On December 17th, 1903, Orville Wright made the world’s first controlled flight in a power driven airplane. Since then man has not looked back and has progressed leaps and bounds in the aviation industry. But what exactly is the meaning of the term aviation? Aviation means ‘Flying in the Air’ or the ‘Art of Flying’. Since we are concentrating on airlines, let us see the meaning of the terms “Airlines Industry”. “The commercial use of aircrafts for the carrying of persons, mail and cargo and the name generally used in the aviation industry to describe the operations of fortified air carriers is known as the airlines industry.”
Significance Of Air Transportation
There are two main significances of air transportation, namely:
Quickest mode of transport – Airways is the most modern, the quickest and the latest addition to the modes of transport. Because of the speeds with which aero planes can fly, travel by air of both passengers and goods has become highly popular.
Suitability – Air transport is highly appreciated by people who want to travel in utmost comfort an d /or reach their destination r e a l f ast. Airways are also suitable for high value light goods, perishable goods and spontaneous delivery of mails.
History of Civil Aviation Sector
India had its own airline on October 15, 1932. Tata Son’s Ltd – which later become Air India International – commenced weekly airmail service with a Puss Moth aircraft between Karachi and Madras via Ahmedabad and Bombay, covering over 1,300 miles. Later two more airlines – Indian National Airways in 1933 and Air Services of Indian in 1937 came up. At the time of independence, the number of air transport companies, which were operating within and beyond the frontiers of the company, carrying both air cargo and passengers, was nine. It was reduced to eight, with Orient Airways shifting to Pakistan. These airlines were: Tata Airlines, Indian National Airways, Air service of India, Deccan Airways, Ambica Airways, Bharat Airways and Mistry Airways. In early 1948, a joint sector company, Air India International Ltd., was established by the Government of India. Its first flight took off on June 8, 1948 on the Mumbai (Bombay)-London air route. The joint venture was headed by J.R.D. Tata, a visionary who had founded the first India airline in 1932 and he had himself piloted its inaugural flight.
The Government then nationalized the airlines industry in 1953, with enactment of Air Corporation Act, and assets of nine existing air companies were transferred to the two new corporations – Air India International and the Indian Airlines. After 40 years, in 1994 Air Corporation Act was repealed ending the monopoly of the national air corporations and enabling entry of private operators. Today, with new entrants in the airline sector particularly with the modus oprandi of being low-cost airlines, the airline industry is in for a major shake-up.
The New Policy
The liberalization in civil aviation industry began in 1986 with the introduction if Air Taxi system to boost development of tourism. Though there were several restrictions relating to seat capacity, airports, timing and fare, the scheme was liberalized over a period of time. Even the fare was totally deregulated, allowing air taxi operators to charge any fare. With Open Sky Policy many private operators began operation in the domestic sector. Of the total of 12 .23 million passengers c a r r i e d o n domestic sector, private carriers carried about 5.7 million passengers.
Changing Pattern of Government Regulations
Civil Aviation sector in India is perhaps the most striking example of the progress made in the liberalization of the Indian economy, a process that began a decade ago. The steps taken b y t h e government are as follows: Investments Opportunities Foreign Equity – Foreign Equity upto 40% and NRI investment upto 100% is permitted in domestic air transport services. Equity from foreign airlines is not permitted directly or indirectly.
Disinvestment of the Government Equity in airlines – Government of India decided to disinvest partly its shareholding in both Air India and Indian Airlines, presently wholly owned companies of the Government. But with general elections round the corner this issue has been put on the backburner with constant opposition from various sections of the society.
Entry-Exit barriers removed – Barriers to entry and exit from this sector have been removed. Only pre-entry scrutiny to verify financial soundness, maintenance, security and safety aspects of operations and human resource development proposals is done. Choice of aircraft type and size left to the operator.
Private participation in Airports – Foreign equity participation is allowed in ventures for airports, upto 74% automatic approvals and upto 100% with special permission. Participation is also open to foreign airport authorities.
A variety of fiscal incentives has been provided to airport project,
as decided by Government from time to time. They are as follows: 100% deduction in profits for purposes of Income Tax for first five years. 30% deduction in profits for Income Tax purposes for next five years.
Full deduction to run for continuous 10 out of 20 fiscal years of
assessee's choice. 40% of profits from infrastructure also deductible for financial institutions providing long term finance for airport infrastructure projects.
Bilaterals for operation of international air services – The Government
has been more liberal in granting additional entitlements to foreign airlines both in terms of capacity as well as in terms of points of call. The ex istin g air services agreement with Un ited Sta te s of America is an extremely liberal one as it allows any number of US airlines to operate services from/to India. US airlines are also allowed to decide the size of aircraft and their frequencies.
Taxes and Tariffs – In
order to facilitate acquisition of aircraft Government of India has reduced tariffs for import of aircraft from 8% to Nil. Even aircraft taken on lease do not attract customs duties. India also has a liberal Corporate Tax/Income Tax regime for airlines and encourages investment by allowance of high depreciation rates.
drawn up a successful growth model for the civil aviation sector, the Government is now engaged in evolving a comprehensive and integrated new civil aviation policy, some of the major highlights of which are: All players and stakeholders are assured of a level playing field. Private participation is encouraged and opportunities are created for investors to realize adequate returns on their investments. Rapid upgradation of airport infrastructure to world class is encouraged with priority to the busiest airports and those handling international flights. International cooperation in aviation and development in tune with international trends and best practices, consistent with airspace sovereignty is promoted. After four decades of control, Civil Aviation sector has been liberalized with a view to draw benefits of efficiency, safety and quality in service. A MOU to enhance air connectivity between India and Singapore has been signed as a beginning towards more open skies between the two countries. India is keen to operate passenger flights to Australia and New Zealand through Singapore. The unresolved issue of ‘fifth freedom’ – that enables the airlines of any two countries to pick up passengers in each other’s territories for destinations in other nations – will be taken up later.
Civil Aviation Policy - Having
Effects of the Reform
Revolutionised by liberalisation, the aviation sector in India has been marked by fast-paced change in the past few years. From being a service that few could afford, the sector has now graduated to being a fiercely competitive industry with the
presence of a number of private and public airlines and several consumer-oriented offerings. All you need to do is walk into any airport to see how many more people today are flying. Thanks to passenger-friendly fares from Low Cost Carriers (LCCs), even a middle class family can afford to fly together on a holiday. Since air services are as much as a part of the infrastructure as roads, the more the number of airlines, the better it is both people and businesses. The market was galvanised a couple of years ago by the introduction of lower price tags which ensured that people could travel at the fraction of the original price of air travel. It was spurred further by the entry of Air Deccan, India's first budget airline, which offered hard-to-believe tariffs. This was the trigger point for the sector to move from having simple economy, business and first class fares, to multiple slab tariffs such as apex fares, internet auctions, special discounts, bulk purchases and last day fares. Some of the tariffs offered are so low that they have brought airline fares neck-to-neck with upper class railway fares. Little wonder then that the consumer prefers air travel to the railways. The fare reduction has given the sector a huge boost with domestic and international traffic growing by 24.2 per cent and 18 per cent, respectively in AprilDecember, 2005. Private airlines now account for 68.9 per cent of domestic traffic. The boom in the aviation sector in India can be gauged by the fact that in one year, the number of people seeking pilot licences has multiplied three times. In April 2005, it was 300. In April 2006, the number rose to 1045. In the last financial year, the civil aviation industry has achieved the biggest ever growth in aircraft movement and passenger traffic. Passenger traffic in the domestic airports increased by 25 per cent to 59.54 million, while aircraft movement increased by 14.2 per cent to 730,000. Aircraft manufacturer Airbus said, “India is one of the world’s most promising markets and it is predicted that 100 million new urban middle-class consumers will become potential air travellers by 2010.” Domestic air travel in India is predicted to grow 20 per cent over the next five years.
India has 125 airports; of these 11 are designated as international airports. In 2004-05, Indian airports handled 60 million passengers and 1.3 million tonnes of cargo.Passenger traffic grew at over 22% in 2004-05 over 2003-04; Cargo grew at 21.6%.
Currently, all 125 airports are owned and operated by the Airports Authority of India (AAI). The Government aims to attract private investment in aviation infrastructure Privatisation of the Delhi and Mumbai airports is in progress – concessions have already been awarded. Expected investment of about Rs.15,700 crores (US $ 3.5 billion) New international airports at Bangalore and Hyderabad are being built by private consortia with a total investment of about Rs.4000 crores (US $ 600 million).
The Committee on Infrastructure has initiated several policy measures that would ensure time-bound creation of world-class airports in India. A comprehensive civil aviation policy is on the anvil. An independent Airports Economic Regulatory Authority Bill for economic regulation is also under consideration. The policy of open skies introduced some time ago has already provided a powerful spurt in traffic growth that has exceeded 20% per annum during the past two years. Greenfield international airports at Bangalore and Hyderabad have been approved and are currently under construction. These are likely to be commissioned by middle of 2008. Modernisation and expansion of the Delhi and Mumbai airports through PPPs has been awarded, based on a rigorous and transparent competitive bidding and evaluation process. Other major airports such as Chennai and Kolkata are also proposed to be taken up for modernisation through the PPP route. PPP is basically just a different method of procuring public services and infrastructure by combining the best of the public and private sectors with an emphasis on value for money and delivering quality public services.Similarly, to ensure balanced airport development around the country, a comprehensive plan for the development of other 35 non-metro airports is also under preparation. These measures are expected to bring a total investment of Rs. 40,000 crore for modernisation of the airport infrastructure. On the analogy of the highways sector, a Model Concession Agreement is also being developed for standardising and simplifying the PPP transactions for airports. In
addition, proposals for revamping the Airports Authority of India are to be finalised soon. This would include upgrading of the Air Traffic Control services at the airports. Issues relating to customs, immigration and security are also being resolved in a manner that enhances the efficiency of airport usage.
If regulations or industry policy provide protection to an industry, the value of protection may be dissipated in poor productivity and higher-than-normal returns to labour and capital. Entry limitations and capacity constraints have the potential to allow airlines to earn above normal returns, which may be appropriated by shareholders or paid out in higher than normal costs (including wages, salaries and working conditions). Given the valuable contribution that aviation and tourism make to national welfare, it is essential that the aviation market is globally competitive and functions in the most efficient way. This means that the inputs that the industry depends on, such as labour and capital, must also be available on an internationally competitive basis.
ATF is the major cost for domestic carriers accounting for 30% of the total operating costs in India, which is much higher than around 10-15% for airlines worldwide. The exorbitant sales tax on the ATF, which increases the price of ATF, is the major reason for this higher share in operating cost. The Jet fuel price has increased by 13.1 % to USD 424.64/ KL in New Delhi during the period May-Aug ’04. The rise in the first seven months of 2004 stands at 21.5%.
The relatively capital-intensive nature of the airline industry, combined with the fact that airlines are generally regarded as being inherently risky investments, means that access to large, well-functioning capital markets is an important issue for all airlines. The effects of these restrictions may vary from country to country, but are likely to be greater for countries with small domestic capital markets.
The regulatory system affects where, how and when airlines can fly. Thus it affects airlines’ ability to operate efficient networks and their revenue. To the extent that airlines cannot use the least cost combinations of aircraft types to carry passengers and freight, the costs of operating existing networks are higher than they otherwise might be (technical inefficiency). Further, they may be prevented from flying the optimum sized and configured network (allocative inefficiency). Thus, costs may be reduced as airlines are able to operate the right aircraft at the right frequencies on an existing route. Airlines, by changing the design of a network and increasing its size, may also be able to decrease costs through economies of scale and scope.
Ownership and control
As airlines strive for greater efficiencies, they consider the benefits of consolidation. However, the normal commercial process of acquisition and/or merger is not available due to restrictions contained in bilateral agreements that are designed to ensure that ownership and control of airlines remain with nationals of the countries where they are based. Growth through merger or acquisition enables airlines to achieve economies scale and scope by consolidating airline functions. The merger of two airlines, for example, may allow them to consolidate their ground handling, maintenance, information technology and various managerial functions.
Airline Acquisition/Leasing Cost
Taking aircraft on lease is one of the preferred modes among the Indian carriers. However, this has suddenly become costlier affair due to changes proposed in Union Budget 2004-05. The budget proposes withdrawal of tax exemption granted to acquire aircraft or an aircraft engine on lease prospectively. This has resulted in imposition of withholding tax of 42% on leasing of aircraft. Impediment of this kind at a juncture
when almost all, Indian carriers are firming up their expansion plans especially through leasing of aircraft is a setback. All carriers barring Jet Airways will feel the heat of the sudden withdrawal of exemption for taking aircraft for lease as they have significant plan to expand the fleet capacity by leasing route. This includes both state carriers like Air India (AI), Indian Airlines (IA), Alliance Air and private carriers like Air Sahara, Air Deccan. As Jet Airways that has predominantly prefers owning aircraft rather than going for leasing. As tax exemptions are not be available for lease agreements after April 1, 2005 the Indian carriers who have plans to take aircraft on lease have to sign agreement either on or before the expiry date or they will have to bear additional cost burden. As leasing route is the most preferred one for a new entrant, the Budget initiatives will prove be a heavy deterrent as they will escalate the effective lease rental cost by almost 42%.
Founded – August 1946 Commenced operations – June 8, 1948. Ownership – Central Government. USP – India's national flag carrier. Network – 47 destinations – 13 in India and 34 abroad.
International Network – Toronto, New York, Newark, Chicago, Los Angeles, Birmingham, London, Paris, Amsterdam, Frankfurt, Moscow, Vienna, Zurich, Nairobi, Dar-Es-Salem, Mauritius, Kuala Lumpur, Sri Lanka, Singapore, Jakarta, Bangkok, Hong Kong, Dhaka, Shanghai, Osaka, Seoul, Tokyo, Kuwait, Dammam, Riyadh, Doha, Jeddah, Dubai, Bahrain. Staff Strength – 15,884 employees. Annual Turnover – Rs 7435 crores (approx. £953mn). Hubs – Mumbai, New Delhi. Consumer Traffic – 4.86 million passengers annually. Frequent Flier Program – Flying Returns (India, UK-US-Canada, Gulf & Far-East & South East Asia Programme) Fleet Overview:
Airbus A300B4 Airbus A310-300 Boeing 747 - Boeing 747-200 - Boeing 747-300 - Boeing 747-400 Boeing 777-200 Total
Current In service
19 15 2 13 4 38 40 2 2 2
Future On Order
0 19 17 2 2 13 4
Business No. of Seats Configuration No. of Zones Seat Pitch (inches) Seat Width Between armrest (inches) Seat Recline (inches) Upright Position (degree) Seat Total Recline (degree)
Statistics: Current Fleet Size (Owned/Dry Leased) Maximum Take-off Weight Wing Span Overall Length Overall Height Cabin Width Wing Area Average Cruise Speed Maximum Operating Altitude Maximum Fuel Capacity 6/7/1 153 tons 144 ft 153.1 ft 51.8 ft 17 ft 2,350 sq ft 0.8 mach 41,100 ft 48.3 tons
Air India Express
Founded – May 2004 Commenced operations – April 28 2005 Ownership – Central Government. USP – 25% lower fares than Air India and will operate on a zero-commission
basis. Network – 14 destinations – 6 in India and 8 abroad. International Network – Kuala Lumpur, Singapore, Muscat, Salalah, Abu Dhabi, Dubai, Al Ain, Sharjah Staff Strength – N/A. Annual Turnover – N/A Hubs – Trivandrum & Cochin. Consumer Traffic – N/A. Frequent Flier Program – N/A Fleet Overview:
Boeing 737-800 Total
Current In service
3 3 3 0
Future On Order
Commenced Operations – 1953 Ownership – Central Government. USP – One of the largest regional airline systems in Asia. Network – 75 destinations - 59 within India and 16 abroad.
International Network – Kuwait, Oman, UAE, Qatar and Bahrain in West Asia, Thailand, Singapore, Yangon and Malaysia in South East Asia and Pakistan, Nepal, Bangladesh, Myanmar, Sri Lanka and Maldives in the South Asian sub-continent. Staff Strength – 18562 employees. Annual Turnover – Over Rs.4000 crores - US$ 1 billion approx. (together with its subsidiary Alliance Air). Hubs – Delhi, Mumbai, Calcutta and Chennai. Consumer Traffic – 7.5 million passengers annually (including its subsidiary Alliance Air). Frequent Flier Program – Silver Edge Club & Golden Edge Club Fleet Overview:
Airbus A300 - Airbus A300B2 - Airbus A300B4 Airbus A320-200 Boeing 737-200 Total
Current In service
3 3 47 11 64 73 9 1
7 4 3 48 11
Commenced Operations - December 3, 1993 (1st private sector airlines) Ownership – Part of the multi-crore Sahara India Pariwar. USP – 1st airline company in the private sector. High level of punctuality (limited
amount of delays in flights). Network – 28 destinations – 24 within India and 4 abroad. International network – Flights to Chicago, Colombo, Kathmandu, London and Singapore (Hong Kong, Bangkok and Kuala Lumpur are the proposed destinations to which Air Sahara is seeking approval from authorities). Staff Strength – 4200 employees approximately Annual Turnover – Undisclosed. Hubs – Delhi. Consumer Traffic – 1.8 million passengers annually. Frequent Flier Programme – Cosmos (Executive, Silver & Gold). Fleet Overview: Aircraft Type
Boeing 737 - Boeing 737-300 - Boeing 737-400 - Boeing 737-700 - Boeing 737-800 Canadair CRJ-200 Total 7 27 27 0 2 2
Current In service
20 4 4 9 3
Future On Order
22 4 4 9 2 7 29 5
Founded – May 1974 Commenced operations – May 5, 1991 Ownership – Naresh Goyal founded Jetair Pvt. Ltd. with the objective of providing
Sales and Marketing representation to foreign airlines in India. USP – Acclaimed by frequent travelers as the most preferred carrier offering the highest quality of comfort, courtesy and standards of in flight and ground service and reliability of operations. Network – 49 destinations – 44 in India and 5 abroad. International Network – Colombo, Kathmandu, Singapore, Kuala Lumpur and London (Heathrow). Staff Strength – 18562 employees. Annual Turnover – Rs. 500 crore - £58m approx. Hubs – Mumbai, New Delhi. Consumer Traffic – 8.6 million passengers annually. Frequent Flier Program – Jet Privilege (JP Blue, JP Silver, JP Gold & JP Platinum) Fleet Overview: Aircraft Type
Airbus A320-200 Airbus A330-200 Airbus A340-300 ATR ATR-72 Boeing 737 - Boeing 737-300 - Boeing 737-400 - Boeing 737-500 - Boeing 737-700 - Boeing 737-800 - Boeing 737-900 Total 52 52 13 20 2 0 2 2 54 6 3 8 41 2
Current In service Stored
Future On Order
0 2 3 8 41 0 6 0 13 20 2
Biggest deal in the Indian civil aviation history was announced on Thursday with Jet Airways taking over Air Sahara for nearly $500 million (about Rs. 2,300 crore) in an-all cash deal, executed on late Wednesday night. Announcing the deal through a joint statement, Jet Airways Chairman Naresh Goyal and Sahara group Chairman and Managing Worker Subrata Roy said they were "pleased to announce the execution of a share purchase agreement for acquisition by Jet Airways India Limited of the entire capital of Sahara Airlines Limited subject to regulatory approvals.''
Sahara confirms that workers will not lose their jobs and cadres
Sahara India confirms that workers shall not lose their jobs and cadres and the gross emoluments will be unaffected. Upon closure of the transaction, based on the requirements and performance, Jet Airways shall absorb suitable employees,'' according to the statement
Sahara group Chairman Subrata Roy, in an internal communication to Air Sahara employees, numbering about 4,400, assured them full job protection. "If the employees find it difficult to work under the new management, the Sahara India Pariwar, in a true family spirit, shall be responsive to any of their genuine difficulties and would take all steps to mitigate their difficulties,'' Mr. Roy said.
Founded – 1995 Commenced operations – 2003 Ownership – Division of Deccan Aviation Ltd (primarily a helicopter company) USP – India’s first low cost carrier. The largest network provider in India
connecting 52 destinations daily with 260 flights. Network – 57 destinations in India. Staff Strength – 2410 employees. Annual Turnover – Rs. 400 crores. - £51.2m. approx. Hubs – Bangalore & Chennai. Consumer Traffic – 1.4 million passengers annually. Frequent Flier Program – N/A Fleet Overview: Aircraft Type
Airbus A320-200 ATR ATR-42 - ATR ATR-42 - ATR ATR-72 Total 15 15
Current In service
9 6 5 1 0
Future Stored On Order
4 2 2 6 6
13 8 5 3 21
Deccan scrip soars on reverse merger talk
Merger could make Deccan the largest domestic airline
Deccan Aviation, the company that owns budget carrier Simplifly Deccan, shot up 23.3 per cent on the Bombay Stock Exchange (BSE) in a falling market on expectations that UB Group chairman Vijay Mallya may be mulling a reverse merger of Kingfisher Airlines with Deccan Aviation to enable him to fly abroad.
The Deccan stock has flared up on rumours that the reverse merger ratio could be in favour of Deccan,’’ said an analyst with a broking house in Mumbai who did not wish to be identified. ‘’Someone has taken a call on the stock and the spurt is not necessarily based on fundamentals,’’ said the analyst. A merger ratio in favour of Deccan, based on shareholding, looks difficult: Mallya controls a bigger stake in Kingfisher Airlines through UB Holdings, the fully-owned arm of United Breweries in which he controls 74 per cent, while UB Holdings enjoys 46 per cent of Deccan Aviation after the open offer. But aviation experts said that Deccan can get a favourable ratio as it carries more people, has more aircraft and larger operations and market share (15.7 per cent versus Kingfisher’s 12.7 per cent). Besides, Mallya has said that Deccan will breakeven faster than Kingfisher despite its higher losses. ‘’Since Mallya has a sizeable share in both the companies, he can play around with the numbers. To stay listed, they will have to retain 25 per cent stake with the people. This could favour the share ratio in Deccan’s favour,’’ said an industry expert who has been tracking the airline since its inception. ‘’Mallya would want to bring in some major investors in the merged entity,’’ added
the industry expert. Jet Airways enjoys a share price of close to Rs 800 on a paid-up capital of around Rs 90 crore. ‘’The merged entity of Kingfisher-Deccan will have a paid-up value of more than Rs 200 crore; so the market feels the valuation should be around Rs 350-400,’’ said a former CFO of an airline. The UB Group has denied rumours of a merger. ‘’We are not thinking of any legal issues, but just examining how we can explore operational synergies,’’ said Ravi Nedugandi, CFO, UB Group. ‘’We are looking at how to profitably integrate route networks, engineering and operations of the two airlines,’’ he added.
But sources close to the group say the mandate to Accenture is to explore all ways and means by which the two airlines can explore the synergies and reap the benefits. So, a merger is not ruled out. Mallya’s predicament is that he will start taking deliveries of wide-bodied planes from June 2007. They are being configured to Kingfisher’s specifications and he doesn’t have a choice but to use Deccan to fly them abroad. Unless, of course, the government relaxes the eligibility criteria for airlines to start flying abroad from five years to three years. Mallya could simply use Deccan to fly abroad, without going for a merger. But he needs the merger to attract investors and money for sustaining his growth plans.
SpiceJet has chosen a single aircraft type fleet which allows for greater efficiency in maintenance, and supports the low-cost structure. And when it came to selecting this single aircraft fleet SpiceJet has opted for new generation Boeing 737-800s. These 189 seater aircraft will allow for safe, comfortable and efficient flying and are ideally suited for short to medium haul flights in Indian conditions.
Technical info and pictures of Boeing 737-800
Single class configuration Engines (maximum thrust) Maximum Fuel Capacity Maximum Takeoff Weight Maximum Range Typical Cruise Speed (at 35,000 feet) Basic Dimensions Wing Span Overall Length Tail Height Interior Cabin Width
189 Seats CFM56-7B24 (24,200 lbs) 26,020 Litres 70,987 kgs 3,060 nautical miles (5425 km) 0.785 Mach (850 kmph) 112 ft 7 in (34.3 m) 129 ft 6 in (39.5 m) 41 ft 2 in (12.5 m) 11 ft 7 in (3.53 m)
Commenced operations – 9 May 2005 Ownership – United Beverages Group under the leadership of Vijay
Mallya. USP – In-flight personalised entertainment on every seat with five video channels and 10 radio channels. Network – 17 destinations in India. Staff Strength – 1500 employees approximately. Annual Turnover – N/A. Hubs – Bangalore. Consumer Traffic – 2 million passengers annually. Frequent Flier Program – King Club (King Red, King Silver & King Gold) Fleet Overview:
Airbus A319-100 Airbus A320-200 Total
Current In service
2 7 9 9 0
Future On Order
2 1 3 3
4 8 12
Founded – October 2005 Commenced operations – 4th November 2005 Ownership – Wadia Group (the owners of Bombay Dyeing and Britannia Industries
Ltd). USP – A low cost carrier. Network – 13 destinations in India. Staff Strength – N/A. Annual Turnover – N/A. Hubs – Mumbai. Consumer Traffic – 0.5 million passengers annually (projected). Frequent Flier Program – N/A Fleet Overview: Aircraft Type
Airbus A320-200 Total
Current In service
3 3 3 0
Future On Order
10 10 10
MDLR Airlines offers the spacious, adaptable cabin of the unique accommodation with most reliable Four Jet Engine Aircraft.
AVRO RJ 70
Seat Capacity Seats in Club Class Seats in Economy Class Wing span Gross wing area Overall length Overall height Passenger cabin Length Headroom Internal diameter Floor width
70 6 64 26.34 m (86ft 5 in) 77.3 m² (832 ft²) 26.16 m (85ft 10 in) 8.61 m (28ft 3 in) 15.42 m (50ft 7 in) 2.07 m (6ft 9.5 in) 3.42 m (11ft 3 in) 3.24 m (10ft 8 in)
Paramount Airways – Paramount started operations in October 2005. It
currently flies to four destinations in India. The airline has called itself ‘Premium Service Schedule Airline’ offering competitive fares.
Jagson Airlines – Jagson Airlines Ltd one of the pioneers in the field of Air
Taxi operations. It was the first private airline in response to the open sky policy in 1991, and started its operations in 1992. For its expansion plans (see fleet details below) it will be investing some Rs15bn (£192.3mn), and likely to offer between 20-40 percent equity to a foreign partner.
IndiGo - Plans to start operating in February 2006. It is perhaps the most
eagerly awaited newcomer – after announcing a 100 Airbus deal at the Paris Air Show 2005. For Rolls Royce, as IndiGo chooses V2500 engines, the Airbus deal is worth $600m. The proposed fleet is a mix of A-319, A-320, and A-321. It does intend to be a low-cost airline, and compete with Air Deccan. IndiGo is based in Gurgaon (Delhi). CEO is Bruce Ashbyon, and MD is Mr Rahul Bhartia. Promoters: Mr Rakesh Gangwal and Interglobe Enterprises Ltd. The MD has been quoted by the media that its initial capital outlay will be $80m and by 2008 $250m. He also said that generally 85 percent of cost of aircraft acquisition is financed through debt or loans from FIIs, whilst 15 percent comes as equity from operators.
Air One has put off its launch and it is rumoured that the company has already
East West Magic Air Indus Air Pioneer Star Air In first of its type, the Kerala State Government sent a proposal to the Centre
requesting permission to set-up an airline to fly between the State and the Gulf region.
Air Frankfinn – Also, it was reported that the Mumbai-based Frankfinn Institute
of Air Hostess Training is planning to start a low-cost airline Air Frankfinn. They expect to launch this airline in 2009, with two Boeing and four smaller aircraft.
Marketing Strategies – A Comparative Analysis
Check in facilities
Tele check-In - If you have a
confirmed seat and plan to travel with hand baggage only, you can tele check-in for the next day too and report at the Tele check-in counter atleast 30 minutes prior to the flight departure.(only for J Class & FFP Members ). This facility is available in the 6 metros - Delhi, Mumbai, Kolkata, Chennai, Bangalore & Hyderabad. Please note these facilities are available for domestic flights only.
Reservations – Reservations can be
made on all major Computerised Reservations Systems (CRS). Twentyfour hour reservations facility at Mumbai, Delhi, Kolkata, Chennai and Bangalore. Jet Airways’ electronic ticketing service offered on www.jetairways.com enables passengers to book tickets to any destination on the airline’s route network through the Internet. Jet Airways has set up call centres for International and Domestic flights & services that operate on a 24X7 basis.
City Check-In – Now you can checkin at the Indian Airlines city booking office for not just the same day flights but also for the next day. If you are traveling with hand baggage only, please report atleast 30 minutes prior to the departure at the Airport check-in counter. If you have check-in baggage, regular reporting time is applied. This facility is available in the 6 metros Delhi, Mumbai, Kolkata and Chennai. Please note these facilities are available for Domestic flights only.
City Check-In – Facility available for
passengers traveling on their domestic network with hand baggage only at Mumbai, Delhi, Kolkata, Chennai, Bangalore and Indore. Passengers can check-in and collect their boarding pass at the city office at least two hours before the flight time and report at the airport 30 minutes before departure.
Same Day Return Check-in – Same
day return flight check-in facility available throughout the network at stations/cities connected by same day return flights provided both stations are connected online by the Departure Control System. Both boarding cards are handed over to passengers at the point of origin, thereby eliminating a second check-in and therefore, a shorter waiting
Return Check-In – Now you can
return check-in if your flight is on the same day or the next. Collect your return boarding card from the originating station and report to the airport just 30 minutes before departure if you're travelling with hand baggage only. Valid for flights between the 6 metros - Delhi,
Mumbai, Calcutta, Chennai, Bangalore & Hyderabad
Through Check-In – You can board
your connecting onward flight without having to check-in again, even if it's upto 24 hours later. Your baggage will also be through checked-in. Valid for flights/ connections from all domestic stations except Kochi, Agatti and Gaya Minimum connecting time 45 minutes.
time at the airport on the return flight. Such passengers would need to report at the airport for the return flight only 30 minutes before scheduled departure.
Tele-Check-In – Jet Airways stations
have tele-check-in facilities for Premiere, Club Premiere passengers as well as Jet Privilege Blue Plus, Gold, Silver and Platinum Card members. Platinum and Gold Card members can tele-check-in 48 hours in advance. Silver and Blue Plus Card members can tele-check-in 24 hours in advance. Passengers may telecheck in upto one hour prior to departure and must arrive at the airport check- in counter at least 30 minutes prior to departure. However, Blue Plus members are required to report 45 minutes prior to departure. All passengers for International flights will need to telecheck-in upto four hours prior to departure. All are required to report 45 minutes prior to departure.
Web Check-in: Jet Airways’ online
facility for Web Check-in is currently available for passengers holding a confirmed and valid E-ticket, anytime between 48 hours and 60 minutes prior to their flight departure, in 29 of the airline’s destinations across India. Etickets can be issued through Travel Agents, Jet Airways portal, Jet Airways airport and city offices. With this, Jet Airways has introduced yet another pioneering initiative that allows customers not only to select their preferred seat but also to print their boarding pass for their same day return flight on www.jetairways.com.
Kiosk Check-in: Kiosk Check-in is
available for domestic flights and can be completed at Jet Airways’ kiosks located at the airport. When a customer uses kiosk check-in, the system performs a name check, verifies the PNR, enables passengers to select their preferred seats and print their boarding passes using the
printer integrated with the kiosk. Kiosk Check-in enables passengers carrying only to proceed directly for security check and thus experience a hassle-free check-in. Currently, Kiosk check-in facility is available at the Mumbai, Delhi and Bangalore airports.
Same day return tele- Check in: Jet
Airways’ Premiere, Club Premiere passengers as well as Jet Privilege Blue Plus, Gold, Silver and Platinum Card members can Tele- check-in for their same day return journey at the originating station. Passengers availing of this facility have to report at the airports 30 minutes prior to departure. However, Blue Plus members are required to report 45 minutes prior to departure. This facility is available only when both the outbound and inbound sectors are on Jet Airways.
Seat Request: Premiere and Club
Premiere passengers are requested to indicate their seat preference at the time of reservation. Advance Seat Reservation Facility to Economy Class passengers is available for their international flights between India and London Singapore & Kuala Lumpur. This can be done at the time of making a booking.
Lounges: Premiere, Club Premiere passengers and Jet Privilege members have the facility of waiting at airport lounges in certain airports. Passengers are offered complimentary beverages and snacks in these lounges.
for the Physically Challenged: Physically challenged passengers can make a request while booking their flight and an attendant with wheelchair will be arranged.
Check-In Facilities for Overseas
Passengers – To assist overseas passengers, Jet Airways have check-in counters at the Chhatrapati Shivaji International Airport,
Check-in – Passengers departing on Jet Airways services and connecting onto international flights can now be through checked-in to their final destinations. This means that their luggage is through labelled and boarding passes issued for their onward international flights. This facility is also available for passengers arriving on incoming international flights. Jet Airways passengers flying to any destination within India and connecting to another flight of the airline can avail the Through Check-in facility to their final destination within India.
To provide an unpolluted environment, smoking has been prohibited on all flights. Meals and beverages are provided on all flights depending upon the scheduled time of departure and arrival, as well as the duration of the flight. “Access" Suggestion Cards are placed on board to solicit valuable suggestions and comments from our passengers in our efforts to improve services. In addition to the variety of newspapers, our in-flight magazine Swagat is kept on board for in-flight reading pleasure. Magazines are placed on board for Executive Class passengers. Cabin Crew Training – Indian Airlines gains strength from its experienced and well-trained cabin crew, whose skills are honed on a regular basis at the Cabin Crew Training School (CCTS) in Hyderabad. The CCTS is equipped to provide technical training including Safety and Emergency procedures, aircraft type specific training, Crew Resource Management modules, programmes on personal grooming, voice and announcements, etc. The CCTS
Jet Airways passengers are warmly greeted on board by our multinational crew offering welcome dr inks, fresh juices and refresher towels. Pillows and blankets are available on request on all flights. A wide choice of newspapers and magazines are offered. The monthly Inflight magazine Jetwings is placed in each seat pocket for your pleasurable reading. Club Premiere passengers may request for exclusive stationery. Jet Airways offers customers exemplary inflight services in Premiere, Club Premiere and Economy classes on all sectors. A choice of vegetarian or non-vegetarian snacks and hot meals are offered in Premiere, Club Premiere and Economy class. All meals are cooked in pure vegetable oil. We also offer a variety of special meals to cater to your every need. Passengers can request for a special meal to be catered onboard 24 hours prior to their flight with our reservations department. During flight, the Crew will take special care of unaccompanied minors. A special giveaway ‘Jetkids’ is offered to Children for their recreation. For our International Operations, we have multinational Cabin Crew to cater to our
conducts courses for external agencies as well. Recently, courses were conducted for personnel from government security agencies, like the CISF. Flight attendants training courses for external candidates are also undertaken. Anyone interested in these programmed can find out more by contacting CCTS. Meals – Indian Airlines offers a wide variety in its in-flight meal menus, with a multi-cuisine approach to cater to the predilections of the range of passengers on its network stretching across the Indian sub-continent and into the MiddleEast and South-East Asia. Reputed hotel chains, like the Taj Group and Ambassador, provide most of our flight catering. Cabin services are continuously under review with innovations and improvements as our aim. Apart from normal Vegetarian and Non-Vegetarian Meals, Indian Airlines also provides Special Meals such as Jain Meal, Diet Meal, Child Meal etc. Swagat Magazine – Indian Airlines gains strength from its experienced and well-trained cabin crew, whose skills are honed on a regular basis at the Cabin Crew Training School (CCTS) in Hyderabad.
valued customers. A wide-choice of in-flight entertainment, gourmet meal service using elegant cutlery, exquisite French Wines and Swiss Chocolates, and the finest assortment of coffee and tea. Passengers can choose from signature Continental, Oriental and Indian menus which will be served on request. Choice of Australian wines and liquor, comfortable seating, in-flight audio-video, brewed coffee are all available in the Economy class. Our Inflight Entertainment offers personalised audio video facility in Premiere, Club Premiere while our Economy cabin provide overhead LCD screens and choice of audio. Jetwings International, a bi-monthly magazine is placed in each seat pocket of all our international flights. Jet Airways flights are non-smoking flights. In accordance with the Government of India’s regulations, consumption of alcohol is not permitted on Jet Airways’ domestic flights. Safety instructions and Emergency procedures are explained by the Cabin Crew on each flight in Hindi and English. Safety Briefing cards are placed in each seat pocket for additional details. On our International flights Safety instructions and Emergency procedures are demonstrated by the use of safety video on each of these flights in Hindi and English. Safety Briefing cards are placed in each seat pocket for additional details. Safety Instruction Manuals in Braille are placed on all Jet Airways’ flights for visually impaired passengers. Jet Airways Cabin Crew is trained to a very high standard of Safety and First Aid by Instructors with International experience. A first-aid kit is available with the cabin crew. Passengers are requested to refrain from using electronic devices during take-off and landing. Cellular phones must always be in ‘Power Off’ mode from the time of boarding the aircraft till disembarkation.
Frequent Flier Program
Silver Edge Club Privileges: As a member of our Silver Edge Club, you can now look forward to a host of special benefits, offers and privileges. To begin with: Personalised Membership card – The first thing you will receive along with your membership is a Special Kit, containing a personalised 'Silver Edge Club Membership Card', one Upgrade Voucher and a special 'Silver Edge Club' Baggage Tag, an announcement of your privileged status. Bonus Mileage Points on Flying Returns Membership – 10% extra mileage point bonus can be earned over and above normal accruals (depending on class of travel) on Indian Airlines or Alliance Air flights on domestic or SAARC sectors. Additional Baggage – You now get the freedom to carry an additional 10 kgs of extra baggage on Airbus-300, Airbus320 and Boeing-737 aircraft on domestic sectors over and above the Flying Returns member normal limit. No excess baggage is however, allowed on ATR-42, Dornier aircraft and on international sectors. Exclusive Offers – A stream of exclusive offers in partnership with premium product and service brands chosen from select categories of apparel, accessories, consumer electronics, entertainment etc at attractive prices. Priority confirmation – Priority confirmation from the wait list. Immediate family members (spouse and children) can enjoy the same privilege when they travel with you. Upgrades – You or your companion enjoy the exclusive privilege of upgradation to Executive Class. We provide you one upgrade voucher with the Silver Edge Club kit. Guaranteed seat reservation – If
5 Membership Levels – In addition to the base JP Blue tier the Jet Privilege programme offers the JP Blue Plus tier. This tier is introduced for our JP Blue members who are on the fast track to an upgrade; they can start enjoying the facility of Tele Check-in as soon as they complete 10 Jet Airways flights or 15,000 Status JPMiles (ie. JPMiles earned on Jet Airways flights) in a six-month period. The programme also has three elite tiers JP Silver, JP Gold and the excusive JP Platinum - specially created for our most frequent flyers. The Dynamic Tier Review (DTR) System - A world first! – To make the tier upgrades and retention easier for our JP Members, Jet Privilege has developed a multi-criteria based tier assessment system. This innovative, award-winning system, which is referred to as the DTR System, is totally unique to Jet Airways and has no precedent anywhere in the world. With this system, we will be able to provide members with quicker tier upgrades as well as more opportunities to retain their tier status. 13-Quarter validity of JPMiles – The Jet Privilege programme offers you yet another benefit. Your JPMiles are now valid for 13 quarters including the quarter they were earned in. Moreover, your JPMiles will only lapse on a quarterly basis (at the end of the 13th quarter) and not on an annual basis, as it was in the earlier system. Hence only the JPMiles earned in that quarter will expire, and not the entire JPMiles earned in that year. The validity cannot be extended beyond 13 quarters, and JPMiles that are not redeemed before expiry, will lapse. Personalised Web Access – Jet Privilege members can login using their JP Number and Password to access and manage their Jet Privilege account, anytime, anywhere through the website
reservation for a seat in Business Class cannot be confirmed immediately, you will be offered an option of a guaranteed seat in Economy Class on the same flight, for booking made 24 hours in advance. Miscellaneous – Special Promotions and Monthly Mileage Statements.
Golden Edge Club Privileges: As a member of our Golden Edge Club, you can now look forward to a host of special benefits, offers and privileges. To begin with: Personalised Membership Card – The first thing you will receive along with your membership is a Special Kit, containing a personalised 'Golden Edge Club Membership Card', two Upgrade Vouchers and a special 'Golden Edge Club' Baggage Tag, an announcement of your privileged status. Bonus Mileage Points on Flying Returns Membership – 25% extra mileage point bonus can be earned over and above normal accruals (depending on class of travel) on Indian Airlines and Alliance Air flights on domestic and SAARC sectors. Additional Baggage – You get the freedom to carry an additional 20 kgs of extra baggage on Airbus-300, Airbus-320 and Boeing-737 aircraft. However, no excess baggage is allowed on ATR-42 and Dornier-228 aircraft. Personalised Check–In – At the time of check - in, at domestic terminals of major airports (Delhi, Mumbai, Kolkata, Chennai, Bangalore and Hyderabad) we have set up a dedicated check - in counter especially for you. Your Golden Edge Club Membership Card puts you upfront, where you belong. Priority confirmation – Priority confirmation from the wait list. Immediate family members (spouse and children) can enjoy the same privilege
www.jetairways.com. With online access to your Jet Privilege Account you can: Update your personal details Manage your e-mail preferences Check your JPMiles or Qualification status Check your mileage expiry details View your Frequent Flyer Activities and Statement Details View detailed information on the Jet Privilege Programme and Partners Update missing JPMiles in your account Purchase JPMiles Request for Redemptions on Jet Airways or Partner Airlines Get customised offers, based on your preferences Check exclusive offers and promotions on Jet Privilege and JP Programme Partners Calculate Mileage you would accrue on or redeem for different routes Request for information from the Jet Privilege Service Centre Provide feedback to the Jet Privilege Service Centre Purchase Jet Airways tickets at special fares exclusively for JPMembers Membership Tier Bonus – JP members earn Bonus JPMiles on all eligible flights, based on their elite membership tier. Tier JP Silver JP Gold JP Platinum Tier bonus 10% 20% 30% Tier Bonus is not available when using Programme Partners. Bonus JPMiles do not count towards evaluation for tier upgrade/retention. Tele Check-in facility – All JP members (except JP Blue) who hold confirmed reservations on Jet Airways flights can call their local reservation
when they travel with you. Upgrades – You or your nominee enjoy the exclusive privilege of upgradation to Executive Class. We provide you two upgrade vouchers with the Golden Edge Club kit. Guaranteed seat reservation – If reservation for a seat in Business Class cannot be confirmed immediately, you will be offered an option of a guaranteed seat in Economy Class on the same flight, for booking made 24 hours in advance. Miscellaneous – Special Promotions and Monthly Mileage Statements
office to Tele Check-in. However, the cutoff time differs for Domestic and International flights on Jet Airways.
Web Check-in – This innovative service allows you to select your preferred seat and also print your boarding pass, online at www.jetairways.com. This facility is available to passengers holding confirmed and valid e-tickets when travelling out of select airports within India only. When travelling in Club Première, you can Web Check-in 48 hours to 1 hour prior to your flight departure. And if you are traveling in Economy class, you can Web Check-in depending on your JP tier, as shown below: Web Check-in Timings 48 hours to 1 hour prior to flight departure
JP Tier Platinum & Gold
Silver & Blue 24 hours to 1 hour prior to Plus flight departure Blue 12 hours to 1 hour prior to flight departure
Complimentary Upgrade Vouchers – When traveling on an economy class booking, JP members can enjoy a complimentary upgrade to Club Première/PREMIERE by using an upgrade voucher. These vouchers are sent by Jet Privilege to its members from time to time, depending on their tier status, use of the Jet Airways Citibank Gold Card or as a special offer. The number of vouchers required for an upgrade per flight, is now based on the "Travelled Distance" concept, which is determined at the rate of 1 voucher for every 2000 flown miles, with a minimum of 1 voucher per boarding pass. The travelled distance is equal to the number of base JPMiles earned for that flight on a full fare economy class ticket. Therefore, the number of vouchers needed for an upgrade is now directly proportional to the distance of the flight.
Flight Distance Number of Vouchers (In JPMiles) needed for Upgrade 1 – 2000 2001 – 4000 4001 – 6000 6001 + 1 2 3 4
No blackout periods for Jet Awards –There are no Blackout periods applicable for JP Awards on Jet Airways flights. All award bookings will however be subject to capacity and class control. For Award bookings on our Programme Partner airlines, blackouts may apply from time to time and if applicable at the time of your request the same will be communicated to you by the JP Service Centre. Lounge Access –
Lounge access at select airports in
India – Members of the elite JP Silver, JP Gold, JP Platinum tiers and Jet Airways Citibank Gold Credit Card holders have access to Lounges at Bangalore, Kolkata, Chennai, Delhi, Jaipur, Mumbai and Hyderabad airports, irrespective of their class of travel. JP Platinum members can take along two guests travelling on the same Jet Airways, JP Gold member can take along one guest travelling on the same Jet Airways flight.
access on International Sectors – JP Gold and JP Platinum members travelling on Jet Airways can access lounges (members only) at airports outside India. Lounge access will be offered only at the departure airport where available. For JP members transiting via our international destinations, the lounge access at the international airports will be offered if the onward travel is on a Jet Airways flight only.
Additional Baggage Allowance on Jet Airways – On Jet Airways flights, as a JP Platinum, JP Gold or JP Silver member, you enjoy an additional
baggage allowance, over and above the normal baggage allowance. Tier Additional Allowance 20 kilos Baggage
JP Platinum 35 kilos JP Gold JP Silver 10 kilos Jet Airways Citibank Gold Credit Card holders get an additional 15 kilos baggage allowance when travelling on Jet Airways flights within India only. Jet Airways Citibank Gold Credit Card holders who are also JP Platinum, JP Gold or JP Silver members will receive only the higher of the two excess baggage allowances and not a cumulative total. Additional baggage allowance is not available on flights operating the ATR aircraft due to loading regulations.
Priority tagging of baggage – We understand that with a busy travel schedule, you may not always have the time to wait until your baggage arrives. That's why we offer our JP Platinum and JP Gold members Priority Baggage Tags for their baggage on our domestic as well as international flights. A Priority Baggage Tag ensures that your baggage is among the first to arrive on the conveyer belt. Guaranteed reservation up to 24 hours before departure – We understand that as a frequent traveller, you may have to fly at short notice. Therefore, we now offer JP Gold and JP Platinum members a guaranteed reservation* in Economy class. To use this privilege, you need to hold a full-fare Economy class ticket. Request for confirmation must be made at least 24 hours before flight departure. Check-in at Club Première & PREMIERE counters – JP Platinum, JP Gold and JP Silver members can check-in at the PREMIERE / Club Première counters, even when travelling Economy class. Jet Airways Citibank Gold Credit
Cardholders can avail of this facility at airports in India. JP Platinum and JP Gold members and PREMIERE passengers can also check-in at the exclusive Park Avenue counter at London, Heathrow.
Cancellation fees waived on published fares – This benefit is exclusively for our JP Platinum members. All cancellation fees on revenue published fare tickets are waived off (Night Fares and non-refundable tickets not included). However, No Show and Gate No Show charges are not included in this waiver. Priority Standby – When you’re travelling on a waitlisted ticket, as a JP member you can rest easy because, when accepting waitlisted passengers for a flight at the time of counter closure for a flight, JP Platinum, JP Gold and JP Silver members will be given the highest priority status in the order of their tier status, as per the applicable check-in procedures. Dedicated customer Service Centre – The Jet Privilege Service Centre is open from Monday to Friday between 9:00 a.m to 9:00 p.m. IST and on Saturdays between 9:00 a.m. to 5:30 p.m. IST (except on public holidays). JP members residing in the UK can call our UK Toll Free number 08 000 265 626 from Monday to Friday between 9:00 a.m. to 5:30 p.m. GMT and on Saturdays between 9:00 a.m. to 1:30 p.m. GMT.
Frequent Flier Program – Credit Card tie up
American Express Citibank
and 10% on Business Class tickets – Pay 15% less on full fare Economy Class tickets and 10% less on Business Class tickets - every time, on any domestic or International Indian Airlines sector. Discounts On Easy Fares & Super Savers – Get a 5% discount on Easy Fares & Super Saver tickets purchased through the IA-AMEX card
Get one free upgrade voucher –
Jet Airways now offer their Jet Privilege members an opportunity to earn free flights even faster with the Jet Airways Citibank Credit Cards. In association with Citibank N.A. and MasterCard International, this is the country's most innovative and rewarding airline co-branded credit card proposition.
Get 1 free upgrade voucher to Business Class the moment you get your Card, and with every subsequent annual renewal. Get free tickets – Get a free 2 coupon return ticket on economy class for any domestic or international sector on IA network after completing travel on tickets worth Rs. 75,000 charged through the IA-AMEX card. Flexibility of Easy Payment – Facility to Roll over Credit to next billing cycle Relax with air accident insurance of up to 50 lakhs – With the Indian Airlines American Express Card, you are covered by air accident insurance cover of upto 50 lakhs. Special Travel Privileges – As a Card member, enjoy special privileges from Indian Airlines including: Free FFP membership (for non Flying Returns members) Extra-baggage Allowance, Priority confirmations, Tele check-in facilities as part of FFP membership benefits Global Calling Card and Global Assist Convert everyday purchases on
Membership to Jet Privilege – Get automatic membership to Jet Privilege, the Jet Airways Frequent Flyer Program, which makes flying a rewarding experience. Earn JPMiles by simply doing what you enjoy!
Earn JPMiles – You get 2 JPMiles for
every Rs.100 spent using this Card. What's more? You also earn JPMiles every time you fly by Jet Airways, or its international partner airlines - British Airways, KLM-Royal Dutch Airlines and Northwest Airlines to over 400 destinations in more than 80 countries across 6 continents.
Fly Free and Other Perks – You can
redeem these JPMiles for free* flights! You are also entitled to a host of exclusive benefits when you use the services of Jet Privilege Program Partners - The Oberoi Hotels and Resorts, The Leela Hotels & Resorts, The Park Hotels, ITC Welcomgroup, The Trident Hotels, Radisson Hotels, Hyatt Hotels Worldwide, Orange, Hutch, BPL Mobile and AVIS Car Rentals.
Safeguard Your Family – Citibank
Suraksha is a unique twin-benefit insurance package that safeguards your family and gives you complete peace of mind. In case of an unforeseen incident, Citibank Suraksha's Credit Shield covers a balance outstanding of up to Rs. 1 lakh on your Jet Airways Citibank Silver Credit
your Card into air-miles – Redeem free flights faster by clocking 100% more Membership Reward points on all your Card spending. These points are freely transferable to the Indian Airlines/Air India Flying Returns program as add on mileage points. (facility available by paying a fee of Rs. 400 per annum)
Card and provides a Personal Accident Insurance cover of up to Rs. 10 lakh. This is available to you at a nominal premium. To sign up for Citibank Suraksha, please call 24-hour CitiPhone in your city.
0% Fuel Surcharge – Rising fuel
prices need not be a cause for concern for you anymore. Citibank and IndianOil bring you a unique opportunity to save on fuel every time you tank up at IndianOil outlets.All you have to do is use your Citibank VISA or Master Card and the 2.5% surcharge will be waived off. Just make sure that you ask for a Citibank Chargeslip.
Enjoy 25% discount on Business
Class tickets – Pay 25% less on full fare Business Class tickets and 15% less on Economy Class tickets - every time, on any Indian or International Indian Airlines sector.
Discounts on Easy Fares & Super
savers – Get a 5% discount on Easy Fare & Smart Super Saver tickets purchased through the IA-AMEX card
Jet Airways Citibank Gold Card:
upgrades to Business Class – Get 2 complimentary upgrade vouchers to Business Class the moment you get your Card, and with every subsequent annual renewal. These vouchers can be used on any of Indian Airlines domestic and international destinations.
Get automatic membership to Jet Privilege, the Jet Airways frequent flyer programme. Earn 4 JPMiles for every Rs. 100 spent using this Card. Get 1000 Bonus JPMiles when you sign up for a Jet Airways Citibank Gold Card. You also earn JPMiles every time you fly by Jet Airways, or its international partners. You can then redeem these JPMiles for free flights on Jet Airways, KLM-Royal Dutch Airlines, Northwest Airlines and British Airways. Complimentary Add-on Card for your loved ones. You can get up to 5 Additional Cards. Get three 30% Discount vouchers on your Jet travel tickets. You get Complimentary Upgrade Voucher on the accrual of 4,500 JPMiles on your Credit Card spends. You get an additional baggage allowance of 15 kg. You are also entitled to a host of exclusive benefits when you use
Free Business Class return tickets
– Get a free, 2 coupon business class return ticket on any Indian Airlines domestic or international sector every time you complete travel on tickets worth Rs. 1,00,000 charged through the IA-AMEX Card over a period of twelve months. Or Get two economy class return tickets (2 coupon) for any sector on IA network after completing travel on tickets worth 1,40,000 purchased through the IA-AMEX card over a period of twelve months.
Triple Membership Rewards points
– Redeem free flights faster by clocking Triple Membership Rewards points on all Card spending. These points are freely transferable to the Indian Airlines/Air India Flying Returns program as add on
Enjoy Global Acceptance with no
Pre-set Spending Limits – With no pre-set spending limit you can now charge virtually all your expenses to the Card, without being constrained by a credit limit, anywhere in the world. Your charges are approved based on your financial particulars and spending and payment patterns. What's more, you can pay conveniently in Indian Rupees.
the service of JP Program Partners The Oberoi Hotels and Resorts, The Leela Hotels & Resorts, The Park Hotels, Radisson Hotels and The Trident Group of Hotels or when you rent a car with AVIS car rentals.
Accident Insurance up to 75 lakhs
– With the Indian Airlines American Express Gold Card, you are covered by air accident insurance cover of upto 75 lakhs. Special Travel Privileges: As a Card member, you can enjoy special privileges from Indian Airlines including: Free FFP membership (for non Flying Returns members) Extra-baggage Allowance, Priority confirmations, Tele check-in facilities as part of FFP membership benefits
Exclusive offer from Fortune Park Hotels by Welcome Group – The Jet Airways Citibank Gold Card makes your life as comfortable even when you're not flying. Since you now get a fabulous 30% waiver on hotel stays plus upgrades at Fortune Park Hotels by Welcome Group. Check-in at Club Première Counters – The Jet Airways Citibank Gold Card opens a world of privileges for the frequent traveller. Instead of queuing up for check-in at the economy class counter, the Card member can check-in at the Club Première counter. This is irrespective of the JP tier that the member belongs to, or the class of travel. The member needs to just produce the Jet Airways Citibank Gold Card at the counter. Complimentary Access to Club Première Lounges – The Jet Airways Citibank Gold Card also allows Card members access to the Club Première lounges. The Card member needs to collect the voucher at the time of check-in from the Club Première counter. You will also receive complimentary refreshments from Citibank at these lounges. Peace Of Mind – Your Jet Airways
Citibank Card brings you peace of mind with its Insurance benefits. The card comes with an Air Accident Insurance cover of up to Rs. 20 lakh p.a for the Primary Cardmembers. The Global Purchase Protection facility on your Jet Airways Citibank Gold Card covers all purchases on the Card against damage or loss due to fire and theft up to Rs. 50,000 per year for 180 days from the date of purchase. In the unlikely event of losing your Card, you are protected against fraudulent charges from the moment you report the loss to us with Zero Card Liability coverage.
Regular Jet Airways Citibank Card Benefits(Silver & Gold):
Welcomed Worldwide – This Citibank Credit Card is welcomed at over 1,10,000 Merchant Partners across India and Nepal and at over 30 million establishments worldwide. Your Card can be used for everyday purchases like petrol and groceries or for high-value items such as consumer durables or home appliances. Paying customs duty and hospital bills also become convenient.
Power-Packed Global Assistance – You can use the MasterCard Global Assistance Services for reporting lost or stolen Cards, requesting for an emergency Card replacement or for emergency Cash Advances. A wide range of miscellaneous information is also available for your benefit.
Cash Access – Round-the-Clock While travelling overseas, you can access cash (up to 60% of your
Credit Limit) at over 8,30,000 MasterCard ATMs across the globe. In addition, you can also access cash from any Citibank branch. Please click here for a list of ATMs. Please Note: A transaction fee of 2.5% will be applicable on all Cash Advances (subject to a minimum of Rs. 250 and US $5 at international ATMs). All Cash Advances also carry a service charge from the date of the transaction until the date of settlement.
Security with a PhotoCard – You can choose to have your photograph and signature digitally printed on your Card. Thus, providing you with the extra recognition and security you deserve as a Citibank Credit Card member. Click here to download the PhotoCard application form.
Buy now Pay later in parts – With Citibank's powerful Revolving Credit Facility you can choose to buy high-value items now and pay as little as 5% of your total outstanding every month.
Call Citibank – Anytime, Anywhere. 24-Hour CitiPhone, the revolutionary Phone Banking service, ensures that Citibank is just a phone call away. From the minute you dial in, the world-class Interactive Voice Response (IVR) Service will guide you right through. In case of an emergency or for any urgent clarification on your Card while you are overseas call our courteous Citibank Phone Banking Officers, standing by you, 24-hours a day and 7 days a week.
Your Card Account at your fingertips – You can access your Card Account from anywhere, at any time through Citibank Online. You can also
pay your utility bills, check your Card Account Statement, order demand drafts and do much more.
Keep track of your Account, even while on the move – With CitiAlert, you can receive constant updates on your Card Account either as an SMS on your mobile phone or e-mail on your PC so that you can keep track of your Card Account even when you are travelling.
Unique Service Characteristics
Commonly known as the 4I’s of Services, it is very important to look into this aspect and check their relationship with the service industry.
Intangible services are difficult to sell because they cannot be produced and displayed ahead of time. They are therefore harder to communicate to prospective customers. It means that services are high in credence qualities whereas goods are high in search qualities. Marketers of services can reduce these risks by stressing on tangible cues that will convey reassurance and quality to the prospective customers. These tangible cues range from the firm's physical facilities to the appearance and demeanor of its staff, from the letterhead to the logo of the company. In the airline i n d u s t r y transportation is the core product. Since it is intangible in nature a service company can distinguish itself from its competitors by providing several tangible cues like:
Food / Beverages Newspapers Movies Music Staff uniforms - For example, Air India’s f e m a l e staff wears a printed
Seats and cushions Audio / Video facilities for work or pleasure Fax, laptops, etc. Baggage retrieval Flight bookings
Many services require customers to participate in creating the service product. In the airline industry, it is very important for the company to consider the customers as a part of the company in order to serve them better. The inseparability of services leads to:
Customer being co-producer; Often customer being co-consumers with other customers and; Customers travelling to the point of service production.
All the above 3 problems are faced by the service marketer in the airline industry. So the service marketer has to think of ways in which he can satisfy his consumers in an efficient manner. In the airline industry, the customer has to be physically present in the service factory. Hence, he is coming in direct contact with the service provider as well as other customers of the airline.
Inconsistency refers to the variability in the service. Service variability leads to difficulty in projecting a consistent image and developing a strong brand. As it is difficult to standardize and to blueprint the service process, there is inconsistency in service quality. Different front-line personnel have different abilities. Even the same service provider has good days and bad days or maybe less focused at different times of day. Services are performances, often involving the cooperation and skill of several individuals, and are therefore unlikely to be same every time. This potential variability of service quality raises the risk faced by the consumer. The service provider must find ways to reduce the perceived risk due to variability. One method is to design services to be as uniform as possible - By training personnel to follow closely defined procedures, or by automating as many aspects of the services as possible. For example – Most airlines include online booking resulting in a standardized procedure & fewer mistakes due to human errors. A second way to deal with perceived risk from variability is to provide guarantees & other assurances that the customer will not be stuck with a bad result. Another way of reducing inconsistency in airlines is the standardization of in-flight procedures for example the security instructions given at the beginning of the flight.
Service businesses cannot normally stockpile their output, because the time bound nature of service delivery makes it impossible to use the finished goods as inventory. For example – The potential income from an empty seat of an airline flight is lost forever once the flight takes off. Conversely, when demand for service exceeds supply, the excess business may be lost.
For example – If some one cannot get as eat on one flight another carrier gets the business or the trip is cancelled or postponed. The inventory for airline industry is mainly the food and the aircrafts spares and p a r t s . Airlines face the problem of i n v e n to r y m ainly due t o irregular demand patterns.
The Goods – Services Continuum
The airline industry is a sector where the goods that are being sold could be either classified as the traveling service rendered by the airline company or the actual purchase of the aircraft. When we consider the purchase of an aircraft, we must understand that only large corporate houses could afford that and that too for its top executives only (McDowell’s owns a small plane). Here the plane is the core product but only the sale of the plane by the manufacturer does not completely fulfill the desire of the customer, hence the manufacturer (BOEING) has to extend a few services to attract more sales to corporate as well as airlines. For example, free servicing, or may be a maintenance contract with the plane is required. Even in case of airline companies where travel is their core product, they have to render additional benefits or services to the passengers to increase the number of sale of tickets.
Hence, in marketing terms there could not be any pure goods or pure services. Without either of them the other wouldn’t be effective. So in order to increase sales and grab a larger market share, every good must be supported by a service and vice versa. In the above diagram there are 4 parts related to sale: purely goods, goods related to services, services related to goods and purely services. But in each case a loophole could be identified if considered in isolation. Hence for a service marketer to be very accurate with the sales figures and forecasts, he must concentrate on the second and third type, i.e. goods related services and services related goods as according to the business they are into, i.e. if the company is into manufacturing of planes they must consider the second option and if they are an airline company, they must opt for the third for maximum benefits.
The Flower of Service
The core service of an airline is the service of transport. The supplementary services are classified into eight clusters & each one is analyzed with respect to the airline industry:
This aspect of supplementary service is common for every person that needs information about the organization. In case of airline industry, up to date information regarding flight schedules, ticket fares, information about promotion schemes etc available to customers. Customers can avail of this information literally at their fingertips today with every airline starting its own website which gives complete details to the customer & also entertains queries. It also includes providing information to employees regarding new policies affecting the airline & equipping them with enough information, which the customers might demand. Extensive training is provided to in-flight attendants regarding handling customer queries, knowledge about the airplane itself, knowledge about cuisine etc.
This aspect of supplementary services can be customized according to the needs of the customer. It is more in the case of people processing and high personnel-contact services. Airlines are moving more actively into the role of consultant today. They are doing away with the travel agents & designing & selling packaged tours to consumers directly. In this aspect they often act as consultants to the customer, by giving him advice & suggestions regarding the type of plan he can choose, the benefits he will get the mode of travel he should choose etc. Another aspect to consultation at airlines is when the customer approaches the airline regarding traveling to particular destination, the airline gives him a variety of choices of routes that he can take. In some cases airline may also design special menus & benefits in consultation with its frequent fliers by keeping in constant touch with them & asking them for suggestion as to what they want in their airline which will make their experience more comfortable.
The order taking procedure is essentially the booking procedure of the airlines. The important aspect to be noted here is that the procedure is smooth, easily understood & fast. Reservation of airline tickets is now easy and reliable since it is fully computerized. There are 24 hours reservations. Passengers can specify their seat preferences at the time of reservation. Most airlines use the telephone, fax, and email methods of booking. The emphasis here is on fast booking & at the same time getting the required information form the customer. This is done by establishing a standard reservation procedure & format thus reducing the risk of inconsistent service delivery. The online booking system also facilitates better order taking & processing. The scheduling aspect assumes importance as reservations on the wrong flight to the wrong place are likely to be unpopular.
Hospitality & Caretaking
With the increased competition today in the airline industry & the increasing similarity of services offered by each airline, hospitality has emerged as a keydifferentiating factor between one airline & the other. The hospitality aspect of an airline is tested right form the time of the reservation (courtesy of the booking official) to the airline’s desk at the airport to the actual inflight travel (the attitude of the flight attendants) to the post flight help extended.
In airlines the safekeeping issue is that of safeguarding the customer’s baggage. Baggage allowances are offered about 30 kegs of check-in baggage is allowed. Passengers carrying international tickets are given further allowance of around an added 3Okgs Priority baggage delivery is offered to members. The customers entrust his baggage to the airline & it is the airline’s responsibility to keep it in a proper condition. Children and infants usually travel along with their parents and guardian. In case of unaccompanied minors, customer service staff renders all assistance like checking in and escorting up to the aircraft and handing over to the senior-most cabin attendant on board the flight. He is looked after on board the flight right up to the point flight reaches the destination and he is received by his guardian.
Special requests – airline very often receive special requests form customers with regards to meal preferences, special amenities for elderly people or children., medical needs etc. these needs have to considered & acceded to wherever possible Handling of customer suggestions / complaints – every airline today has a customer service center which entertains customer suggestions & complaints. On the flight,
customers are often asked for their opinion regarding service equality. Many corporate frequent travelers are consulted when the airline decides to make any new change.
Billing & payment
The billing procedure in airlines is simple. The options available to the customer are plenty including credit card & travelers Cheques. Airlines use the open account system with their corporate clients. Frequent fliers are also given special payment privileges.
Quality Dimensions: RATER Analysis
Customers don’t assess the quality of service on one dimension only, they use multiple parameters to judge the quality of the service that they are being offered. These characteristics which people consider vary from person to person, industry to industry. Even depends upon the product on offer. In the early 1970’s the strategy adopted generally by the service provides was: Work faster and more efficiently to reduce the costs. During the 1980’s and the early 1990’s: Improving the quality aspect rose as a major priority. This requires efforts to improve customer’s satisfaction by creating better service processes and outcomes. We are now seeing a growing emphasis on linking the two strategies in order to create better value for customers and the firm. Because of the intangibility and multifaceted nature of many services, it may be harder to evaluate the quality of a service than a good. Because the customers are often involved in the service production a distinction needs to be drawn between the process of service delivery and the actual output of the service. The most extensive research into service quality is strongly user oriented. Services are broadly classified into 10 dimensions namely:
Tangibility Reliability Responsiveness Competence Courtesy Credibility Security Access Communication Understanding the customer
Since most of these dimensions are overlapping they were pooled down to five dimensions as given below: Reliability Assurance
Tangibles Empathy Responsiveness
When we look at these dimensions with respect to the airline industry we find that the following service qualities are expected by the customer Reliability – flights to promised destinations depart and arrive on schedule Assurance – trusted name, good safety record, Competent employees Tangibles – aircraft, ticketing counters, baggage area, uniforms Empathy – understanding of special individual needs, anticipates customer needs Responsiveness – prompt and speedy system for ticketing, in- flight, baggage handling
Ability to perform the promised service dependably and accurately. This would basically be that company delivers to the customer what is promised & the customers basically like to deal with companies that can fulfill their promises. When we look at the airline industry we can see the following things the customer would expect certain basic facilities like: some functional infrastructure provided to him, the flight leaving & taking off on time, the luggage reaching safely.
Employees’ knowledge and courtesy and their ability to inspire trust and confidence Assurance relates to knowledge and accuracy of employees and their ability to convey trust and confidence. This dimension is of great significance for services where a customer perceives high risk and is not sure of the outcomes. The employees should have a positive morale & should be motivated if they have to promote the firm & create a sense of assurance in the flyer’s mind. Jet Airways is considered to be the more customer friendly of the domestic airlines. Besides this, after the September 11 crisis, there was a lot of skepticism in the fliers & to instill a little confidence in the consumer’s mind, the government paid greater emphasis on security in the aviation policy. This was a l l so that people would f e e l s a f e n e x t t i m e they t r a v e l e d by a i r . `They would appoint a committee and look into the recommendations provided by them to better the security arrangements in the airplanes & airports.
Appearance of physical facilities, equipment, materials personnel and written
Tangible features would be those physical features, which can be seen by the customer. These would be the physical proofs, which would help the customer to judge the quality of service. The customers evaluate the quality of these services on the basis of the tangibles provided by the service providers. The marketers of services emphasize on tangiblising the intangibles. Incase of the airline it’d be the aircraft that the airline uses, how old they are, and the kind of facilities that are provided inside the aircraft or in the waiting area. The technology used for baggage handling, the coaches used to transport the customer to the aircraft; all of these speak leaps & bounds about the service provider. The kind of skilled staff that they, and the uniform that the staff wears. The tangibles would also include the infrastructural facilities present at the airports. This is where we find most of the Indian airports lacking. They have no proper arrangements to handle the customers. When we look at the aircraft fleet that is a very important tangible feature, and we find that Indian Airlines has a really ancient fleet of aircraft’s which doesn’t make it extremely safe as older planes are more prone to damage. Whereas, Jet Airways has the youngest fleet in the business.
Caring, Individualized attention given to customers Empathy basically is when the employees of the organization make the customer feel at home, at ease, making him feel wanted. The customers are mostly offered the same service from most of the airlines. The easiest way for an airline to maintain and grow its client base is to be empathetic towards their customers, to understand their specific needs and to cater to them & they should make each customer feel like he is a unique asset to the company. This can be done by maybe addressing the clients by their first names, keeping a track of their usual flying routes, their preferences in flight, & giving him his favorite seat each time he travels. Customers like to be treated properly for the money that the pay, the airline should therefore try and maximize the benefit to its customers. Air India in April invested 15 crores in the first class segment to give it a face-lift and started providing full-recline seats since they give minimum fatigue on long trips (exceeding 8 hours of flying).
Willingness to help customers and provide prompt service. Responsiveness is willingness to help the customers and provide prompt service. The degree of responsiveness shows the level of commitment that the people of the company have towards their work. It is very necessary for the company to concentrate on prompt & the right kind of responsiveness to the needs of the customer. Incase, a certain passenger doesn’t like a meal served on the plane, the cabin crew should be in a position to offer him an alternative meal, as his perception or opinion of the airline company would mainly depend upon whether his complaint was addressed to and taken care of. Care should be taken that prompt response and top quality service is provided to satisfy all of the customer’s needs.
Low Cost Airlines Vs. Indian Railways: Heating Competition, Melting Price
The continuing fare tussle between the Railways and the Low-cost airlines has changed the contemporary scenario for the Indian traveler. A ticket on India's low-cost carrier (LLC) has made flying, once confined to the rich and elite, an affordable reality for the hordes of Indians travelling across the country. It has taken some time for the low-cost airline industry to carve a niche for themselves, but the wallet-friendly LLC’s are here to stay. When Air Deccan introduced airfares almost equaling the AC II-tier train fares, the response from the leading domestic airlines like Indian Airlines, Jet Airways and Sahara Airlines was immediate. Slashed rates and Advanced Purchase schemes (Apex) swiftly began to take shape, resulting up to 30 to 40 per cent slashed fares for apex fares compared with the original prices. Barely a year after Air Deccan took off came the launch of Vijay Mallya's Kingfisher Airlines, followed by SpiceJet and GoAir. Today the number of LLC's has multiplied from three to a dozen in a matter of months. Since the entry barriers are low, players such as Paramount, IndiGO (Interglobe), Yamuna Air or Kerala Airways, have already filed flight plans. Continuing a steady progress, LLC's are slowly eating into the aviation market share, capturing almost one third of the total market. However the dip in market share does not necessarily mean a drop in the number of passengers or revenues for the mainstream airlines, as the size of the air travel segment has also been swelling. In the market driven by the LLCs- with about half of the passengers being first-time air travelers, there's a bigger pie for everyone. But the biggest loser so far has been Indian Airlines. Even with its trendy make over called Indian, it has been left with a market share of only 23.88 per cent while the potential Jet-Sahara combine controls 45 per cent. As a result it is now exploring the possibility of floating a subsidiary for low-cost operations by merging Air-India Express, the low-fare arm of A-I with Alliance Air, the decade-old wholly-owned subsidiary of IA servicing tier II cities. This could mean that India would have it’s first-ever LLC, having both domestic and international operations. However this fairy tale of low cost airline advent is still in its initial stages. In Europe, North America and Australasia, most successful low cost airlines have operated primarily in domestic or unrestricted international markets. The LLC’s in India on the other hand, have to operate in a highly regulated environment. This is likely to
get compounded with the surge in aviation fuel prices over the past year and the plummeting infrastructure with congestion in airports, lack of landing facilities and parking slots, and increasing staff costs driven by internal competition. These non-frill LLC’s are characterized by few on-board services and elimination of catering. But for the Indian travelers accustomed to travelling in the crowded trains for long hours, the aggressive tariff structure by the LCC’s, costing nominally higher than the AC II-tier by train is becoming a popular alternative. With the LCC’s now targeting the middle-class travelers, the Indian skies are slowly but surely opening up to the one billion plus Indian population
The Servqual Model
This model shows the salient activities of a service organization that influence the perception of quality. In addition, the model shows the interactions between these activities and identifies the links between the key activities, which are pertinent to the delivery of a satisfactory level of service quality. The links are considered as gaps or discrepancies, the gap representing a significant hurdle to achieving a satisfactory level of service quality. Customer expectation-management perception gap (Customer expectationmanagement perceptions of consumer expectations):-this gap exists because there is a lack of proper customer focus. The mere presence of a marketing department does not automatically guarantee customer focus. It requires appropriate management processes, market analysis tools & attributed. Service quality specification gap (management perceptions of consumer expectations – service quality specifications) - Managers will set specifications based on what they believe the consumer requires. This may not necessarily be true. This represents inability on the part of the management to translate consumer expectation into service quality specifications. Service delivery gap (service quality specifications & the service actually delivered):-this is particularly true for services in which the delivery system relies heavily on the people. The gap between the perceived service & service delivery is because of lack of sufficient support for frontline staff, process problems, or frontline staff performance variability. External communication gap (service delivery intentions – what is communicated about the service to customers):- this gap results from inadequate communication by the service provider. A service organization must ensure that its marketing and promotion materials accurately describe he service offering and the way it will be delivered. Expected service – perceived service gap (actual performance – customer perception of the service):- it is the difference between what the customer actually received what and what he expected to receive.
Factors influencing Service Sector
It includes the ‘Supplements’ (value product core product along added services) that with the additional benefits, bundle up together with the
By sales activity we mean the message that the company sends out through its advertising and promotion campaigns. Sales activity also includes the way in which the company monitors its sales intermediaries and the attitude that it projects towards its customers.
After Sales Service
After sales service forms a very important part in customer satisfaction towards
the company. The company has to be very efficient in complaint handling, should seek a time-to-time feedback on its services from its customers and act promptly if there are any flaws. The company should also inform the customer about new offers and schemes as and when they come into existence.
Culture forms a significant part of customer satisfaction. If the customer can relate to a particular culture projected by the company, then his level of satisfaction would be far higher than if the company projects a hostile environment to the customer’s perception. Basically company culture comprises of all intrinsic values and beliefs as well as tangible and intangible symbols that it uses to instill these values into employee behavior at all times.
The interaction between the customer and service provider in the airline industry means that the employee often represents the company to the airline travelers (customers). Especially in the airline industry the service encounter plays a significant role because here the customer comes in direct contact with the employees of the airline company and spends a lot of time in the service factory (the aircraft). Hence the issue of staff presentation is a major tangible factor in the airline industry. This in turn influences the satisfaction level of the customer. The airline company’s organizational structure and culture dictates the extent to which responsibility for staff recruitment, training and motivation is shared b e t w e e n m a r k e t i n g op er atio n s an d human r e s o u r c e s . For service marketers in this industry, the core of service element is the interaction between those providing services and the customer is known as service encounter. The airline sector is considered under the high contact services as the customer is in continuous direct contact with the companies personnel.
Moments Of Truth
A moment of truth exists when a customer comes into contact with the organization. At every point of contact, he experiences the service and makes an evaluation about it being good or bad. That is the moment, which creates satisfaction, is dissatisfaction. That is a moment when a problem may occur. If a problem doesn’t occur and the problem passes off as expected, there is no dissatisfaction. That is also the moment when the experience could be very different than from what was expected, resulting in a perception of intense delight and the expression of ‘wow’. That is the defining moment of reality. Jan Carlzon, president of Scandinavian Airlines, is credited with originating the concept of moments of truth. Carlzon took over as president when the airline had lost 30 million dollars in the two previous years. In his single- minded focus for becoming the best airline of the frequent business traveler in Europe, he determined that the first 15-second encounter between a passenger (Customer) and his front-line people (employees) set the tone or image of the entire company in the mind of that customer. Thus, each encounter with a customer is a moment of truth. Carlzon carefully reviewed every step of the customer contact process, and identified 5 critical times when the airline interacted with the customer. He called these 5 points of contact "the Moments of Truth," and they work for any business.
For airlines, they are:
Making a reservation Getting tickets Boarding Flying Retrieving baggage
Critical incidents are specific encounters between customers and service employees that are especially satisfying or dissatisfying for one or both parties. In the airline industry critical incidents are very important as they help the company evaluate and measure satisfaction level of the customers. The critical incident technique is a methodology for collecting and categorizing such incidents in service encounters.
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:
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: 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 travelers, regarding traveling to a particular country. Overall India’s recent political environment has been largely unstable due to international events & continued tension with Pakistan. 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. 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. 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) Another aspect is that in countries with high corruption levels like India, bribes have to be paid for every permit & license required. Therefore constant liasoning with the minister & other government official is necessary. The state owned airlines suffer the maximum from this problem. These airlines have to make several special considerations with respect to selection of routes, free seats to ministers, etc which a privately owned airline need not do. The state owned airlines also suffers from archaic laws applying only to them such as the retirement age of the
pursers & hostesses, the labour regulations which make the management less flexible in taking decision due to the presence of a strong union, & the heavy control &interference of the government. This affects the quality of the service delivery & therefore these airlines shave to think of innovative service marketing ideas to circumvent their problems & compete with the private operators.
Business cycles have a wide reaching impact on the airline industry. During recession, airline is considered a luxury & therefore spending on air travel is cut which leads to reduce prices. During prosperity phase people indulge themselves in travel & prices increase. After the September 11 incidents, the world economy plunged into global recession due to the depressed sentiment of consumers. In India, even a company like Citibank was forced to cut costs to increase profits for which even the top level managers were given first class railway tickets instead of plane tickets. The loss of income for airlines led to higher operational costs not only due to low demand but also due to higher insurance costs, which increased after the WTC bombing. This prompted the industry to lay off employees, which further fuelled the recession as spending decreased due to the rise in unemployment. Even the SARS outbreak in the Far East was a major cause for slump in the airline industry. Even the Indian carriers like Air India was deeply affected as many flights were cancelled due to internal (employee relations) as well as external problems, which has been discussed later.
The changing travel habits of people have very wide implications for the airline industry. In a country like India, there are people from varied income groups. The airlines have to recognize these individuals and should serve them accordingly. Air India needs to focus on their clientele which are mostly low income clients & their habits in order to keep them satisfied. The destination, kind of food etc all has to be chosen carefully in accordance with the tastes of their major clientele. Especially, since India is a land of extremes there are people from various religions and castes and every individual traveling by the airline would expect customization to the greatest possible extent. For e.g. A Jain would be satisfied with the service only if he is served Jain food and it should be kept in mind that the customers next to him are also Jain or at least vegetarian. Another good example would be the case of South West Airlines which occupies a solid position in the minds of the US air travelers as a reliable and convenient, fun, low fare, and no frills airline. The major element of its success was the augmented marketing mix which it used very effectively. What South West did was it made the environment inside the plane very consumer friendly. The crew neither has any
uniform nor does it serve any lavish foods, which indirectly reduces the costs and makes the consumers feel comfortable.
The increasing use of the Internet has provided many opportunities to airlines. For e.g. Air Sahara has introduced a service through the internet, wherein the unoccupied seats are auctioned one week prior to the departure. Air India also provides many internet based services to its customer such as online ticket booking, updated flight information & handling of customer complaints. USTDA (US trade & development association) is funding a feasibility study and workshops for the Airports Authority of India as part of a long-term effort to promote Indian aviation infrastructure. The Authority is developing modern communication, navigation, surveillance, and air traffic management systems for India's aviation sector that will help the country meet the expected growth and demand for air passenger and cargo service over the next decade. A proposal for restructuring the existing airports at Delhi, Mumbai, Chennai and Kolkata through long-term lease to make them world class is under consideration. This will help in attracting investments in improving the infrastructure and services at these airports. Setting up of new international airports at Bangalore, Hyderabad and Goa with private sector participation is also envisaged. A good example of the impact of technology would be that of AAI, wherein with the help of technology it has converted its obsolete and unused hangars into profit centers. AAI is now leasing these hangars to international airlines and is earning huge profits out of it. AAI has also tried to utilize space that was previously wasted installing a lamination machine to laminate the luggage of travelers. This activity earns AAI a lot of revenue. These technological changes in the environment have an impact on Air India as well. Better airport infrastructure, means better handling of airplanes, which can help reduce maintenance cost. It also facilitates more flights to such destinations.
Zone Of Tolerance
The nature of services makes consistent delivery difficult across employees of the same company and even by the same employee from one day to another. The extent to which customers are willing to accept this variation is called the “zo ne o f tolerance”. It can in cre a se or decrea se for individual customers depending on factors such as competition, price or service attributes. In the airline in du str y , the cu stom er e xp e cts a m i n i m u m le v e l of service below which he is dissatisfied with the service provided by the airline company. This includes easy availability of tickets, quick information about rescheduling of fights or any other immediate changes made, clean aircrafts, hygienic food, safe keeping of baggage and adequate safety measures (oxygen masks, parachutes) in case of an emergency. Many a t i m e s a c u s t o m e r de sires a p a r t i c u l a r le ve l of service f o r complete satisfaction especially in those cases where he/she pays a high premium fo r it . This i n c lu d e s on t i m e se r v ice , c u s t o m i z e d f oo d s e r v i c e , additional supplementary tangibles such as teddy bears for children, shaving kits for men etc., on-board auction (conducted by Air Sahara) to keep the customer interested, transport service from the airport to the final destination of the customer etc. This gap between the desired and the minimum level of service is known as ‘the zone of tolerance’. When a customer pays a high premium i.e. first class passenger, he definitely expects the best service possible and in such a case the zone of tolerance flows from top to bottom. In this case the zone of tolerance will be at a higher par than that of an economic class traveler. If the service delivered is below the minimum level of expectation then the customer will be dissatisfied and he is likely to move to other air carriers for his traveling needs and may even spread a bad word of mouth. On the other h a nd if t h e d e l i v e r e d se r vice su rp asse s the zone of to le r a n ce , th e customer will be delighted and will praise the company for the same.
When the company fails to stand for its promises made to the customer on the basis they build expectation, it’s to be said that there is service failure. When th e se rvice f ailu r e o ccur s, there ca n b e a g a i n s e v e r e r a m i f i c a t i o n . Customer is considered to be the bread and butter, hence retaining them is the biggest challenge, and however service failure acts as an obstacle to it. In such failures, The customer wants what they were promised. Customer wants personal attention Customer wants a decent apology
Customers want that they should not be made to feel that they are the cause of the problem. (Though in many cases they are responsible for nuisance) There are again five steps involved in order to deal with service failure. They are mentioned as below: 1st step: acknowledgement and apology for the fact. 2nd step: listening to the customers. 3rd step: avoid defending the company and offer a rational explanation. 4the step: offer some extra benefits 5the step: have a proper follow up and make sure no mistakes this time, so that he can easily forget about the service failure and is retained. A customer expects 3 shorts of fairness in case of service recovery. They are mentioned as below. Interaction fairness: - when there is service failure, first the company is supposed to acknowledge the customer. Due to this the customer might turn irate, but he still expects fairness and courtesy in the language and tone used by the addresser. Procedure fairness: - to know in detail about the incidence of service failure or to avail the compensation. There should be simplicity in procedure, which is involved. Service failure and complexity in procedure both together might result in a disaster as far as customer is concern. Outcome fairness: - now when the company realizes that there is service failure they should end up compensating, arranging for some alternative mode of transporting or complies with the customer condition. The outcome should be taken by considering the customer, his needs and the company’s policy.
Handling complaints is a big challenge for every company today. Before understanding how to handle, let us see what are the factors, which can result in customer’s complaints
The Fish-Bone diagram for the Airline Industry
The best airlines cannot have 100% security as far as complaints are concerned. Whatever the airlines do, the customer who feels that they are not treated properly are going to complain. In dealing such situation, it is important to know how to diffuse them and turn them into positive experience for all involved. People complain because they have received service below tolerance zone. In airlines generally complaints are regarding weight penalties, no attention from the front office, no guidance by the crew member on the flight, flight delay, bad quality of food and so on. If these complaints are not resolved to the satisfaction of the customer there can be serious ramifications. In particularly, the customer is likely to convey about the bad service to other people. But if the things are done well, there also positive ramifications. It has been observed that those customers who have had problems and proper solution are provided, are the most loyal customers of the company. Employees play a vital role in handling these complaints.
There are nine steps involved in handling complaints effectively. They are mentioned below.
The frontline employee handling complaints should stay calm under any circumstances. Let the customer get the story off their chest- do not interrupt, this will only cause irritation. In this case listening skills comes into picture. Avoid admitting any liability at this stage. The officer just need to show concern like, “I’m sorry for the inconvenience, let me see what I can do”. Give attention to the customer, make him feel important. Get facts by using question and try to find out the real and whole story behind it. After listening and collecting data, just identify appropriate action considering company’s policy and customer’s expectation. Take action if you have authority or involve manager or concerned person. If corrective action cannot be taken immediately, tell the customer. It’s better to give bad news rather giving false news. Record the a c t i o n t o b e taken and inform a n y o n e else i n the organization involved. Look into the matter, provide a proper follow-up. These nine approaches if followed effectively, complaints can be handled properly and possibly a customer can be retained.
Security & Safety Measures
Undertaken by Airlines
Security regulations are framed by the Bureau of Civil Aviation Security and are required to be implemented by all operators. The manpower for the execution of these regulations is drawn from the State Police. While the passengers may face some inconvenience during security checks, it is in their best interest. Some of the security procedures are listed below:
The passenger’s ticket is checked at the time of entering the terminal building. At major airports, the checked baggage is passed through X-ray machines and a
'security checked' sticker affixed before entering the check-in area.
are checked through personal frisking, and doorframe metal detectors and hand held metal detectors. examined.
The cabin baggage is either checked through X-ray machines or physically Security personnel put a security stamp on boarding passes and cabin baggage
In case of a 'Red-Alert', a secondary security check is also carried out near the
stepladder before embarkation.
Checked baggage has to be personally identified by the passengers before it is
loaded on the aircraft. Wherever the boarding is through aerobridges, passenger and baggage reconciliation is done through an internal matching system instead of physical baggage identification.
Ten percent of the checked baggage/cabin baggage is usually physically checked
If the passengers wish to come back from the security hold area after the
completion of security check, they have to get a fresh boarding pass in place of the old boarding pass from check-in counters. They also have to undergo the security check again. This facility is available only in extreme emergency.
Passengers in transit have to remain on board during the ground halt of the
To ensure complete safety of the passengers, the service provider requests the passengers to keep the following in mind:
The passengers should not accept any packet or baggage from any person. The passengers should not leave their baggage unattended with the airport
area. It will be considered as a suspicious object and may be removed by the airport security staff.
If the passengers are carrying firearms and cartridges, they should declare
them. Concealment is an offence under Aircraft Act and Rules.
Battery cells/dry cells carried in the cabin baggage or in any electrical or
electronic item are liable to be removed and the airline may not be in a position to deliver the same at destination. They should be carried in the checked baggage.
Articles, which are not permitted in the cabin due to security reasons, will be
taken charge of by security personnel and will be loaded in the baggage hold after applying a 'Limited Release Baggage Label'. As an added security measure, certain goods are not allowed to be carried in the baggage. These goods are listed under the Dangerous Goods Regulations and they are as follows:
Explosives, ammunition and fireworks Compressed gases Flammable solids and liquids Oxidizing substances, organic peroxides Toxic, poisonous and infectious substances Radioactive material Corrosives Other miscellaneous articles such as, Mercury, Magnetized materials, Offensive or irritating materials, Briefcase, attaché case with installed alarm device or incorporative lithium
batteries and/or pyrotechnic material. In addition to the above dangerous goods, carrying knives, scissors, sharp edged implements, firearms, ammunition, toy replicas are prohibited in the passenger cabin
Safety inside the aircraft
Cabin Baggage – Experience has shown that excess cabin baggage is a safety hazard and can increase accidents in-flight. It can impede quick and safe evacuation in an emergency. Overloading the overhead bins can cause luggage to fall out, and increase the possibility of injury. The comfort of passengers is also compromised when the cabin is cluttered with unstowed cabin baggage. To ensure the passengers' safety and comfort, all passengers are encouraged to observe the Indian Government's regulations permitting ONE piece of cabin baggage per adult passenger. Use of Mobile Phones – Mobile phones are important business tools for passengers. However, it is important for them to know that when used in the aircraft - even when the aircraft is on the ground - a mobile phone can interfere with the instrumentation in the cockpit, and adversely affect the safety of the flight. Even if the passengers are not actively using their mobile phone, it is still making a low level transmission when the power is on, which impacts the sophisticated systems on board. Government regulations require passengers to keep their mobile phone in the 'power off' mode while they are on the aircraft. They should switch it on only after they have disembarked from the aircraft. Smoking – As a separate precautionary measure, all toilets are fitted with smoke detectors. The Government of India prohibits smoking on all domestic flights.
The 3 morning flights scheduled to leave Mumbai for Delhi at 6.30, 8.00 & 8.45 a.m. were delayed due to fog in Delhi. The first 2 were rescheduled over 9.15 a.m. in the hope that by then the weather would improve. At 8.30 the passengers were asked to proceed for security check & await departure call. An announcement at 8.50 a.m. requested the passengers on the second flight who were waiting in the lounge on the ground level to board the aircraft. Those who were booked for the first flight, waiting on the first floor lounge heard this announcement. Anticipating a similar announcement for them, they moved gradually to the gate. The movement of the staff through the aerobridge & to the telephones gave the impression that something was wrong. But the gate did not open. At about 9.15 a.m. one of the staff was asked the reasons for delay. He replied rudely that they would be boarding within five minutes. The passengers were getting restive. When the same answer was given by another assistant, the passengers got infuriated. They also felt that the staff was not doing their duty & that the delay was avoidable. Within another 5 minutes they were asked to board the aircraft. When all were seated, the pilot announced that that the weather in Delhi was still bad, & that the next report was expected 30 minutes after & breakfast would be served on board. From he airhostess, the passengers came to know that the passengers of the second flight were also boarding. This incident could have been communicated periodically. The announcement about the boarding the second flight was misleading. The traffic assistants perhaps themselves did not know the real situation when they had said 5 minutes. This situation further aggravated by further delay due to late arrival of a politician who was also traveling to Delhi. The parting greetings were given to the passengers “Hope you enjoyed the Flight” just before landing at Delhi. As if this was not enough, the passengers had to wait for 1 more hour for luggage clearance.
Which were the critical interactions & which were not? Did all the airline staff & the passengers exhibit technical & interactive skills? What were the reasons for delay at both the airports? What steps could have been taken to rectify the situation as a service recovery strategy? What kind of an image did the partying remarks convey to the passenger? If you were the passenger, how would you perceive the quality of services rendered by the airline?