merging of indian airlines and air india
Post on 21-Jan-2017
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RAJESH GANDHAM (PR)
INDIAN AIRLINES FLIGHT
Established
Head Quarters
Slogan
:
:01-08-1953
New Delhi
:
“Have You Tried The New Air India?”
Logo :
Initial Capital : Rs3,20,00,000/-
Chairman & Managing DirectorRohit Nandan
Indian Airlines focused primarily on Domestic routes. Indian Airlines was state-owned, and was administrated by the Ministry of Civil aviation. It was one of the two flag carriers of India, other being Air India. Eight pre-Independence domestic airlines, Deccan Airways, Airways India, Bharat Airways, Himalayan Aviation, Kalinga Airlines, Indian National Airways and Air Services of India and the Domestic wing of Air India, were merged to form the new domestic national carrier Indian Airlines Corporation.
Key Points
+ =
On July 15, 2007 Air India (AI) and Indian Airlines (IA) were merged to form a new company
called Air India under the National Aviation Company of India Ltd. (NACIL)
Founder Jahangir RatanjiDadabhoy Tata
:
Founded :15-10-1932Head Quarters : New Delhi
Brand Ambassador : Maharaja
Ashwani LohaniChairman & Managing Director
V. HejmadiFinance Director
N.K.JainPersonnel Director
Primary Hubs•Chhatrapati Shivaji International Airport (Mumbai)•Indira Gandhi International Airport (Delhi) Secondary hubs•Chennai International Airport (Chennai)•Netaji Subhash Chandra Bose International Airport (Kolkata) Focus cities•Bengaluru International Airport (Bengaluru)•Cochin International Airport (Kochi)•Rajiv Gandhi International Airport (Hyderabad)•Sardar Vallabhai Patel International Airport (Ahmedabad)
HUBS
SUBSIDIARIES Air India Cargo Air India RegionalAir India ExpressAir India Charters LimitedAir India Air Transport Services
INVOLVEMENT IN SPORTSAir India football ClubAir India cricket teamAir India hockey team
In the year 1938 Tata Air Services was renamed as Tata Air Lines.
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
On 25th August, 1953 all domestic services were transferred to Indian Airlines.
On 27 February 2011, Air India and Indian Airlines merged along with their subsidiaries to form Air India Limited.
KEY POINTS
Destinations• Air India serves 49 domestic destinations and 26
international destinations in 19 countries across Asia, Europe and North America.
• Its capacity has increased to 1312 destinations. Any passenger can travel to any of the destinations within the member airlines, having ticket from Air India.
• No. of passengers have increased from 37000 per day ,to 50,000 passengers per day.
Reasons Leading to MergerEscalating costs of Aviation Turbine Fuel (ATF)Immense competition from private and low cost airlinesIncreased cost pressures due to acquisition of additional
aircraft Leadership crisis due to frequent change of the chairman-
cum-managing directorAir India could not fully use the bilateral rights unlike
foreign airlines which took maximum advantageDeclining passenger traffic in the premium class
What the merger tried to achieveEconomies of scale in areas such as maintenance, ground
operations, the use of landing slots and parking rights etcVolume Discounts in areas such as fuel purchase, insuranceIncreased fleet size such that the combined fleet was of over 120
aircraft, currently over 150 aircraft, placing it among the top 10 airlines in Asia, and the top 30 in the world
Hub and spoke system which could be achieved by the merger of the international and domestic airlines
Leverage and pool-in of resources such as manpower, infrastructure and assets, better aircraft and resource allocation
Star Alliance membership (Air India has been invited to join the 21 member consortium)
Challenges and ObstaclesEmployee opposition due to fear of retrenchment, and
redundancy of roles.Union issues and distrust as both companies had strong
unions which would oppose any kind of wage and operational changes.
Operational differences as both the airlines followed completely different pay structures and airline routes which could result in a conflicts of interests situation.
Different fleet compositions of the airlines would create complications in inventory management, maintenance, repair establishments, and pilot training.
Post Merger ProblemsIncomplete integration of official positions, of IT systems and as
well as infrastructure due to different aircraft flown by the two companies, and inability of employee unions to accept merger
Decline of customer service due to integration issuesBallooning of losses due to
o increasing prices of ATF o decreased passenger traffic during recessiono unnecessary and costly acquisition of aircraft fleet
Leadership crisis continues due to frequent change of CEOs (4 different CEOs in last 2 years)
Increased competition from domestic airlines as well as international airlines due to unfavorable government policies
Pre and Post Merger Profit and Loss
Annual Loss from Financial Year 2009
Growth PoliciesIn annual budget 2012, central govt. announced Rs 30,000 Crore for
rejuvenating he company from recession up to year 2020. Air India received:
Rs 12000 cr in 2013 Rs 6000 cr in 2014
Air India has deducted 25% of the salary of each & every employee. All types of programs, ceremonies and functions has been declined. Finance is being planned to be utilized on infrastructural
developments.
Future Policies• On September,2014 it was decided to form a trust called ‘ Real
estate investment trust’ which shall manage the all the static property of the Air India.
• Air India has property of worth Rs 18500 Crore spreader all over the world.
• R. E. I. T shall give its property on lease or rent to private owners to raise income on regular basis. According to Airport officials, it will certainly help to maximum utilization and regular maintenance of available resources ( and properties) and increase the revenue.
Model : Air India Flight 855
Date : 01-01-1978
Place : Arabian Sea, near Bombay
Passengers : 190
Crew : 23
Survived : 0
Flight Accident
Model : Air India Express Flight 812
Date : 22 May 2010
Summary : Runway overrun due to pilot error
Place : Mangalore international Airport
Passengers : 160
Survivors : 8
Flight Accident
Institutional StructureCMD
JOINT MD
FUNCTIONAL DIRECTOR
EXECUTIVE DIRECTOR
GENERAL MANAGER
AGM
AT DEPARTMENT LEVEL
Senior Manger
Manger
Deputy Manger
Assistant Manger Asst. Manger Officer
Asst. OfficerSupervisorAsst. SupervisorEmployees
DepartmentsPersonnel DepartmentCommercial DepartmentFinance DepartmentMedical DepartmentSecurity DepartmentMaterial management DepartmentEngineering DepartmentInflight services Department Planning DepartmentCorporate AffairsVigilance Department
Pilots
Swot Analysis
Strengths Strong Backing by the government of India Brand New Fleet of aircraft. 108 fleets. Known for its unique and high quality "Maharaja" advertising.
Weaknesses
Poor Management decisions Labour Problems Financial Crisis leading to payment issues of employees High Cost structure
Opportunities Domestic Market Growth Dedicated set of customers. Expansion of routes and international destinations Target low income groups
Threats Rising Labour Costs Rising Fuel Costs Price WarsTerrorist Threats
Services• Flying Returns is Air India's frequent
flyer programme. The programme is
also shared by all other Air India Limited carriers.
• Business Class seats on board the Boeing 777-300ER
• Premium lounges• High Class Cabins• In flight entertainment
Awards And Recognitions• World's first all-jet airline- June 1962• World's largest operator of Airbus A310-300• Air India's security department became the first
aviation security organisation in the world to acquire ISO 9002 certification (31 January 2001).
• Preferred International Airline award for travel and hospitality from Awaz Consumer Awards 2006
Prepared ByRAJESH GANDHAM (PR)
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