Executive summary Case related to the aviation crisis of AI which was primarily rose because of poor performance.

Uncertainty in the airline market and intense competition was the major reason for AIs poor performance. Overstaffing Aging fleet and limited fleet size regulatory or policy constraints on outsourcing non-core activities and on de-staffing, higher cost of ATF due to higher prices, special taxes and a cross-subsidy burden on oil products, Social burden of supporting loss-making routes The burden of supporting Haj pilgrimage and Prime Ministers foreign visits with aircrafts. Internal conflicts between AI & IA. This situation was originated because of Rise in the cost of operations - hike in fare Due to increase in fuel price (crude oil prices in the world market increased from about US$60 per barrel in April 2007 to over $140 per barrel by July 2008) Air port charges were very high Ground handling charges of Indian airports were much high. Fall in the passenger traffic because of economical slow down

2008 when jet fuel prices began falling sharply, Indian airlines showed great inertia in reducing fares. Leisure travel was the main victim. Problem statement: The central problem of this case was Rise in the cost of operations Fall in the passenger traffic In Jan 2007 jet fuel price per gallon was 73.34 rs July 2008 166.46 rs
Jet fuel constitutes over 40% of an airline's operating costs The three fuel retailers -- IOC, Hindustan Petroleum and Bharat Petroleum.-- revise jet fuel prices on the 1st and 16th of every month, based on the average international price in the preceding fortnight

For those affected adversely by the jet fuel price rise, two reasons. The exchange rate of foreign currency and selling price of fuel were increased by the fuel producing country, especially the crude oil producing countries.

OPEC organization of petroleum exporting countries Vienna- Austria

The first element is related to the fall in the value of the dollar in relation to other currencies. http://www.firstpost.com/tag/Jet-fuel http://www.firstpost.com/business/who-will-benefit-from-direct-jet-fuel-imports-yes-reliance-industries206705.html Declare jet fuel as a notified good, which would lead to exemption from high state taxes, providing some relief to battered local carriers. State taxes of as much as 30 percent make

jet fuel more than 50 percent expensive in India compared with the global average, and global airlines have often criticized such high taxation.

http://planningcommission.nic.in/reports/genrep/bkpap2020/11_bg2020.pdf