Indian air line

7/29/2019 Indian air line

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EXECUTIVE SUMMARY

Indian Airlines is the oldest carrier in the domestic aviation industry. It has

been the main stay for domestic air travel in India for more than 45 years. With the

arrival of other private airlines, its interests have been hurt, but it is continuing its

quest to be the leader in this industry. During the research, the main objectives of the

study have been:

a) To understand the perception of travellers towards Indian Airlines.

b) Also to apprehend the perceptions of travel agents towards Indian Airlines.

c) To know how Indian Airlines can improve its overall performance

d) The specific objectives are to improve service quality of Indian Airlines

e) To have a better marketing strategy

f) Market image of Indian Airlines as compared to its counterparts

To find out the required information primary data was collected through self-

administered questionnaire for the passengers and travel agents and secondary datafrom library and the internet. A sample size of 200 was taken including 150

passengers and 50 travel agents.

The passengers and travel agents felt that private airlines were better in certain service

factors. They also could identify a change in Indian Airlines, after the arrival of

private airlines and believed that it was overcoming its I care less syndrome.

For analysis of the data, statistical tools, based on the data collected were used and

comparative analysis was done.

Indian Airlines is a financially strong company and if it carefully plans its strategies,

with more focus on passengers, it will remain the market leader.1


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1.1 PURPOSE OF THE STUDY

The purpose of the study was to understand the perception of travelers towards Indian

Airlines, to apprehend the perceptions of travel agents towards Indian Airlines, to

know how Indian Airlines can improve its overall performance in terms of its

marketing as well as its quality of services provided and total customer satisfaction

and hence with the help of the above to assess the image of Indian Airlines in the

market as compared to its counterparts viz. Jet air and Sahara Airlines.

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1.2 REASERCH OBJECTIVES OF THE STUDY

a) To understand the perception of travelers towards Indian Airlines.

b) Also to apprehend the perceptions of travel agents towards Indian Airlines.

c) To know how Indian Airlines can improve its overall performance

d) The specific objectives are to improve service quality of Indian Airlines

e) To have a better marketing strategy

f) Market image of Indian Airlines as compared to its counterparts

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1.3 RESEARCH METHODOLOGY OF THE STUDY

Research Design: -

There are three kinds of research designs namely;

Exploratory

Descriptive

Causative

In my project, a Descriptive Research was initiated because it was generally a study

which was carried out to describe the market characteristics of various airlines, and of

Indian Airlines in particular, as well as the buying behaviour of travellers.

Situation Analysis: - Conducting a situational analysis means analysing the company,

its market, its competition and the industry in general. The situation analysis is a

background investigation. It involves obtaining information about the company and its

business environment by means of library, research.

Data collection- primary and secondary data: -

Data would be collected through both primary and secondary data for carrying out the

research project.

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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.

Professionals

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

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Annual Report.

Sample design

Doing research via sampling was important because of impossibility of finding all of a

population, as well as other restrictive parameters like cost, time etc. Our sampling

decision should be in-coordination with the research and data objectives. The method

opted for taking samples was `Non-probability sampling. It was a `Purposive Non-

probability sampling/ Judgement Sampling was used. The key assumption underlined

this type of sampling is that, with sound judgement or expertise, and an appropriate

strategy, one can carefully and consciously choose the elements to be included in the

sample, so that samples can be developed that are suitable for ones needs. My

objective for using `Judgement Sampling was that since airline travel is not

experienced by everybody, so `Judgement Sampling was a must to get the closest and

the correct response.

Sample Size: -

150 passengers/ respondents

50 travel agents.

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Method of Data Collection:-

Survey/ Personal Contact Method:- In a survey, the researcher carries out opinion

polls involving customers, sales persons, dealers, traders and experts. In the survey,

the main method of interviewing was by Personal Interviews, as this gave me a better

understanding of the needs and preferences of the passenger. Most of the data is

quantitative in nature and supported by qualitative data.

Instruments for data collection: -

The research instruments used for this survey were structured questionnaires. The

questionnaires were designed to find the satisfaction levels of Domestic Airlines, in

particular, Indian Airlines.

Questionnaire: -

A questionnaire consists of a set of questions prepared to respondents for their

answers. Because of its flexibility, the questionnaire is by far the common instrument

used to collect primary data. Closed Ended as well as Open Ended questionnaire were

used in my market research .

Drafting of a Questionnaire: -

The formulation of the questionnaire, i.e., the structure and the disguise to be used in

the questionnaire depends upon the kind of information that is desired. Questionnaire

was prepared over a period of 5 days by intensive brainstorming. Valuable advice

regarding changes was given by my ORP tutor, Mr. S.L.Gupta, has resulted in the

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formulation of the questionnaire through which responses were collected and

analysed. A copy of the questionnaire has been attached as an annexure to the project.

Since my objective was to derive out the maximum information out of the passengers

without making the whole exercise boring and troublesome, I decided to keep majority

of the questionnaire close-ended.

In order to generate and sustain the interest of the respondents, the initial questions

pertained to the gathering of simple information like the frequency of travel, the

choice of airline and the purpose of travel. Since, I had to balance the twin objectives

of gathering maximum information and at the same time retaining the interest of the

customers, I was compelled to squeeze in a lot of questions and club them up in a

single question.

The question pertaining to assessing the impact of private airlines on Indian Airlines,

for this the respondents ticked in the various options under different parameters. Last

but not the least, the respondents were asked to pen down some personal information

purely for statistical purposes, with an assurance that it would be kept confidential.

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Research Plan:

.

Type of ResearchMarket Survey

Market Segment Passengers / travellers

Geographical Area New Delhi

Data Sources Secondary - Print Media

- Internet

-Company documentation

Primary - Survey research

Research Instrument questionnaire

Sampling Plan Sampling Unit- Airline passengers

- Travel agents

Sample Size- 150 passengers

50 travel agents

Sampling Procedure-Non-probability

judgemental

Contact Method Personal Interviews.

LIMITATIONS

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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 error.

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.

ABOUT TOPIC

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About Aviation Industry

The first Indian State air service began to function on 20th

Dec. 1929. All technical

and operation control was left in the hands of Imperial Airways. After that Tata

Airways came into existence. This airline was dealing with the taking off passengers

and cargo from one place to another.

There were as many as eight private airlines till 1953.

Air India Limited

Air Services of India Limited.

Air Airways (India) Limited.

The Bharat Airways Limited.

The Deccan Airways Limited.

The Himalayan Aviation Limited.

The Indian National Airways Limited.

The Kalinga Airlines.

They were all having their own individual scheduled services in and around India.

However, the private sector of Indian aviation industry was brought to an end in June

1953 by the introduction of an act of parliament known as Air Corporation Act 1953.

This brought in the nationalization of air-transport. Consequently, all the existing

eight private airlines were amalgamated to form one nationalized airline called

IndianAirlines.

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Indian Airlines came into existence in June 1953. Today it is well-established

brand name with sound infrastructure and an overwhelming size.

Progress of Indias Domestic Airlines.

Item 1971 1981 1990-91 1991-92

Hours flown

(000s)

90 93 89 107

Kilometers

Flown ( million)

33.4 44.4 49.7 57.6

Passengers

carried (000s)

2056 5650 7484 8316

Freight Tonnes

(km)

14.1 59.8 88.0 84.5

OPEN SKY POLICY

The process of liberalisation of the Indian air transport industry commenced with

Governments declaration of open sky policy in 1990.In fact, the first step in this

direction was taken when Air Taxi Scheme was introduced as non scheduled

operations in 1987. The scheme did not take off because of severely restrictive

conditions. It was modified in 1990 to remove restrictions on capacity, schedules,

route selection and airfares. The import duty on aircraft was also reduced to 3% to

make airlines operations cheaper. This initiative further received impetus with the

liberalisation of the economy, trade and industry from 1991. The entry of private

scheduled airlines in Indian domestic skies was signaled in October 1992.As a result12


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of these measures a number of parties started air taxi operations on trunk and high

density routes. As Indian Airlines began losing market share and technical staff, the

government took a number of steps to bolster Indian Airlines.

Achievements

Air Cooperation Act, 1953, repealed on March 1st, 1994, ending the states

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.

Most restrictions on types and imports of aircraft and operating routes relaxed in

1994.

Private Airlines Currently Operating:

JET AIRWAYS

SAHARA INDIA

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JET AIRWAYS :

Jet Airways has emerged as a major competitor of Indian Airlines on the sector it

operates. It was launched on 5,May 1993 by Mr. Naresh Goyal with approximately

100 employees and 2 aircrafts. It has an interline agreement with over 90 international

airlines which facilitates ticketing and allows for convenient transfer of passengers.

The crew has been trained in Malaysia Airlines and Ansett-Rankett among the leading

aviation training centres in the world. Jet airways have the most latest and modern

fleet of Aircrafts operating in India. They have a total of 30 Aircrafts, out of which

AIRPLANES fleet Model No. of Planes

Boeing 737 25

A.T.R 5

Total 30

The reservation system used by them is SABRE. They have an efficient and courteous

ground staff to take care of the needs of passengers. They have the quickest baggage

system.

Jet Airways is not just a passenger airline an important part of their revenue accrues

from their cargo division. They have capability of upto 2.5 tons per flight and with the

current fleet expansion the tonnage would be 35000 tons.

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Their basic aim is to fly more people and more cargo to more destinations faster and

more often than any other airline in the country.

Sahara India: -

It was launched in 1978 from Gorakhpur. It was started with a small capital of Rs.

2000/- and the establishment was one small room.

The business today has reached over 1600 crores. Now they have 971 offices and the

biggest infrastructure in the private sector in India. They work force is over 70,000

and the growth is over 180%. The various activities they carry out are parabanking,

housing, steel, aviation and mass communication.

The philosophy of Sahara India is growing emotionally and materially together like a

family i.e. Collective Materialism. They operate with Boeing aircrafts. It follows the

motto of Value Added flying. They have a central reservation system and Gabriel II

programmes. They have in-flight entertainment through audio-visual facility. They

have taken technical assistance from British Airways and provide ratable maintenance

and material management support. They have special security expert team and state of

the art explosive detection equipment.

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PROBLEMS FACED BY PRIVATE AIRLINES

These include: -

Lack of training facilities.

Poor maintenance facilities.

Low inventory of spares due to prohibitive costs of importing spares.

No proper monitoring cell for analysing information.

Lack of skilled manpower with respect to pilots and engineering staff.

Necessity of keeping operation at a low cost.

Poor infrastructure at airport.

COMPANY PROFILE

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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 0.5 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.

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THE HUMAN COMPONENT

Indian Airlines 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 companys service.

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

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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 60s, the first Indian built aircraft HS- 748

(Avro) was induced into Indian Airlines and the year 1971 saw the induction of

Boeing 737s. 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 737 12

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Total 52

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--vis the hours previous year were as follows: -

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1998-99 1997-98

Joint Venture 4687 4812

Hub and Spoke 538 600

Jet Engine Overhaul Complex.

The JEOC, functioning as a separate profit centre since May 1996, has saved the

company expenditure to the tune of Rs. 6.70 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 its new door-to-door cargo

service with M/S Gati Cargo.

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Capacity Production and Utilisation:-

The performance of the company in terms of Capacity Production -`Available Tonne

Kilometers (ATKms) and Capacity Utilisation -`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 8.38 8.17

(Including Alliance Air)

Financial performance of Indian Airlines:-

The net profit has dropped from the previous year from 47.27 crores in the year 1997-

98 to 15.6 crores in 1998-99. Although in the current financial year, i.e, 1999-2000, it

is expected to rise to Rs. 70 crore.

Real Time Computer:-

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The Passenger reservation system of Indian Airlines was switched on to the new

IBM ES-900 computer on the 8,March 1998 replacing the UNISYS mainframe

computer which was in use since March 1985.The improved central processing

response time of the system has resulted in a three fold increase in the capacity to

handle queries. The new system uses the IBM hardware and software designed by the

subsidiary of British Airways.

Computerised Reservation System

Indian Airlines possesses an extensive computerised reservation system to provide

online reservations service to its clients. The reservation system is being maintained

through a powerful mainframe computer, which is accessed by more than EDP 2000

terminals across the length and breadth of India, apart from the International Stations.

Access to the reservation system is also available through several hundred travel

agencies operating in the country.

Indian Airlines participates in the following major CRS' in the world thereby

providing access to the Reservation System to travel agents around the globe-

Sabre

Galileo

Amadeus

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Abacus

World Span

Gemini

Infiniti

GETS

Access

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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 requiredinformation 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.

47% of the passengers purchased their tickets from travel agents.

32% say that their company books it.

21% purchased their tickets directly from an airline counter.

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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

42% of the passengers travel every week.

40% of the passengers travel every fortnight.

16% of the passengers travel every month.

Only 2% of the passengers travel every year.

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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 theoldest and has better connections than rest of the airlines and it still is the leader.

These results indicate the following: -

100% respondents/passengers have traveled by Indian Airlines

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96% respondents/passengers have travelled by Jet Airways. Showing that it is the

main competitor of Indian Airlines.

92% respondents/passengers have traveled by Sahara Airlines. Sahara is slowly

and gradually increasing its market share through continuos advertising, discount

and better flight services.

28

85

90

95

100

IndianAirlines

SaharaAirlines

No. ofRespondents


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4) Most Preferred Airline

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%

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Out of the 150 travelers, who prefer Indian Airlines for domestic travelling say that

they prefer Indian Airlines because of the following reasons: -

It has better connections all over India and it has a wide coverage all over the

country.

For its flight timing and improving punctuality.

Since it is a Government undertaking, all the government employees travel by this

airline

Oldest airline, therefore goodwill.

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5) Purpose Of Travel

The purpose of this question No. 5 is to deter mine the trend of the new age traveller.

Does he use the airlines just for business/work, as was the case in 70s and 80s 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.

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

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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.

32

26%

74%

Percentage of Members , of a frequent flyer programm

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Priority waitlist. Priority on booking of international tickets, who are in

collaboration with the domestic airlines.

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.

(Suitability of Timings) (%)

1) Not Important 4%

2) Least Important 2%

3) Important 58%

4) Very Important 36%

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On time performance: - On time performance is an important consideration forcorporate travellers but when compared on time performance standards of domestic

airlines are relatively poor as compared to the west.

(On time performance) (%)

1) Not Important 0%


3) Important 54%

4) Very important 18%

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In flight service: - With the recent entry of private airlines, the in flight service

standards have improved both for national domestic carriers and private airlines.

Continuos improvements seem to be a part of the programme.

( In Flight Service) (%)

1) Not Important 0%


3) Important 62%


Ease of reservation and cancellation: - Indian Airlines, Jet and Sahara are all in the

race for providing better service, and ease of reservation and cancellation is another

important factor considered by the respondents

(Ease of reservations And Cancellation) (%)

1) Not Important 10%


3) Important 40%


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\Baggage handling: - Baggage handling systems have improved over the few years

and special baggage handling service are provided by Indian Airlines, Jet and Sahara

for its business class travelers.

(Baggage Handling) (%)

1) Not important 6%


3) Important 26%

4) Very Important nil

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In flight comfort: - In flight comfort, is a relatively new factor for consideration, so,

many respondents associated it with the in-flight service. As more or less all operators

have similar models of aircrafts comfort was given less importance as results indicate.

(In-flight comfort) (%)

1) Not Important 0%


3) Important 62%


Appearance and hospitality of crew: - Appearance and hospitality of crew is also one

of the factors that passengers look in the relative choice of airlines

(Appearance and hospitality of crew) (%)

1) Not Important 8%


3) Important 32%


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Frequent Flier Benefits: - Frequent Flier benefits are now being offered by every

airline and so are also the various and varied kinds of benefits. From priority check-

ins to disco at 5-star hotels. Only a few respondents are members of frequent flier

programme, but they agree this definitely influences their buying decision towards an

airline

(Frequent flier benefit) (%)

1) Not Important nil

2) Least Important nil

3) Important 36

4) Very Important 64

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Airfare: - Airfare is also a factor, which plays a dominant role in the buying decision

of an air-ticket. Recently passengers were a witness to a major price war in the

important routes. And this also lead to an increase in overall demand for air travel.

(Air Fare) (%)

1) Not Important 0%


3) Important 62%


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9) Customer Satisfaction Levels of All Domestic Airlines Based On Certain

Parameters

Customer service satisfaction of various airlines has been evaluated on the rating scale

of 1-3 where

1) Stands for Bad Performance

2) Stands for Average Performance

3) Stands for Excellent Performance

It has been evaluated in terms of the following attributes viz, on time performance, in-

flight service, in-flight comfort, cabin crew behaviour, reservations and cancellations,

baggage handling, frequent flier benefits, airfare and discounts, safety and security

measures and flight schedules. The first and foremost objective of the passengers

service survey is to measure the passengers satisfaction.

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Comparative Analysis

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 based on Excellent Performance

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10) 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.

Passenger Perception of Indian Airlines

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%

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11) Passengers are feeling the changes in Indian Airlines and its service levels 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%

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12) The last question is an open-ended question with a purpose to find what passengers want

from Indian Airlines, the way they feel improvements can be made in its service standards,

as well as understanding what are the requirements of a traveller. This answer has been very

useful to give suggestions and recommendations.

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ANALYSIS OF TRAVEL AGENTS

Ans. 1 The domestic airlines sector only has 3 major players and all 50 (i.e. 100%) travel

agents stocked the tickets of all the three major airlines (i.e. Indian Airlines, Jet and Sahara).

Ans. 2 Percentage of tickets sold for Domestic Airlines out of the sample size of travel agents

surveyed, the percentage of tickets for Indian Airlines sold each week has the

maximum share of 52% whereas Jet Airways was second highest at 36% and Sahara

third at 12%.

Ans. 3 Out of the total sample size, it was found that the maximum number of Travel

Agents have corporate clients are: -

92% - Corporate Clients

84% - Professional/ Businessmen

60% - Govt. Public Sector Clients

70% - Walk in Clients

72% - Foreign Clients

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Because of opening up of the Indian Economy, there has been a considerable rise in

corporate clients and since there is continued encouragement to tourism by the Indian

Government, the share of foreign clients (tourists) has also increased.

Ans. 4

Use of computer Reservation system (CRS).

Out of the total travel agents surveyed 38 travel agents use CRS (i.e. 76%).

Out of the 38 travel agents 58% use Amadeus and Sabre/Star, 42% use Galileo for the of

domestic airline ticket.

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Ans.5

Out of the 50, Travel agents surveyed, it was found that the private airline

performance was preferred in relation to the prescribed factors.

For In-flight services: 54% of the travel agents have considered Jet Airways as best airline

for in flight services and 46% have considered Sahara Airlines. Sahara Airlines with its

recent improvement in menu is already on its way to compete with the best.

Booking/Reservation: 38% of the travel agents have considered Indian Airlines the bestairline for its booking services, thanks to the new reservation system, whereas 36% of the

travel agents feel the same for Jet and 26% for Sahara.

Check in Services: 52% of the travel agents consider Jet Airways and 48% Sahara to be the

best in check-in-services to passengers.

Ans. 6 The airlines in order to attract customers are resorting to short-term promotional

schemes (like discounted fares on certain sector free stays in 5 stars) free car rental etc. This

means increased customer attraction to travel by air.

Out of the 50 travel agents, 74% of the travel agents feel that Sahara India Airlines offers the

maximum short term promotional schemes, followed by 26% who said Indian Airlines offers

the maximum short term promotional schemes.

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* S.T.P Short term Promotion

Q.7 The customer preference while buying an airline ticket as according to the travel

agents.

Out of the 50 travel agents surveyed 54% of the travel agents say that most of the

customers generally look for and in-flight services of the airline.

48% of the travel agents, feel the, that most of the customers 40 for cheap fares and

discounts offered by the airline.

40% of the travel agents feel that, most of the customer look for punctuality, timing and

least cancellation of flight.

Ans. 8 Indian Airlines flies to the most destinations across India, to be precise 59, and it is

ever expanding. The travel agent with there trade knowledge, acknowledged the fact that it

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flies to more destination than any other airline. But, private airlines operations are also very

rapidly expanding. The result of the question was 100% i.e. all agreed.

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Ans 9&10

SWOT ANALYSIS OF INDIAN AIRLINES

A SWOT Analysis of Indian Airlines was conducted from the perception of the travel agents

and the findings of the survey. The analysis revealed the following dimensions.

STRENGTHS

Networking and scheduling

Fleet Strength

Market Share built during the monopoly phase

Government Infrastructure which can be upgraded at a comparatively low cost.

Enjoys the strength of NRI traffic as it operates on certain international routes.

Weaknesses

Bureaucratic Organization

Strict Hierarchical System followed in the organisation

Low employee morale and motivation

Customers dissatisfied with the certain aspects (as compared to competitors) in-flight

service and ground staff handling.

OPPORTUNITIES

To increase flight operations on those routes, which have a high tourism potential, so as

to reap the benefits of an upward moving Tourism Industry.

Awareness and realisation among the employees of the growing competition.

The decision to increase the fleet strength

To gear up to the domestic competition at a time, when the majority share is still in Indian

Airlines kitty.

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THREATS

Growing competition from the private airlines.

Customer services being redefined by private airlines.

Dissatisfied travel agents may prove to serious threat of IA existing market share.

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FINDINGS

The Questionnaire study has provided me with the information on the levels of

customer satisfaction and understanding the needs and preferences of travellers.

After doing an in- depth survey of the passengers and travel agents, the following was

found: -

In the travel agent questionnaire, two direct questions were asked regarding the ticket

sales and number of destinations it flies (QuestionNo.8). The findings proved that, firstly

in regard to ticket sales, Indian Airlines sold the maximum number of tickets than any

other airline. With regard to number of destinations, Indian Airlines flies to maximum

number of destinations and findings have proved that .

This result hence proves the hypothesis correct, that Indian Airlines is still the largest

domestic airline in the country in terms of sales of tickets and number of

destinations.

For the second hypothesis, that is, Indian Airlines is the most preferred airline by

passengers a direct question was asked in (Question No.4). The response was in favour of

Jet Airways.

Thus proving the hypothesis wrong. According to the survey conducted, Jet Airways is

the most preferred domestic airline, followed by Indian Airlines and then by Sahara Indian

Airlines. Although the result was in favour of Jet Airways, it also indicated that Indian

airlines was not far away in the preference results, indicating a growing trend for travelling

by Indian Airlines. There were also other indirect questions for preference asked both from

Travel agents as well as passengers for their opinion on the various attributes that come in

passenger satisfaction viz. In-flight service, cabin behaviour etc.

For the third hypothesis that is, passengers are giving importance to the

service levels offered by the airlines, the response has been gauged indirectly. In

Question No. 8 of passenger questionnaire, the passengers were asked about the

factors considered important for relative influence on the Choice of Airline. In this,questions about factors relating to service were asked viz. In-flight service, in-flight

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comfort appearance and hospitality of crew. Also a question relating to passenger

interest was asked in travel agent questionnaire (Q. No.7). The results for both

indicate that service levels have become paramount for customers along with other

factors. The information gathered from passenger questionnaire indicates that these

factors have been considered important or very important by majority of the

passengers. While in the travel agents questionnaire (Q. No. 7) their majority response

was for In-flight service, indicating that passengers are increasingly looking for better

levels of service from the airlines.

From the analysis of Question 1 of the passenger questionnaire, it was found that

maximum number of travellers, purchase their ticket through travel agents, followed by

company bookings and airline counter. Primarily, people preferred travel agents because,

travel agents offered discounts and provided better options.

According to the passengers survey conducted, (in Question No. 10 of passenger

questionnaire) considering the parameters for customer satisfaction viz. On time

performance, in-flight service, In-flight comfort cabin crew behaviour etc. The results

based on Excellent performance of these factors, Jet Airways was the airline which was

the most preferred and provided maximum satisfaction to its passengers, as most people

surveyed believed that Jet Airways provides the best in-flight, food, check- in services

etc. to the passengers.

People feel that Jet Airways being a new airline is very professional in their approach,

while dealing with passengers. Indian Airlines is considered by many as an average

airline as regards to customer satisfaction but it has some of the best discounts and cheap

airfares. Also, due to its large fleet, its flight schedule is also unmatchable.

The survey conducted also showed that all the passengers surveyed, had travelled by

Indian Airlines, while majority of them had travelled also by Jet followed by Sahara.

Passengers perception about Indian Airlines is also changing, through better levels of

customer service, which have been initiated by the airline and the passengers are also

feeling the same. The response in Question No. 10 indicates that, efforts are being done

by the airlines to uplift their standards of their service.

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The result chart shows that there is a good percentage of travellers who feel that the

airlines levels of cabin crew behaviour, In-flight service, Ontime performance etc. are

improving and are much better than before.

Regarding the frequent flier programme, the travellers felt that not enough was being

done by all the airlines to attract travellers to such a programme. Another reason why,

they did feel it was not popular was the lack of much air travel by individuals to be

entitled to its rewards.

In the travel agents questionnaire, it was found that maximum number of travel agents

have corporate clients (in Question No. 3 of Travel Agent Questionnaire), but felt that

with increase in purchasing power and the convenience offered by other airlines, it wasalso getting popular for holiday travel.

The information gathered from the questionnaire states that travel agents mostly

recommend Indian Airlines, because it flies to maximum number of destinations and has

goodwill in the industry, because it is the oldest airline in India.

In the opinion of travel agents, the maximum number of short-term promotional

schemes is carried out by Sahara India Airlines followed by Indian Airlines. They feltSahara does this because, it is relatively new carrier with the fewest destinations, and in

order to gain customer confidence, it kept carrying out such promotional schemes. Indian

Airlines primarily did it, to save its market share as well as to create a bonus for its

Goodwill.

The survey with travel agents also indicated that the customers preference while

buying an airline ticket were good in-flight services, cheap fares and discounts,

punctuality, timing and least cancellation of flight. They felt that these factors were the

most important for the customers. Travellers today are demanding higher levels of

service, and comfort them ever before.

Travel agents also felt that the Private Airlines were more preferred because their service

standards were believed to be higher than Indian Airlines. But, they agree that Indian

Airlines is slowly and gradually improving its standards, and majorities of the travel

agents have considered Indian Airlines as the best airline for booking services.

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SUGGESTION

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.

(Source: - Marketing Management by Philip Kotler)

Customer Satisfaction:

Satisfaction is a persons feelings of pleasure or disappointment resulting from

comprising a products perceived performance (or outcome) in relation to his or her

expectations.

(Source: - In Charge of Customer Satisfaction by Roger Cartwright & George Green,

Preface)

Indian airlines must focus on making strategies that create quality and value that will

meet or exceed customers expectations, by completely satisfying the customer there is no

reason for them to consider alternative airline.

IN FLIGHT 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.

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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 flights 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 VVIPs travelling with

the other travellers on the same flight. The delay due to this factor must be totally avoided by

better co-ordination between the airline and VVIPs 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.

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

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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.

RELATIONSHIP MARKETING

Relationship Marketing as explained earlier in literature review, should be evolved in

itself by developing, maintaining and having more interactions with the customer. When

compared with other private airlines, passengers felt that there was a lack of warmth shown

by the staff. Therefore the staff must be very professional in their approach and very efficient,

but the Indian passenger is used to being pampered, especially when they pay so much for the

services. Therefore, Indian Airlines should train their staff accordingly.

Indian Airlines must give calls to its regular travel agencies and maintain a good

rapport with them. They should also give gifts to the travel agents which they can keep on

their counters as this will keep reminding them of the airline. The concept of Relationship

Marketing must also be used for travel agents as they are a very influential medium between

the airline and the traveller.

Indian Airlines, in order to increase its market share and fight competition, must

introduce short-term promotional schemes, especially in the lean season. Short term

promotional schemes can offer a lot of advantage to the company, firstly it is benefiting the

traveller in every manner, so he is happy, it also gives the chance to the company to create

and improve its goodwill among its traveller, and the short term promsotional schemes also

offer the company better market presence.

Indian Airlines can offer short-term promotion schemes because, it is a financially

stronger compared to its competitors, plus it is more experienced and therefore can offer

better deals. Encouragement must also be given to low traffic sectors, and for that sales

promotion measures must be used.

ADVERTISING

Another major area in which Indian Airlines is weak, is advertising field. Advertising

is the missing link between the brand name and the customers perception. Even if the

product/service has been designed to target the customers want with pin-point precision, it is

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only the communication with the customers, in general and advertising at its most patent

form, in particular that will inform them just how one is trying to provide value to them.

Advertising had been scarce by Indian Airlines before the private airline operators

arrived

Their advertisement should be differentiated from that of competitors.

The benefits offered by their advertising must match their service usage.

Advertisements should focus on brand name

Their advertising should be designed to wake an emotional response.

Indian Airlines enjoyed its monopoly, so they never felt the need to advertise. Now, it hasbecome an altogether different ball game, with advertising forming an important part to

inform the customers, so as to create more awareness about the airline, and its schedule and

its was felt by the travel agents and travellers that private operators were advertising more.

Indian Airlines should develop different advertisements targeting towards different

consumer i.e. international travellers, domestic travellers, corporate clients etc. The clever use

of media can clean a path through the clutter for the advertising message, it must be unique

enough in its own right to make a statement.

Indian Airlines advertisement mix should have benefits offered by the airline and also

something, which tells about the company, so as to create a better image.

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

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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

competitors 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.

MORE FOCUS ON CORPORATE CLIENTELE.

Indian Airlines has all kinds of clientele, from tourists passengers to students, to corporate

clients. But after the arrival to private airlines, the number of corporate clientele travellers has

come down.

Indian Airlines must not forget that these are, and are going to be the maximum users of the

airlines, in order to counter the loss, it should start re-focussing on corporate clients as well.

This can done by promoting its executive and business class more as well as increasing its

standards of service, as well as refurnish the interiors of the planes in which they commute,

offer better comfort and in-flight service as well as frequent flier benefits. If Indian Airlines

follows this strategy of differentiated working, it will be able to re-gain its market share with

corporate clients.

Indian Airlines should invest in other mediums, for promoting and creating awareness of

its airline also. For e.g. It should encourage and promote for extensive use of internet

website by travellers.

According to the data collected, Indian Airlines should also target at those people who

fall in the category of very likely to buy and probably will buy. The people who fall in

very likely to buy is about 28%. They just need a little push in the form of an added

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incentive to fly with Indian Airlines and the people who cannot decide whether to fly Indian

Airlines ticket i.e probably will buy, are potential customers/passengers and therefore they

can be made permanent by offering more benefits in services and through greater awareness

about the airline.

One of the major competitive advantage Indian Airlines enjoys is the best flight

schedules which it offers. Now this competitive advantage should be further strengthened by

Indian Airlines with an ever expanding air network, and more destinations opening, Indian

Airlines must continuously upgrade its fleet size and exploit those destinations first before

the competitors do. It should focus also on providing trunk routes, this can be done through

more efficient and increased utilization of aircrafts. Indian Airlines with its financial strength

and Government backing should make most, by buying new planes and increasing its

network.

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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 IndianAirlines 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 todays 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 agents felt that suggestive and

proactive approach was required by Indian Airlines 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 airlineand 40% of the travel agents feel that most of the customers look for punctuality, timing and

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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.

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LIST OF REFERENCES

1. `Marketing Management Philip Kotler

2. `Marketing Research Ronald S Rubin & David J Luck

3. `Marketing Management Rajan Saxena

4. `Marketing Management in Indian Context V S Ramaswamy & S. Namakumari

5. `Marketing Carol Mayall & Sally Palmer

6. `Research for Marketing Decisions Green, Tull & Abraham

7. `Marketing of Services Bijender Kumar and Bidhi Chand

8. `Customer Driven Services Management S Balachandran

9. `Services Marketing Ravi Shanker

10. Ìncharge of Customer Satisfaction Roger Cartwright &

George Green

11. `Marketing of Service Harsh V Verma

12. `Services Marketing Woodruffe

13. `Valuing Your Customers Angus Jenkison

14. Èffective Management of Market Angela Heatton & Mike

Warson .

15. `Business Standard Special issue on Aviation

16. `Business World April 1997

17. `Business Today October 1996

18. Ìndian Airlines Annual Report, 1997-98

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19. `Indian Airlines Annual Report, 1999-2000

20. Services Marketing K.V.Patankar.

Indian air line

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