LAL BAHADUR SHASTRI INSTITUTE OF BUSINESS MANAGEMENT, DWARKA, NEW DELHI

PGDM EVENING BATCH (PART TIME)

OPERATIONS MANAGEMENT - END TERM PROJECT REPORT

AIR INDIA        

                         

'Air India' is the flag carrier airline of India. Its tagline is "Your Palace in the Sky!". SUBMITTED TO : DR. PRASHANT GUPTA Professor, Operations Management Lal Bahadur Shastri Institute of Management Plot No. 11/7, Sector - 11 Dwarka,New Delhi-110075

SUBMITTED BY GROUP 2 STUDENTS:

MANSI SHISHODIA ROLL NO. 5/ 2014 HARSH SAXENA ROLL NO. 6/ 2014 PIYUSH KAMRA ROLL NO. / 2014

 

FORWARDING LETTER

DATE:11.7.2015 TO: DR. PRASHANT GUPTA FROM: GROUP 2 We the group members namely, Mansi Shishodia, Harsh Saxena, Piyush Kamra feel immense pleasure to present our report on the topic Air India .The objective of the report is to to get an insight of the aviation industry and to understand the degree of competition in such a fast growing sector as the aviation industry in India has seen a constant pace of growth over the past many years. With the liberalization of the Indian aviation sector, the industry had witnessed a transformation with the entry of the privately-owned full service airlines and low cost carriers. We would like to request you to please accept our report for your kind perusal.

                       

 

ACKNOWLEDGEMENT

The end of term project on Air India is part of the syllabus for students undergoing the Part-time Post Graduate Diploma in Business Management Course at the Lal Bahadur Shastri Institute of Management.

We, the students of Semester-III, wish to acknowledge the whole hearted support of our families and friends, who had to bear with our absence from home because our academic pursuits kept us from keeping social commitments.

There were challenging times when some of us in the team could

not follow up with the task we had accepted to complete, because of personal reasons and job constraints. There was total cooperation amongst the team members and each of us compensated for what the other person could not accomplish. We also wish to complement each other for the solid support or else this project would not have been taken to its state of completion. We also wish to acknowledge the guidance provided by Dr Prashant Gupta, Professor of Operations Management at LBSIM who not only made the study of the subject lively but also provided us with the right kind of timely advice that led to completion of this project.    

Mansi Shishodia Harsh Saxena Piyush Kamra

               

 

TABLE OF CONTENTS

TOPIC PAGES History of Air India 6 Air India 7 Logo 8 External Analysis: Industry Overview 9 PESTL Analysis 10 SWOT Analysis 13 PORTER Five Forces 15 The Dark Ages 17 Seven Steps 19 Cover up losses: Implementation 21 Air India Strike 2012 24 Recommendations 25

 

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HISTORY OF AIR INDIA

Tata Sons, a division of Tata Sons Ltd. (now Tata Group) was founded by J. R. D. Tata in 1932. The aviator Nevill Vintcent had an idea to run mail flights from Bombay and Colombo that connected with the Imperial Airways flights from the United Kingdom. He found a supporter for his plans from J. R. D. Tata of the Tata Iron and Steel Company. After three years of negotiations Vintcent and Tata won a contract to carry the mail in April 1932 and in July 1932 the Aviation Department of Tata Sons was formed. On 15 October 1932, J.R.D. Tata flew a single-engined De Havilland Puss Moth carrying air mail (postal mail of Imperial Airways) from Karachi's Drigh Road Aerodrome to Bombay's Juhu Airstrip via Ahmedabad. After World War II, regular commercial service was restored in India, and Tata Airlines became a public limited company on 29 July 1946 under the name Air India. In 1948, after the independence of India, 49% of the airline was acquired by the Government of India, with an option to purchase an additional 2%. In return the airline was granted status to operate international services from India as the designated flag carrier under the name Air India International. On 25 August 1953 the Government of India exercised its option to purchase a majority stake in the carrier and Air India International Limited was born as one of the fruits of the Air Corporations Act that nationalised the air transportation industry. At the same time all domestic services were transferred to Indian Airlines (now a part of Air India) Air India International entered the jet age on 21 February 1960 when its first Boeing 707–420, named Gauri Shankar (registered VT-DJJ), was delivered, thereby becoming the first Asian airline to induct a jet aircraft in its fleet.[25][26] Jet services to JFK International Airport in New York City via London were inaugurated that same year on 14 May 1960.              

 

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AIR INDIA: FLEET    

   

   

 

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Logo: Signification and Importance "The logo of the new airline is a red coloured flying swan with the 'Konark Chakra' in orange, placed inside it. The flying swan has been morphed from Air India's characteristic logo, 'The Centaur', whereas the 'Konark Chakra' is reminiscent of Indian's logo". The new logo features prominently on the tail of the aircraft. While the aircraft is ivory in colour, the base retains the red streak of Air India. Running parallel to each other are the orange and red speed lines from front door to the rear door, subtly signifying the individual identities merged into one. The brand name 'Air India' runs across the tail of the aircraft. This now familiar lovable figure first made his appearance in Air India way back in 1946, when Bobby Kooka as Air India's Commercial Director and Umesh Rao, an artist with J.Walter Thompson Ltd., Mumbai, together created the Maharajah. The Maharajah began merely as a rich Indian potentate, symbolizing graciousness and high living. And somewhere along the line his creators gave him a distinctive personality: his outsized moustache, the striped turban and his aquiline nose. What began as an attempt as a design for an inflight memo pad grew to take Air India's sales and promotional messages to millions of travellers across the world. Today, this naughty diminutive Maharajah of Air India has become a world figure. He can be a lover boy in Paris, a sumo wrestler in Tokyo, a pavement artist, a Red Indian, a monk... he can effortlessly flirt with the beauties of the world. And most importantly, he can get away with it all. Simply because he is the Maharajah!

He has completed 56 years and become the most recognizable mascot the world over. His antics, his expressions, his puns have allowed Air India to promote it's services with a unique panache and an unmatched sense of subtle humour. In fact he has won numerous national and international awards for Air India for humour and originality in publicity.

 

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External Analysis: Industry Overview

The Indian aviation sector consists of many players which are divided into Low-cost and Full-service carriers. Jet Airways, Kingfisher, Air India are some examples of Full-service carriers and IndiGo, Spicejet, GoAir are some of the leaders in Low-cost carriers segment. Recently the Indian Airline Industry is witnessing a series of disastrous events which are a cause for the significant loss in profit and reputation of the individual airlines especially Kingfisher which is heading towards bankruptcy. It is a very big challenge for the low-cost carriers to survive and manage their profitability amid increasing fuel prices and high taxes. The only way for airline companies to defeat the competitors and stay profitable is to provide better service than that of their competitors. Customers evaluate their experience of the flight based on the variety of services delivered by the carrier. Currently low-cost carriers are offering variety of services to attract new customers and retain the existing ones. It is a race and the one who provides services superior to those of the others will always stay ahead and sustain in this hyper-competitive environment. Air India is desperately trying to gain its lost market share by lowering down its fares and offering better service to its customer. It is trying to attract customers by offering its new value added services like cheap up gradation to first class and business class.

 

PESTL analysis: PESTL analysis is a framework, which is used to analyse the external factors acting on an organization and to recognize their impact on the organization. PESTL full form is political, economical, social, technological and legal factors. Political Factors: In a country like India we cannot see any organization without political influences. It is an open secret that every issue has political interferences, in India. Some of those political factors are given below • The route between Kashmir and other major countries was closed by Air-

India, due to the border problems with Pakistan. And terrorism is a major issue, which was stopping many foreign tourists, coming to India

• Major political issue of the decade, which affects the airline industry, was September 11 incident. Due to the fear of terrorism and the involvement of air planes in the industry, a huge drop in air traffic occurred

• In a corrupted country like India, the state owned industry Air-India has to face many problems in route clearances, permits and licences and offering free seats to political leaders etc.

• As it was a state owned company, it kept the routes, which are yielding constant losses as open, because of prestigious issues. Which pushes the organization into losses

Economical factors: The economical factors, which was acting upon Air-India are Due the financial recession in recent year, people are thinking that air travel is luxury and expensive. So a considerable decline in the no. of passengers occurred, which in turn leads to reduce in ticket prices

• After the September 11 incidents, the world economy is facing a great recession. Even biggest companies of India cut the air-travel facilities to their managers and giving them first class train tickets

• The decline in income of Air-India leads to more operational costs and huge insurance costs, which was increased after WTC destruction. This makes Air-India to lay off its employees, which further fuelled the recession as spending decreased due to the rise in unemployment.

 

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• And the biggest economical factor, which is influencing the Air-India was lack of midsized aircrafts, which intern increase the operational costs of its big size aircrafts for the routes, which are yielding losses.

• Even the SARS (disease) outbreak in the Far East was a major cause for slump in the airline industry. Even the Indian carriers like Air India was deeply affected as many flights were cancelled due to internal (employee relations) as well as external problems.

Social factors: These factors tells about the effects of social groups and social issues on the organization as follows: • The rapid changing in the travelling habits of passengers has a great effect

on airline industry. Especially in the developing countries like India, travellers came from various income groups. The air lines have to concentrate on each group and have to provide satisfactory services accordingly. The main passengers of Air-India are from low income group, so it has to concentrate on the low income group passengers and their habits of travel and have to serve them accordingly, like type of food provided, quality of services etc. in order to satisfy them

• As India was a multi cultured country, the passengers may come from various religions and expects more customisation, for example a Brahmin customer will be satisfied, when the passenger, just beside him also a Brahmin, at least a vegetarian. So he expects change of seats can be possible.

• Another biggest issue is services in the airplane. Air-India has a poor performance in this section. It has to improve its services in order to create a user-friendly atmosphere in the airplane.

Technological factors: The increasing usage of the Internet provides huge opportunities for airline industries. Such technological factors are given below • Air-India provides many online services for its customers such as online

ticket booking, flight information updates, and customer queries. But still some inconsistency is there in flight updates

• Many of the international airlines are providing internet access for their business class passengers; this service has a poor performance in Air-India, which may make the business class customers to choose other air

 

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lines, who pays more for the company. • The Authority is developing modern communication, navigation,

surveillance, and air traffic management systems for India’s aviation sector that will help the country meet the expected growth and demand for air passenger and cargo service over the next decade.

• Providing total body scanners at the Indian airports may leads to feel more security for the passengers, which intern makes them to travel with comfort and security.

Legal factors: These factors tells about the laws and barriers for the company according to various legal factors: • As Air-India was a state owned company, it has to face many legal issues

in order to make a decision, as the decision has to processed through various levels of management

• In order to get licenses and route clearances, the company has to undergo to the government processes, starting from aviation minister and involving many legal issues.

• As Air-India was owned by the government, it has to suffer from many archaic laws, applies only for it, such as free seats to ministers, retirement age of pilots and air-hostess and the labour regulations, which intern makes the management less flexible in making new decisions, as the decision making process has to be done in the presence of strong employee union. These barriers will not be there for privately owned companies

• The heavy control and interface with the government affects the quality of the service as well as type of services that has to be provided in order to satisfy all of the customers from various countries and various cultures. Non of these issues will not affect the privately owned air lines

   

 

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SWOT Analysis  

Strengths: • Air-India is India’s finest flying ambassador. It is the largest air carrier in

India in terms of traffic volume and business • AIR-India consists of most updated fleet and repair and maintenance

expertise • Efficient usage of information technology for providing customer services

such as flight information and online booking • Good reputation at domestic as well as global level

• Biggest advantage is, the company has the financial support from the

government • Strong brand name at national level • Firmly established infrastructure • Air-India owns the rights to travel to 96 destinations, all over the world • Biggest advantage of Air-India was, it has prime packing spaces • It was a monopoly in specific international routes Weaknesses : • Declines in the profits and poor utilization of capacity • Lack of clarity in strategic planning and poor management planning • Intense competition at the level of low cost carriers • Compulsion to be a public sector organization and the high cost structures

of Air-India are pushing the company into losses • The company’s strategies in the perspective of human resources, is very

poor • Intense competition in the field of aviation and the decrement in market

share • Poor performance in terms of over head cost controlling

 

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• Bad reputation in terms of in-flight services • Lack of clarity in the efficient usage of resources • Poor aircraft maintenance • Manpower ratio with aircrafts is very high • Level of corruption, within the organization Opportunities: • Faster growing aviation industry in India • The regulations of aviation, at global level are made easy by the world

aviation authority, which leads easy access to the skies and the chance of getting route clearances is very easy

• Strong regulations by the Indian aviation ministry and strong security

system attracting more tourists despite of the threat from the terrorists, which intern provides more opportunities for the air line industries

• Very good time to introduce low cost carriers (LCCs) • The business class customers are less price conscious and expects

quality service, it will be a great opportunity to Air-India to gain more customers by providing high quality services

• Availability of highly skilled native-born pilots at low costs Threats: • Many new entrants in aviation industry at domestic level • The price war triggered by the major air line industries, all over the world • Immense and aggressive competition from the rival air line companies • Chance to go into the collaboration with privately owned organizations • Barriers for the business by various laws of the government, as it was

owned by the state • Increase in fuel prices, all over the world • The Indian Railway

 

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PORTER FIVE FORCES MODEL  Porter’s five force analysis is a frame work used for the industry analysis of an organization. It was used to recognize the current market position of the organization.

Threats of new entrants: Threats from new entrants for Air-India is very high The initial investment for the new entrants into the air lines industry is very huge in amount. In olden days, it is very difficult to start a new air line company, but in recent times, banks are providing good opportunities to the new entrants, by providing long term loans with less interest rate. So this will be a threat for Air-India from the upcoming and new domestic air lines Threats from the competitors: Threats from the competitors for Air-India is very high The competitive rivalry within the air line industry is very intense, as many major air lines are operating the flights to the same destinations, all over the

 

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world. Air-India is facing major threats from the industry competitors like Emirates, Jet Airways and Air Asia etc. The major airline companies are very aggressively competing each other by offering travellers privileges for regular customers, reducing the fares and offering high quality services etc, to attract more customers than their rival companies. So Air-India was facing high threat from its rival companies Bargaining power of the buyers: The threat from the buyers is intensively high for an organization like Air-India. As more domestic and international air line companies are operating their flights to the same destinations with low travelling fairs, the customer can choose from a wide variety of travelling plans offered by the different companies. Then the power of the buyer is very high, as the competition between the companies is more. Air-India is already running in losses, the customer may demand more. At international level this buyer threat is somewhat moderate, but at domestic level, it was very high. Threats from the substitutes: Threats from substitute products is very less for Air-India Airlines are the fastest possible ways to travel from place to place, so there is less threat from the substitutes. However, by considering at domestic level, the customers can choose railways or roadways that are connecting different places. But still it is time consuming. The only one factor that makes people to think about alternate travel options like trains or buses is the cost of air travel, which was expensive for the people of developing countries like India. So there is a little threat at domestic level, but very less threat at international level Bargaining power of suppliers: The threat from the bargaining power suppliers is moderate for Air-India. Suppliers for Air-India are very less in number. The major suppliers for the company are Boeing and Airbus. From the international aviation surveys, there is no cutthroat competition between Boeing and Airbus, so there less chance of bargaining with the customer. However an airline company like Air-India, which was running in losses, the suppliers may demand regarding the payment options. And it was already known that, Air-India already owes $90 million to Boeing.  

 

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THE DARK AGES: From the beginning of 1970s, Air-India faced many difficulties. The economic recession, all over the world, showed a huge impact on the company during this time. In addition since the government owned the company, it kept the routes that were yielding losses open, for prestigious purposes, whereas other commercial airlines closed all these routes. Foreign airlines provided direct competition in carrying foreign passengers. Air-India was mostly dependent on local passengers for their business. Due to this the air fares had to be kept low, which resulted this leads to losses. The darkest spot on Air-India history was, the crash of one of its Boeing 747 with 329 foreign passengers, in to the sea, in June 1985. During the years 1991-1995, Air-India losses incurred were $171 million, complemented with bad reputation for poor services and facilities.

2007 to 2012: The period of unrest In 2007, the Government decided to merge both the airlines Air India and Indian Airlines, including Air India Express and Indian Airlines' low cost subsidiary Alliance Air under the control one body As part of the merger process, a new company called the National Aviation Company of India Limited (NACIL), now called Air India Limited was established as the holding company for Air India and its subsidiaries. In February 2011, the merger came into effect. The merger was to be the starting point of all the trouble and distress of the new Air India Limited The combined losses for Air India and Indian Airlines in 2006–07 were ₹7.7 billion (US$120 million). After the merger of the airlines, it went up to ₹72 billion (US$1.1 billion) by March 2009 In July 2009, SBI Capital Markets was appointed to prepare a road map for the recovery of the airline. The carrier sold three Airbus A300 and one Boeing 747-300M in March 2009 for $18.75 million to survive the financial crunch By March 2011, Air India had accumulated a debt of 425.7 billion(US$6.8 billion) and an operating loss of 220 billion (US$3.5 billion), and was seeking 429.2 billion (US$6.8 billion) crore from the government

 

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For three months (June–August 2011), the carrier missed salary payments and interest payments and Moody’s Investor Service warned that missing payments by Air India to creditors, such as the State Bank of India, will negatively impact the credit ratings of those banks A report by the Comptroller and Auditor General (CAG) blamed the decision to buy 111 new planes as one of the major causes of the debt troubles in Air India; in addition, it blamed on the ill timed merger with Indian Airlines as well.

REVENUE: • Total Revenue increased from Rs.140,620.1 million in 2010-11 to

Rs.147,138.1 million (an increase of Rs.6,518.0 million) during 2011-12.

• Operating Revenue was Rs.146,753.0 million as against previous year’s revenue of Rs.139,760.3 million (increase of Rs.6,992.7 million).

• Passenger Revenue increased from Rs.104,438.2 million last year to Rs.114,236.9 million (an increase of Rs.9,798.7 million) which was mainly due to increase in yield per PKM from 3.46 to 3.74 and increase in Passenger Load Factor from 66.1 to 67.9

EXPENDITURE: • The total expenditure incurred during the year was Rs.234,594.8 million as

compared to the previous year’s figure of Rs.213,215.9 million (an increase of Rs.21,378.9 million).

• Operating Expenses increased from Rs.180,808.0 million to Rs.198,139.9 million (an increase of Rs.17,331.9 million) mainly due to the following :

ü Increase in fuel price by Rs.23,996.1 million i.e. 39.3%; ü Increase in interest on working capital loans by Rs.4,533.1 million

 

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Seven steps action plan to survive Air-India: Airlines and the millions of passengers they shuttle around the globe share a common experience: Periods of smooth flying are interspersed with nervous episodes of gut-wrenching turbulence. Air India is now in the middle of one of those bumpy patches. A seven step action plan was proposed by the management to rescue the organization. The plan was explained below : 1. Create a crisis: Tell the blunt truth to the stakeholders. Openly announce the current situation and actions have to be taken place, to the stake holders and the staff. Creating the crisis includes the sense of urgency that has to take hold of the current airline position and stake holders. 2. Take drastic steps: Air-India had to take some drastic steps in order to generate some revenue. For example Air-India could have given its iconic Nariman House building or New Delhi’s airline building to the new tenants, instead of losing them and generate some revenue 3. Let the leader to do the job: The first step required, to turn over the Air-India’s situation was to have a clear mandate from the government to establish the new leadership. Re-establishing the leadership with highly talented managers from the private sector, who could run the airline very effectively 4. Bringing in talent from private sector: Air-India had to focus on its long term marketing position as well as it had to keep in mind that they may adopt the capital investments from the private sectors. After that, the next step was, bringing the top most executive managers from other private airline industries. 5. Learn from Satyam experience: Satyam was one of the biggest software company established in India, until it was closed down. The main reason for the failure of Satyam was, the individual managers who do not react when the company was going into heavy losses. AirIndia was also facing the same problem with the individual managers. To eliminate this, the organization needed managers with good communication skills and shoulder responsibility for the loss of the company.

 

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6. Establishment of new network and new fleet: Small changes in schedule may lead to bigger results. For example the flights of Air-India would start at 9 am in the morning from the major cities to London. By changing these timings, such that each flight will set off with a ten minutes gap,so that runways and airport gates could be effectively utilized. Establishing the new fleet by cutting down the loss yielding routes as well as aircrafts may lead to positive results. 7. Marketing, yields and revenues: The new management had to take quick steps to yield some revenues and have to stop loss of market share. For example, establishing new plan such that allocating a group of employees for each aircraft, who are responsible for each and every issue of the aircraft.

 

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To cover up the losses: Implementation  • The company planned to increase its reserve cash by selling its Hotel

Corporation in Indian sub continent, worth of $220 million and some old Boeing 747s, worth of $60million.

• The company was planning for a private collaboration from other airlines, which was not accepted by many of the employees and the Government of India.

• And the company plans to reduce the pay roll by $40 million by closing

some unprofitable routes and reducing the employment, which leads to a strike by the employees and the pilots.

• The national carrier has also decided to discontinue loss-making routes, among others steps, to rein in the spending and return to break-even.

• The use of expensive hotels or five-star hotels for stay during the travel or holding events has been restricted unless it is unavoidable and the budget for such activities has been reduced by 10 percent as part of the measures by AI.

• After a long spell of losses, Air India had recorded a net profit of Rs 14.6

crore in December last on account of a healthy growth in both passengers and cargo revenues.

• Air India's total revenue rose by 6.5 percent to Rs 2070 crore during

December 2014 as compared to Rs 1,944 crore in the same period in 2013.

• The state-run airline has reduced both its operational and net loss over the

last two fiscals. Its net loss came down to Rs 5,389 crore in the last fiscal compared with a net loss of Rs 5,490 crore in financial year 2013 and Rs 7,559.74 crores in FY12.

• AI has a cost base of nearly Rs 24,000 crores out of which nearly Rs

14,000 crores is variable and this includes fuel cost of Rs 9,500 crores."With the decline in fuel prices, the company plans to achieve at least a 20-25 percent reduction in its fuel bills in the next fiscal, which will be a substantial saving for the carrier.

 

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• The management has also directed that all routes should be critically

reviewed and routes which are not covering fuel cost or variable costs, removed from the network after studying the historical trends.

• The management has also emphasised to all its employees that the

targets set under the turnaround plan and the budgets should be achieved for this fiscal on a "war footing" and there can be no compromise on these.

• On the operational front, the measures are aimed at improving aircraft

utilisation by cutting down the turnaround time at transit stations, reducing duty travel of crew to the minimum to increase their productivity, close monitoring of occupancy ratios on various flights, bringing down expenditure on entertainment at foreign stations,

 

Financial Restructuring and bail out In April 2009, due to high fuel and loan costs, the Indian government pumped 32 billion (US$510 million) into Air India and in March 2012 the government bailed out Air India Ltd. with a grant of 67.5 billion(US$1.1 billion) As of May 2012 the carrier invited offers from banks to raise up $800 million via external commercial borrowing and bridge financing. In 2013, the Indian government planned to delay equity infusion of Rs.300 billion (US$4.8 billion) that was slated to be infused into the airline slowly over a period of eight years. Plans were changed as the government then planned to spread it over a longer period of time as part of measures to bring down the economy's financial deficit. The original plan was to pump in some Rs.300 billion (US$4.8 billion) into the airline in 2013, while less than half of that amount was mentioned in the annual budget Air India paid GMR Group a sum of 4.15 billion (US$66 million) towards outstanding dues on account of charges related to the airports at Hyderabad and Delhi. Of the amount paid, 3.4 billion (US$54 million) was paid to clear the user development fee (UDF), airport development fee (ADF) and landing and parking charges at the Indira Gandhi International Airport in Delhi. The remaining 750 million (US$12 million) was paid to clear similar fees at the Rajiv Gandhi International Airport in Hyderabad

 

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In order to raise funds for reconstruction, Air India decided to sell and lease back its aircraft, including the newly acquired Boeing 787 Dreamliners. In March 2013, the airline posted its first positive EBITDA after almost 6 years. The airlines bolstered its financial and physical performance with a 44 per cent slash in its operating losses in 2013-14 and an almost 20 per cent growth in its operating revenue since the previous financial year. As of January 2014, Air India is the third largest carrier in India, after IndiGo and Jet Airways with a market share of just above 19%

 

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Air India Strike-May 2012 On May 8, 2012 about 100 pilots went on medical leave as a mark of protest. • Later, the same day it sacked ten agitating pilots and de-recognized their

union after 160 pilots failed to join duty by the given deadline.

• After putting forth an original list of 14 demands, the aviators are now asking for reinstatement of their 101 sacked colleagues

• On the 15th of May, the Union Civil Aviation Minister Ajit Singh stated that

the Government was giving Air India one last chance and that it must perform in order to qualify for a bailout.

• On 4 July 2012 AI management gave an assurance to Delhi High Court

that it would look into the hardships of the pilots sympathetically, the striking pilots have decided to end the 58 day old strike immediately.

• Due to pilots' strike Air India suffered a loss of 500 crores (US$90.5

million) Demand: • Better salary, promotion and increment.

• Equality between Air India and India Airline Staff. • Reappoint the pilots, who force to resign. • Career progression • Integration across various cadres • Rationalization of pay scale

 

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Recommendations Air-India has to cut down all the unnecessary routes, which are yielding losses. However for prestigious purposes, they have to run the flights in those routes, at least they have to provide the list of those routes to the government, such that the government can subsidize those routes

• There is a need for Air-India to establish a new fleet with mid and small

sized aircrafts, to serve the less busy routes

• Air-India has to appoint, highly skilled managers from private sector, in order to turn over the situation

• Instability in the management has to be eliminated, by appointing a firm and constant management and director, as government is changing the management frequently.

• Ratio of manpower to number of aircrafts has to be reduced, in order to

reduce the staff costs • The unnecessary aircrafts have to be rented or they can sell those

aircrafts. For example, half of Air-India’s Boeing 747 aircrafts are remaining in the hangers, without regular usage. The company have to gave them for rent or have to sold them, in order to generate some revenues and to reduce the maintenance costs

• Quality of service and aircraft maintenance have to be improved • The organization has to encourage the private investments, in order to

recover some costs • Collaboration with major international air line companies will be helpful • The pace of decision making process has to be improved