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Mergers, Acquisitions and Takeovers Case Study

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Case Title:

M&A's in Indian Aviation Industry- Strategies for Healthy Competition

Publication Year : 2008

Authors: Lekha .K.C.Ravi

Industry: Transportation

Region:India

Case Code: MAA0153C

Teaching Note: Available

Structured Assignment: Available

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Abstract:
Since 2000 Indian aviation industry has been recording steady growth. The role of the private airline sector has become very significant with the increase in domestic air traffic and the increased purchasing power of the growing middle-class. The arrival of LCCs (Low Cost Carriers) revolutionised Indian aviation industry and air travel hit an all-time-high. As more and more players arrived at the aviation scene the competition grew. Heavy price-cuts and discount offers against a background of rising operational costs proved detrimental, with almost every airliner reporting huge losses. The industry, taking cue from the global developments, moved towards consolidation of stakes so as to scale down excess competition. Many mergers and acquisitions took place which may result in significant synergies in the industry. This strategy to tie-up with the competitor rather than bleed millions by way of losses is seen as an exemplary move towards healthy competition. The opportunities as well as the challenges these mergers bring to the aviation industry is to be seen. And the question that needs to be addressed is - Will the growth of the Indian Aviation Industry sustain?

Pedagogical Objectives:

  • To understand the dynamics of Indian aviation industry
  • To analyse the impact of rise of LCC's in aviation industry
  • To analyse the consolidation initiatives within the Indian aviation industry to combat unhealthy competition
  • To analyse the synergies that can be gained through consolidation
  • To analyse the challenges that the industry may face in the future.

Keywords : ndian Aviation; Consolidation; Mergers & Acquisitions; Competitive strategies; Low cost carriers; Civil Aviation; Airline companies; Indian airlines; Deregulation; Mergers,Acquisitions,Alliances Case Study; Jet Airways; AirDeccan; Kingfisher Airlines; Air Sahara

Contents : 
International Civil Aviation
Top Three International Alliances
General Features of LCC
Significant events affecting the Aviation Industry
Civil Aviation in India
India’s air traffic statistics
Airlines Operating In India as of 2005
Era of Consolidation
Air-India–Indian merger
Kingfisher–Air-Deccan deal

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