travel with them, as they faced threat from various private airlines.
All, the airlines now have a frequent flier programme, but as of now it has not gained much popularity as the results show. 7) The number of respondents who were members of a frequent flier programme out of 150 were 38. Out of these 38 people 20 were the members of ‘Jet Privilege’, the frequent flier programme of Jet Airways and the rest ‘15’ were members of Indian Airlines frequent flier programme. 2 were members of both and 1 was a member of Sahara and Indian airlines. The travellers are mostly corporate travelers who are members of these programmes. And they get following benefits: – • Priority reservation. Free tickets after certain mileage. • Separate check in counter. • Extra baggage allowance. • Priority waitlist. Priority on booking of international tickets, who are in collaboration with the domestic airlines. 29 8) Factors considered important for relative influence on the ‘Choice of Airline’ In the buying process decision for an airline ticket, consumer usually goes through these factors viz, suitability of timings, on time performance, in – flight service, in – flight comfort, appearance and hospitality of crew, ease of reservation and cancellation, baggage handling, frequent flier benefits and airfare.
In the questionnaire I have taken all these factors with a rating of 1 to 4. 1) Stands for Not Important 2) Least Important 3) Important 4) Very Important Suitability of timings: – in accordance to the important survey conducted, the following results were achieved. [pic] 9) Indian Airlines has been a different ball game. Developed and groomed in an environment of monopoly, its staff had developed “ I care less” syndrome which it will take long to overcome. Over staffing and ill discipline was another problem, with the former still existing.
The earlier image of long waiting lists in popular routes of Indian Airlines, frequent delays and unsympathetic attitude is slowly beginning to change as the results may indicate. This has happened as a result of the recent induction of private airlines in the same sector and the new pro-active board, in turn have forced Indian Airlines to become a better service oriented and customer friendly airline. 30 | |Excellent Performance |Average Performance |Bad Performance | IA |Jet |Sahara |IA |Jet |Sahara |IA |Jet |Sahara | |On-Time Performance |22% |52% |32% |54% |44% |60% |24% |– |– | |In-flight Service |6% |86% |54% |68% |10% |38% |26% |– |– | |In-flight Comfort |22% |34% |24% |74% |62% |60% |4% |– |8% | |Cabin crew behavior |6% |80% |32% |64% |16% |58% |24% |– |2% | |Reservation & Cancellations |20% |32% |28% |66% |60% |54% |14% |4% |10% | |Baggage Handling |12% |36% |22% |62% |56% |48% |26% |4% |22% | |Frequent Flier Benefits |36% |24% |20% |58% |66% |60% |6% |6% |12% | |Air-fare and Discounts |22% |8% |44% |74% |76% |36% |4% |12% |12% | |Safety and Security |12% |14% |10% |64% |78% |74% |24% |4% |8% | |Flight Schedules |38% |16% |8% |52% |74% |56% |10% |6% |28% | | Comparative Analysis Comparative Analysis based on Excellent Performance 31 [pic] Passenger Perception of Indian Airlines 32 Better Same as before Worse No Opinion Cabin Crew Behaviour 48% 44% 4% 4% Ground Staff Behaviour 22% 60% 6% 12% In-flight service 42% 54% 2% 2% In-flight comfort 26% 68% – 6% Redressal of
Complaints 6% 50% 20% 24% On-time Performance 26% 58% 6% 10% 33 [pic] 10) Passengers are feeling the changes in Indian Airlines and it’s service level’s therefore they are now encouraged to buy the Indian Airlines ticket. The results indicate that the probability results are fair: – Definitely will buy –28% Very likely will buy –36% Probably will buy –36% 34 35 INDIAN AIRLINES NETWORK 36 CHAPTER . 4 CONCLUSION & RECOMMENDATIONS 37 CONCLUSION From the findings and comparative analysis of the data two of the hypothesis have been proved correct.
The two which are proved correct are that, Indian Airlines is still the largest domestic airline in the country – in terms of sales of tickets and number of destinations. The other hypothesis, which has been proved correct, is that passengers are giving importance to the service levels offered by the airlines. The one which was proven wrong was Indian Airlines is still the most preferred airline, by passengers, amongst the many competitors. Thus this wrong should be converted into right by Indian Airlines, and for that suggestions and recommendations have been given in the earlier chapter. Although the margin of preference is not much, but in today’s competitive scenario, one needs to be the best in all aspects.
It was found during the period of data collection that travel agents also agreed that Indian Airlines is still the largest domestic carrier. Although, majority of them believed Jet Airways to be preferred than Indian Airlines. They also felt that passengers are giving importance to the service levels offered by the airlines. Travel agent’s felt that suggestive and proactive approach was required by Indian Airline’s to be the most preferred airline, and felt that it had begun to take the right approach. They also felt that they lacked innovativeness and were only concentrating on providing air travel but did not aim for excellence in service levels.
The biggest problem a travel service marketer faces is determining what to sell and to whom, thus there is a need to be both circumspect and selective. Over promising and under delivery of a service can lead to a loss of money and loss of client and in a trade which is as insular as the travel trade, the ripple effect is disastrous. While purchasing an airline ticket, about 54% of the travel agents say that most of the customers generally look for good in flight services of the airline. Around 45% of the travel agents felt that most of the customers look for cheap fares and discounts offered by the airline and 40% of the travel agents feel that most of the customer’s look for punctuality, timing and least cancellation of flight.
Therefore it can be said that In-flight service, schedules, punctuality and fare/tariff are the most important considerations that a customer keeps in mind before deciding in purchasing an airline ticket. Indian Airlines is a financially strong company and should work on a turnaround strategy which consists of a focussed attention in improving in-flight services, increased utilisation of aircrafts, Human Resource Development initiatives, increased international operations, creations of profit centres and better commercial initiatives. 39 RECOMMENDAITONS Customer Value Customer delivered value is the difference between total customer value and total customer cost. Total customer value is the bundle of benefits customers expect from a given product or service.
Total customer cost is the bundle of costs customer expect to incur in evaluating, obtaining and using the product or service. Customer Satisfaction: Satisfaction is a persons feelings of pleasure or disappointment resulting from comprising a product’s perceived performance (or outcome) in relation to his or her expectations. Indian airlines must focus on making strategies that create quality and value that will meet or exceed customer’s expectations, by completely satisfying the customer there is no reason for them to consider alternative airline. INFLIGHT SERVICE As Naresh Goyal, chairman of Jet Airways in India has written, ‘Any airline may get you from place to place, but what happens between take off and landing is what makes the difference’.
In-flight service is being given far more importance than every before, since the arrival of private airlines. It should give on its all main routes, complementary gifts, not only for first class and business class passengers but also to the economy class passengers. They should encourage innovative and fresh ideas for in-flight service. Overall, they should encourage and believe in service with a smile. 40 • CABIN CREW BEHAVIOUR The ‘I care less’ attitude which was once trademark of Indian Airlines Cabin Crew, is slowly and gradually shedding away. Firstly, it calls for focussed HRD initiatives from the company itself. The company must help and teach the present staff to be more courteous and understanding.
The company, must also recruit smart, young and active people who can handle the job profile better. The major disadvantage of Indian airlines, since it is a Government undertaking the cabin crew age limit is the same as of a person in another job, so it has a old workforce in its flight’s also, this discourages the traveller and does not give a fresh look to the airline. Indian Airlines must give encouragement to its cabin crew in every way possible, to improve their standards, as this is a service industry and behaviour does matter. • ON TIME PERFORMANCE The on time performance was a cause of concern for travellers, as we found during the survey. The on time performance of Indian Airlines is not great, as is required in this business.
The private airlines are a major cause of envy on this particular factor for Indian Airlines. The major delay facts is the delay due to VVIP flights and VVIP’s travelling with the other traveller’s on the same flight. The delay due to this factor must be totally avoided by better co-ordination between the airline and VVIP’s agencies. Another facts of delay is considered to be, the lazy approach by the allied services staff before the take-off i. e. engineering staff, security staff etc. This must totally be avoided by the Airline, by better training to set new standards for on time performance for the airline. 41 • EFFECTIVE COMPLAINT HANDLING
Effective complaint handling can have a dramatic impact on customer retention rates, deflect the spread of damaging word of mouth and bottomline performance. Indian Airlines has set up few grievance cells and is setting up a few more in every area of operation but travellers feel that it is not much of help. The grievance cell should be more empowered, and should also find out and report the features that customer look for and what dissatisfies them. FREQUENT FLIER PROGRAMME While doing the survey, travellers indicated that frequent flier programme were not very popular in India, but felt if the right rewards/ benefits are attached, it can turn into a lucrative option for the company as well as for the traveller.
The frequent flier programme of Jet was the most popular, therfore Indian Airlines must focus more on this scheme, this option can create more demand and happier customers for it. Since it is the largest domestic airline and carries maximum no. of passengers it can encourage repeat usage. The recent frequent flier programme must be reviewed and more benefits added. • GAINING COMPETITIVE KNOWLEDGE Since competiton has arrived the market share of Indian Airlines has declined, as it ended its monopoly, so it must formulate more effective strategies and knowledge about competitor’s activities must be known. For improving the service of Indian Airlines Limited, Indian Airlines should know what their competitors are doing.
But to out think them, you have to know them thoroughly. Through travel agents, travellers and other company sources, Indian Airlines should track what competitors are doing and what the company can do to create differentiated service. It will help the company to address preferences, service requirements of the travellers better. BIBILOGRAPHY 1. “Indian Airlines to be called ‘Indian’ now”. Rediff. com. 2005-12-07. http://www. rediff. com/money/2005/dec/07ia. htm. 2. “Why one large airline makes economic sense”. The Hindu Businessline. 2005-06-30. http://www. thehindubusinessline. com/2005/06/30/stories/2005063000250800. htmRetrieved 2007-07-30. 3. “Directory: World Airlines”.
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