TITLE OF RESEARCH PAPER

A DETAILED STUDY ON AIR INDIA

By

ALLU. SAI SARAYU

2018007

Semester VII

Name of the Program: 5 years (B.A.,LL.B./LL.M.)

Subject

AIR AND SPACE LAW

Name of the Faculty Member

Mr. JOGI NAIDU

DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY NYAYAPRASTHA,

SABBAVARAM, VISAKHAPATNAM - 531035 ANDHRA PRADESH, INDIA

Date of Submission: 29-11-2021

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 ACKNOWLEGMENT

I would like to extend my heartfelt thanks to my faculty Mr. JOGI NAIDU SIR , for his constant
support and guidance without which this Research Paper would not have been successful despite
my efforts. Also my sincere thanks to Damodram Sanjivayya National Law University,
Sabbavaram for providing me with all the necessary sources and perfectly guiding me in the
preparation of my RESEARCH PAPER.

Submitted by

ALLU. SAI SARAYU

2018007

SEMESTER 7

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Table of Contents
Abstract:......................................................................................................................................................4
INTRODUCTION...........................................................................................................................................4
HISTORY OF AIR INDIA.................................................................................................................................5
The dark ages:.............................................................................................................................................6
Evolution of the company:..........................................................................................................................6
Organizational culture:................................................................................................................................8
Logo: Signification and Importance.............................................................................................................8
External Analysis: Industry Overview..........................................................................................................9
PESTL analysis:...........................................................................................................................................10
Political Factors:....................................................................................................................................10
Economical factors:...............................................................................................................................10
Technological factors:............................................................................................................................11
Legal factors:.........................................................................................................................................12
SWOT Analysis...........................................................................................................................................12
Strengths:..............................................................................................................................................12
Weaknesses :.........................................................................................................................................13
Opportunities:.......................................................................................................................................13
Threats:.................................................................................................................................................13
THREATS....................................................................................................................................................14
Threats of new entrants:.......................................................................................................................14
Threats from the competitors:..............................................................................................................14
BARGAINING..............................................................................................................................................14
Bargaining power of the buyers:...........................................................................................................14
Bargaining power of suppliers:..............................................................................................................15
Risk analysis of Air-India:...........................................................................................................................15
Change management of Air-India:.............................................................................................................16
Seven steps action plan to survive Air-India:.............................................................................................17
To cover up the losses: Implementation...................................................................................................18
The role of power and politics:..................................................................................................................20
Power of Air-India:.....................................................................................................................................20
Air India Strike - May 2012........................................................................................................................20

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Recommendations:....................................................................................................................................21
Conclusion.................................................................................................................................................22

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Abstract:
Air-India was the India’s finest flying ambassador. In recent years Air-India was subjected to
many changes, like merge with Indian Airlines, strike from the pilots etc. This report presents the
complete over view of the company and includes the organizational structure and culture of the
company. The report gives you the complete lists of analysis, like SWOT, PESTL etc. This
report also concentrates on IS/IT changes, leadership development and change management
issues, within the organization.

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INTRODUCTION
Air India was established in 1953 under the Air Corporations Act, 1953 to provide safe, efficient,
adequate, economical and properly co-ordinated international air transport services. The
undertaking of Air India was transferred to and vested in Air India Limited, a public limited
company registered under the Companies Act, 1956 with effect from 1.3.94, after the Air
Corporations (Transfer of Undertakings and Repeal) Act, 1994 came into effect. As on
31.03.2000, the Company has a total staff of 17,690 employees in India and abroad which
excludes 168 people availing 2 years Leave Without Pay (LMP). It has a fleet of 23 aircraft. Air
India Limited presently operates to destinations.

Air India, the state-owned international carrier of the country, today has an extensive worldwide
network offering both passenger and cargo services to more than 140 destinations across east and
South Asia and the Middle East, East Africa, South East Asia, Western Europe and the UK. With
Air India and Indian Airlines aligning their resources together, it has now become a part of
National Aviation Corporation of India Ltd along with two of their subsidiaries, i.e. Alliance Air
and Air India Express. In addition to together servicing 52 cities within the country, both these
airlines offer direct connections to more than 35 international destinations all over the world.

HISTORY OF AIR INDIA

Tata Sons, a division of Tata Sons Ltd. (now Tata Group) was founded by J. R. D. Tata in 1932.
The aviator Nevill Vintcent had an idea to run mail flights from Bombay and Colombo that
connected with the Imperial Airways flights from the United Kingdom. He found a supporter for
his plans from J. R. D. Tata of the Tata Iron and Steel Company. After three years of
negotiations Vintcent and Tata won a contract to carry the mail in April 1932 and in July 1932
the Aviation Department of Tata Sons was formed. On 15 October 1932, J.R.D. Tata flew a
single-engined De Havilland Puss Moth carrying air mail (postal mail of Imperial Airways) from
Karachi's Drigh Road Aerodrome to Bombay's Juhu Airstrip via Ahmedabad. After World War
II, regular commercial service was restored in India, and Tata Airlines became a public limited
company on 29 July 1946 under the name Air India. In 1948, after the independence of India,
49% of the airline was acquired by the Government of India, with an option to purchase an
additional 2%. In return the airline was granted status to operate international services from India
as the designated flag carrier under the name Air India International. On 25 August 1953 the
Government of India exercised its option to purchase a majority stake in the carrier and Air India
International Limited was born as one of the fruits of the Air Corporations Act that nationalised
the air transportation industry. At the same time all domestic services were transferred to Indian
Airlines (now a part of Air India) Air India International entered the jet age on 21 February 1960
when its first Boeing 707–420, named Gauri Shankar (registered VT-DJJ), was delivered,
thereby becoming the first Asian airline to induct a jet aircraft in its fleet. Jet services to JFK
International Airport in New York City via London were inaugurated that same year on 14 May
1960.

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The dark ages:
From the beginning of 1970s, Air-India faces many difficulties. The economic recession, all
over the world, shows a huge impact on the company during this time. In additional to this effect,
as the company was owned by the government, it kept the routes which are yielding losses as
open, as for the prestigious purposes. Whereas other commercial air-lines close all these routes.
For example the route from Mumbai to New York, yields losses for three years from 1972 to
1975, but the route was simply kept open. Another challenge faced by Air-India was the
competition from other air lines in carrying foreign passengers.

Air-India mostly depends on local passengers for the business. Due to this the air fares have to
be kept low, this leads to losses, some times. Another problem was the shortage of tourists from
the other countries. Communal violence and the political situations in India after the
assassination of Prime Minister Indira Gandhi lead to decline in tourism during the periods from
1982-1985. In recent times the terrorist attacks in major air ports of India are also leads to the
decrement in the foreign passengers travelling to India. The darkest spot on Air-India history
was, the crash of one of its Boeing 747 with 329 foreign passengers, in to the sea, in June 1985.

During the years 1991-1995, Air-India losses $171 million. And it got bad reputation for poor
services and facilities. To avoid this, the company planned to increase its reserve cash by selling
its Hotel Corporation in Indian sub continent, worth of $220 million and some old Boeing 747s,
worth of $60million. Despite all of this the company owes $900 million for its new air craft
purchases. Another issue to be considered is the shortage of medium-sized air crafts. Most of its
flights are huge, which intern increases the operational costs. These big sized air crafts are too
large to be profitable. Actually these flights are meant for the business with gulf countries, but
the company has to be desperate to buy some small sized air planes to reduce the over head
costs. As the recovery programmes were placed in the organization, and the profit of $10 million
was shown at the end of the year 1997. But later it was announced that it was actually $10
million loss. The company was planning for a private collaboration from other air lines, but
which was not accepted by many of the employees and the government of India. And the
company plans to reduce the pay roll by $40 million by closing some unprofitable routes and
reducing the employment, which leads to a strike by the employees and the pilots. Despite all of
this recovery, it was an open secret that it will take at least 3 more years are required for the
company to come over the losses. However, it was a known truth that many changes have to be
made to recover from losses.

Evolution of the company:

Air-India is the official Indian national flag carrier. The mascot of maha raja of the company is
pretty famous and the company was well recognized at global level. It has 15,236 employees all
over India. Although it was running in losses, they are very confident about the company will
yield profits in the next two quarters. The main hubs of Air-India are Indira Gandhi international

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airport in Delhi and Chatrapathi sivaji terminal in Mumbai, it was operating two international
hubs in Frankfurt and London, to review their performance and to serve their customers.

In 2007, Air India was merged with Indian Airlines to form the National Aviation Corporation of
India Limited which will maintain its brand. Air-India was started as TATA air lines in the year
of 1932, named after J R D TATA, its founder. First it serves only domestic purposes. In the year
1946, at the end of the world II, it became a public limited company and named as Air-India
limited. With in no time, the government won 49% of its shares and started international services
with regular flights to London, Geneva, Cairo etc, and then it was entitled as Air-India
international limited. The fleet of Air-India consists of 147 aircrafts and the details are given
below

Air bus A-310 – 8

Air bus A-319 - 15

Air bus A-320 – 43

Air bus A-321 – 12

Air bus A-330 – 2

Boeing 737-800 – 22

Boeing 747 – 6

Boeing 737 – 5

Boeing 777 – 14

Airbus A-330

Freighters - 4

Boeing 737 freighters - 6

ATR* - 7

CRJ 700 – 3

Organizational culture:
From the past three years, Air-India is yielding continuous losses, but they have implemented a
strategy to overcome these hard times. The causes for this situation are, poor handling of
resources and lack of good relationship with the staff and workers. Before two years, a strike was

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announced against the management, which further drags the company into losses. So the
improper functioning of organization culture is the major issue. The management of Air-India
was completely Indian management, so no issue of cultural differences will be there, but actually
India itself known as a sub continent, consisting of several cultures. So these cultural differences
may causes to clashes between the employees. For example, in June 2009, a clash occurs
between the pilots of different states, during the landing time of an aircraft, this issue became a
dark spot for Air-India’s organizational culture. As Air-India was operating its sub hubs in
London and Frankfurt, but the management in the hubs are Indians. Although the Indian
management in the other countries is skilful, the persons with local knowledge are required for
the efficient handling of local issues. But the management saying that, Air-India was a
government organization, the managers should be an Indian born. All the pilots of Air-India are
Indian born; they are more skilful and available at less cost. So some cultural changes needed for
Air-India, to handle the international issues

Logo: Signification and Importance

"The logo of the new airline is a red coloured flying swan with the 'Konark Chakra' in orange,
placed inside it. The flying swan has been morphed from Air India's characteristic logo, 'The
Centaur', whereas the 'Konark Chakra' is reminiscent of Indian's logo". The new logo features
prominently on the tail of the aircraft. While the aircraft is ivory in colour, the base retains the
red streak of Air India. Running parallel to each other are the orange and red speed lines from
front door to the rear door, subtly signifying the individual identities merged into one. The brand
name 'Air India' runs across the tail of the aircraft. This now familiar lovable figure first made
his appearance in Air India way back in 1946, when Bobby Kooka as Air India's Commercial
Director and Umesh Rao, an artist with J.Walter Thompson Ltd., Mumbai, together created the
Maharajah. The Maharajah began merely as a rich Indian potentate, symbolizing graciousness
and high living. And somewhere along the line his creators gave him a distinctive personality:
his outsized moustache, the striped turban and his aquiline nose. What began as an attempt as a
design for an inflight memo pad grew to take Air India's sales and promotional messages to
millions of travellers across the world. Today, this naughty diminutive Maharajah of Air India
has become a world figure. He can be a lover boy in Paris, a sumo wrestler in Tokyo, a pavement
artist, a Red Indian, a monk... he can effortlessly flirt with the beauties of the world. And most
importantly, he can get away with it all. Simply because he is the Maharajah! He has completed
56 years and become the most recognizable mascot the world over. His antics, his expressions,
his puns have allowed Air India to promote it's services with a unique panache and an unmatched
sense of subtle humour. In fact he has won numerous national and international awards for Air
India for humour and originality in publicity.

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External Analysis: Industry Overview
The Indian aviation sector consists of many players which are divided into Low-cost and Full-
service carriers. Jet Airways, Kingfisher, Air India are some examples of Full-service carriers
and IndiGo, Spicejet, GoAir are some of the leaders in Low-cost carriers segment. Recently the
Indian Airline Industry is witnessing a series of disastrous events which are a cause for the
significant loss in profit and reputation of the individual airlines especially Kingfisher which is
heading towards bankruptcy. It is a very big challenge for the low-cost carriers to survive and
manage their profitability amid increasing fuel prices and high taxes. The only way for airline
companies to defeat the competitors and stay profitable is to provide better service than that of
their competitors. Customers evaluate their experience of the flight based on the variety of
services delivered by the carrier. Currently low-cost carriers are offering variety of services to
attract new customers and retain the existing ones. It is a race and the one who provides services
superior to those of the others will always stay ahead and sustain in this hyper-competitive
environment. Air India is desperately trying to gain its lost market share by lowering down its
fares and offering better service to its customer. It is trying to attract customers by offering its
new value added services like cheap up gradation to first class and business class. PESTL
analysis: PESTL analysis is a framework, which is used to analyse the external factors acting on
an organization and to recognize their impact on the organization. PESTL full form is political,
economical, social, technological and legal factors. Political Factors: In a country like India we
cannot see any organization without political influences. It is an open secret that every issue has
political interferences, in India. Some of those political factors are given below

• The route between Kashmir and other major countries was closed by AirIndia, due to the
border problems with Pakistan. And terrorism is a major issue, which was stopping many foreign
tourists, coming to India

• Major political issue of the decade, which affects the airline industry, was September 11
incident. Due to the fear of terrorism and the involvement of air planes in the industry, a huge
drop in air traffic occurred

• In a corrupted country like India, the state owned industry Air-India has to face many
problems in route clearances, permits and licences and offering free seats to political leaders etc.

• As it was a state owned company, it kept the routes, which are yielding constant losses as open,
because of prestigious issues. Which pushes the organization into losses Economical factors: The
economical factors, which was acting upon Air-India are Due the financial recession in recent
year, people are thinking that air travel is luxury and expensive. So a considerable decline in the
no. of passengers occurred, which in turn leads to reduce in ticket prices

• After the September 11 incidents, the world economy is facing a great recession. Even biggest
companies of India cut the air-travel facilities to their managers and giving them first class train
tickets

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• The decline in income of Air-India leads to more operational costs and huge insurance costs,
which was increased after WTC destruction. This makes Air-India to lay off its employees,
which further fuelled the recession as spending decreased due to the rise in unemployment.

PESTL analysis:
PESTL analysis is a framework, which is used to analyse the external factors acting on an
organization and to recognize their impact on the organization. PESTL full form is political,
economical, social, technological and legal factors.

Political Factors:

In a country like India we cannot see any organization without political influences. It is an open
secret that every issue has political interferences, in India. Some of those political factors are
given below

• The route between Kashmir and other major countries was closed by AirIndia, due to the
border problems with Pakistan. And terrorism is a major issue, which was stopping many foreign
tourists, coming to India

• Major political issue of the decade, which affects the airline industry, was September 11
incident. Due to the fear of terrorism and the involvement of air planes in the industry, a huge
drop in air traffic occurred

• In a corrupted country like India, the state owned industry Air-India has to face many problems
in route clearances, permits and licences and offering free seats to political leaders etc.

• As it was a state owned company, it kept the routes, which are yielding constant losses as open,
because of prestigious issues. Which pushes the organization into losses

Economical factors:

The economical factors, which was acting upon Air-India are Due the financial recession in
recent year, people are thinking that air travel is luxury and expensive. So a considerable decline
in the no. of passengers occurred, which in turn leads to reduce in ticket prices

• After the September 11 incidents, the world economy is facing a great recession. Even biggest
companies of India cut the air-travel facilities to their managers and giving them first class train
tickets

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• The decline in income of Air-India leads to more operational costs and huge insurance costs,
which was increased after WTC destruction. This makes Air-India to lay off its employees,
which further fuelled the recession as spending decreased due to the rise in unemployment.

• And the biggest economical factor, which is influencing the Air-India was lack of midsized
aircrafts, which intern increase the operational costs of its big size aircrafts for the routes, which
are yielding losses.

• Even the SARS (disease) outbreak in the Far East was a major cause for slump in the airline
industry. Even the Indian carriers like Air India was deeply affected as many flights were
cancelled due to internal (employee relations) as well as external problems. Social factors: These
factors tells about the effects of social groups and social issues on the organization as follows:

• The rapid changing in the travelling habits of passengers has a great effect on airline industry.
Especially in the developing countries like India, travellers came from various income groups.
The air lines have to concentrate on each group and have to provide satisfactory services
accordingly. The main passengers of Air-India are from low income group, so it has to
concentrate on the low income group passengers and their habits of travel and have to serve them
accordingly, like type of food provided, quality of services etc. in order to satisfy them

• As India was a multi cultured country, the passengers may come from various religions and
expects more customisation, for example a Brahmin customer will be satisfied, when the
passenger, just beside him also a Brahmin, at least a vegetarian. So he expects change of seats
can be possible.

• Another biggest issue is services in the airplane. Air-India has a poor performance in this
section. It has to improve its services in order to create a user-friendly atmosphere in the
airplane.

Technological factors:

The increasing usage of the Internet provides huge opportunities for airline industries. Such
technological factors are given below

• Air-India provides many online services for its customers such as online ticket booking, flight
information updates, and customer queries. But still some inconsistency is there in flight updates

• Many of the international airlines are providing internet access for their business class
passengers; this service has a poor performance in AirIndia, which may make the business class
customers to choose other air 12 lines, who pays more for the company.

• The Authority is developing modern communication, navigation, surveillance, and air traffic
management systems for India’s aviation sector that will help the country meet the expected
growth and demand for air passenger and cargo service over the next decade.

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• Providing total body scanners at the Indian airports may leads to feel more security for the
passengers, which intern makes them to travel with comfort and security

Legal factors:

These factors tells about the laws and barriers for the company according to various legal factors

 As Air-India was a state owned company, it has to face many legal issues in order to
make a decision, as the decision has to processed through various levels of management
 In order to get licences and route clearances, the company has to undergo to the
government processes, starting from aviation minister and involving many legal issues.
 As Air-India was owned by the government, it has to suffer from many archaic laws,
applies only for it, such as free seats to ministers, retirement age of pilots and air-hostess
and the labour regulations, which intern makes the management less flexible in making
new decisions, as the decision making process has to be done in the presence of strong
employee union. These barriers will not be there for privately owned companies
 The heavy control and interface with the government affects the quality of the service as
well as type of services that has to be provided in order to satisfy all of the customers
from various countries and various cultures. Non of these issues will not affect the
privately owned air lines.

SWOT Analysis

Strengths:

• Air-India is India’s finest flying ambassador. It is the largest air carrier in

India in terms of traffic volume and business
• AIR-India consists of most updated fleet and repair and maintenance
expertise
• Efficient usage of information technology for providing customer services
such as flight information and online booking
• Good reputation at domestic as well as global level
• Biggest advantage is, the company has the financial support from the
government
• Strong brand name at national level
• Firmly established infrastructure
• Air-India owns the rights to travel to 96 destinations, all over the world
• Biggest advantage of Air-India was, it has prime packing spaces
• It was a monopoly in specific international routes

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Weaknesses :

• Declines in the profits and poor utilization of capacity

• Lack of clarity in strategic planning and poor management planning
• Intense competition at the level of low cost carriers
• Compulsion to be a public sector organization and the high cost structures
of Air-India are pushing the company into losses
• The company’s strategies in the perspective of human resources, is very
poor
• Intense competition in the field of aviation and the decrement in market
share
• Poor performance in terms of over head cost controlling
• Bad reputation in terms of in-flight services
• Lack of clarity in the efficient usage of resources
• Poor aircraft maintenance
• Manpower ratio with aircrafts is very high
• Level of corruption, within the organization

Opportunities:

• Faster growing aviation industry in India

• The regulations of aviation, at global level are made easy by the world
aviation authority, which leads easy access to the skies and the chance of
getting route clearances is very easy
• Strong regulations by the Indian aviation ministry and strong security
system attracting more tourists despite of the threat from the terrorists,
which intern provides more opportunities for the air line industries
• Very good time to introduce low cost carriers (LCCs)
• The business class customers are less price conscious and expects
quality service, it will be a great opportunity to Air-India to gain more
customers by providing high quality services
• Availability of highly skilled native-born pilots at low costs

Threats:

• Many new entrants in aviation industry at domestic level

• The price war triggered by the major air line industries, all over the world
• Immense and aggressive competition from the rival air line companies
• Chance to go into the collaboration with privately owned organizations

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 • Barriers for the business by various laws of the government, as it was owned by
the state
• Increase in fuel prices, all over the world
• The Indian Railway

The Indian railway had rapidly increasing the services and speed in between its long distance
as well as short distance destinations, by providing more number of trains and they their prices
are lower than the prices of Air-India’s low cost carrier services. Due to this the travellers were
more attracted towards trains rather than air travel.

THREATS

Threats of new entrants:

Threats from new entrants for Air-India is very high The initial investment for the new entrants
into the air lines industry is very huge in amount. In olden days, it is very difficult to start a new
air line company, but in recent times, banks are providing good opportunities to the new entrants,
by providing long term loans with less interest rate. So this will be a threat for Air-India from
the upcoming and new domestic air lines

Threats from the competitors:

Threats from the competitors for Air-India is very high The competitive rivalry within the air
line industry is very intense, as many major air lines are operating the flights to the same
destinations, all over the world. Air-India is facing major threats from the industry competitors
like emirates, king fisher and Air Asia etc. The major air line companies are very aggressively
competing each other by offering travellers privileges for regular customers, reducing the fares
and offering high quality services etc, to attract more customers than their rival companies. So
Air-India was facing high threat from its rival companies

BARGAINING

Bargaining power of the buyers:

The threat from the buyers is intensively high for an organization like Air-India. As more
domestic and international air line companies are operating their flights to the same destinations
with low travelling fairs, the customer can choose from a wide variety of travelling plans offered
by the different companies. Then the power of the buyer is very high, as the competition between
the companies is more. Air-India is already running in losses, the customer may demand more.
At international level this buyer threat is somewhat moderate, but at domestic level, it was very

15
high. Threats from the substitutes: Threats from substitute products is very less for Air-India Air
lines are the fastest possible ways to travel from place to place, so there is less threat from the
substitutes. However, by considering at domestic level, the customers can choose railways or
road ways that are connecting different places. But still it is time consuming. The only one factor
that makes people to think about alternate travel options like trains or buses is the cost of air
travel, which was expensive for the people of developing countries like India. So there is a little
threat at domestic level, but very less threat at international level

Bargaining power of suppliers:

The threat from the bargaining power suppliers is moderate for Air-India. Suppliers for Air-India
are very less in number. The major suppliers for the company are Boeing and Airbus. From the
international aviation surveys, there is no cutthroat competition between Boeing and Air bus, so
there less chance of bargaining with the customer. However an air line company like Air-India,
which was running in losses, the suppliers may demand regarding the payment options. And it
was already known that, Air-India already owes $90 million to Boeing.

Risk analysis of Air-India:

Being the first air lines in the country, Air-India has the advantage. In today’s business circle,
everything was involved with risk, such as substitute products, no. of new entries etc. But a
formal risk analysis tells about the risk factors and the actions have to take, to eliminate those
risks.

Risk assessment:

EHS risk management of Air-India is the key procedure to recognize the all possible risks

Risks related to the fuel economy. As Air-India is using mostly Airbus A-320, which are not fuel
efficient. Air-India eliminates this risk by buying and operating small sized planes between the
less profitable routes.

Risk of terrorism. As Air-India was operating from India, the security is always a big risk.
Recent attacks on airports and hijacking of aircrafts reveal that security is a major risk factor.
Air-India tries to eliminates this risk by implementing new security systems and special bomb
squads

So the air bus made sure to have few directives and methods to take the responsibility to reduce
the risks. As a part of this the company tried to improve EHS and tries to eliminate all of the
risks

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Risks regarding to the over head costs. Air-India was operating its flights between the routes,
which are yielding constant losses, for the prestigious purpose of the government and the interest
have to be paid to the suppliers (Boeing and airbus), will be the extra burdens for the company,
regarding the costs of over head.

So, Air-India took all the necessary steps, where ever required including security and economical
regions, to overcome all these risk factors. But still, the company was not handling the risks, very
efficiently.

Change management of Air-India:

Change management is a set of highly efficient tools and specialities which leads to a successful
change process. The changes cannot be analyzed not only with soft skills, which yields
subjective outcomes, but also measured in terms of customer satisfaction, speed of delivery and
quality of service etc.
Whenever a company undergoes a change it is considered as the core process and when the
process is carried out they will often have heavy and inflexible process, so the main aim should
be like achieving the efficient change process.
The general steps involved, whenever a change was made in Air-India, it fallows the steps,
designed by EADS.
Examples of such steps are as follows; consider the change of establishing a new route by
AirIndia.
1. Significance and necessity of the change has to be recognized. Think about the necessity of the
new route and develop questionnaire, is the change was really required?

2. The change have to be placed in the management system which has to make decision as well
as in the PDM system

3. Once the change was placed, then an internal checking has to be done

4. In this step, if the request for the change is accepted after through checking, then the selection
of new route is authorized

5. Then the change has to be documented

6. Then the a request of change have to be handled to investigation section

7. Approval of the change from the investigation department

8. When an external change is requested along with investigation task is made displayed on the
work list of landing gear provider. In this links to documents are also available

9. Implying the engineers on change proposal is performed then the solution is accepted by the
technical point of view. Following with the proposal offers, counter offers and finally acceptance
is done.

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10.The solutions also have to be rechecked and program level and an order for change has to be
generated at program level

11.Task is defined so as to perform and realize the change which is linked with work order.

12. After this, the change has to be implemented in various phases

13.Models and their related documents are produced and uploaded on the PDM system with
status, document number and version.

Seven steps action plan to survive Air-India:

Airlines and the millions of passengers they shuttle around the globe share a common
experience: Periods of smooth flying are interspersed with nervous episodes of gut-wrenching
turbulence. Air India is now in the middle of one of those bumpy patches. A seven step action
plan was proposed by the management to rescue the organization.

The plan was explained below :

1. Create a crisis: Tell the blunt truth to the stakeholders. Openly announce the current situation
and actions have to be taken place, to the stake holders and the staff. Creating the crisis includes
the sense of urgency that has to take hold of the current airline position and stake holders.

2. Take drastic steps: Air-India had to take some drastic steps in order to generate some revenue.
For example Air-India could have given its iconic Nariman House building or New Delhi’s
airline building to the new tenants, instead of losing them and generate some revenue

3. Let the leader to do the job: The first step required, to turn over the Air-India’s situation was
to have a clear mandate from the government to establish the new leadership. Reestablishing the
leadership with highly talented managers from the private sector, who could run the airline very
effectively

4. Bringing in talent from private sector: Air-India had to focus on its long term marketing
position as well as it had to keep in mind that they may adopt the capital investments from the
private sectors. After that, the next step was, bringing the top most executive managers from
other private airline industries.

5. Learn from Satyam experience: Satyam was one of the biggest software company established
in India, until it was closed down. The main reason for the failure of Satyam was, the individual
managers who do not react when the company was going into heavy losses. AirIndia was also
facing the same problem with the individual managers. To eliminate this, the organization
needed managers with good communication skills and shoulder responsibility for the loss of the
company.
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6. Establishment of new network and new fleet: Small changes in schedule may lead to bigger
results. For example the flights of Air-India would start at 9 am in the morning from the major
cities to London. By changing these timings, such that each flight will set off with a ten minutes
gap, so that runways and airport gates could be effectively utilized. Establishing the new fleet by
cutting down the loss yielding routes as well as aircrafts may lead to positive results.

7. Marketing, yields and revenues: The new management had to take quick steps to yield some
revenues and have to stop loss of market share. For example, establishing new plan such that
allocating a group of employees for each aircraft, who are responsible for each and every issue of
the aircraft.

To cover up the losses: Implementation

• The company planned to increase its reserve cash by selling its Hotel Corporation in Indian sub
continent, worth of $220 million and some old Boeing 747s, worth of $60million.

• The company was planning for a private collaboration from other airlines, which was not
accepted by many of the employees and the Government of India.

• And the company plans to reduce the pay roll by $40 million by closing some unprofitable
routes and reducing the employment, which leads to a strike by the employees and the pilots.

• The national carrier has also decided to discontinue loss-making routes, among others steps, to
rein in the spending and return to break-even.

• The use of expensive hotels or five-star hotels for stay during the travel or holding events has
been restricted unless it is unavoidable and the budget for such activities has been reduced by 10
percent as part of the measures by AI.

• After a long spell of losses, Air India had recorded a net profit of Rs 14.6 crore in December
last on account of a healthy growth in both passengers and cargo revenues.

• Air India's total revenue rose by 6.5 percent to Rs 2070 crore during December 2014 as
compared to Rs 1,944 crore in the same period in 2013.

• The state-run airline has reduced both its operational and net loss over the last two fiscals. Its
net loss came down to Rs 5,389 crore in the last fiscal compared with a net loss of Rs 5,490 crore
in financial year 2013 and Rs 7,559.74 crores in FY12.

• AI has a cost base of nearly Rs 24,000 crores out of which nearly Rs 14,000 crores is variable
and this includes fuel cost of Rs 9,500 crores."With the decline in fuel prices, the company plans
to achieve at least a 20-25 percent reduction in its fuel bills in the next fiscal, which will be a
substantial saving for the carrier.
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 • The management has also directed that all routes should be critically reviewed and routes
which are not covering fuel cost or variable costs, removed from the network after studying the
historical trends.

• The management has also emphasised to all its employees that the targets set under the
turnaround plan and the budgets should be achieved for this fiscal on a "war footing" and there
can be no compromise on these.

• On the operational front, the measures are aimed at improving aircraft utilisation by cutting
down the turnaround time at transit stations, reducing duty travel of crew to the minimum to
increase their productivity, close monitoring of occupancy ratios on various flights, bringing
down expenditure on entertainment at foreign stations, Financial Restructuring and bail out In
April 2009, due to high fuel and loan costs, the Indian government pumped 32 billion (US$510
million) into Air India and in March 2012 the government bailed out Air India Ltd. with a grant
of 67.5 billion(US$1.1 billion) As of May 2012 the carrier invited offers from banks to raise up
$800 million via external commercial borrowing and bridge financing.

In 2013, the Indian government planned to delay equity infusion of Rs.300 billion (US$4.8
billion) that was slated to be infused into the airline slowly over a period of eight years. Plans
were changed as the government then planned to spread it over a longer period of time as part of
measures to bring down the economy's financial deficit. The original plan was to pump in some
Rs.300 billion (US$4.8 billion) into the airline in 2013, while less than half of that amount was
mentioned in the annual budget Air India paid GMR Group a sum of 4.15 billion (US$66
million) towards outstanding dues on account of charges related to the airports at Hyderabad and
Delhi. Of the amount paid, 3.4 billion (US$54 million) was paid to clear the user development
fee (UDF), airport development fee (ADF) and landing and parking charges at the Indira Gandhi
International Airport in Delhi. The remaining 750 million (US$12 million) was paid to clear
similar fees at the Rajiv Gandhi International Airport in Hyderabad 23 In order to raise funds for
reconstruction, Air India decided to sell and lease back its aircraft, including the newly acquired
Boeing 787 Dreamliners. In March 2013, the airline posted its first positive EBITDA after
almost 6 years. The airlines bolstered its financial and physical performance with a 44 per cent
slash in its operating losses in 2013-14 and an almost 20 per cent growth in its operating revenue
since the previous financial year. As of January 2014, Air India is the third largest carrier in
India, after IndiGo and Jet Airways with a market share of just above 19%.

The role of power and politics:

Air-India was first started as a private air line service, named after J R D Tata, its founder. At
the end of the Second World War, the government of India bought 49% of its share, thus it
becomes a state owned air lines. As it was owned by the government, many political issues came

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to the screen, which controls Air-India’s operations. As it was operated under the control of the
government, the decision making process takes a long time, as the decision have to come through
various phases of the government, starting from the ministry and management. As the corruption
level in India is very high, it is very difficult to take up new projects or to get a route clearance.
Politics will indulge in each and every issue, including human resource and procurement.
Political issues are one of the significant causes for the failure of Air-India. The organization has
operating its flights in between the destinations, which are yielding constant losses due to
prestige of government and political pressures. This was the major reason for the revenue loss of
Air-India. Another reason for its failure is, lack of skill due to the reservation system in the jobs
for back ward religions and unstable government.

Power of Air-India:
Air-India was the India’s biggest air carrier service. The company was owned by the
government, so it can have a financial back up from the government. Obviously, AirIndia has
the large fleet of Aircrafts among all of the air line companies in India. AirIndia has ordered 10
A-380 aircrafts, from Airbus, which shows the buying power of Air-India.

Air India Strike - May 2012

On May 8, 2012 about 100 pilots went on medical leave as a mark of protest.

• Later, the same day it sacked ten agitating pilots and de-recognized their union after 160 pilots
failed to join duty by the given deadline.

• After putting forth an original list of 14 demands, the aviators are now asking for reinstatement
of their 101 sacked colleagues

• On the 15th of May, the Union Civil Aviation Minister Ajit Singh stated that the Government
was giving Air India one last chance and that it must perform in order to qualify for a bailout.

• On 4 July 2012 AI management gave an assurance to Delhi High Court that it would look into
the hardships of the pilots sympathetically, the striking pilots have decided to end the 58 day old
strike immediately.

• Due to pilots' strike Air India suffered a loss of 500 crores (US$90.5 million)

Demand:

Better salary, promotion and increment.

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Equality between Air India and India Airline Staff.

Reappoint the pilots, who force to resign.

Career progression

Integration across various cadres

Rationalization of pay scale

Recommendations:
There is a need for Air-India to establish a new fleet with mid and small sized aircrafts, to serve
the less busy routes

Air-India has to cut down all the unnecessary routes, which are yielding losses. However for
prestigious purposes, they have to run the flights in those routes, at least they have to provide the
list of those routes to the government, such that the government can subsidize those routes

Air-India has to appoint, highly skilled managers from private sector, in order to turn over the
situation

Instability in the management has to be eliminated, by appointing a firm and constant

management and director, as government is changing the management frequently.

The ratio of man power to no. of aircrafts has to be reduced, in order to reduce the staff costs

The unnecessary aircrafts have to be rented or they can sell those aircrafts. For example, half of
Air-India’s Boeing 747 aircrafts are remaining in the hangers, without regular usage. The
company have to gave them for rent or have to sold them, in order to generate some revenues
and to reduce the maintenance costs

Quality of service and aircraft maintenance have to be improved

The organization have to encourage the private investments, in order to recover some costs

Collaboration with major international air line companies will be helpful

The pace of decision making process have to be improved.

Conclusion
 

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Air India has established its position as India’s largest and most effective air carrier on all fronts,
according to the extensive studies done and information gathered. Their service is up to date and
relevant, serving millions of passengers on a regular basis.

They aggressively position themselves in the market using a variety of promotional tactics,
including campaigns and social media, to keep consumers informed about future packages and
more. Consumers see their low prices as a competitive advantage and selling feature. Overall,
their marketing and commercial tactics have been effective in propelling them to new heights
while remaining innovative.

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