Market Power of the Indian Civil Aviation Market
Research Question
To what extent did the decrease in the market power of the Indian Civil Aviation Market lead to the shutdown of Jet Airways Limited?
Parameter for measuring market power
Parameter 1: 4-Firm concentration ratio
This parameter will be used to find the decrease in the market power of the sector
Parameter 2: Market share of Jet Airways
Methodology
Primary Data
Questionnaire for Jet Airways Official
What do you think are the possible reasons behind the decrease in the profitability and market share of Jet Airways?
How did the entry of LCC’s in 2005 affect the aviation sector?
Do you think that the entry of LCC’s affected the market share of Jet Airways?
Do you think Jet was able to differentiate its services as a full service carrier as compared to the LCC’s?
Data shows that the aviation tax and hence the aviation fuel price in India is higher as compared to other countries.
To what extent, do you think, does this affect the profitability of Indian aviation firms?
The dollar has appreciated consistently versus the Indian Rupee, which is another contributor to the higher fuel prices.
To what extent, do you think, does this affect the profitability of Indian aviation firms?
Some experts say that the acquisition of Air Sahara by Jet was at a price that was higher than the price justified? What are your views on the same?
What are your views on the debt levels of Jet? Were they particularly high or low?
Were they one of main contributor to the cost of operation for Jet?
According to you, what were the three most important things that caused the shutting down of Jet?
Questionnaire for LCC Official
Why the low cost carriers (LCC’s) called by this name?
How do you differentiate your services from that of the full service carriers (FSC’s)?
Today more than 50% market share is controlled by LCC’s. What do you think are the reasons for the success of LCC’s in general?
What are the specific strategies that are used by your airline to attract customers?
Do you think that the Indian aviation market is very price sensitive?
In continuation to the previous question, do you think that it is challenging for a FSC to operate in this market? If yes, what are the unique challenges faced by them as compared to LCC’s?
Data shows that the aviation tax and hence the aviation fuel price in India is higher as compared to other countries. To what extent, do you think, does this affect the profitability of Indian aviation firms?
The dollar has appreciated consistently versus the Indian Rupee, which is another contributor to the higher fuel prices. To what extent, do you think, does this affect the profitability of Indian aviation firms?
Do you think that the entry of LCC’s affected the market share of Jet Airways?
According to you, what were the three most important things that caused the shutting down of Jet?
Secondary Data
Source Data Collected
DGCA (Directorate General of Civil Aviation) Website Market share of all airlines
Fleet Size
Operating Expenses per RPKM
Moneycontrol.com Profit and Loss statement for Jet Airways from 2010 to 2018
Balance Sheet for Jet Airways from 2010 to 2018
Investing.com USD to INR historical data
IATA.org Aviation Fuel Prices
Livemint Product Differentiation
Costs of production of Jet Airways
Economic Time Decrease in the average airfares from 2012 to 2015
Scroll.in Air Sahara deal
Business-Standard Aviation fuel prices in India vis-à-vis other countries
Do we have articles to the above-mentioned websites?
Analysis Planned
Reason Tool Diagram
Decrease in market power Decrease in Concentration ratio
Bar chart showing the increase in the number of airlines. Each bar will be show a breakup of FSC and LCC
Decrease in the market share of Jet Airways from 2010 onwards and corresponding increase in the market share of the LCC’s
Consistent economic loss by Jet Airways from 2010 to 2018
Inability to charge a higher price for extra services offered Diagram showing the decrease in the quantity and the profit for a firm with some market power
Inefficiencies in production Costly acquisition of Air Sahara
Higher Fleet size leading to higher leasing costs
International flights leading to higher costs of operations
Higher debt levels leading to higher interest costs
Higher average cost per RPKM Diagram showing the comparison between Jet and an LCC showing different level of profit because of different average costs of production
Feedback:
Questions in the questionnaire are not really relevant to the data required for justifying parameters mentioned in your plan.
This doesn’t seem to be well thought plan, rather a vague plan not backed by any data
Parameters, questionnaire and reasons mentioned in the plan doesn’t seem to be coherent and synced with each other.
