Air India

 Overview
Air India, which is initially known as Tata Airlines, was founded in 1932 by honourable
Jehangir Ratanji Dadabhoy Tata (J.R.D Tata). It was India’s first national air carrier and was
always professed as pride of the nation. By 1939, Air India had been serving across several
routs namely, Trivandrum, Delhi, Colombo, Lahore, and intermediate points. Post second
world war, in 1946 Tata Airlines was listed as public company. Later in 1953, Indian
government nationalized all Indian airlines, to create two independent companies namely,
Indian Airlines Corporation for domestic services, and Air-India International Corporation,
serving the international air space.

In the next few decades, Air India expanded its international routes to all continents except
South America, along with its cargo operations. The glory of the first national air carrier
began diminishing post 1994, due to the liberalization of the Airline industry. Despite,
loosing its dominance to private players such as Jet Airways, Indigo, and Spice Jet, the
company continued to expand its fleet and labour forces. Beginning from 2007, the company
continued to accumulate billions of dollars in debt. After, great consideration the
government of India decided to privatize the airline in 2017 and was finally sold to Tata
Group in 2021.

 Management and its outlook

Air India organization consists of a functional structure with business heads for each
functional unit.

o Overall Organization Structure:

o Commercial Operations:

o Sales and Marketing:

o Cargo:
o Customer Services:

o Strategy and Planning:

o Finance:
o HR:

o Operations:

o Engineering:
 o Corporate Affairs:

 Environmental Factors
o PESTLE Analysis
 Political Factors:
 International Trade & Other Treaties
 Tension with neighbouring countries
 Threat of Terrorist Attacks
 Regulatory Practices
 Economic Factors:
 Availability of Capital and associated interest rates
  Foreign exchange rates
 Price fluctuations
 Impact of COVID-19 and associated restrictions
 Demand Shifts from Goods Economy to Service Economy
 GDP trend
 Social Factors:
 Consumer attitude towards savings
 Health and safety
 Employment opportunities
 Demographics of income groups
 Government contracts
 Technological Factors:
 Technology Disruption
 Fuel prices and cost of production
 Mobile payments and fintech services
 Empowerment of supply chain partners
 Transparency and digital drive
 Legal Factors:
 Monopoly laws and restrictive trade practices
 Business laws
 Employment laws
 Judiciary and relative influence of government
 Environmental Factors:
 Influence of climate change
 Effectiveness of environmental agencies
 Level of consumer activism regarding environmental concerns
 CSR culture

o SWOT Analysis
 Strengths:
 Largest air carrier in terms of fleet of aircrafts
 Possession of latest aircraft fleet and advanced information systems
 Proficient in aircraft maintenance and repair operations
 Financial backing from government before acquisition by Tata Group.
 Goodwill for quality, after acquisition by Tata Group.
 Reputation in both national and international markets
 Ownership of significant airport spaces
 Weakness:
 High-cost structure of the airline
 Low profitability of the operations
 Massive debt of the airline operations
 Price competitive being low than industry standards
 Ineffective usage of massive employee base
 History of flight delays and cancelation
 Opportunities:
 Rising country’s GDP and tourism spend
  Evolution of consumer preferences in terms of value for money vs time
and comfort
 Expansion of national and international routes
 Growing establishment of airports
 Growing investments in airline industry
 Threats:
 Extreme competition
 Domestic price battles
 Volatile nature of fuel costs

o Porter’s Competitive Analysis

 Threat of New Entrants - High
 Investments in competitors
 Liberalization of aviation industry
 Rapid growth of demand for airline services
 Power of Buyers - High
 High bargaining power of buyers due availability of numerous options
 Power of Suppliers - High
 High production times of aircrafts
 Significant power of labour unions
 Dynamic prices of aviation fuel and aviation turbine fuel
 Threat of Substitutes - Medium
 Cheaper services offered by road and rail services
 Dynamic prices of air tickets favouring services by substitute industries
 Competitive Rivalry - High
 Rapid rise in market dominance of competitors
 Competition in domestic and international routes
 Performance of competitors

 Planning Aspects
o Performance turnaround:
 Prominent focus on improving business class revenue
 Introduction of marketing initiatives for upgradation of FFP
 Sales strategy to improve passenger, cargo, and excess baggage revenue
 Loss making routes rationalization
 Reduction of contractual employment & outsourced agencies
 Restructuring of city offices in India and abroad
 Catering enhancements
 Implementation of passenger feedback
 Focus to reduce cost of operations
o Infusion of additional capital to improve customer experience
o Implementation of strategic revival plan. Aim to establish self-sustaining airline
o Implementation of loyalty programmes such as Frequent Flyer Programme and
o Marketing initiatives to maximize passenger and cargo revenues through performance-
based initiatives.
o Incentivizing corporate customers by offering volume-based initiatives.