Consumer Segmentation within Indian Airline Industry

The major segments in the aviation market are –

1) Passenger

The Passenger segment is segmented further on the following basis

Travel Purpose – This has always been the basic segmentation variable, with the important divisions being business and leisure travel. Most of the trips are placed in either of the divisions but there are some exceptions. For example – Catholics travelling to Vatican City for pilgrimage, medical tourism, etc. Business travelers can be subdivided into

(A) Corporate Travelers – These are the people who travel for the corporation and are able to charge their ticket price and other business travel costs on an expense account.

(B) Independent Business Travelers – These people are either self-employed or work for small companies.

Similarly Leisure travelers can be subdivided into

(A) Holiday Travelers

(B) Visiting-Relatives-and-Friends

Time-span of Journey – The duration of the journey can be either short-haul or long-haul. A short-haul flight is defined as a flight under 3 hours in length. While a long-haul journey involves long distances and generally beyond six hours in length.

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Culture – Aviation is a global industry that often involves operations across borders. With rise in the movement of people around the world, there are many occasions when the flight crew comprises of individuals from various cultural backgrounds. The most common cultural issues within an international airline are national, professional/ occupational and organizational in nature.

2) Freight

Freight can be sub-divided on the following basis

Frequency – The most commonly identified air freight segments are Emergency and Routine. The ’emergency’ market is small but in-elastic in nature. ‘Routine’ can be further sub-segmented into

(A) Perishable goods – These are the goods which remain saleable only for a limited period of time. For example – Flowers, fruits (Physically Perishable) and fashionable clothes, newspapers (Economically Perishable).

(B) Non-Perishable – These goods are not subject to rapid spoilage and hence, can be stored for a long period of time.

Airlines need to offer a range of products such that they are better placed

due to the probability of a downturn in some markets being counter-balanced by

upswings in other markets. An important reason for product and market diversification is

due to .synergy.. .It is the term used to describe a situation where a firm producing

several products is able to do so more effectively than a set of firms with each firm

concentrating on a single item.. pg 7

http://courses.nus.edu.sg/course/hisilg/YEO.pdf

http://www.fin.gc.ca/consultresp/airtravel/airtravstdy_1-eng.asp – consumer characteristics

9327993190

Substantial

http://www2.mercermc.com/Perspectives/Specialty/MOT_pdfs/4-Is%20Airline%20Industry%20Risk.pdf – risks

http://www3.ambest.com/ratings/cr/reports/UnitedArabEmirates.pdf – uae risk

The aviation industry in the United Arab Emirates plays an essential part in its economy. It is one of the fastest growing aviation industries in the world. The General Civil Aviation Authority (GCAA), headquartered in Abu Dhabi, regulates civil aviation in the UAE. Foreign ownership and control of airlines in the UAE is restricted to a 49% equity stake. But in 2009, UAE signed an air liberalization policy statement with six other countries and the European Commission. The policy principles focuses on three main issues : freedom to access capital markets, freedom to do business, and freedom to price services. The aviation industry makes up 15-20% to the GDP . It earned a profit of $15 billion profit in 2010. The UAE aviation industry is expected to be the 2nd largest aviation market with the growth rate of 10.2% in 2013. According to the forecasts, the UAE will have 82.3 million air travelers and will be handling 2.7 million tons by 2014. Dubai has become a major hub of aerospace both in the middle east as well as on a global level as traditional players like The USA and Europe continue to slump.

http://www.arabianbusiness.com/uae-passenger-traffic-hit-82-3m-by-2014-says-iata-380800.html

http://www.uaeinteract.com/docs/UAE_aviation_market_will_be_second-fastest_growing_by_2013/44449.htm

http://www.dancewithshadows.com/flights/dubai-aviation.asp

http://www.scoop.co.nz/stories/BU1012/S00286/10-more-liberalised-aviation-agreements-for-emirates-in-2010.htm

http://www.emirates.com/mv/English/about/public_affairs/liberalisation.aspx

http://www.gcaa.gov.ae/en/pages/welcomegcaa.aspx

http://english.alrroya.com/content/uae-signs-air-liberalisation-policy-statement-iata

The United Arab Emirates (UAE) is a rapidly diversifying and highly developed economy,