Turbulent Times for Airlines in India - ICMR Case Studies and Management Resources

Details

Case Code : CLBS077
Publication date : 2009
Subject : Business Strategy
Industry : -
Length : 02 Pages
Price : Rs. 100

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Key words:

Low cost airline carriers, full service airline carriers, aviation turbine fuel (ATF) prices, Minister of State for Civil Aviation, Praful Patel, Indian aviation sector, Deccan Aviation Limited, Air Deccan, Jet Airways, Spicejet, Federation of Indian Airlines

Note

* This caselet is intended for use only in class discussions.
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Abstract:

Low cost airline carriers and full service airline carriers in India are reeling under huge losses due to high ATF prices, rising labor costs, rapid fleet expansion, and intense price competition.

Introduction

On September 28, 2006, the Minister of State for Civil Aviation, Praful Patel, held a meeting with the heads of various domestic carriers to discuss the problem of growing losses in the Indian aviation sector.

The minister said that there would be closer scrutiny of new applications before issuing licenses to new carriers. He also said that the ministry would take up the issue of high aviation turbine fuel (ATF) prices with the oil companies and the petroleum ministry. The Indian aviation sector had witnessed strong growth in 2005 with the entry of many low cost carriers (LCC). The increased competition resulted in lower air fares for travelers and the domestic air passenger traffic grew from 19.8 million during July 2004 and June 2005 to 27.5 million during July 2005 and June 2006.

However, in an effort to increase market share, the carriers had resorted to offering tickets at highly discounted prices...

Turbulent Times for Airlines in India*