1

Certificate
This is to certify that the following students of St. Xavier’s College, Mumbai, currently
enrolled in the fourth semester of Bachelor’s of Management Studies Programme have
successfully completed the research project titled -

“Flying High- A study on the Airline Preferences of Individuals in Urban India”

This project was undertaken as a part of the continuous internal assessment for the
subject (C.BMS.4.01) Research Methods in Business and MS-Excel, under the guidance
and supervision of Ms. Soni George Tharakan.

Karan Castello
Roll Number- 07
UID Number- 154015

Samarth Khitha
Roll Number- 27
UID Number- 154004

Sheena Oberoi
Roll Number- 35
UID Number- 154060

Nihal Saldanha
Roll Number- 44
UID Number- 154012

Simran Ahluwalia
Roll Number- 56
UID Number- 164503

Soni George Tharakan

Head of Department- Management Studies
St. Xavier’s College, Mumbai

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Acknowledgements
We would like to express our sincere gratitude towards St. Xavier’s College and the
Department of Management Studies for providing us with this wonderful opportunity for
undertaking this research project.

We would like to thank Ms. Soni George Tharakan, Head of Department of Management
Studies at St. Xavier’s College and our guide for this project for her constant support,
supervision and inputs which have helped us improve this project greatly.

We would also like to thank each and every one of our respondents who took out time and
helped us conduct this research.

Lastly, we would like to thank our parents, families and friends for their support and for
providing us with constant inspiration and resources in order to meet the expectations we
had from this study. 


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Index

S. No. Topic Page

1 Executive Summary 4
2 Research Methodology 5
I. Objective of study
II. Sample
III. Primary Data
IV. Secondary Data
V. Limitations of Study
3 Introduction 7
I. Market size
II. Robust performance, supported by growing demand
III. Growth and progress of Aviation sector
IV. InvestmentProblems/Challenges faced by the aviation sector
V. Government Initiatives
4 Highlighting Major Airlines in India 13
Air India
GoAir
IndiGo
Jet Airways
Spice Jet
Vistara
5 Performance of domestic airlines for December 2016 17
I. Passenger Growth
II. Passenger Load Factor
III. Cancellations
IV. On Time Performance
6 Road Ahead 21
7 Observations and Conclusions 22
8 Closing Remarks 54
9 Limitations of Study 57
10 References 58
11 Annexure 59

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Executive Summary
“FLYING HIGH- A STUDY ON THE AIRLINE PREFERENCES OF INDIVIDUALS IN
URBAN INDIA”

The project involves the design of a research based on the primary data collected on the
airline preferences of individuals in urban india of different age groups from 16-84,
belonging to diverse cities from across India.

The project also focusses on gathering data on various aspects of economic status of
people and the different flights they prefer based on various amenities like punctuality,
pricing of tickets, baggage allowance etc. It also explores respondents’ enrolment in
reward programmes, their preferred cabin classes, their most frequent means of booking
their tickets etc. It also explores the frequency and most common purpose of travel of
individuals.

The questionnaire was designed in such a way that it gave the respondents an opportunity
to rank the 6 major domestic airlines in India- Air India, SpiceJet, Indigo, Vistara, Jet
Airways & Go Air.

The project involves the use of various statistical tools like measures of central tendency,
Chi Square, ANOVA etc. to establish relationships among various aspects like income and
frequency of travel, income and baggage, frequency of travel and purpose of travel and
other such bivariate field.

The project also includes the secondary data collected about the highlights of the major
domestic players in the airline industry in india, performance of the airlines in the past,
future of airline industry in India and other related topics.


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Research Methodology
Objective of Study

To study the airline preferences and ticket buying and booking patterns for domestic travel
in India, of individuals residing in urban cities of India, from different socio-economic and
professional backgrounds, aged between 16 to 84 years, over the period of 2016-17.

The above undertaken study is a cross sectional study which has been conducted in order
to understand and analyse the currently prevalent patterns with respect to the factors that
affect the choice of airlines, individuals take.

Sample

The sample used for this study comprised of 449 respondents aged between 16 and 84,
residing in the cities of- Ajmer, Bengaluru, Bhubaneswar, Chandigarh, Chennai, Delhi
(National Capital Region), Hyderabad, Indore, Jaipur, Jodhpur, Kolkata, Lucknow, Mumbai,
Nagpur, Panjim, Patiala, Pune, Srinagar, Surat, and Trichy. These respondents were
made to fill out a questionnaire (Annexure 1), the data from which comprises the primary
data collected to carry out the research.

Primary Data

The six domestic airlines considered for the study are GoAir, Vistara, Jet Airways, Indigo,
SpiceJet and Air India (Domestic). The major reason to consider these airlines is that they
represent the majority of people travelling between major cities, by air in India. These
airlines consist from full fare to low priced airlines.

The questionnaire uses different types of questions which are mostly multiple choice
questions. The pool of questions included questions which use the Likert scale, Rating
scales and Ranking based questions.

The primary data collected, as stated above, has been analysed using statistical tools like
Measures of central tendency, Anova, Chi Square, Correlation etc.

Chi square analysis helps understand whether or not there exists a relationship between
two variables.

Analysis of Variance (ANOVA), gives an idea of the extent of variation between the means
two or more than two independent variables.

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Correlation quantifies the extent of relation between two independent variables.

Secondary Data

The secondary data used in this study has been taken from various sources including
websites and published material of major airlines in India, the Ministry of Civil Aviation,
Airports Authority of India etc.


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Introduction
India’s civil aviation industry is on a high-growth trajectory. India aims to become the third-
largest aviation market by 2020 and the largest by 2030. 

The Civil Aviation industry has ushered in a new era of expansion, driven by factors such
as low-cost carriers (LCCs), modern airports, Foreign Direct Investment (FDI) in domestic
airlines, advanced information technology (IT) interventions and growing emphasis on
regional connectivity. India is the ninth-largest civil aviation market in the world, with a
market size of around US$ 16 billion. India is expected to become the third largest aviation
market by 2020.

“The world is focused on Indian aviation – from manufacturers, tourism boards, airlines
and global businesses to individual travellers, shippers and businessmen. If we can find
common purpose among all stakeholders in Indian aviation, a bright future is at hand” said
Mr. Tony Tyler, Director General and CEO, International Air Transport Association (IATA).

Market Size

During January-August 2016, domestic air passenger traffic rose 23.14 per cent to 64.47
million from 52.36 million during the same period in 2015. Passenger traffic during FY
2015-16 increased at a rate of 21.3 per cent to 85.57 million from 70.54 million in the FY
2014-15.

In July 2016, total aircraft movements at all Indian airports stood at 168,400, which was
14.3 per cent higher than July 2015. International aircraft movements increased by 8.2 per
cent to 32,830 in July 2016 from 30,330 in July 2015. Domestic aircraft movements
increased by 15.8 per cent to 135,570 in July 2016 from 117,050 in July 2015.

Indian domestic air traffic is expected to cross 100 million passengers by FY2017,
compared to 81 million passengers in 2015, as per Centre for Asia Pacific Aviation (CAPA).

India is among the five fastest-growing aviation markets globally with 275 million new
passengers. The airlines operating in India are projected to record a collective operating
profit of Rs 8,100 crore (US$ 1.29 billion) in fiscal year 2016, according to CRISIL Ltd.

Robust performance, supported by growing demand

Domestic air passenger traffic has been growing at a healthy rate driven by growing
economic activity and affordable air fares. Further, addition of new players as well as

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capacity enhancements by incumbents has resulted in a Compound Annual Growth Rate
(CAGR) of 9% over the last three fiscals in the industry average monthly available seat
kilometres (ASKMs) to 8,150 million. The industry capacity has recovered from the sharp
cuts experienced during FY2015 due to the financial crisis at SpiceJet. In addition to
capacity growth, the industry passenger load factor (PLF) has also grown from an average
level of 75% to 83% over FY2013 to FY2016, steered by the strong traffic growth.

As a combination of the aforementioned factors, the industry average monthly revenue

passenger kilometres (RPKMs) has increased at a CAGR of 12.7% - from 4,700 million in
FY2013 to 6,750 million in FY2016, although at the expense of marginally lower yields.
Nonetheless, compared to other countries, the domestic air traffic growth (as measured in
RPKMs) has been by far the highest in India during FY2016. It stands at a much higher
level than the global domestic RPKM growth of 6.7% during the same period.

Although the domestic ASKMs reported a CAGR of 9% over FY2013 to FY2016, the
growth is outpaced by passenger traffic growth of ~14% during the same period. Lack of
anticipation of demand growth and cautious approach towards capacity expansion by
many of the players translated into this lag in capacity addition. Indigo has been the only
outlier with Available Seat Kilometres (ASKM) growth of ~22% during this three-year
period, while the industry (excluding Indigo) grew at a paltry rate of 3%.

The international traffic to/from India has also been growing at a steady pace over the past
decade, registering a CAGR of 10.5% between FY2006 and FY2016. Though the pace
has slowed down over the last three years (7.7% growth during FY2016) due to the weak
economic environment, overall the international traffic growth has remained satisfactory.
Of the current 10 scheduled domestic airlines operating in India, Indigo continues to enjoy
a dominant market share - ~37% for FY2016 - primarily driven by rapid capacity addition
and healthy PLFs on the back of superior on-time performance, while the other
incumbents have faced some market share erosion by the new entrants.

Growth and progress of Aviation sector

In the sphere of civil aviation, there has been remarkable progress in India. Both in respect
of speed and carrying capacity modern aircraft are far superior to those in use even a
decade ago. As already mentioned earlier, India is already among the top 10 aviation
markets serving over 16 million passengers annually.

The volume of air traffic, both in terms of passenger and goods, is also daily increasing.
Now-a-days very few among those who can afford the cost of air travel use any other form
of conveyance, especially in long-distance journeys.

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These improvements that are being daily made may very well further reduce the time of
travel and correspondingly improve the safety and comfort of journeys.

Investment

According to data released by the Department of Industrial Policy and Promotion (DIPP),
FDI inflows in air transport (including air freight) between April 2000 and March 2016 stood
at US$ 931.05 million.

Key investments and developments in India’s aviation industry include:

• Airbus SAS has signed an agreement with Karnataka-based Aequs Aerospace, an
aircraft component maker, for the supply of over 100,000 titanium machined parts
for its A320 new engine option (NEO) aircraft.
• Boeing Company, an American plane maker, and Tata Advanced Systems Ltd
(TASL), a fully owned subsidiary of Tata Sons, have entered into a joint venture to
set up a new facility in Hyderabad to manufacture Boeing AH-64 Apache helicopter
fuselages.
• GoAir, India's fifth-biggest carrier by passengers travelled, has signed a
memorandum of understanding (MoU) with Airbus to buy 72 A320neo aircrafts,
valued at US$ 7.7 billion, as part of an expansion drive.
• Lockheed Martin Corporation plans to make India a manufacturing base for its
F-16V fighter jets, C-130J Super Hercules military transport planes and helicopters.
• Auto components maker Bharat Forge Ltd (BFL), the flagship company of the US$
3 billion Kalyani Group, has formalised agreement with Rolls-Royce Plc, under
which BFL will supply critical and high integrity forged and machined components
for a range of aero engines.
• The Ministry of Civil Aviation has signed Memorandum of Understanding (MoU) with
Finland, Kazakhstan, Kenya, Sweden, Norway, Denmark, Oman and Ethiopia for
increased co-operation between the countries in terms of additional seats, sharing
of airlines codes, increased frequencies and additional points of call, during the
International Civil Aviation Negotiations (ICAN),2015 held in Antalya, Turkey.
• Tata Advanced Systems (TASL) has signed a joint venture with American aircraft
manufacturing major, Boeing, to establish a centre of excellence for manufacturing
aerostructures for Apache helicopter initially and collaborate on integrated systems
development opportunities in India in the long term.
• US-based aircraft manufacturer Boeing plans to assemble one of its two helicopters
namely, Chinook (heavy-lift) or Apache (attack type) in India, thus becoming yet
another global company to invest in India encouraged by the ‘Make in India’
campaign.

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• Airbus, leading European aircraft manufacturer, plans to invest US$ 40 million to set
up a pilot and maintenance training centre in New Delhi, which will be operational
by the end of 2017.
• Airbus also expects India’s aviation industry to grow at over 10 per cent annually in
the next decade, almost double the average growth rate of the global aviation
industry.

Problems/Challenges faced by Aviation Industry

There is dearth of properly trained pilots and technicians necessary for quick expansion of
aviation services.
Though several centres for the training of pilots and technicians have already been
opened they are patently inadequate to meet the requirements of even the existing volume
of air traffic.
Another difficulty is with regard to aviation petrol. India, having very small supply of
indigenous petroleum, has to depend on foreign sources for fuel, especially for aviation
purposes. Whenever there is any bottleneck in the regular supply of aviation spirit, even
the regular scheduled services, have to be cut off temporarily.
Besides these hurdles, the general poverty of the masses is a factor to be taken into
account in estimating the possibilities of the expansion of aviation in India.

Government Initiatives

Government agencies project that around 500 brownfield and greenfield airports would be
required by 2020. The private sector is being encouraged to become actively involved in
the construction of airports through different Public Private Partnership models, with
substantial state support in terms of financing, concessional land allotment, tax holidays
and other incentives.

In the Union Budget 2016-17, the government introduced various proposals for
Maintenance, Repair and Overhaul (MRO) operations for airplanes. These include
customs and excise duty exemption for tools and tool-kits used in MRO works. The
government has also scrapped the one-year restriction for utilisation of duty free parts
apart from allowing import of unserviceable parts by MROs for providing exchange. As per
revised norms, the foreign aircraft brought in to India for MRO work would now be
permitted to stay up to six months or as extended by aviation regulator Directorate General
of Civil Aviation (DGCA). Such foreign aircraft would also be henceforth permitted to carry
passengers in the flights at the start and end of its period of stay in India.

Some major initiatives undertaken by the government are:

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• The Ministry of Civil Aviation has finalised and put forward for approval to the Union
Cabinet, the new aviation policy, which includes proposals such as allowing new
airlines to fly abroad, introduction of more regional flights and a new formula for
granting bilateral flying rights.
• The Indian Space Research Organisation (ISRO) has signed a memorandum of
understanding (MoU) with the Airports Authority of India (AAI), aimed at providing
space technology for construction of airports.
• The Government of India is planning to boost regional connectivity by setting up 50
new airports over the next three years, out of which at least 10 would be operational
by 2017.
• Airports Authority of India (AAI) plans to develop city-side infrastructure at 13
regional airports across India, with help from private players for building of hotels,
carparks and other facilities, and thereby boost its non-aeronautical revenues.
• Directorate General of Civil Aviation (DGCA), India's aviation regulator, has signed
an agreement with United States Technical Development Agency (USTDA) for India
Aviation Safety Technical Assistance Phase II, aimed at bringing in systemic
improvements in the area of operation, airworthiness and licensing.
• The Government of India has given site clearance to Delhi Mumbai Industrial
Corridor and Development Corporation (DMICDC) for setting up of a Greenfield
Airport for public use near Bhiwadi in Alwar district of Rajasthan and has granted 'in-
principle' approval to 13 other greenfield airport projects.
• The Airports Authority of India (AAI) plans to revive and operationalise around 50
airports in India over the next 10 years to improve regional and remote air
connectivity.
• Gujarat is expected to get a second international airport at Dholera. The state
government has formed Dholera International Airport Co. Ltd. and is obtaining
approvals from the union government.
• The Directorate General of Civil Aviation (DGCA) has given its approval to Air
India’s maintenance, repair and overhaul (MRO) unit.
• The Government of India has decided to award airports in Kolkata, Chennai, Jaipur
and Ahmedabad on management contract. AAI has issued the ‘Request for
Qualification’ document for these four airports.

The Civil Aviation Ministry today received a substantial increase of over 22 per cent in
budgetary allocation at Rs 5,167.60 crore for the next financial year. In the Union Budget
2017-18, presented by the Finance Minister Arun Jetley, out of the ministry’s total
allocation, a good chunk will be for Air India, which is to get Rs 1,800 crore. Besides, the
airline will be given Rs 508 crore as part of investment in public enterprises.

National airports operator AAI has been allocated Rs 2,543 crore, apart from a budgetary
support of Rs 100 crore. Meanwhile, the budgetary funds for aviation watchdog DGCA has

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been stepped up significantly to Rs 230.56 crore for 2017-18. The amount is at Rs 29.67
crore for the current fiscal.

Significantly, UN aviation watchdog, International Civil Aviation Organisation (ICAO) is

scheduled to audit India’s air safety preparedness in the second half of this year. The
Bureau of Civil Aviation Security (BCAS), the country’s apex aviation safety agency, has
been allocated Rs 214.50 crore in the latest Budget. The amount will be extended to the
national carrier as part of the bailout package announced by the then UPA government in
2012.

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Highlighting Major Airlines in

India
AIR INDIA, AIR INDIA REGIONAL and AIR INDIA EXPRESS

Air India is the flagship carrier airline of India and is owned by Air India Ltd. It began its
operations in 1932. Presently, it is the third largest airline in India in terms of domestic
market share. It mainly operates a fleet of Airbuses and Boeing aircrafts serving various
domestic and international airports. It is headquartered in the Indian Airlines house at New
Delhi.

Air India has two major domestic hubs at Indira Gandhi

International Airport, New Delhi, and Chhatrapati
Shivaji International Airport, Mumbai, and secondary
hubs at Chennai International Airport and Netaji
Subhas Chandra Bose International Airport, Kolkata. It
operates one of the youngest fleets in the world and
regular upgrades ensure that they provide a superior
flight experience to its customers.

Air India Express is a Low-cost carrier headquartered in Kochi, operated by Air India
Charters Limited (AICL), a wholly owned subsidiary of flag carrier airline Air India. It
operates nearly 596 flights per week to 30 destinations including the Middle East and
Southeast Asia.

Air India Regional is an Indian airline which was started as a low-cost arm of Indian
Airlines as Alliance Air. As part of Indian's merger with Air India, it was renamed Air India
Regional. It operates 170 weekly flights to 42 domestic destinations as a subsidiary of Air
India.

GO AIR

The Wadia Group owns Go Airlines (India) Ltd which

operates its services under the brand name GoAir.
GoAir launched its operations in November 2005. It is
a low-fare carrier launched with the objective of
commoditising air travel, and offering airline seats at
marginal premium to train fares across India. The
airline currently operates across 23 destinations with

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140 daily flights and approximately 975 weekly flights.

GoAir is positioned as 'the Smart People's Airline'. Its captivating theme, 'Fly Smart' is
aimed at offering passengers a consistent, quality-assured and time-efficient service
through 'pocket-friendly' fares. The airline uses the state-of-the-art Airbus A320 aircraft
fleet.

The GoAir route network spans prominent business metropolis as well as key leisure
destinations across the Indian subcontinent. GoAir is currently servicing the airports at
Ahmedabad, Bagdogra, Bengaluru, Chandigarh, Chennai, Delhi, Goa, Guwahati, Jaipur,
Jammu, Kochi, Kolkata, Leh, Lucknow, Mumbai, Nagpur, Patna, Port Blair, Pune, Ranchi
and Srinagar.

INDIGO

IndiGo is a low-cost airline headquartered at Gurgaon,

Haryana, India. It is the largest airline in India in passengers
carried, with a 42.6% market share as of October 2016. The
airline operates to 44 destinations and is the second largest
low-cost carrier in Asia. It has its primary hub at Indira
Gandhi International Airport, Delhi.

The airline was founded as a private company, by Rahul

Bhatia of InterGlobe Enterprises; and Rakesh Gangwal, a
United States-based expatriate Indian; in 2006. It took
delivery of its first aircraft in July 2006 and commenced operations a month later. The
airline became the largest Indian carrier in passenger market share in 2012. The company
went public in November 2015. Currently it has a fleet size of 126.

JET AIRWAYS

Jet Airways is a major Indian airline based in Mumbai. It is the

second largest airline in India, both in terms of market share
and passengers carried. It operates over 3,000 flights daily to
66 destinations worldwide. Its main hub is Mumbai, with
secondary hubs at Delhi, Kolkata, Chennai and Bengaluru. It
has an international hub at Brussels Airport, Belgium. The
airline went public in 2005.

Jet Airways was incorporated as an air taxi operator on April

1, 1992. It started commercial operations on May 5, 1993 with
a fleet of four leased Boeing 737-300 aircraft from Malaysia Airlines. In January 1994, a

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change in the law enabled Jet Airways to apply for scheduled airline status, which was
granted on January 4, 1995. Naresh Goyal – who already owned Jetair (Private) Limited,
which provided sales and marketing for foreign airlines in India – set up Jet Airways as a
full-service scheduled airline to compete against state-owned Indian Airlines.

Jet began international operations from Chennai to Colombo in March 2004. In January
2006, Jet Airways announced that it would buy Air Sahara for US$ 500 million in an all-
cash deal, making it the biggest takeover in Indian aviation history. Air Sahara was
renamed JetLite, and was marketed between a low-cost carrier and a full service airline. In
August 2008, Jet Airways announced its plans to completely integrate JetLite into Jet
Airways.

SPICE JET

SpiceJet is a low-cost airline headquartered in Gurgaon, India. It is the fourth largest airline
in the country by number of passengers carried, with a market share of 12.9% as of
October 2016. The airline operates 306 daily flights to 45 destinations, including 39 Indian
and 6 international destinations from its hubs at
Delhi, Kolkata and Hyderabad. It has a current
fleet size of 40.

Established as air taxi provider ModiLuft in 1994,

the company was acquired by Indian entrepreneur
Ajay Singh in 2004 and re-christened as SpiceJet.
The airline operated its first flight in May 2005. Indian media baron Kalanidhi Maran
acquired a controlling stake in SpiceJet in June 2010 through Sun Group which was sold
back to Ajay Singh in January 2015. The airline operates a fleet of Boeing 737 and
Bombardier Dash aircraft.

VISTARA

Vistara is an Indian airline based in New Delhi with a hub at the Indira Gandhi International
Airport. The carrier commenced operations on January 9, 2015 and operates 14 daily
flights with 3 Airbus A320 aircraft. The Full service carrier was announced in 2013 and was
established as a joint venture between Tata Sons and Singapore Airlines. It is the first
carrier to offer premium economy seats on domestic flights in India.

The airline is a joint venture (JV) between Tata Sons and

Singapore Airlines Ltd (SIA). The carrier was announced in
2013 as a full-service airline based in New Delhi. The two
companies will initially invest a combined US$ 100 million to
start the carrier, with Tata Sons owning 51 per cent and

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Singapore Airlines owning the remaining 49 per cent. The joint Tata and SIA venture
received approval from India's Foreign Investment Promotion Board in October 2013,
allowing SIA to take a 49 per cent stake in the airline. Vistara is taken from the Sanskrit
word Vistaar, meaning “expansion”.

Comparative Table

Start of Type of Company Fleet

Airline Headquarters Destinations
Operations Airline Slogan Size

Air India 1932 Flag Delhi Air India... Truly 118 101
Carrier Indian
Go Air 2005 Low Cost Mumbai Fly Smart 24 23
Indigo 2006 Low Cost Gurgaon Go Indigo 126 44
Jet 1993 Full Mumbai The Joy of 113 66
Airways Service Flying
Spice 2005 Low Cost Gurgaon Red. Hot. Spicy. 40 45
Jet
Vistara 2015 Full Delhi Fly the New 13 20
Service Feeling

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Performance of domestic airlines

for December 2016
Passenger Growth

Passengers carried by domestic airlines during Jan-Dec 2016 were 998.88 lakhs as
against 810.91 lakhs during the corresponding period of previous year thereby registering
a growth of 23.18%.

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Passenger Load Factor

The passenger load factors of various scheduled airlines for the month of december 2016
are as follows-


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Cancelations

The overall cancellation rate of scheduled domestic airlines for the month of Dec 2016 has
been 2.18 %.

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On time Performance

On-Time Performance (OTP) of scheduled domestic airlines has been computed for four
metro airports viz. Bangalore, Delhi, Hyderabad and Mumbai. Airline-wise OTP at four
metro airports for the month of Dec 2016 is as follows:

OTP in Mumbai OTP for four major airports

70% 72%

63% 70%

56% 68%

OTP In 4 major airports

49% 66%
OTP in Mumbai

42% 64%

35% 62%

28% 60%

21% 58%

14% 56%

7% 54%

0% 52%
Spice Jet Vistara Air India GoAir Indigo Jet Airways
Airlines

Airline Spice Jet Vistara Air India GoAir Indigo Jet

Airways
OTP in Mumbai 54.8 55.6 49.6 59.9 50.2 61.6

Average OTP in 4 70 64.2 59 63.6 61.6 64.3

major airports

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Road Ahead
India’s aviation industry is largely untapped with huge growth opportunities, considering
that air transport is still expensive for majority of the country’s population, of which nearly
40 per cent is the upwardly mobile middle class. 

The industry stakeholders should engage and collaborate with policy makers to implement
efficient and rational decisions that would boost India’s civil aviation industry. With the right
policies and relentless focus on quality, cost and passenger interest, India would be well
placed to achieve its vision of becoming the third-largest aviation market by 2020 and the
largest by 2030.

Exchange Rate Used: INR 1 = US$ 0.0149 as on September 30, 2016.

The domestic airlines are likely to add ~55 new aircraft during FY2017 as against ~33
added during FY2016. The addition of aircraft in the fleet, coupled with improved network
planning and operational efficiencies, are likely to boost overall industry capacity, with the
industry ASKMs expected to report strong double digit growth during FY2017. Considering
this capacity addition, ICRA expects passenger growth to continue to remain robust at
~20-25% in FY2017, even if the PLFs are maintained at the current levels.

Currently, the airlines are providing deep discounts, by utilising the buffer provided by
lower fuel prices, and maintaining healthy PLFs. The current scenario of comparatively
steady yields and lower costs has given rise to some improvement in revenue per
available seat kilometre (RASK)-cost per available seat kilometer (CASK) spread. Despite
the benefits of low fuel price, which is unlikely to change anytime soon, ICRA believes that
sustainable improvement in the cost structures and the underlying demand, backed by
recovery in business and tourism, remain critical points for long term sustainability of
domestic airlines.

Further, with rising competition, we believe a strategy revisit by the airlines is necessary to
maintain market position, possibly by offering differentiated services, better connectivity
and competitive pricing.

Overall, the prospects of the Indian aviation industry in the near to medium term are
largely dependent on the movement in the crude oil prices and foreign exchange, in
addition to reform measures. However, underpinned by the improving operating
performance, the balance sheets of Indian carriers are expected to improve in FY2017.

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Observations and Conclusions

Demographics of respondents: Age Groups and Gender

Age Group Male Female Total

16-22 55 97 152
22-30 39 43 82
30-50 23 64 87
50+ 75 30 105
Total 215 234 449

Male Female Total Sample

Maximum Age 84 61 84
Minimum Age 16 16 16
Average Age 38.02 30.81 34.27
Median Age 38 24 27
Mode Age 20 19 19

Male Female

100

90

80
Number of respondents

70

60

50

40

30

20

10

0
16-22 22-30 30-50 50+
Age groups

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Place of residence of Respondents

LEGEND (Airport codes as per Airport Authority of India)

• BLR- Bangalore
• IXC- Chandigarh
• MAA- Chennai
• DEL- Delhi/ NCR
• HYD- Hyderabad
• JAI- Jaipur
• CCU- Kolkata
• BOM- Mumbai
• NAG- Nagpur
• PNQ- Pune
• SXR- Srinagar

BLR IXC MAA DEL HYD JAI CCU BOM NAG PNQ SXR Other

15 4 13 83 5 9 9 236 13 8 11 41

300

270

240
number of respondents

210

180

150

120

90

60

30

0
e

ai

ad

ur

ne

ar

er
ba

pu
or

ar

at
C
nn

ip

ag

th
ab

Pu
um
lk
/N
al

ig

ag
Ja

O
he

in
Ko
ng

nd

er

N
hi

Sr
C

yd
Ba

ha

el

H
D
C

City of residence

Flying High- A study on the Airline Preferences of Individuals in Urban India

 24
Profession of Respondents and Family Income

Profession Males Females

Professional (lawyer, doctor, engineer etc) 34 24 58
Student 61 111 172
Self employed 43 20 63
Service 50 25 75
Unemployed 1 15 16
Retired 13 4 17
Teacher/Professor 13 35 48
Total 215 234 449

Income

More than Rs. 25 Lakh 131

Rs. 10 Lakh- 25 Lakh 147
Rs. 5 Lakh- 10 Lakh 98
Rs. 2.5 Lakh to 5 Lakh 43
Upto Rs. 2.5 Lakh 30
Total 449



11% 13% 7%
4% 10%
4% 29%

17% 22%
38%
14% 33%

Professional More than Rs. 25 Lakh

Student Rs. 10 Lakh- Rs. 25 Lakh
Self Employed Rs. 5 Lakh- Rs. 10 Lakh
Service Rs. 2.5 Lakh- Rs. 5 Lakh
Unemployed Upto Rs. 2.5 Lakh
Retired
Teacher/ Professor

Flying High- A study on the Airline Preferences of Individuals in Urban India

 25
Amenities and Most preferred Airlines

The respondents were asked to rate the following amenities on a scale of 1 to 5 (1 being
lowest and 5 being highest), which they look for in an airline, when travelling in the
domestic circuit.

Category 1 2 3 4 5 Total Average Rank

Leg Room 33 50 128 114 124 449 3.55 6
Baggage Allowance 24 51 121 123 130 449 3.63 4

Price of Ticket 18 25 63 91 252 449 4.19 2

Staff/ Service 20 47 136 146 100 449 3.58 5

Timing of Flights 18 19 66 136 210 449 4.12 3

Punctuality of flights 13 24 49 119 244 449 4.24 1

Ground staff and 41 45 116 133 114 449 3.52 7

services
On flight food 41 64 120 116 108 449 3.41 9

In- flight 82 76 128 104 59 449 2.96 10

entertainment

Airline image 39 48 122 133 107 449 3.49 8

In the life of the modern urban indian, time is of prime importance and hence it can be
seen that with an average rating of 4.24 out of 5, people place the maximum importance
on punctuality of flights and prefer airlines with higher on time performance records. This is
followed by price of ticket with 4.19 and timing of flights with 4.12, respectively.

The next in order of amenities by importance is baggage allowance with an average rating
of 3.63. Most domestic airlines provide a standardised baggage allowance of 15 Kgs
checked in baggage and 7 Kgs hand baggage, on their flights. However, many a times, as
a part of promotional strategies, airlines offer extra baggage allowance to their flyers.
Airline reward programmes also give frequent flyers privileges like this.

Following this staff and service on board with an average rating of 3.58, in- flight leg room
with 3.55 and ground staff and services with 3.52. The next in importance is airline image
and reputation which is at an average rating of 3.49.

Flying High- A study on the Airline Preferences of Individuals in Urban India

 26
The least in importance are in- flight food and in- flight entertainment with average ratings
of 3.41 and 2.96 respectively. In- flight catering is of moderately high importance however,
in- flight entertainment of relatively low importance as most domestic flights are of short
durations and travellers do not seek in- flight entertainment in such short flights.

The respondents were also asked to rank their most preferred airline in the domestic
sector. They were given a pool of 6 major airlines to rank among.

1 2 3 4 5 6 Average
Indigo 122 114 103 50 48 12 2.6
Jet Airways 123 146 85 43 37 15 2.49

Vistara 68 58 97 73 65 88 3.62
Go Air 24 40 88 125 112 60 3.98
Air India 94 52 56 46 62 139 3.77
Spice Jet 18 57 91 88 104 91 4
Note-
Rank 1 is the highest, rank 6 being lowest.
As some of the respondents stated that they had not travelled by a particular airline, their ranking was assumed to be
equal to an average of 3.
Respondents were allowed to give the same ranking to more than one airline.

The above table summarises the responses received for the ranking of airlines. When
averaged out, the lower the average, the higher ranking the airline is.

As per this, the order of most preferred airlines can be given as follows-

1. Jet Airways
2. IndiGo
3. Vistara
4. Air India
5. GoAir
6. Spice Jet.

Flying High- A study on the Airline Preferences of Individuals in Urban India

 27
The following table shows the average rating for each of the 10 amenities as rated by
those who ranked the 6 airlines as number 1.

Indigo Jet Vistara GoAir Air India Spice Jet

Airways
Number of 122 123 68 24 94 18
rank 1s
Leg room 3.35 3.42 3.57 3.67 3.85 3.89
baggage 3.53 3.63 3.75 3.71 3.82 3.67
allowance
price of 4.22 4.23 4.25 4.13 3.96 4.39
ticket
staff/ 3.56 3.41 3.60 3.17 3.83 3.83
service
timing of 4.16 4.14 4.06 3.96 4.12 4.06
flights
punctuality 4.31 4.20 4.12 4.17 4.20 4.39
ground 3.39 3.28 3.44 3.42 3.89 3.56
staff/
services
on flight 3.19 3.14 3.60 3.25 3.79 3.28
food
in flight 2.73 2.83 3.03 2.79 3.33 2.83
entertainm
ent
airline 3.41 3.63 3.16 3.29 3.68 3.39
image

It can be seen that for those who ranked Indigo and GoAir as number 1, the most
important amenities in order are punctuality and pricing of ticket, while the least important
is in- flight entertainment.

For travellers of Jet airways and Vistara, the most important amenities in order are price of
ticket, followed by punctuality, while the least important is in- flight entertainment.

For Air India travellers, punctuality is rated the highest and followed by timing of flights
whereas in-flight entertainment continues to be of the least importance.

Lastly, for those who ranked Spice Jet as 1, punctuality and price are of prime importance
at the same level and in- flight entertainment is of least concern.

Flying High- A study on the Airline Preferences of Individuals in Urban India

 28

Analysis of Variance
H0= There is no difference or variation in the way males and females, rate amenities when
travelling by air.

HA= There is a variation in the way males and females rate amenities relating to air travel.

Level of significance= 0.05

Degrees of freedom between group= 1
Degrees of freedom within group= (20-2) = 18

Criteria rated Average rating for Males Average rating for Females
Leg room 3.74 3.37
baggage allowance 3.52 3.74
price of ticket 4.13 4.25
staff/service 3.63 3.53
timing of flights 4.08 4.15
punctuality of flights 4.24 4.24
ground staff/services 3.55 3.50
on flight food 3.49 3.35
in-flight entertainment 2.94 2.97
airline image 3.58 3.41
Average of means 3.69 3.65
Grand Average of means= 3.67
Between column mean square= 0.008
Within column mean square= 0.1672
F value= BMS/WMS= 0.0478

Conclusion:
Since calculated value of ANOVA (0.0478) lies within the acceptance region (-4.4139 to
+4.4139), therefore, our null hypothesis is satisfied and we accept it.

Hence, we conclude that there is no variation in the way males and females, rate
amenities when travelling by air.

Flying High- A study on the Airline Preferences of Individuals in Urban India

 29

Spearman’s Rank Correlation

Average Average
rating for rating for
Amenities Males Rank (m) Females Rank (f) |D (m-f)| D square
price of ticket 4.13 2 4.25 1 1 1
punctuality of 4.24 1 4.24 2 1 1
flights
timing of flights 4.08 3 4.15 3 0 0

baggage allowance 3.52 8 3.74 4 4 16

staff/service 3.63 5 3.53 5 0 0
ground staff/ 3.55 7 3.50 6 1 1
services
airline image 3.58 6 3.41 7 1 1

Leg room 3.74 4 3.37 8 4 16

on flight food 3.49 9 3.35 9 0 0
in-flight 2.94 10 2.97 10 0 0
entertainment
Sum= 36

Spearman’s rank correlation =

1- [6 (36)] / [10 (100-1)]

= 1- 0.218

= 0.782

Flying High- A study on the Airline Preferences of Individuals in Urban India

 30
After applying spearman’s rank correlation we can conclude that there is a
moderately high correlation in the manner males and females rate the above listed
amenities.

Males Females

4.4

4.21

4.02

3.83
Average rating

3.64

3.45

3.26

3.07

2.88

2.69

2.5
price of ticket

punctuality of flights

timing of flights

baggage allowance

staff/service

ground staff/services

airline image

Leg room

on flight food

in-flight entertainment

Amenity

Flying High- A study on the Airline Preferences of Individuals in Urban India

 31
Frequency of Travel

Frequency of Travelling

Less than once a year 32 (7%)

More than twice a month 35 (8%)
Once a month 63 (14%)
Once in 2-4 months 142 (32%)
Once in 6 months 114 (25%)
Once in a year 63 (14%)
Total 449

Upon analysing the data collected in

More than twice a month Once a month
the above assumed sample, it can be Once in 2-4 months Once in 6 months
noted that most people travel at least Once in a year Less than once a year
once in 4 months i.e. 54%. About 25%
people travel once in 6 months. As
7% 8%
few as 21% people tend to travel
either annually or lesser. 14% 14%

25%
32%

Flying High- A study on the Airline Preferences of Individuals in Urban India

 32
Purpose of Travel and preferred Cabin Class

Most frequent Purpose of Travel

Leisure 228 (51%)

Business 101 (22%)
Between home and work/college 120 (27%)
Total 449

Preferred Cabin Class

Economy 389
Premium Economy 35
Business 25
Total 449

86% people choose to travel by economy class,

8% by premium economy while only 6% choose 240
business class. This further validates the fact as 216
to why the average rating for price of ticket on a
192
scale of one to five, stands at a level as high as
4.19. 168

144
51% people travel for the purpose of leisure 120
while 22% travel for business and 27% travel 96
between work/college and home.
72

48
Economy Premium Economy
Business 24

0
Leisure

Business

Between home and work/college

6%
8%

87%

Flying High- A study on the Airline Preferences of Individuals in Urban India

 33
Ticketing Mechanism and how much extra are respondents willing to spend for a
flight ticket as a replacement for a train ticket

Means of Booking Tickets Chart 1

Agent 85
Online Agent 112
Airline Website 230
Through the Airport 22
Total 449

How much respondents are willing to spend Chart 2

for a flight ticket as a replacement for a
train ticket

More than Rs. 1500 110 (24%)

Rs. 1000- Rs. 1500 163 (36%)
Rs. 500- Rs. 1000 128 (29%)
Upto Rs. 500 48 (11%)
Total 449

76% people choose to book their air tickets using the internet. This can be further divided
into 51% who choose to book directly using their preferred airline’s website, while 25%
choose to use third party online agents like MakeMyTrip.com, yatra.com etc. 19% choose
to book through agents and remaining 5% choose to book directly through the airport. This
reflects the extent of convenience the modern Indian individual seeks. Moreover, airline
websites and third party online agents more than often offer lucrative deals and discounts
on the price of tickets and other amenities.
Agent Online Agent
Airline Website Through the Airport

5%
19%

51% 25%

Flying High- A study on the Airline Preferences of Individuals in Urban India

 34
In the age of low cost carriers where flying from one destination to another has become
cheaper than ever, railways have started losing importance for the urban, metropolitan,
educated indians. People are more in favour of travelling by air and it was observed that
24% of the sample is willing to spend more than Rs. 1500 to replace a train ticket with a
flight ticket. 36% are willing to spend between Rs. 1000 and Rs. 1500, 29% are willing to
spend Rs. 500- Rs. 1000 and a meagre 11% are willing to spend Rs. 500 or lesser. This
can be attributed to the fact that people place more weight on saving travel time versus
money.

180 An example of this can be that, a ticket in 3

tier air conditioned Rajdhani between Delhi
160
and Mumbai costs around Rs. 2200
140 (source IRCTC) and takes upto 17 hours
120 through the course of the journey. Train
tickets are also highly subject to availability
100
and with the newly introduced dynamic
80 pricing by IRCTC, prices rise as the
demand rises. However, a flight ticket if
60
booked a month in advance on a low cost
40 carrier on the same route is usually
20 available at prices as low as Rs. 3000 and
takes only 2 hours to cover the same
0 distance. Moreover, convenient and wide
0

00

00

00
50

variety of timing options are further better

10

15

15
s.

s.

s.

s.
R

for travellers. This further validates the

R

-R

R
o
pt

0-

n
00

a
U

50

th

importance placed on timing of flights as

10

e
s.

or
s.
R

placed by respondents at an average of

M

extra amount willing to pay 4.12.

Additionally, trains often tend to be delayed due to rail traffic, unavoidable weather
conditions etc. which reflects poorly upon the punctuality and as observed, the
respondents rated punctuality of flights at an average of 4.24. The average on time
performance for the 6 major airlines as chosen in our study (for the months of December
2016, covering 4 major airports of Mumbai, Delhi, Hyderabad and Bangalore) is 63.78%
and the highest cancellation rate was approximately 2.8%. Contrastingly, more than 2500
trains were cancelled alone in the month of December 2016 (source IRCTC).

Flying High- A study on the Airline Preferences of Individuals in Urban India

 35
Likert’s Scale rating

The respondents were given the following two statements to rate using the bipolar Likert’s
scale.

Options I pack lesser than required to I would be willing to spend

avoid excess baggage fees, marginally extra (upto 20%) for
when travelling by air. an airline where the flight is more
(chart 1) comfortable and provides better
services like food, leg room,
baggage allowance etc.
(chart 2)

Strongly Agree 134 86

Agree 194 197
Neither agree nor 83 86
disagree
Disagree 33 67
Strongly Disagree 5 13
Total 449 449

strongly agree agree neither agree nor disagree disagree

strongly disagree

7%1% 3%
15% 19%
30%
18%

19%

44%
43%

chart 1 chart 2

Flying High- A study on the Airline Preferences of Individuals in Urban India

 36
On this bipolar scale, 30% people strongly agreed while 43% agreed that they pack lesser
than required when travelling by air, in order to avoid excess baggage fees. Baggage
allowance is a matter of important consideration for air travellers as airlines usually levy
high charges when the same is exceeded. It is of moderately high relevance with an
average rating of 3.63. A mere 1% strongly disagreed with this statement.

Air India typically used this tactic to capitalise on the need for extra baggage allowance by
letting passengers carry upto 25kgs of checked-in baggage (source: airindia.in) as against
the usual 15kg as offered by other airlines, on domestic circuit. It can be seen that the
respondents who ranked Air India as their most preferred airline (rank 1), rated baggage
allowance at an average of 3.83 which is highest amongst all other airlines.

Furthermore, 19% strongly agreed and 44% agreed with the statement that they will be
willing to spend marginally extra (20%) for an airline which offers them a more comfortable
flight with extra amenities like more leg room, better on flight catering, extra baggage
allowance etc. While 15% disagreed and 3% strongly disagreed with the above statement.
19% gave a neutral response to this question. Such dynamic explains as to why amenities
like in-flight food and entertainment are of lesser importance to people on domestic flights
which are usually of shorter durations.


Flying High- A study on the Airline Preferences of Individuals in Urban India

 37
Airline Reward Programmes

The respondents were asked if they take part in airline reward programmes and if they do,
then how many.
participation in airline reward programmes
Yes 116
No 333
Total 449

Number of airline reward programmes

people are enrolled in
1 48
2 35
3 16
4 5
5 4
Unspecified ~ 8
Total 116

Yes No
Flight reward programmes are loyalty programmes used by
many airlines to reward frequent fliers. Most such
programmes calculate points on the basis of how often and
what distance a traveller travels with the airline in concern.
26%
T h e s e
programmes are 50
initiated by airlines 45
Number of respondents

74% in order to facilitate 40

repeat travel. 35
30
In the assumed 25
sample, a little over a quarter (26%) of the 20

respondents agreed to be enrolled in such 15

10
programmes. 41% of these respondents were
5
only enrolled in one such programme where as
0
30% were enrolled in two.
 1 2 3 4 5 ~
Number of airline reward
programmes

Flying High- A study on the Airline Preferences of Individuals in Urban India

 38
Frequency of Travelling with respect to Enrolment in airline reward programmes.

Frequency of travel No Yes

More than twice a
month 22 13 35
once a month 38 25 63
Once in 2-4 months 102 40 142
once in 6 months 85 29 114
once in a year 54 9 63
less than once a
year 32 0 32
333 116 449

Flying High- A study on the Airline Preferences of Individuals in Urban India

 39
Purpose of Travel and Frequency of Travel

• The bivariate chart above shows the purpose of travel of the respondents with respect to
the frequency of their travel.
• People who travel once in a year travel mostly for leisure.
• In the 2-4 months category, an equal percentage travel between home and work/college
and for leisure.
• In the once in 6 months category, people mostly travel for leisure.
• Those travelling less than once a year mostly do so for leisure, and people hardly travel
for business in this time frame.
• When it comes to monthly travelling, people travel mostly for business followed by
travelling between home and work/college.
• In the more than twice a month category, mostly people travel for business and hardly
people travel for leisure.


Flying High- A study on the Airline Preferences of Individuals in Urban India

 40
Preferred Cabin Class and Income Levels

• The above chart shows the relationship between the different cabin class preferred by
the respondents with respect to their income levels.
• It can be clearly seen that people with income level of upto 2-5 lakh prefer economy with
very few people preferring premium economy.
• People falling in the income bracket of 5-10 lakh usually prefer economy, followed by
premium economy.
• People with more than 25 lakh prefer economy the most and business class and
premium economy equally.
• Hence we can conclude that there is hardly any relationship between the income levels
and preferred cabin classes as most people for domestic travel prefer economy
irrespective of income levels. This could be due to the shorter duration of the flights.


Flying High- A study on the Airline Preferences of Individuals in Urban India

 41
Preferred Ticketing method and Frequency of Travel

• From the above bivariate chart it can be observed that most of the people book their
tickets online irrespective of the frequency of their travelling. A reason for this could be
the relative ease of booking tickets online than approaching an agent or booking it at the
airport.
• Though booking through travel agents is still prevalent and accounts for about 20% (on
an average) very few book directly through the airport.
• Hence it can be concluded that there is very little relationship between preferred ticketing
method and frequency of travel.

Flying High- A study on the Airline Preferences of Individuals in Urban India

 42

CHI Square Analysis

Relationship between income and the extra amount that a person is willing to pay for a
flight ticket vis-à-vis a train ticket

H0= There is no relationship between income and the extra amount that a person is willing
to pay for a flight ticket vis-à-vis a train ticket
HA= There is a relationship between income and the extra amount that a person is willing
to pay for a flight ticket vis-à-vis a train ticket

Level of significance: 0.05

Degrees of freedom: (4-1)(5-1)=3*4=12

Critical value of chi-square=21.026

Observed values:
Income/ extra amount Rs. Rs. 500- Rs. More than Rs. Tota
willing to pay 0-500 1000 1000-1500 1500 l
Upto Rs. 2.5 Lakh 7 9 9 5 30
Rs. 2.5 Lakh to 5 Lakh 8 20 11 4 43
Rs. 5 Lakh- 10 Lakh 10 36 35 17 98
Rs. 10 Lakh- 25 Lakh 13 40 57 37 147
More than Rs. 25 Lakh 10 23 51 47 131
Total 48 128 163 110 449

Flying High- A study on the Airline Preferences of Individuals in Urban India

 43
Expected values:

Income/ extra
amount willing to Rs. 500- Rs. More than Rs. Tota
pay Rs. 0-500 1000 1000-1500 1500 l
Upto Rs. 2.5 Lakh 3.207126949 8.55233853 3.177514 7.349665924 30
Rs. 2.5 Lakh to 5
Lakh 4.59688196 12.25835189 15.61024499 10.53452116 43
Rs. 5 Lakh- 10
Lakh 10.4766147 27.9376392 35.57683742 7.004826365 98
Rs. 10 Lakh- 25
Lakh 15.71492205 41.9064588 53.36525612 36.01336303 147
More than Rs. 25
Lakh 14.00445434 37.34521158 47.55679287 32.0935412 131
Total 48 128 163 110 449

Flying High- A study on the Airline Preferences of Individuals in Urban India

 44
Chi-Square test value= 37.47437744

Conclusion:

Since calculated value of chi- square (37.47437744) does not lie within the acceptance
region (-21.026 to +21.026) i.e. it lies within the rejection region, therefore, we reject our
null hypothesis that there is no relationship between income and extra amount that a
person is willing to pay for a flight ticket vis-à-vis a train ticket.

Hence, we conclude by accepting the alternate hypothesis that there is a

relationship between income and extra amount that a person is willing to pay for a
flight ticket vis-à-vis a train ticket.

Flying High- A study on the Airline Preferences of Individuals in Urban India

 45
Relationship between income and frequency of travel

H0= There is no relationship between income and frequency of travel

HA= There is a relationship between income and frequency of travel

Level of significance: 0.05

Degrees of freedom: (5-1)(6-1)=4*5=20

Critical value of chi-square=31.410

Observed values:

Income/ Rs. 2.5 Rs. 5 Rs. 10 More than

Frequency of Upto Rs. Lakh to 5 Lakh to Lakh to 25 Rs. 25 Tota
Travel 2.5 Lakh Lakh 10 Lakh Lakh Lakh l
More than twice
a month 0 1 6 7 21 35
Once a month 3 2 12 24 22 63
Once in 2-4
months 6 16 17 57 46 142
Once in 6
months 7 14 29 37 27 114
Once in a year 9 8 22 14 10 63
Less than once
a year 5 2 12 8 5 32
Total 30 43 98 147 131 449

Flying High- A study on the Airline Preferences of Individuals in Urban India

 46
Expected values:

Income/
Frequenc Rs. 2.5 Rs. 10 More than
y of Upto Rs. Lakh to 5 Rs. 5 Lakh Lakh to 25 Rs. 25 Tota
Travel 2.5 Lakh Lakh to 10 Lakh Lakh Lakh l
More
than
twice a
month 2.338530067 3.351893096 7.639198218 11.45879733 10.21158129 35
Once a
month 4.20935412 6.033407572 13.75055679 20.62583519 18.38084633 63
Once in
2-4
months 9.487750557 13.59910913 30.99331849 46.48997773 41.4298441 142
Once in 6
months 7.616926503 10.91759465 24.88195991 37.32293987 33.26057906 114
Once in a
year 4.20935412 6.033407572 13.75055679 20.62583519 18.38084633 63
Less than
once a
year 2.138084633 3.064587973 6.9844098 10.4766147 9.336302895 32
Total 30 43 98 147 131 449

Frequency of Travel w.r.t. Income

40%

30%

20%

10%

0%
Rs. 2.5 Lakh to 5 Lakh Rs. 5 Lakh- 10 Lakh Rs. 10 Lakh- 25 Lakh More than Rs. 25 Lakh

once in a year Once in 2-4 months once in 6 months less than once a year
once a month More than twice a month

Flying High- A study on the Airline Preferences of Individuals in Urban India

 47
Chi-square test value = 63.08561454

Conclusion:

Since calculated value of chi- square (63.08561454) does not lie within the acceptance
region (-31.410 to +31.410) i.e. it lies in the rejection region, therefore, we reject our null
hypothesis that there is no relationship between income and frequency of travel.

Hence, we conclude by accepting our alternate hypothesis that there is a

relationship between income and frequency of travel.

Flying High- A study on the Airline Preferences of Individuals in Urban India

 48
Relationship between frequency of travel and the extra amount that a person is willing to
pay for a flight ticket vis-à-vis a train ticket

H0= There is no relationship between frequency of travel and extra amount that a person is
willing to pay for a flight ticket vis-à-vis a train ticket
HA= There is a relationship between frequency of travel and extra amount that a person is
willing to pay for a flight ticket vis-à-vis a train ticket

Level of significance: 0.05

Degrees of freedom: (4-1)(6-1)=3*5=15

Critical value of chi-square=24.996

Observed values:

Frequency/ amount willing to Rs. Rs. 500- Rs. More than Rs. Tot
pay extra 0-500 1000 1000-1500 1500 al
More than twice a month 4 7 9 15 35
once a month 7 16 21 19 63
14
Once in 2-4 months 11 43 61 27 2
11
once in 6 months 12 29 40 33 4
once in a year 8 25 20 10 63
less than once a year 6 8 12 6 32
44
Total 48 128 163 110 9

Flying High- A study on the Airline Preferences of Individuals in Urban India

 49
Expected values:

Frequency/
amount
willing to Rs. More than
pay extra Rs. 0-500 Rs. 500- 1000 1000-1500 Rs. 1500 Total
More than
twice a
month 3.741648107 9.977728285 12.70601336 8.574610245 35
once a
month 6.734966592 17.95991091 22.87082405 15.43429844 63
Once in 2-4
months 15.18040089 40.48106904 51.55011136 34.78841871 142
once in 6
months 12.18708241 32.49888641 41.38530067 27.92873051 114
once in a
year 6.734966592 17.95991091 22.87082405 15.43429844 63
less than
once a year 3.420935412 9.122494432 11.6169265 7.839643653 32
Total 48 128 163 110 449

Flying High- A study on the Airline Preferences of Individuals in Urban India

 50
Chi Test value = 65.47051175

Conclusion:

Since calculated value of chi- square (65.47051175) does not lie within the acceptance
region (-24.996 to +24.996) i.e. it lies in the rejection region, therefore, we reject our null
hypothesis that there is no relationship between frequency of travel and extra amount that
a person is willing to pay for a flight ticket vis-à-vis a train ticket.

Hence, we conclude by accepting the alternate hypothesis that there is a

relationship between frequency of travel and extra amount that a person is willing
to pay for a flight ticket vis-à-vis a train ticket.

Flying High- A study on the Airline Preferences of Individuals in Urban India

 51
Relationship between income and packing lesser to avoid excess baggage fees

H0= There is no relationship between income and packing lesser to avoid excess baggage
fees
HA= There is a relationship between income and packing lesser to avoid excess baggage
fees

Level of significance: 0.05

Degrees of freedom: (5-1)(5-1)=4*4=16

Critical value of chi-square=26.296

Observed values:

Income/ packing
lesser than strongly agre neither agree disagre strongly Tota
required agree e nor disagree e disagree l
Upto Rs. 2.5 Lakh 11 11 8 0 0 30
Rs. 2.5 Lakh to 5
Lakh 17 18 5 3 0 43
Rs. 5 Lakh- 10
Lakh 34 44 15 5 0 98
Rs. 10 Lakh- 25
Lakh 36 70 28 12 1 147
More than Rs. 25
Lakh 36 51 27 13 4 131
Total 134 194 83 33 5 449

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Expected values:

Income/
packing
lesser neither
than strongly agree nor strongly
required agree agree disagree disagree disagree Total
Upto
Rs. 2.5
Lakh 8.953229399 12.96213808 5.545657016 2.204899777 0.334075723 30
Rs. 2.5
Lakh to
5 Lakh 12.83296214 18.57906459 7.948775056 3.160356347 0.478841870 43
Rs. 5
Lakh-
10 Lakh 29.24721604 42.34298441 18.11581292 7.202672606 1.091314031 98
Rs. 10
Lakh-
25 Lakh 43.87082405 63.51447661 27.17371938 10.80400891 1.636971047 147
More
than Rs.
25 Lakh 39.09576837 56.6013363 24.21603563 9.628062361 1.458797327 131
Total 134 194 83 33 5 449

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Chi-Square test value= 19.68704108

Conclusion:

Since calculated value of chi- square (19.68704108) lies within the acceptance region
(-26.296 to +26.296), therefore, our null hypothesis is satisfied and we accept it.

Hence, we conclude that there is no relationship between income and packing

lesser to avoid excess baggage fees.


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Closing Remarks
The Indian Aviation Industry is among the world’s fastest growing industries. It has
undergone huge transformation following the liberalization of the aviation industry in India.
Once owned by the Government, the aviation sector of India is now privately owned with
full service airways and affordable carriers. Most of the domestic aviation sector consists
of the private airlines as well as joint ventures between Indian and International players.
Earlier viewed as a costly means of transportation, afforded by few, air travel is now cheap
and can be availed by many.

By itself, the Civil Aviation Sector contributes significantly to the process of development
by generating employment opportunities directly and indirectly besides facilitating
enhancement of productivity and efficiency in the movement of goods and services. Civil
Aviation is a key infrastructure sector that facilitates the growth of business, trade and
tourism, with significant multiplier effects across the economy.

The modern urban consumers are loyalists and this is exploited by airlines by offering
lucrative offers and deals to their regular customers and in the form of airline reward
programmes. They also partner with third party booking agents to attract and retain a
larger customer base. This has allowed a whole new generation of travel related start-ups
to grow and create an impression. Example of these start-ups includes MakeMyTrip, Yatra,
ClearTrip etc.

On the basis of popular opinion the most preferred airlines in an order are as following-

1. Jet Airways
2. IndiGo
3. Vistara
4. Air India
5. GoAir
6. Spice Jet.

Gurgaon- based domestic low-cost airline IndiGo Airlines maintained its leadership
position in the domestic aviation sector by carrying 85.03 lakh passengers in the January-
March period for the calendar year 2016. As a consequence the market share of the
company during the period stood at 37%.

Mumbai based Jet airways and country’s national air carrier Air India came distant second
and third respectively by flying 41.94 lakh and 35.38 lakh passengers within the country.
The market share of the two carriers in the January-March period stood at 18.2% and
15.4% respectively.

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The market share of another low cost carrier SpiceJet stood at 13% while the same for
Mumbai-based Go Air stood at 8.1% up to March.

On the basis of our research, it can be seen that men and women do not particularly
differentiate in the way they look at various amenities when choosing between airlines as
there is a moderately high correlation between the way they rate 10 basic amenities
mentioned below-

Leg room
Baggage Allowance
Price of Ticket
Staff/Service
Timing of flights
Punctuality of Flights
Ground staff and services
On- flight food
In- flight Entertainment
and Airline image.

In the age of Low Cost Carriers, ordinary citizens are able to easily access the aviation
service from their respective air terminals. In a highly competitive environment the
provision of high quality services to passengers is the core competitive advantage for an
airline's profitability and sustained growth. These competitive advantages are capitalised
on by airlines in the form various amenities. As per our survey, the most important ones
being punctuality of flights, pricing of tickets, timing of flights and other amenities like
baggage allowance, leg room etc.

Most people tend to travel at least once in 6 months, about 62 per cent of the population is
in the working age group of 15-60 years and this proportion is set to increase in future
indicating a larger employee base, greater business travel and greater economic activity.
People with higher incomes tend to travel more often. Income also affects the amount
people are willing to spend to replace a train ticket with a flight ticket.

The aviation sector has become one of the most important segment in the economic
development of a nation. It plays a vital role in moving people or products from one place
to another, be it domestic or international, especially when the distances involved are far.
Stiff competition and favourable initiatives of the Government of India added fuel to
enlarge both flights and fleets.

In the past decade, as the air transportation market has become even more challenging,
many airlines have started to focus on airline service quality to increase service

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satisfaction. Service quality conditions influences a firm’s competitive advantage by
retaining customer patronage, which in turn results in an increase in market share.
Delivering high-quality services to passengers is essential for airline survival, so airlines
need to understand what passengers expect from them.

The researchers plan to continue researching and gaining better insight into the study in
concern.

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Limitations of Study
• The study is restricted to domestic air travel within India only.
• Respondents were allowed to give the same ranking to more than one airline in question
number 18 of the questionnaire.
• As the pool of respondents considers a wide variety of individuals from different socio-
economic backgrounds, certain applicants claimed to having not traveled by a particular
airline, which was then assigned an average rank of 3, in question 18.
• The study only takes into account airline carriers which operate in most major cities or
travel between at least twenty destinations, and does not consider regional and charter
airlines.


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References
Media Reports, Press Releases, Press Information Bureau, Directorate General of Civil
Aviation (DGCA), Airports Authority of India (AAI), Union Budget 2016-17

FICCI-KPMG ‘India Aviation Report 2016’

http://www.financialexpress.com/budget/union-budget-2017-civil-aviation-ministry-gets-22-
more-budgetary-funds-for/533669/

http://www.icra.in/Files/ticker/SH-2016-H1-1-ICRA-Airlines.pdf

www.airindia.in

www.goindigo.in

www.airvistara.com

www.spicejet.com

www.goair.in

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Annexure
Questionnaire on Airline preferences in the domestic circuit.

Instructions-
Please answer all questions with reference to domestic (within India) air travel only.
You may write only your initials if you are uncomfortable using your full name.
All information will be kept strictly confidential.

1. Name: ___________________________ 2. Age: ________ 3. Gender: ______

4. City of residence: ____________
5. Phone Number: ______________

6. Profession-

A. Student
B. Service
C. Self Employed
D. Teacher/Professor
E. Professional (lawyer, doctor, engineer etc.)
F. Unemployed
G. Retired

7. What is your family income per annum?

A. Upto Rs. 250,000

B. Rs. 2.5 Lakh- 5 Lakh
C. Rs. 5 Lakh- 10 Lakh
D. Rs. 10 Lakh- 25 Lakh
E. More than Rs. 25 Lakh

8. How often do you travel by air in the domestic circuit?

A. More than twice a month

B. Once a month
C. Once in two- four months
D. Once in six months
E. Once a year
F. Less than once a year

9. What is the most frequent purpose for your air travel?

A. Business
B. Liesure
C. Between Home and Work/College

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10. Which cabin class do you usually take?

A. Economy
B. Premium Economy
C. Business

11. How do you usually book your air tickets?

A. Through the airline website

B. Through an agent
C. Through online agents
D. From airport counter
E. Others: ________

12. I pack lesser than required to avoid excess baggage fees when travelling by air.

A. Strongly Agree
B. Agree
C. Neither agree not disagree
D. Disagree
E. Strongly Disagree

13. I would be willing to spend marginally extra (upto 20%) for an airline where the flight is more comfortable
and provides better services like food, leg room, baggage allowance etc.

A. Strongly Agree
B. Agree
C. Neither agree not disagree
D. Disagree
E. Strongly Disagree

14. Upto how much extra amount would you be willing to pay for a flight as a replacement for a train ticket?

A. Rs. 0-500
B. Rs. 500- 1000
C. Rs. 1000-1500
D. More than Rs. 1500

15. Do you participate in airline reward programmes?

A. Yes B. No

16. If Yes, how many airline reward programmes are you enrolled in?
_____

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17. On a scale of 1-5 (1 being lowest, 5 being highest), rate the amenities you look for when booking an air
ticket (domestic only).

A. Leg room: ______

B. Baggage allowance: ______
C. Price of ticket: ______
D. Staff and services: ______
E. Timing of flights: ______
F. Punctuality of flights : ______
G. Ground staff and services (during check in procedure etc.): ______
H. On flight food: ______
I. In- Flight entertainment: ______
J. Air line image: ______

18. Rank in order of preference (1 being most preferred) the following airlines in the domestic circuit-

A. IndiGo: ______ B. Jet Airways: ______ C. Vistara: ______

D. GoAir: ______ E. Air India: ______ F. Spice Jet: ______
Others (if any): ______

Flying High- A study on the Airline Preferences of Individuals in Urban India