air india_ignited minds (1)

8/3/2019 AIR INDIA_Ignited Minds (1)

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PRESENTING BY:

IGNITED MINDSMBA ISEM

AIR INDIA

THE WOUNDED MAHARAJA


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THE MAHARAJA

IS AIR INDIA'SOFFICIALMASCOT

(15 NOV 2006)


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Air India is a state-owned flag carrier, the oldest and thelargest airline of India.

Founder by JRD TATA in 1932. Named as TATA Airlines.

29 July 1946 became a Public Limited Company underthe name of Air India.

In 1948, 49% of the airline was acquired by theGovernment of India.


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On 25 August 1953, the Government of India exercisedits option to purchase a majority stake in the carrier.

Head Office Located at Nariman Point, South Mumbai.

1960 purchased first Boeing 707(named Gauri Shankar)and entered jet age.

June 1962 the airlines name was officially truncated to

Air India.


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Best International West Bound Airline out of India forthree successive years by Galileo Express Travel WorldAward. (An initiative of GMR group.)

Dun and Bradstreet (D&B) which ranked the airline as the

first in terms of revenue out of the top airline companiesout of India

Was set for disinvestment in 2001 but it failed due toglobal slowdown.

Senseless merger of the two wings of the airline took lossfigures to Rs7,200 cr. by March 2009.


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March 2007: Air India and Indian Airlines post a loss ofRs541.30 cr. and Rs230.97 cr. respectively during 2006-07.

August 23, 2007: The government formally announcesthe merger of Air India and Indian Airlines into a newcompany called National Aviation Co of India Ltd, orNACIL.

March 2008: NACIL posts a loss of Rs2226 cr. in 2007-08.


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June 12, 2009: Air India issues a circular that the Junesalary will be delayed by 15 days due to a cash crunch.

June 24, 2009: Air India is asked to prepare arestructuring plan by Mr Manmohan Singh in 30 days.

July 3, 2009 : Air India staff strike for two-hours againstdelay in the payment of June Salaries.


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July 14, 2009: Civil Aviation minister Praful Patelannounces that AI has accumulated losses of Rs7200 cr.with a loss of more than Rs5,000 cr. in 2008-09.

July 20, 2009: Mr. Patel announces Air Indias borrowings

rose from Rs6550 cr. in Nov 2007 to Rs15241 cr. in June,2009.

July 25, 2009: Air India executives and SBI Caps wereasked by Committee of Secretaries to prepare a costreduction initiatives to justify its demand of Rs15,000 cr.bail out.


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August 21, 2009: Air India said it will cut 50% ofproductivity lined incentives from its 31500 employeesaiming at saving Rs700 cr.

September 03 2009: Air India puts off domestic low fareservice launch to November.

September 28, 2009: Talks between Air Indiamanagement, pilots fail.


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September 30, 2009: Govt intervention to end pilots

strike wont help national carrier reach cost-cutting goalto qualify for rescue.

October 6 2009: The losses are mainly on account ofexcess capacity in the industry and high jet fuel costs,said the official who did not want to be identified.

February 21, 2010: State-owned oil marketing firms hadthreatened to halt jet fuel sale on credit.


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The airline is still recovering from the 22 May crash of anaircraft in Mangalore that left at least 158 passengersand crew dead.


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STEPS TAKEN BY NATIONAL

AVIATION COMPANY OF INDIALIMITED(OR NACIL).


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November 10, 2009: The launch of an all-economydomestic service by NACIL had been expected to reduceairfares and help the state-run airline firm compete betterwith rivals Jet Airways (India) and Kingfisher Airlines.

November 18, 2009 :Air India, which had posted anaccumulated loss of Rs7,774 cr. till now, appointed BoozAllen to look at costs across the board and suggest ways

to save.


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May 30 2010: At least 16 banks have queued up withoffers to refinance a $475 million aircraft acquisition loanas part of its restructuring programme.


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MAJOR CAUSES OFTHE PROBLEM


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Unnecessary fleet expansion causing huge debttrap of around 25000 crore.

Bloated workforce-due to the merger theworkforce is double than the global benchmark.Compared to other international airlines whichhave a employee/aircraft ratio of around 150 AirIndia has around 250.


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Grievances of the staff ;HR issues is one of themost important reasons why Air India hasbecome almost bankrupt.

Low passenger load factor: its load factor is lessthan 70% when other competitors like Air Deccanhit around 80%.


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The final and the most important issue is theefficiency of the top management which isactually running the airline. Over the years the

head of Air India has been a handpicked personfrom the aviation ministry.


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To cut unprofitable routes and create a new plan thatwould focus on a hub-and-spoke route model.

To clear $9 billion in debt as well as outstandingdues both to airport developers and state oil firms.

To arrange $4 billion of working capital debt.

To lease some of the 14 vacant floors in its landmarkbuilding in south Mumbai to raise about $1 billionover five years.


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THANK YOU

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