The New 'Indian' Airlines


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Case Details:

Case Code : MKTG123
Case Length : 19 Pages
Period : 2002 - 2005
Pub Date : 2006
Teaching Note :Not Available
Organization : Indian Airlines Ltd.
Industry : Airline
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 Contd...

Fare Games

When IA ruled the Indian skies, the prices of air tickets were very high. The company's monopoly position enabled it to set high prices for its services. However, with passengers having more options, IA had to reduce its fares to attract passengers.

In fact, IA pioneered the concept of flexible fares in 2001. Under its flexible fare system, the company would charge lower fares during non-peak hours and higher fares during peak hours.

IA called these 'flexifares'. Said an IA official, "The flexible fares policy will mean that air fares will vary from sector to sector and on a season to season basis.

With the introduction of the flexible fares policy, Indian Airlines will become the first in India to follow the international pricing policy for air travel." During 2002, IA introduced a variety of promotional schemes for its customers...

What the Customers Said

By 2003-04, customers were beginning to realize that IA's service standards had improved considerably. There was reportedly a marked improvement in the in-flight and ground services of the airline. Said Radhika Chadha (Chadha), a Chennai-based management consultant, "Everyone remembers the pre-Jet days, when travelling by IA was a nightmare of non-choice...

Will 'Indian' Rise Above the Competition?

With the entry of two more low-cost carriers namely, SpiceJet and GoAir, and Kingfisher Airlines coming in as a 'value carrier', the year 2005 saw stiffer competition for the existing players. In addition, a number of new low-cost carriers were waiting to take off by 2006. The growing popularity of the low-cost air-carriers was confirmed by the considerable increase in market share of low-cost airline companies like Air Deccan and SpiceJet (Refer Exhibit XI for market shares of full service airlines and LCCs in early 2006)...

Exhibits

Exhibit I: Indian Airlines Aircraft with Old Logo
Exhibit II: 'Indian' Aircraft with New Logo
Exhibit III: Market Shares of IA and JA
Exhibit IV: Existing Fleet of IA/Alliance Air
Exhibit V: IA's New Fleet
Exhibit VI: Apex and Standard Fares of IA, AS and JA in June 2003
Exhibit VII: Apex and Standard Fares of IA, AS and JA in April 2004
Exhibit VIII: Promotional Offers of Major Airline Companies in 2004
Exhibit IX: Promotional Schemes of IA
Exhibit X: Air Fares of Major Airline Companies in August 2005
Exhibit XI: Market Shares of Major Airline Companies in January 2006



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