SWOT Analysis of the Indian Aviation Industry
strengths weaknesses opportunities and threats also known as Swot of the Indian Aviation industry is important As Aviation is one of the fast-growing industries in the world achieving new heights every year and it is one of the most competitive industries in the world. For airlines, it is very important to do a SWOT analysis to be in competition.
Table of Contents
Importance of swot analysis of the Indian aviation industry
Importance of swot analysis of the Indian aviation industry. SWOT Stands for Strength, Weakness, Opportunity, and Threats it is a tool used by management to analyze business under four aspects. it helps in planning for the future and helps management to grow the business.
SWOT Analysis of the Indian aviation industry
Strength Of the Indian Aviation Industry
Strength Of the Indian Aviation Industry, is growing at a high rate there are many factors which is the strength of the Indian aviation Such as low labor cost as in Indian pay is fewer compared to a western country which helps the airline to reduce their cost of operations and second is LCC low-Cost Carrier which changes the India market as this help travel to get a ticket at less price and increase the passenger flow Because the price is more important than the service they get.
A-Low Labour cost
In India, the salary of personnel working is way less than in other country developed counties like the united state of America and even countries like Qatar. This helps the airline to save costs in terms of salary and wages expenditure and make Strength the Indian Aviation Industry
B-Low-Cost Carriers
Indian aviation is dominated by low-cost carriers as their main focus is on cost reduction and making air travel affordable by cutting operational costs such as in-flight service. In the Indian aviation market over 80% market share is of low-cost carriers that make air treble more affordable and this is also considered to be a Strength of the Indian Aviation Industry
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C-Faster and more Convenient than Railways
In the last few years, Indian railways service has improved but if compared to the Aviation industry they do not match the level of service also aviation industry is the fastest with more convenience.
Weakness of the Indian Aviation Industry
Weakness of the Indian Aviation Industry, Indian aviation has 2 main weaknesses the first one is the Aviation Fuel price Which is one of the factors why Airline face huge loss as per data Aviation fuel contribute more than 50% of Operational cost And every state have its different fuel price because of Taxes applied by the State government Due to which Airline profit margin reduced and Second main reason is High Competition Most of the airline suffers losses as in India 50% market share it dominated by Indigo Airline and other Airline continue facing losses
A- Aviation Turbine Fuel Cost is too high.
Aviation Turbine Fuel is one of the key expenditures for Airlines in India. In normal operations, it can cost up to 50-60 percent of the total operational cost and let to an increase in the ticket price or push airlines to losses. Now airlines are investing in Sustainable aviation fuel to save costs. The cost of ATF is one of the key Weakness of the Indian Aviation Industry
B- Different Tax rates across the Country
In India Fuel does not come under the GST so there is no standard tax across the country every state charges a different tax rate on ATF, for example, Tamil Nadu charges a VAT of 29%.
C- High Competition
Indian aviation is a highly competitive market where Indigo Airlines dominant the market with over 50 percent of the market share and other airlines with 5-10% it can let to huge competition and airlines try to cut the cost of operations to be in profit this is also the Weakness of the Indian Aviation Industry
Opportunities for the airline industry
Opportunities for the airline industry, as the Indian Government is working to Boast the Aviation Industry, they Introduce new schemes Like UDAN (Ude Desh Ka Aam Nagarik) That help to Increase Reginal connections and give Airline intensive and promote regional routes also Government allowed FDI investment in the Aviation Industry to 49% and more than 49% permission is needed That help Indian Aviation to Grow as Vistara Airline is an Example of FDI where 49% is invested by Singapore Airlines.
A- Increasing Passenger Traffic
Indian aviation is seen an increase in passenger traffic and already reached the pre-covid levels as per the ministry of civil aviation in January and February Indian airlines carried 246.11 lakh passengers and Indian aviation is 3rd largest aviation industry in the world now and this is the Opportunities for the airline industry.
B- Government Schemes Like Regional Connectivity Schemes UDAN (UDE DESH KA AAM NAGARIK)
The Indian government is working hard to grow the aviation industry with the launch of new routes and removing rules like 5/20 rules is now changed to 0/20 new airlines with 20 aircraft can start international operations and the regional connective scheme UDAN (UDE DESH KA AAM NAGARIK) which help to promote the regional connective in the country giving airline some benefits to starting operations to the regional airport to promote connectivity.
C-Introduction of new more efficient aircraft and technology such as DIGI Yatra.
Aviation industry seeing lot of new technology which lead to increase efficiency and also cost reduction like new aircraft such as Airbus A350 Airbus A320 neo with better fuel efficiency that will lead reduction in fuel cost for airlines and also Sustainable aviation fuel that can save lot of money. With the increasing role of Artificial intelligent (AI) customer service and Airline or Airport operation are becoming more efficient which let to cost saving that begins Opportunities for the airline industry
Threats in the Indian Aviation Industry
Threats In Indian Aviation Industry, If we talk about the Biggest Threats in Indian aviation industry is Fuel prices which result in huge losses to Airlines as they are unable to generate profit due to high Operational costs and many Airlines become bankrupt Covid-19 is also one of the Threats due to Covid International flights even domestic flights got affected and mostly plane is grounded due to lockdown and airline has to face huge loss and threat of terrorist attack is one of the biggest threats to Aviation Industry.
A- The economy Slow Down Across the world.
After the Covid-19 and Ukraine Russia war that world is going throw the economy slow down resulting the job losses and that will let down the money flow in the economy which will affect aviation industry also as demand will be less than compared to past period this can be Threats to Indian Aviation Industry
B- Security Treats Such as Hijacking
The aviation industry spends most in ensuring the security of the passengers and international agencies like IATA and ICAO time to time issue guidelines to protect against any unlawful activity and ensure security most common is hijacking and that we have seen 9/11 which change the aviation industry after that new rules such as Cockpit door will be opened from inside only. This is one of the key Threats in the Indian Aviation Industry.
C- Oversupply of Manpower
As per the reports of Directorate general of civil aviation chief Arun Kumar its state that from one out of three pilots are unemployed due to oversupply.
SWOT analysis in strategic management
SWOT analysis in strategic management, helps an organization to make their plan and also study their weakness over the competition in the industry, helps in making Strategic planning to gain an advantage over their competition.
FAQS
1 What is an ultra-low-cost carrier?
It is a basic business model where airlines provided less service to save their operational cost and increase profit margins
2 Who owns Akasa Air?
It is funded by the investor Rakesh Jhunjhunwala
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