Air India Marketing Strategy

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  • Topic: Airline, Flag carrier, Malaysia Airlines
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Air India
Marketing Strategy

Name: Harsha Sinha
Enrollment No. 11BSPHH010328
Section – B
Seat No. - 2

AirIndia is a state-owned flag carrier, the oldest airline of India. It is part of the Indian government-owned AI Limited.  The airline operates a fleet of Airbus and Boeing aircrafts. According to the International Air Transport Association (IATA), by its latest estimates, India will contribute significantly to air travel, which is to grow from US$ 5.1billion to US$ 5.6billion. Market research firm PhoCus says that domestic air traffic is likely to more than double and touch 86.1 million passengers , up from 32.2 million passengers .For AI it is imperative that it formulates a marketing strategy to tap this growing demand.

To understand the strengths and areas of improvement for AI we need to look at the microenvironment and macroenvironment.

Macroenvironment :
Political Factors :
- Excise Duty and Sales Tax on Aviation Turbine Fuel
- Modernization of Airports
- The government does not allow any domestic airline operator to operate international flights unless they have served minimum of 5 years in the domestic market. This acts as deterrent for the other operators to enter the industry. AI also has to deal with Safety Regulatory Authorities (DGCA,FAA etc.). Technological Factors :

- Growth of Electronic Ticketing Systems
- Satellite based Navigation Systems for aircrafts
- Time and speed of delivery being of special importance in the aviation industry, AI has rolled out the ORACLE supply chain solution, a module of ORACLE ERP application. Demographic Factors :
* India has a wide demographic reach and hence at times it becomes difficult for AI to operate on this hug scale. Also the expectations of customers across regions is very varied.

It is very important for AI to attract passengers as the average passenger load on AI's domestic flights was jus 22.2% in 2010, according to Directorate General of Civil Aviation(DGCA). AI posted a minor growth in passenger loads and revenue in June. Compared to last year, when the passenger load recorded was 69.3%, it registered a growth of around 3% with 72.4% load.

Microeconomic Factors :
Competitors :
AI faces tough competition from major domestic players like Kingfisher, Indigo, Jet airways etc. The fact that Kingfisher was awarded a 5 Star ranking by Skytrax in comparison with AI’s 3 star makes the competition even more intense for the nationalized carrier. Suppliers:

Air India needs to synchronize with all its suppliers at every level for operational smoothness. AI has suppliers from 3rd party ground handling crew, oil companies for ATF (IOC, BP), logistical support companies that handle Airport capacity, route structures, companies like Boeing and Airbus from whom AirIndia needs to purchase parts. Hospitality partners for inflight food and beverages(Sky Gourmet). Employees :

Employees play an integral part for the airline to carry out its operations. They need to work in harmony to cater to it’s customers. Strikes, shortage of crew, ageing fleet does not bode well for the company. The strike by the pilot’s association in May caused cancellation of 1,600 flights and a revenue loss of Rs 150crore.

Marketing Mix :
Positioning :
AI has positioned itself clearly between the full-service airlines (Kingfisher) and budget carriers (IndiGo).It needs to position itself in the minds of the consumers as an airline operator that stands for time performance and value for money.

To further pursue this objective AI has got into a codeshare agreement with 12 airline operators. The biggest advantage that AI gets is that it allows it’s passengers greater access to cities through a given airline's network without having to offer extra flights, makes connections simpler by allowing single bookings across multiple planes. This would help AI to cement its objective of being the top airline operator. AI performed better than all other’s registering...
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