A Project Report On

In partial fulfillment of BBA

Submitted by: VIPUL Roll No. University roll no.

Submitted to: MR. AMIT GUPTA (Course co-ordinator)

Maharaja Agrasen Institute of Management Studies
(Affiliated to Guru Gobind Singh Indraprastha University)



It is to certify that Mr. VIPUL Studying in our institute of management studies was allotted the project on “INDIAN AIRLINES” by Guru Gobind Singh University has successfully completed it under the guidance of Mr. AMIT GUPTA (Course co-ordinater)

(Course co-ordinator)



I take this opportunity to express my profound sense of gratitude and respect to all those who helped me through out the duration of this project. It gives me immense pleasure to acknowledge my indebtedness and sense of gratitude to Mr. AMIT GUPTA (Project guide) for the project under taken. I also immensely thank the other faculty members of the institute under who continuous support and guidance I completed the project.



I here by declare that the project work titled “INDIAN AIRLINES” Is an authentic work carried out by me under the guidance of (Project guide) for the partial fulfillment of degree of BACHELOR OF BUSINESS ADMINISTRATION (Gen). And this has not been submitted anywhere else for the award of any other degree or diploma


The current millennium has unfolded new business rules most the significant of them being that company has to constantly look into minds of the customer. Customer loyalty plays a significant role and today securing that loyalty requires quality right price and of course last but not the least i.e. creating awareness about their service. As a trainee, I was given knowledge about the way and style of their working, their routine and their environment. It was a great experience in getting under such a reputed company, which has in it the ability to retain customer.


• Preface • Objective • Research methodology

Introduction • Company profile • Marketing strategy

• Analysis of data

• • • • Questionnaire Suggestion Conclusion Limitation





I feel great pleasure in doing my project “EFFECTIVENESS OF VARIOUS PROMOTIONAL FARES OF INDIAN AIRLINES” with Indian Airlines. The whole hearted support of the executives of the Indian Airlines has enabled me to complete this project. This project is all about the “Marketing initiatives taken by Indian Airlines” with a rapidly changing technological, social, economic, political-legal and the trend towards globalization of business and industry, emerging of various private airlines; effective marketing management has become a very challenging job. In this project I have analyzed the different promotional fares implemented by Indian Airlines and have given feedback regarding their effectiveness and whether they should be continued or discontinued on different sectors.


 To identify the services offered by INDIAN AIRLINE.  To study and analyze the customer perception and preference about INDIAN AIRLINE.

Finally to draw the various conclusion and recommendation on the basis of study conducted.



Managers need information in order to introduce products and services that create value in the mind of the customer. But the perception of value is a subjective one, and what customer’s value this year may be quite different from what they value next year. As such, the attributes that create value cannot simply be deduced from common knowledge. Rather, data (information) must be collected and analyzed. The goal of Marketing Research (analysis) is to provide the facts and direction that managers need to make their more important marketing decisions. The analysis involves the following steps:  Define the problem.  Determine research design.  Identify data types and sources.  Determine sample plan and size.  Collect the data.  Analyze and interpret the data.  Prepare the research report.

For the purpose of study, data from the in-house survey conducted by the marketing department (secondary data) has been used and also for

coming out with the recommendation. It was also felt that mere secondary data would not provide in-depth information for the analysis, hence it was decided that interactive discussions with the managers and the head of every department would help in an in-depth and true understanding of challenges faced by the department. The methodology adopted was to gather relevant information from the appropriate department, correlate the information obtained and to present the information in a logical and systematic manner.


INTRODUCTION Though the Open Sky Policy was announced 11 years back, for all practical purposes, the Indian aviation industry actually took off with the entry of as many as 6 companies in the first half of 1991 when the state run Indian Airlines was facing industrial strife.

After reporting an Rs.11 crore profit in 2001, Indian Airlines suddenly saw its market share drop and its supremacy challenged. Pilots let the airline in hordes to more lucrative jobs with the private operators, which resulted in under utilization of its Boeing fleet. Passengers, too, suddenly realized that there were airlines willing to offer that little extra bit that means so much, and Indian Airlines suddenly saw its market share drop to 53 per cent from its earlier unassailable position. The growing disenchantment with the services (or lack of it) of IA and the frequent agitation by its employers prompted the “decision-markets” to usher in private air-taxi operators (ATO’s). Nineteen others got no objection certificates (NOC). By 1996, there were 12 operators in the market, by their market share in domestic traffic was negligible. By 1999, there were seven players who were operating with a scheduled airline’s while 22 others were fling as non-scheduled or ATO. The scheduled airlines included EAST-WEST AIRLINES, MODI-LUFT,

DAMANIA, JET AIRWAYS, NEPC and ARCHANA. Companies such as EAST-WEST leased several 100 plus seater aircraft and developed a large network in a short span. Jet Airways grew slowly and not only outlived competition, but established itself as the largest private sector player.

While the market share of private operators soared to 41% from 1996 to 1999 (eating into IA’s share), the initial euphoria died out in 1997 when the Air Corporation Act of 1953 was repealed and it became obligatory for ATOs with three or more aircraft to become scheduled airlines and operate according to certain guidelines (protocol). It became mandatory for scheduled airlines to fly at least 10% of their capacity to the far flung uneconomical areas such as north-east, Jammu and Kashmir and 50% to non-trunk stations. With this, came the realization that a whole lot of overheads associated with the flying were involved and higher utilization of the leased aircraft and better route planning was essential to survive. Obviously, when there was a mismatch between the returns and the outgo, some of them shut shop.

But, even before the guidelines were issued in 1997, DAMANIA, which had created brand equity of its own as an elegant, passenger-friendly

airline, buckled under pressure and was purchased by NEPC in 1996. UB AIR and RAJ AIR followed it. By the first quarter of 2000, three more airlines suspended their operations due to non-availability of aircraft, EAST-WEST in May 1999, MODILUFT in November 1999, and NEPC in March 2000.


They came, some faltered, most fell by the side, but while they were there, they managed to shake Indian Airlines from its monopolistic complacency, and prepared it to battle for its tort with the likes of Jet Airways and Sahara Airways as and when they fly. After a fairly long bout of uncertainty, domestic airlines are on the upswing again. And as aviation experts projected, only the players who understood the rules of the game, have survived and are prepared to make a comeback to this glamorous but highly capital- intensive industry.

Jet Airways is on a fleet expansion spree, while Sahara Airlines is preparing for a face life that should really gear up the domestic market. Indian Airlines, despite its failure to phase out older aircraft, is regaining lost ground.

Today, the Indian sky is left for Jet Airways, Sahara Airlines and Indian Airlines to expand and grow…



Indian Airlines (IA) is the India’s largest government owned regional airline systems in Asia, with a fleet of 62 aircrafts (i.e. Dornier D-228, ATR-42, Boeing 737, wide bodied airbus A300s, one Fly-By-Wire Airbus A320s). Indian Airlines became operational since its inception in the year 1953 and celebrated its Golden Jubilee in the year 2003 completing its 50 years of transcendental service in air traveling.

Indian Airlines has been setting the standards for civil aviation in India since its inception. It has many first to its credit, including the introduction of the wide-bodied Airbus A300, Domestic shuttle service and Walk-In Flights. Moving with time, Indian Airlines is one of the first organizations in the country to establish a widespread computerized network for reservations and ticketing.

Alliance Air is the fully owned subsidiary of Indian airlines. Indian Airlines has total staff strength of approximately 19600 employees with an annual turnover of more than Rs 4000 crores (1billion USD) including that of Alliance Air. The passenger carriage, which was 0.5 million in 1954-55, has grown to 7.78 million in 1999-2000. Today Indian Airlines


together with its subsidiary airlines carries a total of over 7.8 million passengers annually, which includes 64 national and 16 international destinations with 35000 seats daily?

Indian Airlines have been divided into four regions i.e. Eastern region, Western region, Northern region and Southern region. The Indian Airlines international network spans over Kuwait, Oman, UAE, Qatar and Bahrain in west Asia, Thailand, Singapore, Yangon and Malaysia in south-east Asia and Pakistan, Nepal, Bangladesh, Myanmar, Srilanka and Maldives in the south Asian sub-continent.

Its unique orange & white logo emblazoned on the tails of all its aircraft is perhaps the most widely recognized Indian brand symbol that has over the years become synonymous with service, efficiency and reliability. It has state-of-the-art facilities for all aspects of maintenance. The pilots are trained at Hyderabad where the commanders and captains are trained in all types of aircraft in the Indian Airlines fleet. State-of-the-art full flight simulators are available for A300, A320 and B737 aircrafts.

The Airlines online facility provides services like Passenger Reservation, Ticketing, Message Switching and fare display. An interactive voice

recording system for providing flight information is also integrated with the reservation system. Airline code:IC CD Indian Airlines Alliance Air

Aircraft acquisition:A300 A320 737 ATR 228 154 62 Class:C JY Business class Executive class Economy class Wide Bodied Airbus A300 Fly-By-Wire Airbus A320 Boeing 737 ATR-42 Dornier 228 TU 154 IL 62

Days:1 2 Monday Tuesday

3 4 5 6 7 -

Wednesday Thursday Friday Saturday Sunday


AIRCRAFT TYPE A-300 A-320 B-737 D-228 ATR-42

STRENGTH 4 41 11 2 4

AVG LIFE(YRS) 20.5 8.7 18.8 14.6 -




J 20 33 32 -

Y 119 125/126 215 215 19 50

TOTAL CAPACITY 119 145/146 248 247 19 50







ANNUM(HOURS) 1999-00 2000-01 2001-02 199920002001-02 A-300 A-320 B-737 24886 81680 905 24804 84346 431 19629 98042 670 00 2274 2954 **** 01 2400 3048 **** 2491 3178 ****

**** B-737 has been given on lease to Alliance Air.



Today nearly 80%of the customers are provided by the travel agents to the Indian Airlines and these travel agents are 2000 in number spanning the whole country. Indian Airlines provides 5% and 7% commission on domestic and international fares respectively to the travel agents.

STRENGTHS  Large fleet.  Experienced staff.  Dedicated departure terminal at Delhi.  Connectivity with the reservation centers and agents is good.  Adequate infrastructure and large network.  People are loyal towards the national carrier.  Government Backing.  Indian Airlines has a modern and complete in-house training facility.

WEAKNESSES  High overheads and huge workforce resulting in lower output.  Preconceived image of PSU’s.  Attitude of the staff.  Ageing fleet.  Inaccessibility of the staff over phone.  Political/Bureaucratic interference.  On the spot decision making flexibility not there.  Ageing workforce (cabin crew).

 Indian Airlines has its socio-economic responsibility of catering to the inaccessibility areas at subsidized rate affecting operational expenses.  Being a dedicated terminal all services rendered at the airport is presumed by passengers to be done by Indian Airlines.  Job security too high.


OPPORTUNITIES  Tourism industry is gaining momentum.  Induction of new aircrafts on lease.  Response to some of the promotional fares (schemes) is encouraging.  Shelving of the privatization plans of Indian Airlines by the Government of India.  Corporates are showing interest in Indian Airlines.  Weakening of the dollar rate in comparison to the rupee.  Economic scenario is showing an upturn.

THREATS  Perception of the better product in comparison to that of the competitor.

 Recent world events hitting the tourism industry badly.  Expectation of people from Indian Airlines is high, even some of them are unrealistic.  Increase in the capacity of various airlines.  Falling market share of Indian Airlines to that of Jet Airways.



The product that Indian Airlines sells are ‘SPACE’ it may be its seats or cargo space. This product is highly perishable and costly. Airlines earn revenue by selling this space. This means that higher the seats sold more is the revenue generated. Thus if the plane goes in the air with empty space, this means that much space has perished. Thus the life cycle of the airline’s product begins and ends with each flight. The marketing concept of building an organization around the profitable satisfaction of customer needs has helped firms to achieve success in high-growth, moderately competitive markets. However, to be

successful in markets in which economic growth has leveled and in which there exist many competitors who follow the marketing concept, a well-developed marketing strategy is required. Such a strategy considers a portfolio of products and takes into account the anticipated moves of competitors in the market. AFTERMATH To rectify the melody that has been slowly but surely creeping, resulting in crippling results and damaging reputation. Indian Airlines took resort to the Turn Around Strategy which constitutes the following:


TURN AROUND STRATEGY: On 1st March 1997 Indian Airlines became a Public Limited Company. Till now IA had only emphasized on distribution, with marketing as a non-issue. Since the company was faced with increasing competition, lack of resources and mounting losses, it had to formulate and implement a Turn Around Strategy. To find its place in the sun again, IA has unleashed an aggressive marketing & advertising exercise backed by service up gradation & customer friendly overturns. The new plan consisted, of the following: 1. HRD Initiatives As the first step free and frank discussions with a cross section of the employees were held. Top management undertook extensive tours of all stations to communicate the details and vision behind all major policy initiatives and to get their response to them. Focus on training of personnel was enhanced to increase effectiveness. A greater transparency was built into recruitment and transfer policies with a view to boosting their trust and confidence. In interactions with unions and Associations a firm but fair attitude was taken. Productivity Lined Agreements, where the inflows exceed the outflows despite the fact that market wages were being given, were entered into.

2. Increased Utilization of Aircraft With a view to increasing aircraft utilization, pilots needed to be made to put in more flying hours and steps had to be taken to increase the number of Commanders. Productivity of Engineers also had to be linked to the daily availability of aircraft. i. Enhanced Productivity and Availability of Pilots The agreement signed with ICPA in 1996 resulted in the increase in monthly utilization of Pilots from 50 to 63 hour. With the promotion of 80 Pilots into the executive cadre monthly utilization went up further to 75 hours. Certain rationalization and changes in training patterns of Commanders, due to signing of a landmark agreement with pilots’ Association resulted in increased out-turn of

Commanders. ii. Increased Productivity of Engineers Productivity of Engineers has also significantly increased as a result of other productivity-linked agreement thereby increasing daily availability of aircraft as follows: A-300 A-320 7-8 aircraft per day from 4-5 25-26 aircraft per day from 20

3. Increased International Operations (a) Indian Airlines went in for increasing the number of destinations to neighboring countries. In 1997 Indian Airlines operated 12 international stations, which went up to 17 stations in 1999. The new stations added are Doha, Kuala Lumpur, Kuwait, Bahrain and Yangon. (b) On the domestic front – IA is planning to start Shuttle type flights on major metro routes like Mumbai–Bangalore, Mumbai–Chennai, and Delhi-Bangalore. It has already started launching shuttles on the heavy Mumbai–Delhi routes. 4. Creation of Profit Centers While on one hand, Indian Airlines’ size is strength, it is also a major disadvantage when it comes to operating in a fast changing and competitive environment. It is not possible to take decisions specific to small groups of employees without reference to the 22003 strong work forces. The organization is unable to be as nimble as it ought to be in terms of decision making, customer service and employees motivation. Consequently, an integral part of turn around strategy was to hive off certain activities into separate profit centers, to make them more focused, flexible and accountable. Also a more direct


linkage between productivity and emoluments has been created, thereby reducing problems of industrial relations. The first of such profit centers was the state-of-the-art Jet Engine Overhaul Shop at Delhi. Similarly the Central Training Establishment at Hyderabad was also converted into a Profit Centre. On conversion as Profit Centre the earnings of CTE from outside party jobs after fully meeting the requirement of Indian Airlines, increased from Rs. 30 lakhs in 199795 to Rs. 390 lakhs in 1999-97. Recently the Auxiliary Power Repair Unit at Calcutta, the Ground Support Department and the Cargo Department has also been declared a Profit Centre. Indian Airlines has also set up a subsidiary airline, Alliance Air. This airline has helped in increased utilization of the Boeing aircraft by inducting Commanders from the open market and focusing on regional routes. It has also enabled the Commanders in Indian Airlines to be utilized more optimally on A-300 and A-320 fleet. 5. Marketing Initiatives Indian Airlines took a number of economic initiatives and brought about significant improvements in its product. Sustained and


meaningful campaign was launched to disseminate information about these improvements. The marketing initiatives taken were: I. PRODUCT IMPROVEMENT 1999-00 EXTRA SEAT-PITCH: Extra seat-pitch in B-737 and Economy Class of Airbus A-300. WIDER SEATS: Wider seats provided in Executive Class of Airbus A-320 aircraft. CHOICE OF MEALS: Introduction of a choice of meals, bread/fruit baskets, soups, damask linen tablecloth and napkins, hot and cold towels. FREQUENT FLIER PROGRAMME: IA has further strengthened its frequent flyers programme (FFP), by entering into a reciprocal arrangement with Air France and launching Joint Promotions with American Express, Hertz Rent – a – car and the Welcome group. It also launched a major drive to enroll more members to its FFP program, with lucky draws for a luxury car, for which passengers who had flown at least five times between midDecember 2000 and mid-March 2001, tried their luck.


SENIOR CITIZEN DISCOUNT: Persons who have attained the age of 65 years on the date of travel land who are resident citizens of India are entitled to 50% discount on the normal rupee Adult Fare. WAIVING OF CANCELLATION CHARGES: 2000-01 Indian Airlines has waived of cancellation charges, provided the reservation is cancelled one hour before the scheduled departure of the flight. There will be a nominal refund fee of Rs. 100/- only in case the ticket is refunded /reissued. CHECK-IN PLUS: Assistance for minors, elderly and handicapped passengers. BAGGAGE PLUS: Baggage Allowance on all domestic flights enhanced by 10 kilograms. Infants also allowed 10 kilograms of free Baggage Allowance. DIET SPECIAL: Light, low fat, easily digestible recipes made by new cooking methods and mediums, sugar, salt, and fat free diet meals and mineral water. MEAL SPECIAL: Better presented meals with weekly changes.

TRANSIT SPECIAL: Special Transit Desks, through check-in of baggage and meals during transit waiting time. FESTIVAL FOODS: Passengers were served special sweets on Diwali, Bengali food on Durga Puja, Avadhi food on Holi and Plum Cake on X’mas. DIAL-A-CANCELLATION: Passengers and Travel Agents can now effect cancellation on telephone or through fax message.

REPORTING TIME: Reporting Time reduced from 75 minutes to 60 minutes at all the airports except Delhi, Srinagar, Leh and Jammu. II. RESERVATION FACILITIES • To facilitate reservation between any two stations of Indian Airlines network, the instant reservation facility has been extended to a total number of 69 stations.

• Of the 53 domestic stations where Indian Airlines flights are being operated presently, 52 stations are equipped with computerized reservation facility.

• All the 17 international stations, where Indian Airlines is presently operating are equipped with CRT terminals. • Computerized reservation facilities extended to about 750 agents spread over 38 stations. • Indian Airlines and Air India jointly under National Marketing Division (NMD) are distributing Systems Interface for Travel Agents Reservations (SITAR), which is the state-of-the art technology from SABRE. 6. Incentive Schemes IA has realized that unless the distribution network is rejuvenated with generous doses of incentives, the agents, who account for twothirds of the airline sales, will just not respond. The airline has

introduced a three per cent sector-linked – incentive-commission, which can be deducted by agents at source. Even the bank

guarantees were frozen at last year’s level for all the agents and not raised to match over trading. The guarantees were raised in proportion of increasing business, which invariably discourage agents from plumping for more sales. The airlines set up an “agency help desk” to focus on problems of the trade. High – speed modems are also being installed to facilitate faster transactions. 7. Price


In the year 1999, IA started a “make up strategy” i.e. slash in price for the make up of losses. It was followed up by many airlines as a quick penetrating strategy to draw in big crowds. The General Managers in the four regions have been authorized to extend a 15% bulk discount to passenger groups depending on market conditions; point-to-point fares have been rationalized (a special discount of 9% is offered on 135 specific routes) and excess baggage payments are accepted in credit cards. 8. Promotion through Frequent Flyer Programme (FFP) To add more value to its FFP, IA is talking to both American Express and Citibank to issue a co-branded card, which will offer a host of benefits against ticket purchase and entertainment expenses. It is also signing up a ‘flying returns’ agreement with Citibank, which will entitle users to redeem their credit card points against mileage points and free tickets thereafter.


9. Offer of Free Pagers by Mobilink It has also tied up with Mobilink to offer free pagers to some 70,000 frequent flyers at six major metros. The pagers will enable the airline to inform the passenger about the changes in schedule, flight delay etc. While the pagers service will be free in the first year, in the subsequent years, Mobilink will levy a nominal user fee. The pager Company will thus acquire a large chunk of customers and ‘sell advertisements’ on the pager. 10. Customer Contact Programme The airline is finally laying more emphasis on customer contact programs. In order to design an ideal flight schedule, IA has hired IMRB to meet a sample group of 10,000 frequent flyers at Delhi, Mumbai, Chennai, and Calcutta. It is also roping in a direct marketing agency to respond to passengers grievances. 11. Touchdown boards The message to the passenger, obviously is, “we care”. To increase customer awareness, the airline has put up “touchdown” boards at the six major metros, to keep passengers informed about customer relevant developments in the airline such as the monthly product upgrade, value addition schemes, promotional efforts, lucky draws etc. The airline has also launched advertisement cum media


blitzkrieg to drive home its strengths: IA’s schedule advantage, same day return facility, multiple options, etc. 12. Advertisement Cum Media Blitzkrieg Designed, developed and executed by Nexus Equity Advertising, now known as Enterprise Nexus Communications after its merger with Enterprise Advertising, the marketing programme is a multimedia communication module. The package aims at establishing the strengths of IA, reinforcing its leadership and overall improving its image amongst business travelers, as the primary target. It includes press ads, posters, picture postcards, calendars and the “travel wise consumer contact programme”. The first campaign in 1998 highlighted IA’s tangible strengths. Using an almost negative creative approach, through a confessional tone to disarm the angry passengers, one of the ads said: “We admit Indian Airlines does not give you the same choice as others do”, followed by copy that read, “Indeed, no other airline offers such a wide choice of aircraft, and not just a choice of seats. Overall, this campaign

highlighted IA’s fleet size, maintenance efficiency, infrastructure, leg room, extra baggage allowance.


The second campaign in the same year was a progression of the first but it adopted an emotional approach with lines such as: “I choose my airline the same way I choose my doctor, on sheer experience”. A third campaign, still ongoing, attempts to now bring out consumer benefits that arise from IA’s strengths that were brought out in the previous campaigns. While the visuals emphasis the reach and spread of Indian Airlines, the tone is more assertive. 13. Cargo Handling In the passenger segment, the IA cargo division – an independent profit centre now-has launched an all-out drive to garner a large share of the business. Unlike the passenger segment, the cargo cell still retains about 80% of the market. catching up. Interestingly, the ad campaign launched by the cargo division seeks to highlight the changing face of business. It underscores the vast network, its exclusive tie-up with GATI for door-to-door express service, a special arrangement to go global with Air France and an attempt to touch every nook and corner of the country with the Indian Posts and Telegraphs Department. But competition is slowly

IA has learnt to be a lot more flexible in its dealings with cargo agents now. It is also working at automation of all the cargo officers.

Consolidation of assorted cargo with bulk rates is now being allowed, and freight rates are being revised instead of sticking to published tariffs. What was unthinkable till some years aback has now become a distinct reality. Through all its efforts, IA is gradually trying to shed its monolithic image. And its communication exercise has; at least, given it a

clearer face as far as the consumer is concerned. But this public sector organization will have to keep its bootstraps pulled up if it wants to retain leadership in the market place. For, private airlines are not exactly sitting back on their haunches. CONSEQUENCES OF TURN AROUND STRATEGY:

1. Aircraft utilization increases A good average utilization of aircraft is 2600 hours per aircraft per annum, which was down to a low of 1600 hours in 1997. Efforts were made to increase aircraft utilization by increasing the productivity of engineers, pilots and by increasing the number of commanders. Aircraft utilization now well exceeds the desired norm of 2600 hours per annum.

2. Productivity of pilots rises -


With the implementation of the turnaround strategy, pilot productivity rose substantially. In fact, the monthly average flying increasing from 50 to 63 hours initially, and then to 75 hours.

3. Productivity of engineers grows The number of aircraft made available for operation per day measures engineering productivity. The aircraft availability

improved significantly over the last three years. The availability of A300s went up from a mere 4 aircraft per day in 1997 to 8 in 2000 and A320 from 20 in 1997 to 27 aircraft in 2000.

4. Creation of Commanders Indian Airlines had lost 166 pilots to private airlines. After the revised training pattern, the number of new commanders added to the fleet strength each year rose dramatically, from 20 new commanders added in 1997-95 to 67 in 1999-97.

5. International operations After 1997 five new destinations were added- Doha, Kuala Lumpur, Kuwait, Yangon and Bahrain. Also, fifteen new international city links were added.

6. Employee morale 40

With increased training efforts and management-staff interaction, there was a visible upsurge in morale and productivity among employees. What is significant is that no man-days were lost in the last two years. 7. Creation of profit centers a. Establishment of Alliance Air There was a dramatic increase in the utilization of B737, A320 and A300 aircraft with the hiring of new commanders and pilots, which benefited both Alliance Air and Indian Airlines. b. Jet Engine Overhaul Shop As a result of the creation of separate profit centre, the Overhaul Shop saves the company an amount of Rs. 2.85 crore in foreign exchange every year. c. Central Training Establishment Prior to its setting up as a profit centre, the annual revenue was around Rs. 30 lakh. This increased dramatically, with the revenue touching Rs. 390 lakh during 1999-97.

8. Passenger perception improves 41

From the ‘least preferred’ airline in 1997, IA has now become the ‘most preferred’ airline. Image tracking studies carried out from amongst the airline passengers by the reputed market research agency IMRB, over the last three years, show that Indian Airlines is now ahead of the private airlines. Other surveys carried out by reputed organizations such as MARG, MODE and MDRA also show that Indian Airlines is the most preferred carrier presently. Since this is a service industry with an intangible product, how do you market it ? Marketing the tangible aspects associated with the intangible product does it. The tangible aspects include price, promotion and place. To distinguish our product from that of others we have to maneuver the 4P’s of marketing i.e. Product, Price, Promotion and Place (place of distribution). Since the product of all the airlines is the same, why does one airline fare better than the other? This is because of the positioning of the brand in the mind of the customer. This approach is needed because consumers are bombarded with a continuous stream of advertising. The consumers mind reacts to this high volume of advertising by accepting only what is consistent with prior knowledge or experience.

The easiest way of getting into someone’s mind is to be first. It is very easy to remember who is first, and much more difficult to remember who is second. Even if the second entrant offers a better product, the first one more over has a large advantage that can make up for other shortcomings. In the eyes of the agents Jet Airways is the best placed in comparison to that of Indian Airlines in the next place in the eyes of the customers. They feel that same is the case in the eyes of the customers (this data is based on the survey of 48 agents carried in Delhi, mostly South Delhi). Indian Airlines was the first airline in the country but it is now positioned at the second place.



160 140 120 100 80 60 40 20 0 CUSTOMER AGENTS IC S2 9W

IC S2 9W

– Indian Airlines – Jet Airways – Sahara Airlines


60 50 40 27 30 20 10 0 Indian Airlines Jet Airw ays Sahara Airlines 22 51



This shows that people are generally aware of Indian Airlines (as compared to Sahara and Jet and actually travel by it also). The most preferred feature of the advertisement happens to be presentation for Indian Airlines. As regards Jet Airways people are moderately aware of it and also travel by it. Most liked feature of the advertisement is the message. Similarly in Sahara Airlines the feature most preferred is the media. This shows that people who are aware of the airline are not just verbally aware but also prefer to travel by that airline. This depicts that the effect of advertisement of is directly proportional to the uses to the airlines. Besides the high percentage of Indian Airlines travelers can be attributed to the fact that for the government officials it is mandatory to travel by IA.

Hence the question arises that how IA position itself?


Positioning of a service can be done either through promotional schemes or through the level of service provided.

PROMOTIONAL SCHEMESPromotional decisions are those related to communicating and selling to potential consumers. While coming out with the promotional schemes it is worthwhile to note the profile of customers served.

PROMOTIONAL FARESDifferent types of promotional fares are introduced to attract more and more passengers to travel in specific airlines to promote sales. With the implementation of promotional fares the motive is to increase the number of airline loyal passengers and of course revenue. Indian Airlines follows dual fare policy for its domestic service. The two types of fares are as follows: 1) USD FARE-

A. USD fare is applicable for all sales made abroad for domestic travel within India.

B. USD fare is also applicable for all sales made in India for domestic travel within India for following categories of

passengers: i. ii. Foreign nationals. Indian nationals residing permanently outside India.

C. Unless and until specified otherwise, USD fare is applicable for all sales made worldwide including India for domestic travel within India against the following documents: i. ii. iii. Sale against document of interlines patrons. Sale against IA international MCOs/PTAs. Sale against international credit cards and UATP card.

2) INR FAREINR fare is applicable for all sales in India for domestic transportation wholly within India for the following category of PAX: A. Indian nationals permanently residing in India. B. India, Nepal, Bhutanese, Tibetan refugees residing in India, Nepal and Bhutan. C. Foreign national studying in India and holding a resident permit. D. Foreign nationals studying in India and who are otherwise eligible for student discount under IA rules.


RESERVATIONThe Computerized Reservation System at Delhi, a state-of-the-art Computer Main Frame, is accessible to all major computerized reservation systems of the world. This enables the valued IA passengers to make reservation on any Indian Airlines flight for any sector all over the network from a single location in its booking office at any station. Besides, there are nearly 2000 approved travel agents all over India at the service of our passengers.

 Passengers can also make the reservation over telephone on time limit basis and purchase the tickets before the expiry of the indicated time limit.

 While making the reservation the passengers need to indicate all there contact numbers, including their residence, business and mobile numbers, where they can be contacted at all points of their itinerary. This helps IA to inform the passengers wherever they are in case of any schedule change or delay to their flight.

 Passengers also need to give their meal preference at the time of making reservations.


 Also special assistance is offered to the passengers who require special handling over and above the normal attention, like the disabled, those on wheel chair, stretcher or unaccompanied minors. Such requests for special attention may be made to the airline’s office while making reservations.

FARES IA domestic fares are quoted both in Indian Rupees (INR) as well as US Dollars (USD). The INR fare consists of basic fare and two governmental levied taxes, namely Inland Air Travel Tax (IATT) and Passenger Service Fee (PSF). The INR fare is applicable to resident Indians only while the dollar fare is applicable to foreign nationals and non-resident Indians.

 Besides, there are some special fares and discounts for senior citizens, students, the armed forces personnel, war disabled persons and many others.  Details of all concessions and special fares are available at all Indian Airlines booking offices and travel agents.


CANCELLATION CHARGES To allow flexibility to our passengers in their travel plan, we do not levy any cancellation charge provided the cancellation is effected at least one hour before the scheduled departure.  Rebooking and Refund charges may be applicable on a few specified routes during peak season to avoid fictitious booking and help availability of seats to bona fide passengers.

 Although there are no cancellation charges, ‘No-Show’ charges are applicable if a confirmed reservation is not cancelled at least one hour prior to departure. No refund except IATT/PSF is permissible on a ‘No-Show’ ticket.  Passengers can effect cancellation on phone or fax to our main booking offices and present the ticket physically for cancellation within Twenty-four hours.

Refund Administration Fee is levied while affecting the refund for unutilized tickets. The details can be obtained from the Indian \Airlines offices and travel agents.

 Passengers must keep their tickets in safe custody, as no refund is permissible against lost tickets. However, for international travel where passport control is possible, duplicate tickets can be issued after completion of certain formalities.

VALIDITY OF TICKETSIA domestic tickets, issued on normal fare, are valid for one year from the date of issue. International tickets are valid for one year from the date of travel on the first leg of journey. Validity of tickets issued on concessional and special fares may be different as governed by the rules applicable to that particular concession. DIFFERENT TYPES OF PROMOTIONAL FARESDifferent types of promotional fares are introduced to attract more and more customers to travel in a specific airline. The promotional fares on which I had worked are as follows:

Promotional One -Way Fare (POW) - Promotional one-way-fare is for travel introduced in one-way on a specific sector. Eg: - Delhi-Mumbai sector. Following table shows the number of passengers that traveled in POW promotional fare scheme out of the total number of passengers in the year 2003-2004 (April 2003–March 2004) in few sectors:


Round Trip Promotional Fare/Return Fare (RTP) – Round trip promotional fare is for travel to & fro on a specific sector. Eg: - Delhi-Mumbai-Delhi sector. Following table shows the number of passengers that traveled in RTP promotional fare scheme out of the total number of passengers in the year 2003-2004 (April 2003–March 2004) in few sectors:

Flight Specific Fare (FS) – Flight specific fare is introduced on that particular flight only. Eg: - The Flight Specific Fare on IC-801. Following table shows the number of passengers that traveled in FS promotional fare scheme out of the total number of passengers in the year 2003-2004 (April 2003–March 2004) in few sectors:


Question No. 1. Responses Brand Awareness – Top of the Mind Recall Indian airlines 57% Jet Airways Sahara Airline 2. Airline Usage Indian Airlines Jet Airways Sahara Airline 3. 62% 20% 18% 24% 19%

Awareness about Advertisement Indian Airlines Jet Airways Sahara Airline 51% 27% 22% of the



liked Feature Advertisement

Indian Airlines Presentation 56% Message 15% Media 19% Others 10% Jet Airways Message 61% Presentation 20%



Sahara Airline Media 50% Presentation 30% Message 20%


 Fare charges should be same for foreigners as for Indians.  Debit/Credit cards should be accepted for reservation.  There should be more transparency (clarity) in the announcement of the flights.  To open separate counters for single baggage and last minute departure.  Check-in time should be reduced.  Security checks need improvement. Personnel need to be more humane.  Easy information should be available to passengers regarding transit baggage.  More decent, polite and cheerful staff.  The baggage tags should have a solid glue system. The present plastic tags are very easy to tamper with.


The research study and the analysis of various aspects tapped lead to the following recommendation:  141 should be outsourced to a call center to deal with the enquiries. Non-availability of help lines has been the most common complaint of agents and passengers. IVRS should be provided for the agents/passengers waiting for their call to be attended by the operator. Some of the government organizations have successfully done outsourcing help lines.  With the oncoming of the Private Airlines on the country the customer awareness and aspiration of quality of service has been enhanced considerably. So Indian Airlines should emphasis on providing more efficient services both on the ground and in the air as done by Jet Airways to a large extent.  Dedicated counters should be made to handle last minute reservation, preferably for reservations being done on the day of the flight.  Ticket counters can be placed at major corporate houses which have a substantial amount of travel budget: wherein all the information about the schemes is available. These ticket counters are to be maintained at the expense of Indian Airlines.

 There should be internal and external audits to look in to the working of various departments.  An incentive scheme should be launched for the people at the front desk of the agency such as the ticketing agents. The ticketing agents should be provided with a unique identity number that they would have to quote on the tickets. The points would automatically credited to their account. On the accumulation of certain number of points they will be given FOC’s. This will also help in checking false ticketing.

Apex-7 and Apex-21 fare (scheme) should be continued on account of its popularity.

Scheme like Smart Apex fare scheme for business class passengers can be introduced.

 Flexibility in Smart Apex fare scheme should be increased.  All the promotional schemes and services should be extensively advertised to bring awareness to make itself better known to the potential customers. They should be advertised through e-mails, corporate presentations and through road shows. Executive class bonanza scheme should be started again.


 Holiday packages should be sold only through Indian Airlines booking offices and not through agents, as there is every chance of the agents offering parallel deals to the customers.

 Indian Airlines should schedule more number of flights to and
from stations like Mumbai, Delhi, Chennai, and Kolkata as these sectors account for high Pax load.  Indian Airlines can introduce late bird/night bird flights between metros.  The check-in time should be minimal. Wherever there is likely to be long cues more counters should be opened.  Indian Airlines as introduced by Sahara Airlines should adopt the facility of valet services and it should be extended to all classes.  Tele reservation and computerized check-in procedure should be made mandatory.  The process of ticketing and cancellation should be made more easy, smooth and as flawless as possible as most of the respondent are not happy with the present ticketing procedure.


 Delayed flight, which is a very painful experience for the travelers, should be attended to as top priority because the main clientage is business men and they are time bound.  Indian Airlines should acquire (induct) new aircraft to upgrade product quality in order to build brand image and retain passengers.  AASL should be given more autonomy so that it could conduct some of the activities related to marketing at its own to add up innovative schemes and generate in revenues.

 Alliance Air authorities should be made in easy approach to the passengers for the grievance handling and complaints.  The flight of Alliance Air should be made more attractive that can be in the form of a booklet as it is of the Jet Airways.  It is necessary for Alliance Air that it should reconcile the sectors and the frequency at which it is operating so that it could reduce costs and earn more profit.  Alliance Air is required to add up more and more places, which have the status of tourist places.


 Service innovations like automated flight schedules, over the phones, provision for customizing meals, in-fight mail order shopping etc. should be introduced to lure the passengers.  Indian Airlines needs to undertake aggressive marketing.  Alliance Air should consolidate its market share by further improving its service standards and adding more routes to its network  Indian Airlines should undertake customer satisfaction surveys.  IA should make provisions to add up more financial benefits for its passengers.  International desk of Indian Airlines should be made more accessible.  Flight status should be made available through SMS.



The healthily competition of domestic airlines has set new trends in the quality of service. Previously in the monopolistic environment of Indian Airlines the quality and the desire to win over the constraints was totally dismal. With the oncoming of Jet Airways and Sahara Airlines there is sea change in the quality of service and the pride of the job. Hence today it is a matter of great significance that the Indian Airlines staff now cares about the passenger comfort and take pains to see that the flight is on time. Indian Airlines so should try the high percentage 98% of on time service of Sahara Airlines is the hallmark of their quality of service.

Advertisement has brought awareness among the people regarding Indian Airlines (as compared to Sahara and Jet and actually travel by it also). The most preferred feature of the advertisement happens to be presentation for Indian Airlines. As regards Jet Airways people are moderately aware of it and also travel by it. Most liked feature of the advertisement is the message. Similarly in Sahara Airlines the feature most preferred is the media.


This shows that people who are aware of the airline are not just verbally aware but also prefer to travel by that airline. This depicts that the effect of advertisement of is directly proportional to the uses to the airlines. Besides the high percentage of Indian Airlines travelers can be attributed to the fact that for the government officials it is mandatory to travel by IA. Customer grievance and prompt redressal should also be rated as top priority as this will not only provide the necessary input and the feedback but also would go a long way in improving the image of Indian Airlines.



 Due to constraint of time, a larger sample size could not be chosen.  The respondents may not have divulged their true feelings.  Marketing strategy of a company is indeed a closely guarded secret especially in the face of stiff competition as in the case of the airlines sector in India. Therefore, to extract information on the marketing strategy was a difficult task.  Minor errors may have been introduced due to fatigue, etc.


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www.indianairlines.com www.indianairlines.net www.indian-airlines.com www.indian-airlines.nic.in www.indianairlines.indiatimes.com www.jetairways.com www.airsahara.com www.airliners.com www.airsahara.net


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