A study to identify Critical Factors affecting Performance of Low Cost Airlines in India

A study to identify Critical Factors affecting Performance of Low Cost Airlines in India

The main objective of the study is to identify the critical factors affecting performance of low cost airlines in India For this purpose, the research focused on the low cost airline industry with regards to their macro environment, its strategic aspects and an analysis of the industry The study incorporated the Porters Five Forces Model to study the five forces having an impact on the industry and thus directing a firms strategic actions The study also conducted an industry analysis from the point of view of travel agents through questionnaire A customer satisfaction survey was also done to know their satisfaction levels and loyalty to a particular airline. This is achieved by the adoption of primary research techniques including surveys and interviews of the industry specialist and customers and secondary research including reading the existing literature on the subject, industry reports and articles published in journals A critical analysis of the industry highlighted the factors having an impact on the industry as a whole The porters five forces analysis revealed the current and future trends for the industry and provided an understanding for future survival strategies for the airlines. Industry professionals state that the Airline industry is in infancy stage They have a long way to go The factors such as airport infrastructure, massive expansion plans, aggressive growth strategies, demand and supply patterns and the exchange rate mechanism affects their performance But the highest factor restricting the growth of any airline is the high price of ATF All the three- industry professionals, travel agents and consumers believe that LCCs have benefited the industry providing low fares and making air travel affordable They are quite positive about the times ahead and hope that the industry will bounce back Consumers are quite satisfied and content with the offerings As suggested by a consumer that they should be named as ??value for money airlines and not LCCs The Porters Five Forces analysis revealed that there are high entry barriers as this is a highly capital intensive industry and that buyers and suppliers both have high bargaining power There is moderate threat of substitute like railways looking at the future potential of the aviation sector The analysis further revealed that the market is highly competitive with very few players and to reach the customers expectations the players have to cut their prices most often thus creating an imbalance in the cost and revenue Also, unhealthy competitive practices prevail in the industry which hamper the overall growth process and thus affect the performance The research provided insight on the future opportunities and the several future industry success and survival factors The research also gives further scope of the study and thereby concludes that there needs to be a consensus so that both the regulatory bodies and the airlines are benefited thus promoting growth and prosperity of the country. Dissertation Layout: The first chapter of the dissertation titled ??Introduction primarily covered a range of aspects from history to the LCC situation globally and then following it traces to India thus leading to the statement of the problem and the objectives of the study The second chapter ??Review of Literature covered the previous research on the factors impacting the performance of low cost airlines The third chapter ??Research Methodology covered the data collection process, sampling description and the methodology for data analysis The fourth chapter titled ??Data Analysis and Interpretation covered the customer satisfaction and industry analysis The fifth chapter ??Summary and Conclusion listed the major findings, implications and limitations, scope for further research and conclusion drawn from the research. Keywords: LCCs, critical factors, performance, airlines, low cost, ATF, aviation.

Khirbat Surbhi

Management Studies