Project on Low Cost Airlines SUBMITTED BY: UNDER THE GUIDELINES OF: Vishwanath v Ashalatha k Praveen kumar Assistant professor Ravindranath Nayak JKSHIM Richard barbooza Nitte Niveditha patrika Vindhya shetty Justice K. S. Hegde Institute of Management NMAMIT, Nitte – 574110 ●●●●●●●●●●●●●●●●●●●●●●●● Contents Page No. 1. INTRODUCTION.......................................................................................................4 2. AVIATION INDUSTRY IN INDIA...........................................................................6 3. Brief Profile of Captain G R Gopinath........................................................................9 4. Overview of Air Deccan (Kingfisher Red)................................................................10 5. Decision Tree Analysis for Low Cost Airlines based on a Survey conducted...........12 6. DATA ANALYSIS...................................................................................................13 7. FINDINGS AND SUGGESTIONS...........................................................................23 FINDINGS AND SUGGESTIONS EXECUTIVE SUMMARY It’s a known fact that the aviation industry is a booming sector of the world economy. As we have noticed that in United States aviation industry during the time of recession even the company like south west airlines have managed to show profits in their balance sheet where other airlines companies failed to do so. This proves that the proper strategies used in a proper time and place leads to success of the business. Hence this study is about the implementation of low cost airline introduced by Capt. G R Gopinath and its success projection. In the initial part of the study the brief introduction is explained along with the scope, objectives, methodology and limitations. After discussing the Indian aviation industry, its history, present and future prospects are displayed which also includes the list of airlines companies existing in India. Before analyzing the survey, a thorough introduction of Capt. G R Gopinath is given with the Overview of Air Deccan which is named as Kingfisher Red presently. This was very important as it explains the company profile, its establishments and achievements as well. The next part is the systematic analyses of the data which is been collected by the primary source with the help of questionnaire. This includes the age group which we selected for the survey, occupation pattern, income generated, purpose and number of times they travel as well. Through this we have generated the information like the safety level considered by the respondents, their preference and reason for choosing particular airline in tabular form. Final part of the report includes the decision tree analyses which displays the pattern of decision could be taken by the decision taker, the finding of the study with the conclusion and valuable suggestion which is generated after the analyses of the completed report. Therefore this study will be helpful in decision making process of the reader which answers the question like the level of competition, market to be targeted, level of success can be achieved. On the other hand by investing in this project, it can capture the untapped market and carve the niche for itself by beating the competition. This will cater the lower segment of the market and increase the sales as well as profits. 1. INTRODUCTION Research design is a preliminary design of research work to be carried out and is an agreement to be conditioned for the collection and analysis of data in a manner that aims to combine prevalence of research and helps to achieve the objective of the study. It specifies the various tools to be used for collecting data, techniques used to interpret and analysis of data and finally concluding the certain points with the findings and recommendations. A research design provides the glue that holds the research project together. A design is used to structure the research, to show how all of the major parts of the research project – the samples, groups, measures, treatments or programs and methods of an assignment which work together to address the central research questions. The study is concentrated on identifying the customer perception towards the Low cost airlines in India. This particular study is conducted in the form of a survey through structured questionnaires and interviews in the Mangalore Airport. Objectives of the study To understand the customer perception towards the low cost airlines. To analyze the future scenario of Low cost airline providers. To Analyze, if so Captain G R Gopinath introduces the low cost airlines once again, customers are ready to go for it or not. Scope of the Study: The study is restricted itself only to Air Deccan and the analysis of low cost airlines in the Indian Aviation industry. This particular study helps us to know the costumers perception towards the cost airlines and its future scenario. And this study restricts only to the Mangalore Airport for conducting the detailed survey in the month of March 2011. Any further improvements or modifications concerned to the data recorded in this study after the earlier specified period is not included. The data has been collected with the help of structured questionnaires and interviews. Data Collection: The data collection is carried out in the form of structured questionnaires which was further used to analyze the customer perception towards the low cost airlines. Sampling Method: The sampling method chosen is based on convenience sampling having a sample size of about 50 customers picked up at random from Mangalore Airport. Limitations of the Study: Despite all the possible efforts to make analysis pure and comprehensive, a study of the present kind is bound to have certain limitations. The following are the limitations of this study. The primary data is based on the views collected using a self-administered questionnaire in the form of a personal interaction. It is assumed that the respondent is true and unbiased. The sample size selected is restricted to only 50 respondents and therefore it is very difficult to give an accurate judgment on the basis of this limited sample. Some of the respondents jumped to hasty conclusions due to their busy work schedule. The scope of the study is restricted only to Mangalore Airport. The time available for conducting the research survey was limited to carry out an exhaustive study. 1. AVIATION INDUSTRY IN INDIA Introduction Aviation Industry in India is one of the fastest growing industries in the world. With the liberalization of the Indian aviation sector, aviation industry in India has undergone a rapid transformation. From being primarily a government-owned industry, the Indian aviation industry is now dominated by privately owned full service airlines and low cost carriers. Private airlines account for around 75% share of the domestic aviation market. Earlier air travel was a privilege only a few could afford, but today air travel has become much cheaper and can be afforded by a large number of people. The origin of Indian civil aviation industry can be traced back to 1912, when the first air flight between Karachi and Delhi was started by the Indian State Air Services in collaboration with the UK based Imperial Airways. It was an extension of London-Karachi flight of the Imperial Airways. In 1932, JRD Tata founded Tata Airline, the first Indian airline. At the time of independence, nine air transport companies were carrying both air cargo and passengers. These were Tata Airlines, Indian National Airways, Air service of India, Deccan Airways, Ambica Airways, Bharat Airways, Orient Airways and Mistry Airways. After partition Orient Airways shifted to Pakistan. In early 1948, Government of India established a joint sector company, Air India International Ltd in collaboration with Air India (earlier Tata Airline) with a capital of Rs 2 crore and a fleet of three Lockheed constellation aircraft. The inaugural flight of Air India International Ltd took off on June 8, 1948 on the Mumbai-London air route. The Government nationalized nine airline companies vide the Air Corporations Act, 1953. Accordingly it established the Indian Airlines Corporation (IAC) to cater to domestic air travel passengers and Air India International (AI) for international air travel passengers. The assets of the existing airline companies were transferred to these two corporations. This Act ensured that IAC and AI had a monopoly over the Indian skies. A third government-owned airline, Vayudoot, which provided feeder services between smaller cities, was merged with IAC in 1994. These government-owned airlines dominated Indian aviation industry till the mid-1990s. In April 1990, the Government adopted open-sky policy and allowed air taxi- operators to operate flights from any airport, both on a charter and a non charter basis and to decide their own flight schedules, cargo and passenger fares. In 1994, the Indian Government, as part of its open sky policy, ended the monopoly of IA and AI in the air transport services by repealing the Air Corporations Act of 1953 and replacing it with the Air Corporations (Transfer of Undertaking and Repeal) Act, 1994. Private operators were allowed to provide air transport services. Foreign direct investment (FDI) of up to 49 percent equity stake and NRI (Non Resident Indian) investment of up to 100 percent equity stake were permitted through the automatic FDI route in the domestic air transport services sector. However, no foreign airline could