Actik Air (Full Service Carrier Subsidiary) Actik Air Launched Operations at the End of 2013 and Has Since Been the Fastest Growing Airline in Indonesia
Total Page:16
File Type:pdf, Size:1020Kb
Rules • All solution sheets must contain the participants’ name and their college name. • All solutions should be emailed as an attachment to [email protected] • Emails containing the solution should have the subject “NSBC_Team Name.” • The file should be saved as “TeamName_Participant1_Participant 2_Participant 3. •The solution should be in PDF format with font type Times New Roman and font size 12. • There is no constraint on the word limit. It is the participants' will to make it as comprehensive as they want. •Feel free to use tables, pie charts, graphs, and other graphic art. • The solution will be judged on the basis of logical analysis, practicality, and adequate justification, and the number of questions answered. • Send your solutions latest by 11:59 PM, 11 January 2020. •Entries after that shall be not be considered. •Any form of plagiarism will result in immediate disqualification. Rules • All solution sheets must contain the participants’ name and their college name. • All solutions should be emailed as an attachment to [email protected] • Emails containing the solution should have the subject “NSBC_Team Name.” • The file should be saved as “TeamName_Participant1_Participant 2_Participant 3". • The solution should be in PDF format with font type Times New Roman and font size 12. • There is no constraint on the word limit. It is the participants' will to make it as comprehensive as they want. • Feel free to use tables, pie charts, graphs, and other graphic art. • The solution will be judged on the basis of logical analysis, practicality, and adequate justification, and the number of questions answered. • Send your solutions latest by 11:59 PM, 14 January 2020. • Entries after that shall be not be considered. • Any form of plagiarism will result in immediate disqualification. • In case of any doubts, feel free to contact us Tanish (7678423449) Jayshree (9911608566) The Aviation Industry Global Scenario Aviation industry drives economic progress and promotes growth and financial strength of a country. It provides a high degree of communication and distribution lines interlinking several markets. It also acts as the foundation of international tourism. Aviation industry thus forms part of a country’s economic strength which attracts new industries, global business and enhances its connections. Major Players The aviation industry has some huge market players along with multiple smaller airlines. Southwest Airlines Co. is an American airline and the world's largest low-cost carrier. Southwest schedules flights to 101 destinations in 41 states, Puerto Rico, Mexico, Central America and the airlines only operates Boeing 737 jetliner models with 752 currently in service. Lufthansa, is the largest German airline, and when combined with its subsidiaries, is also the largest European airline in terms of passengers carried. Lufthansa is one of the five founding members of Star Alliance. In total, the group has over 700 aircraft, mainly comprised of Airbus A320-200s and Airbus A321-200s among several other aircraft such as Boeing 747-81, Airbus A321-100 etc. Lufthansa has a segmented business model and targets mainly two groups: individuals and business groups.To the individuals, it provides travel services.For business groups, it provides cargo air services. It serves in 193 international destinations in 81 countries across Africa, Americas, Asia, and Europe and 18 domestic destinations. Turkish Airlines, which serves 315 destinations in Europe, Asia, Africa, and the Americas, is the national flag carrier airline of Turkey. It is the largest mainline carrier globally by number of passenger destinations. The airline serves the most no. of destinations non-stop from a single airport ,and flies to 126 countries, more than any other airline. Its fleet mostly comprises of Boeing 737-800s and Airbus A321-200s among several others, and its also a member of the Star Alliance group. Other major players include the American Airlines which is the largest by its fleet size, revenue and passengers carried.It is an American publicly traded airline holding company. Its fleet mostly comprises of Boeing 737-800s and Airbus A321-200s. Ryanair, which is an Irish budget airline, tops the list when the number of routes covered are taken into account. Its fleet comprises of only Boeing 737- 800s and just 1 Boeing 737-700. Though Ryanair has the most no. of city destinations in France, 28 in total, Spain is the number one country destination. (in millions) Airlines majorly employ two models-Low Cost Carriers and Full Service Carriers, both of which have been described below. FSC A full-service or “Legacy” carrier typically offers passengers in flight entertainment, checked baggage, meals, beverages and comforts such as blankets and pillows in the ticket price. They do not rely on generating ancillary revenue -AR: any source of income besides the actual airfare.The seats usually have more recline and leg room than a low cost carrier. Full service airlines also offer passengers the choice of economy or business class travel and on some flights premium economy and first class. The airlines in this category transfer baggage between flights and alliance partners. Full service carriers are often flag carriers for their countries of origin. LCC A low-cost carrier or a budget /no - frills airline is an airline that is operated with a high emphasis on minimizing operating costs and without some of the traditional services and amenities, resulting in lower fares and fewer comforts. These airlines may charge extra fees – such as for carry- on baggage,to compensate for the revenue lost in decreased ticket prices. Most LCCs have adopted the point-to-point model.Wherein,the flight connects each origin and destination via non-stop flights. This provides substantial cost savings by eliminating the intermediate stop at the hub. Airline Alliance An airline alliance is an arrangement between two or more airlines which agree to co-operate on a substantial level. Alliances may provide marketing branding to facilitate travellers making inter-airline connections within countries. Star Alliance Star Alliance is the largest global alliance by passenger count with 762.27 million. A fleet of approximately 5,033 aircraft, serving more than 1,290 airports in 195 countries is operated by its 26 member airlines. The alliance shares airport terminals, known as co-locations and offers a two-tier rewards program, Silver and Gold, with incentives such as priority boarding, upgrades etc. SkyTeam SkyTeam, which was the last of the three major airline alliances to be formed, has an annual passenger count of 630 million. SkyTeam consists of 19 carriers from five continents and flies to more than 1,150 destinations in more than 175 countries and operates more than 14,500 daily flights. Oneworld Oneworld, which was founded on February 1, 1999 has continuously aimed to be the first choice airline alliance for the world's frequent international travellers. Oneworld enjoys the status of being the third-largest global alliance in terms of passengers with more than 527.9 million passengers carried and its member airlines collectively operate a fleet of 3,447 aircraft. They serve about 1,000 airports in more than 158 countries, carrying 527.9 million passengers per year on 12,738 daily departures. Importance of Fleet Boeing Co. is the largest manufacturer of aircrafts edging out Airbus SE, its rival duopoly by manufacturing 20 more aircraft in 2018. There has been an intense competition between Boeing and Airbus. However, the suspension of Boeing 737 Max due to 2 fatal crashes has had an immediate adverse effect on its shares. This also affected the airlines as many had to ground all Boeing 737M carriers amounting to major loss of revenue. Boeing 717 is a 2 engine 1 aisle carrier developed as a low cost carrier. Only 156 models were made and its production ceased in 2006. The model has however seen a resurgence in demand after a decade and the airlines that have leased the model including Delta Airlines and Volotea have been able to utilize its small size and light body, which allows it to optimise revenue from less popular routes. It has also been claimed to be the safest carrier in the world. Indonesian Aviation Ecosystem Indonesia, which is located in the South-Eastern part of Asia, is the fourth most populous nation in the world. The country has a strong aviation system in place, owing to poor land transport infrastructure. Domestic air traffic in Indonesia has more than tripled over the past 12 years, from less than 30 million in 2005 to almost 97 million in 2017. and accounting for nearly 75% of total passenger traffic. Bali, which is the most popular city had an Indonesian international passenger traffic proportion of only 26% in 2013, compared to 32% in 2017, which indicates the fast-expanding role of tourism in the country's international market. Secondary cities in Indonesia have limited international traffic. Surabaya and Medan, the second and third largest cities in Indonesia, are mainly outbound markets but are relatively small, with Medan accounting for only 7% of international seat capacity and Surabaya for 6%.Indonesia is the biggest aviation market in the ASEAN group of nations however is not yet a full member of the ASEAN open sky agreement.The relatively slow domestic growth in Indonesia over the past five years may partially be attributed to a sluggish economy compared to most of its ASEAN peers. GDP growth was above 6% in 2010, 2011 and 2012 but has since been below 6%,and partly to the depreciation of the Indonesian rupiah (due to local demand.) Indonesia currently has 61 scheduled and unscheduled commercial airlines.Overall, Indonesian domestic air travel business is dominantly ruled by two groups; Lion Air group and Garuda Indonesia group. Lion Air group accounts for 51% of market share, while Garuda Indonesia group has a 33% market share, approximately, followed by other airlines such as Indonesia AirAsia and Sriwijaya Air.