A PROJECT REPORT ON (MODULE-5) ON

AIR INDIA

N. J. SONECHA MANAGEMENT & TECHNICAL INSTITUTE,

CHANDUVAV (VERAVAL)

In partial fulfilment of the award for the degree of M.B.A.

GUJARAT TECHNOLOGICAL UNIVERSITY, AHMEDABAD

PREPARED BY:-

NAME ENROLLMENT NO.

Yadav Riddhi N. 188170592043
Maurya Pankaj P. 188170592024

ACADEMIC YEAR: - 2018-2019

Semester: 3

GUIDED BY:-

Miss Dhara Abhani

 DECLARATION

We are the student of Master of Business Administration, Narandas Jethalal

Sonecha Management & Technical Institute, Chanduvav, Veraval, affiliated
toGujarat Technological University, Ahmadabad, hereby declare that this
Module 5 report prepared is our own work and efforts to the best of our
knowledge has been carried out under the guidance and supervision of Miss
Dhara Abhani, Faculty of Narandas Jethalal Sonecha Management & Technical
Institute, Chanduvav, Veraval.

This project report has not been previously submitted to any university
for any examination.

Signature

Date : _______________

Place: Veraval ______________

 PREFACE

A practical study project report is an integral part of the MBA. The main
objective of project report is to enhance the skill of researcher and gain the
valuable knowledge of management skill that will be useful in the future career
building.

A practical study project report is one the highly effective means of the
learning and acquiring knowledge. It generates a concerted effort by students to
acquire in depth knowledge on subject and present the same in systematic
manner.
 ACKNOWLEDGEMENT

As the ocean is made of drops and each and every drop should be given
importance. Same way my project is not success of my only efforts but it is due
to the help of my all well-wishers and supporters.

We feel glad by thanking our Teachers, professors of Narandas Jethalal

Sonecha Management & Technical Institute who help me at every phase of my
project.

We would like to thanks our faculty members and lastly we would like to the
Air India Company and our friends who corporate for this project report.
 INDEX

Sr. No. Particular Page No.

01 Company Introduction
02 Company Profile
03 Vision & Mission
04 Services
05 SWOT Analysis
06 IF 4549221
07 CRV 4549222
08 FPT 4549284
09 MCS 4549386
10 Leadership 4549298
11 Bibliography
 INTRODUCTION

 Air India is the flag carrier airline of India, headquartered at New Delhi. It is owned
by Air India Limited, a government-owned enterprise, and operates a fleet
of Airbus and Boeing aircraft serving 94 domestic and international destinations.
 The airline has its hub at Indira Gandhi International Airport, New Delhi, alongside
several focus cities across India.
 Air India is the largest international carrier out of India with an 18.6% market
share. Over 60 international destinations are served by Air India across four
continents. The airline became the 27th member of Star Alliance on 11 July 2014.
 The airline was founded by J. R. D. Tata as Tata Airlines in 1932; Tata himself flew
its first single-engine de Havilland Puss Moth, carrying air mail from Karachi to
Bombay's Juhu aerodrome and later continuing to Madras (currently Chennai).
 After World War II, it became a public limited company and was renamed as Air
India. On 21 February 1960, it took delivery of its first Boeing 707 named Gauri
Shankar and became the first Asian airline to induct a jet aircraft in its fleet. In 2000–
01, attempts were made to privatize Air India and from 2006 onwards, it suffered
losses after its merger with Indian Airlines.
 Air India also operates flights to domestic and Asian destinations through its
subsidiaries Alliance Air and Air India Express.
  Air India's mascot is the Maharajah (Emperor) and the logo consists of a flying swan
with the wheel of Konark inside it.

Privatization

On 28 June 2017, the Government of India approved the privatization of Air India. A
committee has been set up to start the process.

Alliance
Air India became the 27th member of Star Alliance on 11 July 2014.

India
 Chhatrapati Shivaji International Airport, Mumbai
 Indira Gandhi International Airport, Delhi
 Chennai International Airport, Chennai
 Kempegowda International Airport, Bangalore
 Rajiv Gandhi International Airport, Hyderabad
 Sardar Vallabhbhai Patel International Airport, Ahmedabad

International
 John F. Kennedy International Airport, New York City
 Heathrow Airport, London
 San Francisco International Airport, San Francisco
 PROFILE

Founded 15 October 1932 (as Tata Airlines)

Commenced 29 July 1946; 73 years ago[3]

operations

Hubs Indira Gandhi International Airport (Delhi)

Secondary hubs Chhatrapati Shivaji Maharaj International Airport (Mumbai)

 Chennai International Airport

Focus cities
 Cochin International Airport
 Kempegowda International Airport (Bangalore)
 Netaji Subhas Chandra Bose International
Airport (Kolkata)
 Rajiv Gandhi International Airport (Hyderabad)
 Sardar Vallabhbhai Patel International
Airport (Ahmedabad)
 Trivandrum International Airport

Frequent-flyer Flying Returns

program
Alliance Star Alliance
Subsidiaries  Air India Express
 Alliance Air
Fleet size 136 (excl. subsidiaries)
Destinations 102
Company slogan Your palace in the sky.

Parent company Air India Limited

Headquarters Airlines House, Delhi, India
Key people  Ashwani Lohani
(Chairman & MD)
 J. R. D. Tata
(Founder)
Employees 20,956 (November 2016)
Website www.airindia.com
 VISION & MISSION

Vision:

“To create an eco-system to enable 30 crore domestic ticketing by 2022 and 50 crore by
2027.”

Mission:
“Provide safe, secure, affordable and sustainable air travel with access to various parts of
India and the world.”
 SERVICES

Business Class seats on board the

Boeing 777-200LR/777-300ER

Air India London Heathrow Airport

Lounge.

India's Maharaja Lounge at

John F. Kennedy International
Airport in New York City

Cabin
The Boeing 777-200LR/777-300ER and Boeing 747-400 aircraft operated on long haul
flights are in a three-class configuration. Boeing 787 Dreamliner and Airbus A321 aircraft
have a two-class configuration. Airbus A320 aircraft operated on domestic- and short haul
international flights are in either an all-economy configuration or a two-class
configuration. Airbus A319 aircraft have a full economy configuration. Air India serves
meals on all international flights and on domestic flights with a flight duration of over 90
minutes.

In-flight entertainment
Air India aircraft are equipped with Thales i3000 in-flight entertainment system. Passengers
can choose from five channels airing Hindi and English content. Air India's Boeing 777, 747
and 787 aircraft are also equipped with personal on demand in-flight entertainment systems
on which passengers can choose from available content. Showtime is the official
entertainment guide published by Air India. Shubh Yatra (meaning Happy Journey) is a
bilingual in-flight magazine published in English and Hindi by Air India.
Frequent flyer programme
Flying Returns is Air India's frequent-flyer programme. It is shared by Air India and its
subsidiaries. The points can be redeemed for awards travel on some other airlines.

Premium lounges
The Maharaja Lounge (English: Emperor's Lounge) is available for the use of First and
Business class passengers. Air India shares lounges with other international airlines at
international airports that do not have a Maharaja Lounge available. There are eight Maharaja
Lounges.
 SWOT ANALYSIS

Strengths:
 Largest air carrier in India in terms of traffic volume.
 Strong backing by the government of India
 Brand new fleet of aircraft
 Maharaja’ as mascot
 Flies to 84 destinations in India & Abroad
 Connects remote destinations

Weaknesses:
 Financial crisis (domestic routes losses on 2/3)
 Government intervention
 Low Profitability
 Low utilization of aircraft (resource)
 Labour problems
 Flight Delays and cancellations records

Opportunities:
 Changing consumer opinions including price consciousness
 Expansion of routes and international destinations
 Recent increase in GDP of India, growth of tourism
 CAGR of India’s airline traffic best in the world (10.5%)
 100% FDI allowed in civil aviation sector
 Changes in Civil Aviation Policy

Threats:
 Extreme competition from Global airlines counterparts
 Domestic ‘price wars’ affected fare structures
 New changes in Civil Aviation Policy
 Volatile nature of fuel costs
 Poor track record compared to its competitors
 New aviation rules giving edge to competitors
International Finance
Code: 4549221
Topic: Hedge Against A Foreign Exchange Risk
How do Indian airline companies hedge against a foreign
exchange risk?

Cheaper oil prices may help Air India save Rs.20 billion for the year ending 2016, and may
also help the company break even before its target of turning a profit by 2019.

New Delhi:
Air India Ltd is conducting large scale hedging of jet fuel for the first time, as the state-run
carrier seeks to take advantage of lower crude oil prices, a person with direct knowledge of
the matter said.

Air India is hedging 2 million barrels of aviation turbine fuel annually at $75 per barrel,
which should cover more than a fifth of its fuel requirements, the person said. The company
doesn’t expect oil prices to fall any further, he said.

Crude oil prices slumped almost 50% last year as the US pumped oil at the fastest rate in
more than three decades while the Organization of the Petroleum Exporting Countries
resisted calls to cut supply. That resulted in boosting economies of import-driven countries,
while providing a breather to airlines, which typically operate on tight margins.

Cheaper oil prices may help Air India save Rs.20 billion ($324 million) for the year ending
31 March 2016, and may also help the company break even before its target of turning a
profit by 2019.

Jet fuel in Singapore traded at $63.05 a barrel on 16 January, data compiled by Bloomberg
showed. Indian federal and state taxes make jet fuel in the nation Asia’s most expensive.

Some airlines, which had hedged jet fuel prices at higher prices, have failed to take advantage
of the recent slump, and may actually end up losing money from the sudden drop.

Some Asian carriers, like Singapore Airlines Ltd, have hedged fuel at an average of $116 a
barrel of jet fuel, when spot market rates are about $85. That can result in losses on paper as
airlines will have to account for their hedges or pay charges to unwind contracts prematurely.
Efficiency
Air India plans to cut 10% of its variable cost of Rs.140 billion as it seeks to become a more
efficient company, the person said. It won’t replace 7,000 people due to retire in the next 5-6
years, he said.

Air India, which has about 23,500 employees with 108 planes, also plans to reduce its
aircraft-to-manpower ratio to 1:100, the person said. It will do so by transferring as many as
12,000 employees to subsidiary companies handling ground operations and maintenance, he
said.

Air India Chairman Rohit Nandan did not respond to a call to his mobile phone.

Air India, which is still flying on an Rs.300 billion taxpayer-funded bailout, needs to meet
cost, revenue and load factor targets to keep getting funds every year until 2020.

Air India plans to completely hive off some subsidiary companies, and make them
independent, the person said. Those companies will get just 30-40% of their total business
from Air India, he said.

To help its maintenance, repair and overhaul unit, Air India has asked the government to
introduce tax breaks in the sector, the person said. Indian finance minister Arun Jaitley will
present his second budget to the parliament at the end of next month. Bloomberg
Corporate Restructuring &
Valuation
Code: 4549222
Topic: Merger of Airline & Indian airline
Merger proved as a recipe of disaster

• Failed to meet up invitation of Star Alliances

• Market share declined ( 19.2% – 14% )
• Dropped down its market position from 1st to 4th
• Over staffing
• Short of working capital ( purchased unplanned aircraft i.e. 28 – 68)
• Disregarded Indian Pilots Guild ( IPG )
• Gave away two prime routes
Kochi - Doha –Bahrain and Calicut- Doha-Bahrain

Reasons of merger failure

• Lack of effective leadership
• Lack of synergy
• Fleet Expansion
• HR integration
• Lack of IT integration
Finance Planning & Taxation
Code: 4549284
Topic: E-filing of ITR Process
 Types of E-filing:-

 Type I: In case you are using digital signature, no further action is required.

 Type II: In case you are filing the return without digital signature, ITR-V form is to be
filed with the department. This is a single page receipt-cumverification form.

 Type III: You can also file your return through an e-return intermediary who would
do e-filing and also assist you file the ITR -V Form
  Process of E-filing of ITR:-

1. E-filing site homepage:-

2. Registration form:-
3. Registration form individual:-

4. Log in:-
5. Download Income Tax Utility:-

6. Select & download ITR form:-

7. Generate XML file:-

8. Submit XML file:-

9. Upload return:-

After Return is Uploaded

In Case the return is digitally signed.

On generation of “acknowledgment” the return filling process gets completed. Assessee may
take a printout of the acknowledgment for his record.

In Case the return is not digitally signed.

On successful uploading of e-return, the ITR-V form would be generated which needs to be
printed by the tax payers. This is an acknowledgment-cum-verification form. The tax payer
has to fill up the verification part and verify the same. A duly verified ITR-V form should be
submitted with the local income tax office within 15days of filling electronically. This
completes the returns filling process for non-digitally signed returns.
Management Control System

Code: 4549286
  Control Process in Air India

 SAP ERP
 Vigilance Department
 SITA, to provide new Passenger Services System
 Integrated Operations Control Centre (IOCC)
 Norms set for the discharge of functions
 Scrutiny of policies and activities
 The budget allocated to each agency

Management Style & Culture

 Vision And Mission
The Main object to carry on business, in any part of the world as an airline and air
transport and to provide air transport services and carry out all other forms of aerial work,
whether on charter terms or otherwise, and to carry on any other trade or business or do
anything which is calculated to facilitate or is auxiliary to or associated with such
business

 Focus

 Relationships
 Shared goals
 Shared knowledge
 Mutual respect.

 Decision making process

 Power is delegated
 Discussions among cross section of departments
 Worker/management committees.
  Attitude towards employees

 Employees are treated as valuable assets

 Stable work environment
 Encourage innovation and creativity.

 Credibility & caring

 Ability to inspire trust

 The ability to inspire in employees the belief that their leaders care deeply about their
well-being.

 Relational competence

 The ability to relate effectively with others

 Enhances team work

Safety Culture
“Safety Culture is the set of enduring values and attitudes regarding safety issues,
shared by every member of every level of an organization.

Communication & Coordination

1. Internal Communication
• SITA
• TELEPHONE SYSTEM
• RADIO COMMUNICATION SYSTEM

2. External Communication
• 24 hour dedicated call centre
• Rescheduling messages to customer’s mobile phone.
• Audit agency for continuous image audit, media relations, communication counsel, advising
on regular basis for effective channel of communication

3. Investor Relations
• Media Centre
• Web Site
• Right to Information
• Manuals
• Annual Statements

4. AUDIT COMMITTEE
Functions of Audit committee
• Management responses.
• Half yearly and yearly basis
• Recommendations are taken from more than 1 audit firms
• To review the company statement
• To review the internal audit program & ensure co-ordination between the internal &
external auditors.

BENCHMARKING
Air India did not reveal any bench marking details in their annual report. But it uses industry
standards which are followed by every other airline like Flight on time, Security Measures,
Annual Maintenance Plansand Maharaja Club

5. BUDGET
The twin budget is prepared in air India which is both annual and five year plan Forecast
Highlights
• Traffic
• Yields
• Load Factor
• Fuel
6. HR POLICIES

Recruitment
Appraisal
Compensation
Reward

7. ADVANTAGES & DISADVANTAGES

• Represents brand India
• Job security to employeesomer service
• No proper mechanism to manage salaries of employees
• Sales to compensation ratio is decreasing since 2008
• Most employees are 50+ with less energy levels and motivation for quality

8. RECOMMENDATIONS
• Adopt strict cost control measures
• Revise wage and implement multi-skill environment
• Limit government control and policies for AI
• Increase fleet size and invest in aircraft maintenance
• Refresh and rebrand the company
• Timely payment of salaries to employees
Leadership
Code: 4549298
INTRODUCTION:

Person driven by his spirit of flying

Born : 29th July, 1904 in Paris, France

Father – Mr. Ratanji Dadabhoy Tata

Mother – Suzanne Sooni Briere (French citizen)

Popularly known as “Jeh” among his friends

Education in France, Japan and England

Joined French army after education

Joined Tata as an unpaid apprentice in December 1925

At the age of 25, JRD surrendered his French

Citizenship to embrace India as his workplace

In 1929, he became the first Indian

To pass the Pilot examination

He established “Tata Airlines”, which later on became “Air India”

At the age of 34, JRD was made the Chairman of Tata Sons

He married to Thelma in 1930.

He passed away in Geneva, Switzerland on 29th November, 1993 at the age of 89.

Contributions by J.R.D. Tata

1. Entrepreneurship:

He started with 14 enterprises and after half a century, when he left, Tata & Sons was a
corporation of 95 enterprises.

Tata Motors, TCS, Titan, Voltas, Tata Tea, Tata Communications are some of the giants
started under his leadership.

2. Aviation:
 Formed the Tata Aviation Service in 1932 Launched “Air India International” as India's
first international airline

Director on the Board of Indian Airlines for 25-years

Bestowed with the title of Honorary Air Commodore of India

3. Social Responsibility:

Trustee of Sir Dorabji Tata Trust from its inception

Founded the TISS (Tata Institute of Social Sciences) in 1936, Tata Institute of
Fundamental Research in 1945 and the National

Centre for Performing Arts

Established Asia's first cancer hospital, the Tata Memorial Centre for Cancer, Research
and Treatment, Bombay, 1941.

4. Employee Welfare:

J.R.D. Tata initiated a program of closer "employee association with management"

believed in employee welfare

initiated the principles of an eight-hour working day, free medical aid, workers' provident
scheme, and workmen’s accident compensation schemes

Tata Steel Township, selected as a UN Global Compact City because of the quality of life,
conditions of sanitation, roads and welfare that were offered by Tata Steel

As a Management Thinker

1. Leader:

Felt for his workers

Lead human beings with affection

2. Group Concept

Cluster of 95 companies at the end of 50 years of Chairmanship.

 merged ten rival cement companies to form the Associated Cement Companies (ACC), run
by the Tatas.

3. Entrepreneur believer:

Created supportive climate

Led to the first public- private affair

4. Benign Boss:

He picked individuals and trusted them, giving them his total support

Gave credits to his Employees for even small development

5. Professionalism:

Tata legacies were chaired and Run by Professionals.

JRD financed young boys to carry out their professional courses from foreign Universities

Management Skills

1. Courageous:

Invested in high-risk industries like oil and manufacturing, going against the will of Board
of Directors.

2. Diplomat:

Diplomatic way to tackle Nehru

3. Committed to Values:

Firm and committed with policies

4. Realistic:

Curbed his dreams which were hard to realize.

5. Charismatic:

Smart businessman
6. Compassionate:

Strived hard for the betterment of workers

s7. Supportive towards innovation

Set up Tata Chemicals lab

8. Approachable

Comfortable Personality

Awards and Recognition:

“Legion d’honneur”, in 1954

“Padma Vibhushan” in 1957

“Tony Jannus Award” in 1979

“Guggenheim Medal” in 1988

“Bharat Ratna” in 1992

“United Nations Population Award” in 1992, for family planning movement in India
Bibliography

(n.d.). Retrieved from www.airindia.com.

Annual reports of Air India.