Low Cost of Air

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 was started by the Indian State Air Services in collaboration with the UK based Imperial Airways. It was an extension of London- Karachi flight of the Imperial Airways. In 1932, JRD Tata founded Tata , 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, 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 -London air route. The Government nationalized nine airline companies vide the Air Corporations Act, 1953. Accordingly it established the 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, , 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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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 Sahara, NEPC Airlines, East West Airlines, 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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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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 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 and the one at , 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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 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, , 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:-

Market Share Seat factor Airlines Percentage share (in lakhs) (in %) Air India (Domestic) 7.62 18.2 72.9 Jet Airways 7.66 18.3 74.2 Jet Lite 3.18 7.6 78.1 Kingfisher 8.98 21.4 75.8 Spice Jet 5.27 12.6 81.0 Paramount 0.13 0.3 85.0 Go Air 2.46 5.9 78.0 IndiGo 6.58 15.7 82.4

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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 , a fully-owned subsidiary of Air India. Air India plans to join 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 ). 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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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 ) was established, into which both Air India (along with Air India Express) and Indian (along with ) 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 , Punjab and Mangalore to Dubai, Abu Dhabi, Al Ain, Muscat and 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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10. 11.

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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 e- ticket 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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 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. (excl. subsidiaries) as of November 2011:

22. A 23. A 24. A 25. A 26. A 27. B 28. B 29. B 30. B 31. i i i i i o o o o T 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 f t A A A A 7 7 7 7 3 3 3 3 4 7 7 8

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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 R R 32. I 33. 2 34. 1 35. 2 36. 2 37. 5 38. 8 39. 1 40. - 41. n 4 8 0 2 8 S e r v i c e 42.

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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 -200LR Worldliners, twenty-three Boeing 777-300ER and twenty seven Boeing 787-8 Dreamliners

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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  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 -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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61.

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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 67. 68. Parent Company 69. Tailwinds Limited 70. Sector 71. Airlines 72. Tagline/ Slogan 73. The Joy of Flying 74. USP 75. Premium Airline, High Class 76. STP 77. Segment 78. Passengers preferring comfort 79. Target Group 80. Corporate, Upper Middle Class 81. Positioning 82. Premium 83. SWOT Analysis 84. Strength 85. 1. Has created a good image among the Indian fliers 2. Trusted Airline by the Corporates 86. Weakness 87. 1. Competition from the LCCs 88. Opportunity 89. 1. Strongly positioned in the International routes 2. Has presence in every segment 90. Threats 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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2.Air India 97.

98. British Airways 99. Logo 100. 101. Parent 102. International Airlines Group Company 103. Sector 104. Airlines 105. Tagline/ 106. To fly. To serve. The world's favourite airline; Slogan Upgrade to British Airways 107. USP 108. Premium Airline, Upper Middle Class, Middle Class 109. STP 110. Segment 111. Passengers Preferring Comfort / reliability 112. Target 113. Corporates / Upper Middle Class / Middle Group Class 114. Positioning 115. Premium 116. SWOT Analysis 117. Strength 118. 1. Strong Backing of UK Govt 119. 2. Strong Hub in UK 120. 3. Strong brand presence and excellent global presence 121. Weakness 122. 1. Severe Competition from Cash Rich Middle Eastern Airlines 123. Opportunity 124. 1. The Heathrow Terminal is a major hub across the world and it has a major presence here 125. 2.Expanding its global operations 126. Threats 127. 1. Rising Fuel Costs 128. 2. Rising Labour Costs 129. 3. Increasing Competition in European Market 130. Competition 131. Competitors 132. 1.Virgin Airlines 2.British Midland 3. 4.Emirates 5.Jet Airways 133.

134.

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135. Logo 136. 137. Parent 138. United Breweries Group Company 139. Sector 140. Airlines 141. Tagline/ 142. Fly The Good Times Slogan 143. USP 144. Premium Airline, High Class 145. STP 146. Segment 147. Passengers preferring comfort 148. Target 149. Corporate, Upper Middle Class Group 150. Positioning 151. Premium 152. SWOT Analysis 153. Strength 154. 1. Has created a good image among Indian fliers 2. Strong backing from promoters 155. Weakness 156. 1. Heavy Debt 157. 2. Poor On time Performance 158. Opportunity 159. 1. Reputation of providing the best amenities in Indian skies 160. Threats 161. 1. LCCs eating up the marketshare 162. 2. Rising Fuel Costs 163. 3. Rising Labour Costs 164. Competition 165. Competitors 166. 1.Jet Airways 167. 2.Air India 168.

169. Emirates 170. Logo 171. 172. Parent 173. The Emirates Group Company 174. Sector 175. Airlines 176. Tagline/ 177. Be good to yourself, Fly Emirates; Fly Slogan Emirates. Keep Discovering 178. USP 179. Premium Airline, Upper Middle Class, Middle Class 180. STP 181. Segment 182. Passengers Preferring Comfort / reliability 183. Target 184. Corporates / Upper Middle Class / Middle

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Group Class 185. Positioning 186. Premium 187. SWOT Analysis 188. Strength 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 Customers 193. Weakness 194. 1. Relying Heavily on International Onward Moving Traffic 195. Opportunity 196. 1. Brand New Fleet. Leverage this and also improve the customer confidence in the airline 197. Threats 198. 1. Increasing Competition in Middle East Market 199. Competition 200. Competitors 201. 1.Etihad 202. 2.Qatar Airways 203. 3.Jet Airways 204. 4.Air India Express 205.

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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."

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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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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 – & 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:

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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 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) 5. 6. 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.

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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.

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