Analysis of the air transportation market in India
The relevance of research
Air transport is a strategically important link in the Indian economy, as it plays a key role in solving problems: ensuring transport accessibility of transportation for the population, improving the quality of life of the population and the level of economic development
Purpose of the study
Analysis of the state of the air transportation market, assessment of the market size, analysis of competitors, as well as identification of factors affecting the air transportation market
Content
Part 1. Overview of the Indian air transport market
1.1. Definition and Characteristics of the Indian Air Transport Market
1.2. Dynamics of the volume of the Indian air transport market, 2014-2018
1.3. Market structure by type of service provided in India
1.4. Structure of the air transportation market by Union Territories
1.5. Assessment of current trends and development prospects of the studied market
1.6. Assessment of factors affecting the market
1.7. Analysis of sectoral indicators of financial and economic activity
Part 2: Competitive Analysis in the Air Transport Market in India
2.1. Major players in the market
2.2. Market shares of the largest competitors
2.3. Profiles of major players
Part 3: Air traffic consumption analysis
3.1. Estimated volume of air transport consumption per capita
3.2. Market Saturation and Estimated Market Potential in India
3.3. Description of consumer preferences
3.4. Price analysis
Part 4. Assessment of factors of investment attractiveness of the market
Part 5. Forecast for the development of the air transportation market until 2023
Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators
Research excerpt
Part 1. Overview of the Indian air transport market
1.1. Definition and Characteristics of the Indian Air Transport Market
Air transport is a strategically significant link in the Indian economy, as it plays a key role in solving the following tasks:
ensuring transport accessibility of transportation for the population, improving the quality of life of the population and the level of economic development;
using the transit potential of India, integrating into the world transport system and increasing its competitiveness in the global market;
ensuring the economic security of the state by maintaining its transport integrity;
preparedness for emergency situations in terms of modernization and operation of air transport infrastructure facilities.
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Diagram 1. Structure of the transport services market by type, 2018
1.2. Dynamics of the volume of the Indian air transport market, 2014-2018
During 2014-2018 volume of the air transportation market in monetary terms …
Diagram 3. Dynamics of the volume of the air transportation market in India for the period 2014-2018 in monetary terms, billion Rs.
In the field of passenger transportation by air, it was noted as …
1.3. Market structure by type of service provided in India
In 2018, cargo transportation in the air transportation market accounted for only …%, while in passenger transportation it amounted to …%.
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1.4. Structure of the air transportation market by Union Territories
In 2018, …
1.5. Assessment of current trends and development prospects of the studied market
The main trends in the air transportation market:
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1.6. Assessment of factors affecting the market
Let's consider the main factors influencing the market and, accordingly, demand.
Social (demographic)
Chart 10. Population change in India, 2014-2019 (Nov)
Level of real incomes of the population.
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Economic
GDP is a macroeconomic indicator that reflects the market value of all final goods and services (that is, intended for direct consumption) produced per year in all sectors of the economy on the territory of the state for consumption, export and accumulation, regardless of the nationality of the factors of production used. It is the main, most complete official indicator of public welfare.
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The industrial production index shows the total volume of all industrial production, utilities, etc. in terms of money.
During 2014-2018 the index of industrial production had a multi-vector orientation.
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Rate of inflation.
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technological
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The process of fleet renewal in Indian airlines at present and in the long term will be linked to the action of factors such as:
expanding the production of a model range of domestic aircraft and the gradual development of tools to support their sales, as well as an after-sales service system;
the impact of a single customs and tariff policy of the member countries of the Eurasian Economic Union;
start of delivery of new generation aircraft manufactured by Boeing and Airbus to the fleets of leading airlines, which will consequently change the demand model for the purchase of domestically produced aircraft.
Chart 18. The cost of aviation fuel TS-1 2014-2019 (Nov.), Rs./t.
Political
Industry regulation. In India, there are a number of laws regulating the air transport industry: the Air Code of India, the State Regulation of Aviation Development, the Transport Security; Resolutions of the Government of India: “On approval of the federal target program “Development of the transport system of India (2010-2020)”, “On approval of the state program of India “Development of the aviation industry for 2013-2025”; orders of the Government of India (“On the Transport Strategy of India”, “On Approval of the List of Federal Airfields Necessary for the Exercise of India’s Powers”), orders of the Ministry of Transport of India, GOSTs, technical regulations (“On Approval of the Federal Aviation Regulations “Aviation Security Requirements for Airports”, “On approval of the Rules for conducting pre-flight and post-flight inspections”, etc.). In addition, airport services are regulated by the states of natural monopolies.
State. support. In the federal districts and regions of India, the implementation of regional programs for the development of transport infrastructure, modernization of the aircraft fleet, subsidizing domestic regional (local) and interregional air transportation continues. The positive influence of the factor.
Certification. According to the Federal Aviation Rules ""Aircraft copy. Requirements and certification procedures"" entered into force on March 30, 2004, a civil aircraft copy is allowed for operation only if there is a certificate of airworthiness. The Rules are obligatory for legal entities and individuals upon admission to operation and maintaining the airworthiness of aircraft copies.
The positive influence of the factor.
Licensing. Licensing requirements for a license applicant (licensee) to carry out activities for the carriage of passengers and (or) cargo by air.
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Table 4. STEP analysis of factors influencing the air transportation market
In general, the impact of macro factors on the air transportation market can be assessed as …
1.7. Analysis of sectoral indicators of financial and economic activity
Let us consider the financial and economic indicators for the industry (51.10) “Passenger air transport activity” and (51.21) “Cargo air transport activity” in dynamics, for 2014-2018.
Profit from the sale of services
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Gross margin
Gross margin is gross profit divided by sales revenue (excluding excise taxes and VAT). Gross margin shows how much gross profit falls on a unit of revenue. Gross profitability serves as an assessment of the economic efficiency of an enterprise, which reflects the rational use of labor, material, monetary and other resources.
Table 6. Gross margin of the air transport industry in comparison with all sectors of the Indian economy, 2014-2018, %
Return on profit
The profitability indicator at the end of 2018 in the industry ""Activity of cargo air transport"" is ... %, and in the industry ""Activity of passenger air transport"" - ... %.
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Absolute liquidity
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Current liquidity
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Business Activity Indices
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Financial stability
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Part 2: Competitive Analysis in the Air Transport Market in India
2.1. Major players in the market
The largest players in the air transportation market in 2018 are XXX Group
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2.2. Market shares of the largest competitors
As of 2018, the XXX Group remains the largest operator of the air transportation market in India, accounting for …%.
2.3. Profiles of major players
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Part 3: Air traffic consumption analysis
3.1. Estimated volume of air transport consumption per capita
During 2014-2018 Air transport consumption per capita has steadily increased.
3.2. Market Saturation and Estimated Market Potential in India
The current state and development of freight and passenger transport services does not lead to an increase in the needs of the population, the organization in timeliness, reliability, accessibility, safety and environmental friendliness. This is mainly due to the underdeveloped system of strategic management in organizations, with a high degree of depreciation of vehicles and infrastructure.
With the development of a high level of competition, many transport companies are beginning to pay more attention to solving the problem of improving the quality of services in accordance with the requirements of the time, thereby increasing their competitiveness.
It is necessary to move to a qualitatively new level of development of the industry, for which India has an objective potential. This is, first of all, the geographical location as the basis for the development of transit cargo flows, it is the economic growth necessary for the development of export-import transportation of goods, and, finally, the country's population and the growth of purchasing power as the basis for the ""home"" transportation market.
The development of multimodal transit points is also promising, in which it would be possible to combine air and rail transport, and in some places also river and sea transport. Such a network delivery of cargo (port - station - airport) will allow our air carriers to significantly reduce logistics costs and ensure acceptable delivery times.
An analysis of the situation with cargo transportation does not give a complete picture of the situation with the dynamics of transport services in general, since another area of activity is not affected, this is passenger transportation.
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To ensure high service, passenger transportation requires appropriate technical equipment and infrastructure. In the service of passengers during transportation, the main role is assigned to passenger companies and service centers.
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Currently, the air transportation market and the air transport infrastructure of India are undergoing another cycle of transformation and modernization.
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3.3. Description of consumer preferences
According to the results of a study by the Institute of Public Opinion, … % of Indians have ever flown on airplanes. Moreover, this indicator significantly varies depending on the level of income and the size of the settlement in which the respondents live.
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It should be noted that… % used the services of large Indian airlines when traveling by air, while foreign ones — only … %. Domestic and foreign low-cost airlines are even less popular among Indians.
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When choosing an air carrier for cargo, companies pay attention to the following:
Time of delivery. Decent companies will not play for time and will not allow the cargo to lie in warehouses. Especially if it's express delivery.
Extensive partner networks. The more partners the carrier has both within the country and around the world, the faster and better the cargo will be delivered to any point. A bona fide carrier can always provide a list of its partner networks, which can be consulted.
Weight restrictions. Usually, qualified carriers do not make such restrictions. If the company guarantees the client the transportation of goods of any weight and complexity (dangerous, oversized, fragile goods, etc.), then this is a professional company.
Availability of warehouses. If you need urgent shipment of goods, but there is nowhere to store the goods, then you can use the warehouses of the air carrier. Large companies always have such warehouses for the responsible storage of their customers' cargo.
Air carriers with a good reputation primarily offer a wide range of services, such as freight forwarding, door-to-door cargo transportation, responsible storage of goods in warehouses and others.
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3.4. Price analysis
Payments for services rendered by transport organizations are carried out using transport tariffs. Tariffs include:
the fee charged for the carriage of goods;
fees for additional operations related to the carriage of goods;
rules for calculating fees and charges.
As an economic category, transport tariffs are a form of price for transport products. Their construction should provide for the transport company the reimbursement of operating costs and the possibility of making a profit, and for the buyer of transport services - the possibility of covering transport costs. As you know, one of the significant factors influencing the choice of the organizer of the delivery of goods is the cost of transportation. The struggle for customers, inevitable in a competitive environment, can also make adjustments to transport tariffs.
The average tariff for the transportation of 1 ton of cargo/mail on international air lines (INL) is on average … % higher than the cost of transportation on domestic air lines (DHL).
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Diagram 32. Average tariff for the transportation of 1 ton of cargo or mail by international air lines and domestic air lines, Rs./t.
Air civil aviation is under the jurisdiction of the Order of the Ministry of Transport No. 155 dated September 25.09.2008, , which approves the uniform Rules for the formation and application of tariffs for regular air transportation of passengers and baggage.
Passenger transportation tariffs are divided into regulated and unregulated:
regular transportation at a regulated rate is carried out using tariff rates that have been approved by a regional authority or self-government body with the obligatory preservation of the prescribed travel benefits for certain categories of citizens;
regular transportation at non-regulated rates is carried out using rates determined by the transport company.
Part 4. Assessment of factors of investment attractiveness of the market
The most significant positive factors.
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The most significant negative factors include the following.
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Part 5. Forecast for the development of the air transportation market until 2023
We will analyze the market based on methods based on identifying trends over time, adjusted for expert opinion in the industry.
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GidMarket analysts predict…
It should be noted that this forecast is only valid for the medium term.
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Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators
In India, as in other developed countries, transport is one of the largest basic sectors of the economy, the most important part of the industrial and social infrastructure.
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Both in the freight transportation market and in the passenger transportation market, consumers of services give preference to large market players.
Diagrams
Diagram 1. Structure of the transport services market by type, 2018, %
Chart 2. Types of aircraft registered in India, 2019, %
Diagram 3. Dynamics of the volume of the air transportation market in India for the period 2014-2018 in monetary terms, billion Rs.
Diagram 4. Dynamics of the volume of the air cargo market in India for the period 2014-2019 (10 months) in kind
Diagram 5. Dynamics of the volume of the passenger air transportation market in India for the period 2014-2019 (10 months) in kind
Diagram 6. Market structure by type of services provided in India, 2018, %
Diagram 7. Structure of the passenger transportation market in India, 2019, %
Diagram 8. Structure of the passenger transportation market in India, 2019, %
Chart 9. Structure of air transportation provision in India by Union Territories, 2018, %
Chart 10. Population change in India, 2014-2019 (Nov)
Chart 11. Dynamics of real incomes of the population of India, 2014 -2019 (Jan-Sept.)
Diagram 12. Dynamics of India's GDP, 2014 - 2019, % to the previous year
Chart 13. The dynamics of the US dollar against the rupee, 2015-Nov. 2019, Rs. for 1 US dollar
Chart 14. Dynamics of the inflation rate in India, 2014-Nov. 2019
Chart 15. Average annual prices for Indian oil in the period 2014-Nov. 2019
Chart 16. Retail trade volume in India, trillion Rs., 2014 - 2019 (Jan-Sept.)
Diagram 17. Number of aircraft fleet, thousand units
Chart 18. The cost of aviation fuel TS-1 2014-2019 (Nov.), Rs./t.
Chart 19. Profitability before tax (profit of the reporting period) in the industry of air transport services in comparison with all sectors of the Indian economy, 2014-2018,
Diagram 20. Current liquidity (total coverage) in the field of air transportation for 2014-2018, times
Chart 21. Business activity (average turnover period of receivables) in the field of air transportation, for 2014-2018, days days
Diagram 22. Financial stability (security of own working capital) in the field of air transportation in comparison with all sectors of the Indian economy, 2014-2018, %
Diagram 23. Shares of the largest competitors in the air transportation market in India in 2018, %
Diagram 24. Dynamics of the total revenue of the largest market operators (TOP-5) in India, 2014-2018, billion Rs.
Diagram 25. Volume of air transportation consumption per capita, 2014-2018, Rs./person
Diagram 26. Distribution of respondents by Union Territories with flight experience, %
Diagram 27. Flight destinations, %
Diagram 28. Distribution of respondents by Union Territories with flight experience, %
Chart 29. Airline choice factors, %
Diagram 30. Most trusted transport service providers, %
Diagram 31. Assessment of the state of air transportation in India,%
Diagram 32. Average tariff for the transportation of 1 ton of cargo or mail by international air lines and domestic air lines, Rs./t.
Diagram 33. Average tariff for transportation of 1 passenger on international and domestic flights, Rs./pass.
Diagram 34. Forecast of the volume of the air transportation market in 2019-2023, billion Rs.
Figure 1. Air transport market life cycle stage
Tables
Table 1. Revenue from the sale of services for 2014-2018, billion Rs.
Table 2. Index of industrial production by states of India (in % of the previous year), 2014 - 11 months 2019
Table 3. The dynamics of the US dollar against the rupee, 2015 - Nov. 2019, Rs. for 1 US dollar
Table 4. STEP analysis of factors influencing the air transportation market
Table 5. Profit (loss) from the sale of air transport services in the Union Territories of India, 2014-2018, million Rs.
Table 6. Gross margin of the air transport industry in comparison with all sectors of the Indian economy, 2014-2018, %
Table 7. Absolute liquidity in the air transport sector in comparison with all sectors of the Indian economy, 2014-2018, times
Table 8. The main companies participating in the air transportation market in India
Table 9. Basic information about the participant of the air transportation market ""XXX"" (parent company PJSC ""XXX"")
Table 10. Basic information about the participant of the air transportation market PJSC ""XXX""
Table 11. Basic information about the participant of the air transportation market GC ""XXX""
Table 12. Basic information about the participant of the air transportation market GC ""XXX""
Table 13. Basic information about the participant of the air transportation market JSC XXX Airlines
Table 14. Air Freight Consumer Price Indices by State of India, 2014 - 11 months 2019, %
Table 15. Assessment of factors of investment attractiveness of the air transportation market
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