Kingfisher Airlines - Business Strategy and Market Analysis for Indian Business

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History of Civil Aviation in India.

1.The history of civil aviation in India began in December 1912. This was with the opening of the first domestic air route between Karachi and Delhi by the Indian state Air services in collaboration with the Imperial Airways, UK, though it was a mere extension of London-Karachi flight of the latter airline. Three years later, the first Indian airline, Tata Sons Ltd., started a regular airmail service between Karachi and Madras without any patronage from the government. 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.

2.In early 1948, a joint sector company, Air India International Ltd., was established by the Government of India and Air India (earlier Tata Airline) with a capital of Rs 2 crore and a fleet of three Lockheed constellation aircraft. Its first flight took off on June 8, 1948 on the Mumbai (Bombay)-London air route. At the time of its nationalisation in 1953, it was operating four weekly services between Mumbai-London and two weekly services between Mumbai and Nairobi. The joint venture was headed by JRD Tata, a visionary who had founded the first Indian airline in 1932 and had himself piloted its inaugural flight.

3.A chronological diary of major milestones is as given below:

(a)1953: Nationalisation of Aircraft Industry. The assets of 8 existing companies were transferred to two entities in the aviation sector controlled by the Government into two companies viz. Indian Airlines, primarily serving domestic sectors, and Air India, primarily serving the international sectors. This had the following implications: (i)Aviation became a preferred mode of transport for elite class (ii)Restricted Growth of Aviation Industry

(iii)High Cost structure
(iv)Underdevelopment of infrastructure
(b)1986: Private Sector Players permitted as Air taxi operators. Jet, Air Sahara, etc. started service. (c)1990:The Open-sky policy came in April 1990. The policy 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. The operators were, however, required to use aircraft with a minimum of 15 seats and conform to the prescribed rules. (c)1994: Private Carriers permitted to operate scheduled services. Six operators granted license, however only Jet and Air Sahara able to service. (d)2003: Entry of low cost carriers. Air Deccan, Spice Jet, Go Air, Indigo. This had the following implications: (i)Aviation becomes more affordable with check fares and discount schemes. (ii)Various Operators with different business model in the industry. (iii)Huge growth in Aviation sector.

Regulatory Environment of Aviation Sector
4.The regulatory environment of the Indian Aviation Industry comprises the following: (a)Federation of Indian Airlines.Federation of Indian Airlines is a body formed by the scheduled carriers in India. FIA, as the voice of India's airline industry, works to identify and take up issues on behalf of the industry, with various regulatory authorities, government departments and other key stake-holders. The functioning of the FIA is guided by an Executive Council, comprising chiefs of each of the member airlines.

(b)Ministry of Civil Aviation.The Ministry of Civil Aviation in India is located at New Delhi. The ministry formulates national policies & programs for development & regulation of civil aviation & also prepares schemes for the growth & expansion of Civil...
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