Preview

Airlines Industry in India

Better Essays
Open Document
Open Document
1946 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Airlines Industry in India
Airlines
PEST Analysis: The Indian Airline Industry

A PEST analysis is an analysis of the external macro-environment that affects all firms. P.E.S.T. is an acronym for the Political, Economic, Social, and Technological factors of the external macro-environment. Such external factors usually are beyond the firm's control and sometimes present themselves as threats. For this reason, some say that "pest" is an appropriate term for these factors. Let us look at the PEST analysis of the Indian aviation sector:

Political Factors In India, one can never over-look the political factors which influence each and every industry existing in the country. Like it or not, the political interference has to be present everywhere. Given below are a few of the political factors with respect to the airline industry:

o The airline industry is very susceptible to changes in the political environment as it has a great bearing on the travel habits of its customers. An unstable political environment causes uncertainty in the minds of the air travellers, regarding travelling to a particular country. o Overall India’s recent political environment has been largely unstable due to international events & continued tension with Pakistan. o The recent Gujarat riots & the government’s inability to control the situation have also led to an increase in the instability of the political arena. o The most significant political event however has been September 11. The events occurring on September had special significance for the airline industry since airplanes were involved. The immediate results were a huge drop in air traffic due to safety & security concerns of the people. o International airlines are greatly affected by trade relations that their country has with others. Unless governments of the two countries trade with each other, there could be restrictions of flying into particular area leading to a loss of potential air traffic (e.g. Pakistan & India) o Another aspect

You May Also Find These Documents Helpful

  • Satisfactory Essays

    Airbus Research Paper

    • 269 Words
    • 2 Pages

    The airline industry is subject to changes in the political environment as it has a numerous direction on the travel habits of its customers. An unbalanced political environment causes uncertainty in the minds of the air travelers, for instance the political stability of the United States was severely trembled by the terrorist events of September 11, 2001, and this directly resulted in a devastating drop in airlines business in that…

    • 269 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Five Forces of Competition

    • 1224 Words
    • 5 Pages

    Air travel has changed the way people live and experience the world today. The airline industry is a strategic sector that plays a fundamental role in the globalization of other industries since it promotes tourism, world trade, foreign investment and, therefore, leads to economic growth. However, all airlines within the industry operate in a highly dynamic environment where various legal, social, technological and economic forces interact with each other, thus influencing their decisions and actions…

    • 1224 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    In the year 2008, the growth of global aviation industry received a major bolt from the fear of global economic slowdown and the rise in crude oil prices. Though the global economic uncertainties impacted the business of airlines, but the steep surge in crude prices has changed the financial equations of the airline across the world, with India being no exception.…

    • 3222 Words
    • 13 Pages
    Powerful Essays
  • Best Essays

    Air India

    • 2898 Words
    • 12 Pages

    In today’s fast paced world the Aviation Industry has grown gradually over the recent years, resulting as one of the fastest flourishing industries in the world. This never ending trend has increased the constant demand for pilots, aircraft engineers and cabin crews at the same time increasing the expectation of the passengers. Going through a turbulent phase over the past years facing constant complications, the Indian Aviation Industry has faced struggles including high oil prices and limited pricing power as well. With increasing debts, widening losses, pilot strikes, shutting down of overseas operations and no sign of a solid recovery plan, India’s aviation sector is heading to get worse. Privately owned Kingfisher, which has shut down its overseas operation, is one in the heaviest debts and also in need of funds. Air India is equally struggling, owing employees Rs124 crores (US$23.5 million) in unpaid salaries (The Sun Daily, 2012). The other airlines are Jet Airways, SpiceJet and GoAir. This report is mainly focused on Air India and its current situation in the aviation industry of India. The problems which Air India faces will be looked into with suggestion to overcome its struggles.…

    • 2898 Words
    • 12 Pages
    Best Essays
  • Good Essays

    More than half a century has gone, when JRD Tata first took off in his own airplane. He added a new chapter in the Indian history. This was the beginning of aviation industry in India. But very soon the government took over his aviation company, and thus that nationalized company was named, Indian Airlines. Almost the next fifty years no competition was to follow for the Indian Airlines, as it remained the only airline company in India. But in the last decade and a half or so, things changed. A handful of airline companies came into existence, some backed by big business houses, and some being collaboration between international airline giants and local business houses. Some of these companies were not a success story and had to shut down operations. Besides this limited competition the growth of this industry has been more or less a linear one.…

    • 848 Words
    • 4 Pages
    Good Essays
  • Satisfactory Essays

    It is raining airlines now in India. After Tata son’s JVs with Singapore Airlines and AirAsia, smaller players are now aiming for the Indian Sky too. The aviation ministry headed by Ashok Gajapathi Raju has given thumbs up to new six new airlines. Out of six, government has given license to four companies, which had sought permits for launching scheduled, private or charter air operations.…

    • 326 Words
    • 1 Page
    Satisfactory Essays
  • Powerful Essays

    Fuel Impact

    • 2938 Words
    • 12 Pages

    Airline business is known for being extremely sensitive to any global event from weather disasters to economic/political crisis regardless of how remote the airline physical location is.…

    • 2938 Words
    • 12 Pages
    Powerful Essays
  • Powerful Essays

    Airlines Industry India

    • 7270 Words
    • 30 Pages

    The aviation industry in India has grown by leaps and bounds in recent years in terms of kilometers flown as well as customers serviced. The economy of a country is substantially determined by the quality of air transport. The airlines today have made themselves more popular among its customers by various marketing tactics like:…

    • 7270 Words
    • 30 Pages
    Powerful Essays
  • Good Essays

    The economy plays a very large part in the airline industry. Recessions are known to cause less demand for air travel for both business and leisure travelers. The financial crisis in 2008 had an extremely negative impact on the industry. The companies saw sharp declines in both passenger traffic and profit margins. While the industries are still in a sensitive spot, the US airlines managed to make a small profit in 2009. Thanks to the efforts of combating the dwindling demand by shrinking capacity, US companies were able to enjoy a small victory.…

    • 661 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    Air India

    • 258 Words
    • 2 Pages

    After all the turbulence national air carrier Air India went through in the recent past, Arvind Jadhav, Chairman and Managing Director of the beleaguered airlines is now determined to have a positive balance sheet by 2014-15 and is ready with a turnaround strategy. Some of the key targets the national carrier has set for itself include achieving 25 million domestic and 15 million international passengers by 2015, 93% on-time punctuality, and 75% load factor. The turn around strategy involves the activation of a low cost air service especially in the domestic market as well as the consolidation of the existing domestic operations before any expansion both in the domestic as well as the international markets is done. Air India has already achieved one major feat in the entire blueprint of the strategy, that is, they have got all the unions on board. It may be noted that Air India had halted operations in the past under the pressuring demands of the union. While the strategy clearly outlines wage and manpower rationalization, what comes as a relief to Air India’s employees is that there will not be any wage cut nor any job will be axed. This comes as a surprise move from a carrier which has the highest ratio of manpower to aircrafts in the entire industry. It seems the virtue of the fact that Air India is a Government carrier and not a private player has come to the rescue of its…

    • 258 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    The aviation sector has become the most important segment in the economic development of a nation. It plays a vital role in moving people or products from one place to another, be it domestic or international, especially when the distances involved are far. Stiff competition and favorable initiatives of the Government of India added fuel to enlarge both flights and fleets. Air Deccan was the premier airline, which offered low tariff to the domestic as well as international destinations and created a new landmark in aviation sector in India. Now ordinary citizens easily access the aviation service from their respective air terminals. In a highly competitive environment the provision of high quality services to passengers is the core competitive advantage for an…

    • 784 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    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. Air transportation in India is under the purview of the Department of Civil Aviation, a part of the India's Ministry of Civil Aviation and Tourism.…

    • 7650 Words
    • 31 Pages
    Powerful Essays
  • Powerful Essays

    A clear understanding of the mechanism of the aviation industry is vital for explaining why the governments’ influence is of such importance to this field. The commercial airline industry is regarded as a highly competitive and extremely difficult. Its special attributes give the industry a rather unusual structure.…

    • 5178 Words
    • 21 Pages
    Powerful Essays
  • Powerful Essays

    Captain Gopinath

    • 3424 Words
    • 14 Pages

    The Indian aviation industry is a niche market and is one of the fastest growing in the world frontier; becoming an integral part of the Indian economy. The influence of liberalization on Indian aviation had drastic consequences, which reflected in the shift of industry from being a government owned to a private owned sector. Air travel has progressed from the introductory stage to the growth stage due to the sudden increase in need, competition and advancements in technology with the main purpose revolving around leisure and business.…

    • 3424 Words
    • 14 Pages
    Powerful Essays
  • Powerful Essays

    Low Cost Airlines

    • 1892 Words
    • 8 Pages

    The Airline Industry has been growing persistently and consistently over the past decade. Central to the globalization taking place in many other countries is the Airline Industry as it facilitates world trade, economic growth, international investment and tourism. It’s growth has generated many new opportunities for the tourism development. The benefits of tourism to the national economies of the countries are being realized by the government of those countries. Because of the companies becoming increasingly international in term of their production, distribution, investment and their customers, business travel has also grown rapidly. Very closely tied to economic growth and trade is the Airline’s Profitability. The air travel industry’s outlook is very strong and fast growing. The Tourism Industry is directly or indirectly related to the Airline Industry. Customers must be understood in order to understand how the new aircraft might fit into the current market. Travel and Tourism can be thought of as a manufacturing industry. Tourism has become one of the major international trade categories. For many developing countries it is one of the main income source and number one export category, creating much needed employment and opportunities for development. The worldwide contribution of tourism to gross domestic product is almost similar to that of airline industry. The importance of tourism tends to higher in developing countries thus making more flights to fly to that destination resulting in inter dependence of tourism and airline industry on each other. One of the best ways to keep this interdependence alive and foregoing was the introduction of the low-cost airlines. The low-cost airlines as the name suggests are amazingly cheap but for every additional thing (from food to luggage), the customer has to pay but another plus point of low-cost airlines besides being cheap is that it promotes tourism vastly. As nicely said by Thomas Fuller, “The…

    • 1892 Words
    • 8 Pages
    Powerful Essays

Related Topics