محرک های بهره وری عملیاتی و تاثیر آن بر عملکرد بازار در صنعت هواپیمایی هند Drivers of operational efficiency and its impact on market performance in the Indian Airline industry

1. Introduction India is touted as one of the toughest aviation markets (Bloomberg Business, 2015), due to expensive taxation (Economic Times, 2012) and highly price-sensitive customers. High fuel prices (50% more than the price in West Asian and European countries (BS reporter, 2011)), overcapacity and intensive price competition, exacerbated by the recent global recession have resulted in continued losses for majority of airline operators, with one of them, the Kingfisher airlines1 , shutting down operations in 2012 and the state owned carrier Air India being bailed out (India Today, 2012) by the Indian government with infusion of huge cash flows ($263.3 million in 2010e11)2 . The total debt of major airlines in India is currently estimated to be $13 billion3 . This scenario in India is more or less similar to other countries, wherein airlines have suffered from high levels of competition and economic pressure, with high volatility in fuel and foreign exchange rates adding to their financial woes (Merkert and Hensher, 2011). Despite these setbacks however, one or two successful airlines have emerged in the recent past with consistently good performances and have demonstrated the potential for profitability in the Indian airline sector. Indigo airlines, the most profitable airline in India, is well known for its sharp focus on key deliverables (Business Standard, 2012) like on-time performance, low fares, and consistent on-board and ground service4 , despite being a low cost carrier (LCC) that made its entry into the airline industry a mere 8 years ago. While the case of Indigo substantiates the desirability of LCC strategy from the cost efficiency perspective as already documented by other studies in the literature (Barros and Peypoch, 2009; Merkert and Hensher, 2011), it also raises questions about there being more to the LCC strategy than just low cost benefits.