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Low Cost of Airlines Air India
CHAPTER I
INDUSTRY PROFILE
Aviation Industry in India is one of the fastest growing aviation industries in the world. With
the liberalization of the Indian aviation sector, aviation industry in India has undergone a
rapid transformation. From being primarily a government-owned industry, the Indian aviation
industry is now dominated by privately owned full service airlines and Low Cost Carriers
(LCC). Private airlines account for around 75% share of the domestic aviation market.
Earlier air travel was a privilege only a few could afford, but today air travel has become
much cheaper and can be afforded by a large number of people.

The origin of Indian civil aviation industry can be traced back to 1912, when the first air
flight between Karachi and Delhi was started by the Indian State Air Services in
collaboration with the UK based Imperial Airways. It was an extension of LondonKarachi flight of the Imperial Airways. In 1932, JRD Tata founded Tata Airline, the first
Indian airline. At the time of independence, nine air transport companies were carrying both
air cargo and passengers. These were Tata Airlines, Indian National Airways, Air service of
India, Deccan Airways, Ambica Airways, Bharat Airways, Orient Airways and Mistry
Airways. After partition Orient Airways shifted to Pakistan.

In early 1948, Government of India established a joint sector company, Air India
International Ltd in collaboration with Air India (earlier Tata Airline) with a capital of
Rs.2,00,00,000/- and a fleet of three Lockheed constellation aircraft. The inaugural flight of
Air India International Ltd took off on June 8, 1948 on the Mumbai-London air route. The
Government nationalized nine airline companies vide the Air Corporations Act, 1953.
Accordingly it established the Indian Airlines Corporation (IAC) to cater to domestic air
travel passengers and Air India International (AI) for international air travel passengers. The
assets of the existing airline companies were transferred to these two corporations. This Act
ensured that IAC and AI had a monopoly over the Indian skies. A third government-owned
airline, Vayudoot, which provided feeder services between smaller cities, was merged with
IAC in 1994. These government-owned airlines dominated Indian aviation industry till the
mid-1990s.
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Low Cost of Airlines Air India
In April 1990, the Government adopted open-sky policy,it means unrestricted access by any
carrier into the sovereign territory of a country without any written agreement specifying
capacity, ports of call or schedule of services. In other words an Open Skies policy would
allow the foreign airline of any country or ownership to land at any port on any number of
occasions and with unlimited seat capacity. There would be no restriction on the type of
aircraft used, no demand for certification, no regularity of service and no need to specify at
which airports they would land. Defined in this manner, it is not surprising that Open Skies
policies are adopted only by a handful of countries, most commonly those that have no
national carriers of their own and that have only one or two airports. No sovereign country of
any eminence practices Open Skies least of all the European Union, UK, USA, Japan,
Australia or countries in South East Asia.and allowed air taxi- operators to operate flights
from any airport, both on a charter and a non-charter basis and to decide their own flight
schedules, cargo and passenger fares. In 1994, the Indian Government, as part of its open sky
policy, ended the monopoly of IA and AI in the air transport services by repealing the Air
Corporations Act of 1953 and replacing it with the Air Corporations (Transfer of
Undertaking and Repeal) Act, 1994. Private operators were allowed to provide air transport
services. Foreign direct investment (FDI) of up to 49% equity stake and NRI (Non Resident
Indian) investment of up to 100% equity stake were permitted through the automatic FDI
route in the domestic air transport services sector. However, no foreign airline could directly
or indirectly hold equity in a domestic airline company.
By 1995, several private airlines had ventured into the aviation business and accounted for
more than 10% of the domestic air traffic. These included Jet Airways Sahara, NEPC
Airlines, East West Airlines, ModiLuft Airlines, Jagsons Airlines, Continental Aviation, and
Damania Airways. But only Jet Airways and Sahara managed to survive the competition.
Meanwhile, Indian Airlines, which had dominated the Indian air travel industry, began to lose
market share to Jet Airways and Sahara. Today, Indian aviation industry is dominated by
private airlines and these include low cost carriers such as Deccan Airlines, GoAir and
SpiceJetetc, who have made air travel affordable.

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Low Cost of Airlines Air India

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Low Cost of Airlines Air India
Airlines:
Size:-Of a total number of 454 airports and airstrips in India, 16 are designated as
international airports. The Airports Authority of India (AAI) owns and operates 97 airports. A
recent report by Centre for Asia Pacific Aviation (CAPA), Over the next 12 years, India's
Civil Aviation Ministry aims at 500 operational airports. The Government aims to attract
private investment in aviation infrastructure. India has been witnessing a very strong phase of
development in the past few months. Many domestic as well as international players are
showing interest in the growth and development of the aviation sector with immense focus on
the development of the airports. Indian private airlines Jet, Sahara, Kingfisher, Deccan,
Spicejet - account for around 60% of the domestic passenger traffic. Some have now started
international flights. For the next years to come India is poised with strong focus on the
development of its airport to meet the international standards. The government is planning
modernization of the airports to establish a standard. The newly developed airports will help
releasing pressure on the existing airport in the country
Plans:-A projected investment of USD 8.5 billion has been planned for the development of
Indian airports during the 11th plan. Mumbai and Delhi airports have already been privatized.
These two airport are being upgraded at an estimated investment of US$ 4 billion for the
period 2006-16. Development of airport infrastructure is a focus area for the Government.
There has been a significant uptrend in domestic and international air travel.
AAI has planned a heavy investment of USD 3.07 billion over the next five years. Out of it
43 per cent will be for the three metro airports in Kolkata, Chennai and Trivandrum. The rest
will be invested in upgrading other non-metro airports and in the modernization of the
existing aeronautical facilities.


Passenger traffic is projected to grow at a CAGR of over 15% in the next 5 years. It is



estimated that the data will cross 100 million passengers per annum by 2010
Cargo traffic to grow at over 20% per annum. over the next five years, crossing 3.3




million tonnes by 2010
Major investments planned in new airports and up gradation of existing airports
100% FDI is permissible for existing airports; FIPB approval required for FDI beyond



74%.
100% FDI under automatic route is permissible for greenfield airports.
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Low Cost of Airlines Air India


49% FDI is permissible in domestic airlines under the automatic route, but not by






foreign airline companies.
100% equity ownership by Non Resident Indians (NRIs) is permitted.
AAI Act amended to provide legal framework for airport privatization.
100% tax exemption for airport projects for a period of 10 years.
Open Sky Policy of the Government and rapid air traffic growth have resulted in the
entry of several new privately owned airlines and increased frequency/flights for
international airlines.

Initiatives:-The Committee on Infrastructure has initiated several policy measures that would
ensure time-bound creation of world-class airports in India. A comprehensive civil aviation
policy is on the anvil. An independent Airports Economic Regulatory Authority Bill for
economic regulation is also under consideration.


The policy of open skies introduced some time ago has already provided a powerful



spurt in traffic growth that has exceeded 20% per annum during the past two years.
Major airports such as Chennai and Kolkata are also proposed to be taken up for



modernization through the PPP route.
To ensure balanced airport development around the country, a comprehensive plan for
the development of other 35 non-metro airports is also under preparation. These
measures are expected to bring a total investment of Rs. 40,000 crore (USD 8.312



billion) for modernization of the airport infrastructure.
A Model Concession Agreement is also being developed for standardizing and



simplifying the PPP transactions for airports, on the analogy of the highways sector.
This would include upgrading of the ATC services at the airports. Issues relating to
customs, immigration and security are also being resolved in a manner that enhances



the efficiency of airport usage.
A greenfield airport is already operational at Bangalore and the one at Hyderabad,
built by private consortia at a total investment of over USD 800 million, will be



operational soon.
A second greenfield airport being planned at Navi Mumbai is planned to be developed



using public-private partnership (PPP) mode at an estimated cost of USD 2.5 billion.
35 other city airports are proposed to be upgraded through PPP mode where an
investment of USD 357 million is being considered over the next three years.

Potential:-

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Low Cost of Airlines Air India



High demand for investments in aviation infrastructure.
Favorable demographics and rapid economic growth point to a continued boom in



domestic passenger traffic and international outbound traffic.
Greenfield airport projects planned in resort destinations and emerging metros such as



Goa, Pune, Navi Mumbai, Greater Noida and Kannur.
International inbound traffic will also grow rapidly with increasing investment and
trade activity and as India’s rich heritage and natural beauty are marketed to



international leisure travelers.
Modernization / up-gradation of metro airports induction of partners for Chennai,



Kolkata expected subsequently
SME lending, a largely untapped market, presents a significant opportunity. This
accounts for 40% of the industrial output and 35% of direct exports.

Airlines Market Share:Airlines
Air India (Domestic)
Jet Airways
Jet Lite
Kingfisher
Spice Jet
Paramount
Go Air
IndiGo

Market Share
(in lakhs)
7.62
7.66
3.18
8.98
5.27
0.13
2.46
6.58

Percentage share
18.2
18.3
7.6
21.4
12.6
0.3
5.9
15.7

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Seat factor
(in %)
72.9
74.2
78.1
75.8
81.0
85.0
78.0
82.4

Low Cost of Airlines Air India
1. COMPANY PROFILE
2. Air India is the national flag carrier of India with a worldwide network of passenger
and cargo services and also having in-house maintenance, repair and overhaul
capabilities to support its present fleet of owned and leased aircrafts.
3. Air India’s Department of Engineering has obtained the coveted ISO-9002
Certification for its engineering facilities for maintenance of its fleet of Aircrafts and
family of Engines and APU’s - also included are such services provided at other
operators and customers
4. The crucial function of procurement of spares, components and related materials
required for the maintenance of Air India’s entire fleet of aircrafts and Customer
Engines is performed by the Aircraft Spares Procurement Group of Materials
Management Department in close coordination with Materials Planning Division of
Engineering Department, Regional Offices of MMD at New York and London, Cargo
Offices and Freight Forwarder’s at various On-line Stations, Finance Department and
large spectrum of Vendors from all over the world.
a. Background and inception of the company:
5. The national flag carrier of India with a worldwide network of passenger and cargo
services, Air India is the only government-owned airline in the country, having
recently merged with Indian Airlines. With its main base at ChhatrapatiShivaji
International Airport, Mumbai and Indira Gandhi International Airport, Delhi, Air
India connects 146 international and domestic destinations around the world,
including 12 gateways in India with Air India Express, a fully-owned subsidiary of
Air India. Air India plans to join Star Alliance and has ordered 27 Boeing 787 (+7
options),

to

be

delivered

after

2009.

In 1932, Air India began its journey under the aegis of Tata Airlines, a division of
Tata Sons Ltd. (now Tata Group). Following World War II in 1946, regular
commercial service was restored in India and Tata Airlines became a public limited
company under the name of Air India. Under the Air Corporations Act of 1953, the
Government nationalized the air transportation industry and Air India International
Limited was born. In 1960, Air India flew its first international flight to New York via
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Low Cost of Airlines Air India
London. In 1962, Air India became the world's first all-jet airline and its name was
officially

truncated

to

Air

India.

In 2007, the Government of India announced that Indian would be merged into Air
India. As part of the merger process, a new company called the National Aviation
Company of India Limited (now called Air India Limited) was established, into which
both Air India (along with Air India Express) and Indian (along with Alliance Air)
would be merged. Once the merger was completed, the airline - called Air India would continue to be headquartered in Mumbai and would have a fleet of over 130
aircraft.
b. Nature of Business Carried:6. Air India Limited mainly concentrated on aviation sector and few other services
which is separately maintained and managed by Air India Limited. It has its own
subsidiaries. They are as follows:
7.
 Air India Air Transport Services Limited (AIATSL)
8. Air India Air Transport Services Limited (AIATSL)

is

a Public

Sector

Undertaking (PSU) of the Government of India. AIATSL is a subsidiary of Air
India and is headquartered in Mumbai, India. The company provides ground handling
services (cargo, passenger, baggage) at various airports in India. The Company has
authorized Share Capital of Rs.500 crores divided into 42,56,36,820 Equity Shares of
Rs.10/- and 74,36,318 Redeemable Preference Shares of Rs.100/- each and present
paid-up capital comprises 15,38,36,427 fully paid equity shares of Rs.10/- each
amounting to Rs.153.84 Crores


Air India Charters Limited (AICL)

9. Air India Charters Limited (AICL) is a Public Sector Undertaking (PSU) of the
Government of India. Headquartered in Mumbai, India, this subsidiary of Air India
operates low cost carrier Air India Express from India to the Gulf and Southeast Asia.
AICL operates flights from airports in Kerala, Punjab and Mangalore to Dubai, Abu
Dhabi, Al Ain, Muscat and Salalah in the Middle East and Singapore in the east. Air
India Charters has charters flying throughout India. It works with other charter
companies including VibhaLifesavers for air ambulance and Hi Flying aviation for
its general charters in India.
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Low Cost of Airlines Air India
10.
11.
12.
c. VISION, MISSION and QUALITY POLICY
13. Company’s Mission:
 To be rated among the top five airlines in Asia Pacific by customers and distribution
partner
 Effective and efficient services to passengers.
14. Company’s Vision:
 To rationalize all business processes around passenger and departure control
applications using industry standards with a view to enhance revenues and reduce
cost.
 Upgrade participation levels with various Global Distribution System (GDS) to the
highest level.
 Provide for various modes of booking and check-in and thus extend the convenience
to the customers.
 Timely and accurate revenue determination per flight departure due to uplift of eticket coupons and speedier interline settlements.
 Ensure that NACIL hosted system has incorporated latest Industry Standards (IS)
changes relevant for all PSS applications as per requirements.
 Provide the customers using the airline IBE for passenger services an experience to
cherish.
 Provide a world class Frequent Flyer system with comprehensive interface with other
frequent flyer systems of Global Alliances partner airlines.
15. Quality Policy:









ISO-9002 Certification for its engineering facilities for maintenance of its fleet
Assist the Sectional heads in purchase of project related equipments,
preparation of management reports and budgetary controls.
Participation in review meetings and deliberations in appropriate
forums.
Interact with System Group in DIT regarding issues encountered in
System and their timely resolution.
Obtain price catalogues from various vendors and update the System.
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Low Cost of Airlines Air India
 Assist Sectional and Divisional heads in administration and job
 allocation to staff.
 Interact with clearing agencies for sea shipments and bulk supplies such
 as tires, lubricants, oils, chemicals, etc.
 Assist Sectional and Divisional heads in vendor development,
 performance review, etc.
 Any additional job allotted from time to time.
d. Product and Services Profile:
16. Product Profile:17. Air India mainly concentrated on these following products:





Airline
Ground Handling Services
Hotels
Services

18. Air India has had a number of aircraft in its fleet. Below is a list of current and
former Air India, Tata Sons Aviation Department and Tata Airlines aircraft (includes
leased-in aircraft):
19. Fleet:
20. Air India has had a number of aircraft in its fleet. Below is a list of current and
former Air India, Tata Sons Aviation Department and Tata Airlines aircraft (includes
leased-in aircraft):
21. Air India fleet (excl. subsidiaries) as of November 2011:
22. A

23. A

24. A

25. A

26. A

27. B

28. B

29. B

30. B

i

i

i

i

i

o

o

o

o

r

r

r

r

r

e

e

e

e

c

b

b

b

b

i

i

i

i

r

u

u

u

u

n

n

n

n

a

s

s

s

s

g

g

g

g

A

A

A

A

7

7

7

7

3

3

3

3

4

7

7

8

f
t

Page 10

31.
T

Low Cost of Airlines Air India
1

2

2

3

7

7

7

7

9

0

1

0

-

-

-

-

-

-

-

4

2

3

8

2

2

2

0

0

0

0

0

0

0

0

0

0

0

0

L

E

36. 2

R
38. 8

R
39. 1

32. I

33. 2

34. 1

35. 2

n

4

8

0

37. 5

40. -

2

S
e
r
v
i
c
e
42.
43.
44. Fleet info:45. The Boeing customer code for Air India is 37, meaning a model name of, for example,
a 747-437 (an Air India 747-400). As of May 2010, the average age of the Air India
fleet is 9.5 years.
46. First Boeing 787 is to be delivered in March 2012.
47. Air India's Boeing 787 will be powered by General Electric GEnx.
48. New aircraft orders
49. On 11 January 2006, Air India announced an order for fifty eight jets - eight Boeing
777-200LR Worldliners, twenty-three Boeing 777-300ER and twenty seven Boeing
787-8 Dreamliners

Page 11

41.
8

Low Cost of Airlines Air India
50. The airlines received its first Boeing 777-200LR aircraft on 26 July 2007 and Boeing
777-300ER on 10 October 2007.
51. In April 2010, the airline has orderd three Boeing 777-300ERs.
52. Service Profile:53. Frequent flyer programme:54. Flying Returns is Air India's frequent flyer programme. The programme is also shared
by all other Air India Limited carriers.
55.
Premium lounges:56. The Maharaja Lounge (English: "Emperor's Lounge") is offered to First and Business
class passengers. Air India shares lounges with other international airlines at
international airports that do not have a Maharaja Lounge available. There are
five Maharaja Lounges, one at each of the five major destinations of Air India, which
are as following:
57. International:



London Heathrow Airport
John F. Kennedy International Airport (New York)

58. India:





Bengaluru International Airport (Bangalore)
ChhatrapatiShivaji International Airport (Mumbai)
Indira Gandhi International Airport (Delhi)
Rajiv Gandhi International Airport (Hyderabad)

59. In-flight entertainment:60. Air India's Boeing 777-200LR/-300ER as well as some refurbished Boeing 747-400
aircraft use the Thales Top Series IFE systems for onboard in-flight entertainment.
Airbus A310s do not have personal LCD screens. Airbus A330s have widescreen
displays in Business and Economy classes but no personal IFEs.

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Low Cost of Airlines Air India
61.

Page 13

Low Cost of Airlines Air India
e. Ownership Pattern:
62. Authorised:-The company currently having 4,875,645,020 Equity shares of Rs.10
each (Previous Year 1,375,645,020 Equity shares) & 12,440,498 Redeemable
Preference Shares of Rs.100 each (Previous Year 12,440,498 Redeemable Preference
shares)
63. Issued, Subscribed and Paid up:-945,000,000 Equity shares of Rs.10 each fully paid
up (Previous Year 145,000,000 Equity Shares) & (Of the above 144,950,000 Equity
Shares were issued pursuant of Amalgamation)
f. Competitors Information:
64. Air India Limed having following competitors:





Jet Airways
British Airways
King Fisher
Emirates

65. Jet Airways
66. Logo
68. Parent Company
70. Sector
72. Tagline/ Slogan
74. USP
76. STP
77. Segment
79. Target Group
81. Positioning
83. SWOT Analysis
84. Strength

67.
69. Tailwinds Limited
71. Airlines
73. The Joy of Flying
75. Premium Airline, High Class
78. Passengers preferring comfort
80. Corporate, Upper Middle Class
82. Premium
85. 1. Has created a good image among the Indian fliers

86. Weakness
88. Opportunity

2. Trusted Airline by the Corporates
87. 1. Competition from the LCCs
89. 1. Strongly positioned in the International routes

90. Threats

2. Has presence in every segment
91. 1. LCCs eating up the market share
92. 2. Rising Fuel Costs
93. 3. Rising Labour Costs

94. Competition
95. Competitors

96. 1.Kingfisher
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Low Cost of Airlines Air India
2.Air India
97.
98. British Airways
99. Logo

100.
102.

International Airlines Group

Company
103.
Sector
105.
Tagline/

104.
106.

Airlines
To fly. To serve. The world's favourite airline;

Slogan
107.
USP

Upgrade to British Airways
108.
Premium Airline, Upper Middle Class, Middle

101.

Parent

Class
109.
110.
112.

STP
Segment
Target

Group
114.
Positioning
116.
SWOT Analysis
117.
Strength

121.
123.

111.
113.

Passengers Preferring Comfort / reliability
Corporates / Upper Middle Class / Middle

Class
115.
Premium
118.

1. Strong Backing of UK Govt

119.

2. Strong Hub in UK

120.

3. Strong brand presence and excellent global

Weakness

presence
122.
1. Severe Competition from Cash Rich Middle

Opportunity

Eastern Airlines
124.
1. The Heathrow Terminal is a major hub
across the world and it has a major presence here

126.

130.
131.

Threats

Competition
Competitors

125.
127.

2.Expanding its global operations
1. Rising Fuel Costs

128.

2. Rising Labour Costs

129.

3. Increasing Competition in European Market

132.

1.Virgin

2.British
3.Lufthansa
4.Emirates
5.Jet Airways
133.
134.

Kingfisher Airlines
Page 15

Airlines
Midland

Low Cost of Airlines Air India
135.

Logo

137.

Parent

Company
139.
Sector
141.
Tagline/
Slogan
143.
USP
145.
STP
146.
Segment
148.
Target
Group
150.
Positioning
152.
SWOT Analysis
153.
Strength

136.
138.

United Breweries Group

140.
142.

Airlines
Fly The Good Times

144.

Premium Airline, High Class

147.
149.

Passengers preferring comfort
Corporate, Upper Middle Class

151.

Premium

154.

1. Has created a good image among Indian

fliers
155.
158.
160.

Weakness

2. Strong backing from promoters
156.
1. Heavy Debt

Opportunity

157.
159.

Threats

Indian skies
161.
1. LCCs eating up the marketshare

2. Poor On time Performance
1. Reputation of providing the best amenities in

162.

2. Rising Fuel Costs

163.

3. Rising Labour Costs

166.

1.Jet Airways

167.

2.Air India

171.
173.

The Emirates Group

Company
174.
Sector
176.
Tagline/

175.
177.

Airlines
Be good to yourself, Fly Emirates; Fly

Slogan
178.
USP

Emirates. Keep Discovering
179.
Premium Airline, Upper Middle Class, Middle

164.
165.

Competition
Competitors

168.
169.
170.

Emirates
Logo

172.

Parent

Class
180.
181.
183.

STP
Segment
Target

182.
184.

Passengers Preferring Comfort / reliability
Corporates / Upper Middle Class / Middle
Page 16

Low Cost of Airlines Air India
Group
185.
Positioning
187.
SWOT Analysis
188.
Strength

Class
186.
Premium
189.

1. Strong Backing of Dubai Govt

190.

2. Advantage of Being Present in Oil Rich

Emirate
191.

3. Strong Hub in Dubai

192.

4. Satisfied Customer and Preferred Airline of

193.

Weakness

Customers
194.
1. Relying Heavily on International Onward

195.

Opportunity

Moving Traffic
196.
1. Brand New Fleet. Leverage this and also

Threats

improve the customer confidence in the airline
198.
1. Increasing Competition in Middle East

197.

Market
199.
200.

Competition
Competitors

201.

1.Etihad

202.

2.Qatar Airways

203.

3.Jet Airways

204.

4.Air India Express

205.
206.
207.
208.
209.
210.

McKinsey 7S Model:

211.

A model of organizational effectiveness that postulates that there are seven

internal factors of an organization that needs to be aligned and reinforced in order for
it to be successful. The 7S Model was developed at McKinsey & Co. consulting
firm in the early 1980s by consultants Tom Peters and Robert Waterman, authors of
the management bestseller "In Search of Excellence."

Page 17

Low Cost of Airlines Air India
212.

1. Strategy
213.
The concept of strategy includes purposes, missions, objectives, goals and
major actions plans and policies. They are as follows:
214.

Aggressive pricing: Air India’s economy-class passengers can upgrade to

business class by paying Rs. 4,000 for distances up to 750km and Rs.6,000 for longer
distances at the counters in 17 airports

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Low Cost of Airlines Air India
215.
216.

Turnaround Strategy:

217.

The government will soon spell out a comprehensive turnaround plan for flag

carrier Air India, which is burdened with a cumulative loss of Rs.22,165 crore and
struggling to even pay wages to employees, parliament was informed Friday."There
are two plans under consideration -- one is the turnaround plan and the other is a
financial restructuring plan which is being considered by a group of ministers,"
218.




Strategic Relationships:

Strategic Alliance with Lufthansa (LH)MOU signed in August 2003
Joint capacity plan till 2007
Additional frequencies –AI : 22 (18 via Frankfurt to USA) - LH: 15•LH to provide AI
commercially viable slots at Frankfurt•19 slot pairs provided till winter 2004 (in



exchange for 4 additionalfrequencies)
Reciprocal World-wide Free Flow Code Share & FFP Cooperation under





implementation
Special Prorate Agreement implemented in November 2003
Cooperation in IT/MRO/Cargo being pursued
Air India developing relationship with other Star Alliance partners – United Airlines






& Air Canada Joint Marketing
Special Prorate Agreement
Reciprocal code share
FFP cooperation
Will pursue FFP cooperation with other domestic airlines in India togenerate



incremental revenue streams
Will continue existing code shares with existing 14 airline partners & pursue such

relationships with other airlines
 May also consider becoming a full-fledged member of a globalalliance in the future
2. Structure:219.

Air India Ltd., extended its operations all over the world and the quality

services improves by dividing and sub allocation of duties and responsibilities to their
each department heads and sub-ordinates. The Air India Ltd., functions are flow from
superiors to sun-ordinates.
3. System:
Page 19

Low Cost of Airlines Air India
4. Air India Ltd., providing quick response and fast services to their customers and to
survive in aviation industry by competing with other Airlines. So they are using these
technologies and set of procedures to handling the customers as well as their

















5.
6.

employees.
Ground Handling
Information Technology
Security
CargoTechnology Up gradation
IT Projects
Revenue Management
PROS implemented
Ticketing Time-Limit software implemented
Direct connect with GDS’s
Integrated computerization system for MMD
Disposal of surplus/redundant inventory
Implementation of Unit Load Device management system
Disaster recovery site at remote location
Air India Express IT Infrastructure
Data Mart for CRS sales data
Ramp Assistance Billing System for GSD/Finance
Online Financial Information System (FINESS)
Style:

Page 20

7.

This is one of the domestic airlines in India offering an extensive network of

cargo and passenger services. This airline company was honored a 4 star rating for its
safety and cabin procedures from Skytrax airline for its best basic and luxury
comfort.Flights to Air India can be booked conveniently to various destinations.
International tickets are also easily available, besides the air fares from the US to India
is economical in comparison to other carriers. Air India is popular amidst NRIs
traveling to India for holidays.
8. Staff:
9. Staff is one of the important asset for every company who having the innovative ideas
in the operations of the company by their smart and skillful work and very difficult to
retain them in the organizations.
10.
 Increased manpower productivity
 Comprehensive HR Policy with focus onMotivation, Training & Development, Multi

skilling, Scientific
job description & objective performance appraisal Special dispensations obtained

from DGCA Operating Crew – Increased Flight Time Limits
 Settlement to be reached with pilots
 Cabin Crew - Executive crew to fly as per DGCA time-off
 RegulationsComputerization of Operating/Cabin crew scheduling
 Out-sourcing/Hiving-off Non-Core activities already out-sourced
 Printing Press
 Crew/Employee TransportPotential for out-sourcing
 Medical Services
 Payroll
 Revenue Accounting
 Canteen
 Civil WorksHiving off to subsidiaries
11.
12. Skill:
13. The term skills include those characteristics, which are developed over a period of
time, under result out of the interaction of number of factors, performing certain task
successfully over a period of time, the kind of people in the organization, the top
management style, the organization structure etc.,
14.
15. Negotiation Skills: With the need to reduce costs and squeeze margins in a highly
competitive market, it’s vital you equip your people with the most effective
negotiation skills. Whether they’re managing complementary income streams or
negotiating contracts with clients, travel agents and partners, this program will

transform their ability to achieve a profitable outcome with each and every deal that’s
made.
16.
17. Creative Problem Solving: Airline industry professionals need to be able to generate
novel solutions to manage such economic pressures. This program will dramatically
shift the way your people think about problems, releasing the potential to develop
innovative solutions that inspire business growth.
18.
19. Developing a unified vision for future success: with the pressures facing today’s
airline industry, it’s vital your executives can come together to agree on a strategic
vision that will give your organization the competitive edge.

Our Executive

Development Program is proven to be highly successful at creating a unified
executive team using tailor-made solutions for business success
20. Shared Values:
21. The idea of Shared Values is often confused with value sharing. The former a more
universal presumption about a set of beliefs and the latter a calculated measure of
utility. In a service industry, delivering value to customers demands a highly evolved
understanding of meeting needs and desires. For example, how well does an airline
deliver on an individual’s hope to be with family on the holidays? Can that same
airline deliver on another individual’s hope to get to a distant meeting and back for
another commitment? Calculating the costs of delivering value is trivial by
comparison, in that the components are concrete, not fuzzy. Air India was able to gain
market share over competitors focusing on being the low-cost airline provider and
inspiring employees to deliver on that shared value. Every decision made at the
corporate level hinges on that principle and the results are clear in their resilience in
spite of the hostile economic climate and changing regulatory environment that daily
challenges their operating costs.
22.
23.
24.

25. SWOT Analysis
26. Strengths of AIR INDIA: Air India has been the largest air carrier in India in terms of traffic volume and
company assets.
 It owns the most updated fleet and competent repairs and maintenance expertise.
 Its information systems are advanced and compatible with its operation and service.
 It has a good reputation in both international and domestic markets, quality service
and the age-old Goodwill that has still kept it alive in the interests of the rescue
operators.
 Has financial backing of the Government
27. Weaknesses of AIR INDIA: Air India is operating across broad international and domestic markets competing
with world leading giant airlines as well as local small operators. This lack of clarity
on the strategic direction largely dilutes its capabilities and confuses its brand within
markets.
 Low profitability and utilization of capacity.
 Growing Competitor base and entry of Low-Cost Carriers (LCC’s)
 The airline’s high-cost structure and the compulsions of being a public sector unit are
the reasons and it had been making a loss and shall continue to make losses for some
more quarters.
28. Opportunities of AIR INDIA: India airline industry is growing faster and will continue to grow as the GDP
increases, and the trend is predicted to continue once the slowdown recedes.
 Worldwide deregulations make the skies more accessible; the route agreement is
easier to be achieved. The number of foreign visitors and investors to India is
increasing rapidly.
 Complementary industry like tourism will increase demand for airline service. The
Civil Aviation Ministry’s strong regulation and protection provides opportunities for
consolidation and optimization.
 Customers are getting wealthier, tend to be less price-conscious and prefer to choose
quality service over cost.
 Best time for introducing LCC’s
29. Threats for AIR INDIA:-

 Air India faces imminent aggressive competition from world leading airlines and
price wars triggered by domestic players.
 The Indian Railway Ministry has dramatically improved speed and services in their
medium/long distant routes, attracting passengers away from air service, with prices
almost at par with the low cost carriers
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220.

Learning Experience:

45. Air India Ltd., is one of the leading public sector aviation company which having the
major share in the aviation industry. It’s very difficult to maintain and manage the
affairs of the company with the competition from many private sectors. It’s having lot
of transactions in each day and the records are maintained systematically and the
officials of Air India Ltd., are well co-ordinated helps the smoothening in flow of

work. This project helps to make a thorough study of the company’s activities
especially in the fund flow of the organization and to acquire practical knowledge in
this filed. It also provided to understand the work force the strategy, the identification
of the skills,the sharing of the work i.e. designation done in the public sector
enterprise.It was a good learning experience in the analysis of the balance sheet got to
know the application of the loans and applications and the tabulation. This study will
be of great benefit for the future career.It’s an opportunity to know about the industrial
world. Being within the company helped to learn how the Management theories and
concept are applied in an organization. It helps to interact with the top level
executives and to see how the managers deal with the figures and numbers and how
the handle the work pressure. More over the project was a good exposure to learn
about the working conditions of the organization.
46.
47.

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