Low Cost Airlines Strategy Essay example

7749 Words Dec 23rd, 2010 31 Pages
| Airlines Low Cost Industry | | | | |

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Situation

It’s a chilly winter evening in Bangalore and Vijay Mallya looks out of the window with a Kingfisher Beer pint in his hand. He looks out at the reddish horizon and contemplates the future of his airlines - The Kingfisher Airlines. He has recently bought the first low cost carrier in India, Air Deccan. With the sale of Air Deccan, the industry has seen a correction of sorts, in terms of the cost of travel. With increasing oil rates and the turmoil that the airlines’ industry is currently in, Mallya needs to come up with a strategy to make best of the low cost carrier. He also needs to
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Situation started improving in the second half of 2009. In 2009-10, the passenger traffic increased to 123.73 million passengers from 108.88 million in 2008-09. For the first time, in 2009 -10 the passenger traffic crossed 120 million mark and has recorded 123.73 million (34.37 million international and 89.36 million domestic passengers) passengers.

Passenger traffic (million)

Source : AAI Traffic News June 2010

According to Director General of Civil Aviation passenger data, passenger carried by domestic airline operators have grown to 33.9 million during January-August 2010 as against 28.4 million over the same period a year ago.

Recent Trend

According to Airport Authority of India (AAI), the total aircraft movement increased by 3.3% from 329.84 thousand to 340.79 thousand during Apr-Jun 2010 as compared to Apr- Jun 2009. The international aircraft movements have shown an increase of 7.1% during Apr-Jun 2010. The higher growth in traffic has witnessed in Kolkata, Trivandrum, Amritsar and Delhi airport due to increase in frequency by the existing airlines. The civil aviation traffic with respect to passenger and aircraft movements is growing from past few years. The total passenger traffic handled during Apr-Jun 2010 raised by 20% to 35.29 million from 29.35 million over the same period previous year. During the first six months of 2010, world passenger

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