PGDM I SEMESTER

Session 2021-22

PGDM101 – Management Principles And Organizational Behaviour

Case Study

Submitted to: Submitted by:

Dr Veenu Arora Student Name: Harsh Gupta
Enrollment No. ABS/PGDM/21/057
Q1. Air India is one of the largest acquisitions under the leadership of the

current management of Tata Group. The decision reached by Tata Sons was

totally based on the study undertaken and concluded by those under the

leadership of group chairman N Chandrasekaran, What are very various

opportunities and challenges involved in Tata and Air India deal?

Answer: -

As I have read the whole case study, I have analysed the opportunities that

Tata group got by acquiring the Air India are that the Tatas will get ownership

of iconic brands like Air India, Indian Airlines & the Maharajah. Air India has a

fleet of 117 wide-body and narrow-body aircraft and AIXL has a fleet of 24

narrow-body aircraft. Tatas, through Air India acquisition, will get 4,400

domestic and 1,800 international landing and parking slots at domestic

airports, as well as 900 slots at airports overseas

A significant number of these aircraft are owned by Air India. Air India

provides a unique and attractive international footprint. More than 2/3rd of

Air India’s consolidated revenues come from the international market. It is the

number one player from India in the international market having a strong

footprint across geographies like North America, Europe, and the Middle East

with attractive slots & bilateral rights. The Air India frequent flyer program has

more than 3 million members.

On the Other had Tata group will face many challenges like One of the first

big steps for the Tata Group after the acquisition will be deciding on the

relationship between its different airline interests. The group holds about an

84% share in the low cost carrier (LCC) AirAsia India, after acquiring most

of AirAsia’s stake. It is also owning 51% of the full-service carrier Vistara.

It seems likely that Tata will at least look to merge Air India Express and AirAsia

India into a larger LCC. Such an entity would have a combined fleet of 58

aircraft, which would move it just ahead of Go First to be the third largest LCC

in India.

Vistara is a more complex question, as any potential merger with Air

India would require the agreement of its joint-venture partner Singapore

Airlines, or a buyout.

A merger would probably be the desirable option for Tata Group,

but Singapore Airlines has remained bullish about Vistara’s prospects. Some

form of cooperation between the airlines would be another option.

Q2. What are various cultural interventions required by Tata group after

completion of acquisition procedure with Air India?

Answer: -

Various cultural interventions required by Tata group after completion of

acquisition procedure with Air India are: -

• Tatas may have to invest over 1 billion dollars to upgrade and refurbish

Air India’s fleet and improve its passenger reservation system.

• The first three tasks will be refinancing Air India's existing loans,

upgrading its aircraft gradually, and rewriting the various business

contracts with suppliers and vendors.

• Air India's acquisition will allow various Tata group firms – from TCS to

the soon-to-be launched super app, TATANEU – to sell their products to

the airline.

• Tata Capital and Indian Hotels will also be able to cross-sell their

products to the airline's customers and crew. In fact, several group firms

are already supplying their products to the two airlines operated by the

Tatas. Consider also that Air India has a frequent flier club customer

base of 3 million that can be used to offer discounted products.