Indian Aviation: Price Wars & More
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Case Details:
Case Code : MKTG029
Case Length : 12 Pages
Period : 2002
Pub Date : 2002
Teaching Note : Available
Organization : Indian Airlines, Jet Airways, Sahara Airlines
Industry : Airlines
Countries : India
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
The Survivors
Analysts felt that most of the private carriers ran into problems because of the government regulations and high costs of operation. All the carriers hired planes at international prices and their maintenance was also undertaken by global companies at international rates. The only 'Indian advantage' was the availability cheap labor...
All's Fair in the Fare War
As the government owned both AI and IA, the Indian commercial aviation air transport services market was monopolistic in nature. Not surprisingly, the concept of marketing was virtually absent in the aviation industry.
The only advertising campaign ever run was AI that of which featured its mascot
'Maharaja', an elegant, plump little man, with a stylish turban and an
impressive 'handlebar moustache.' Advertising and marketing activities started
only after the Indian skies were opened for private players.
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Initially, advertisements by the new players were limited to the print and electronic media. However, with the entry of new players in the 1990s, competition began to intensify. IA also expanded its domestic network and started foraying into international market...
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The War Continues
Industry observers remarked that the most interesting feature of the price war in 2002 was that Sahara, the smallest of the Big Three, was the most aggressive. Apart from launching the novel bid schemes, it also offered the highest agent commissions to increase volumes of the tickets sold, while maintaining the lowest fares.
Analysts felt that this was because it had the smallest capacity among the three. However, Sahara increased its capacity in late 2001 and planned to lease about 6 additional Boeing 737s towards the end of 2002... |
Exhibits
Exhibit I: Classification of Air-Travel Routes
Exhibit II: JA Apex Fares
Exhibit III: Gifts Offered Under Sahara's ‘Bid ‘N'Win'Scheme
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