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ARITHMOS' 23
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Rule Sheet
1. Participants are expected to be in formal attire throughout the
event
2. In case of discrepancies the decisions taken by the organizing
committee will be final and binding on all participants.
3. The round will be held online. The zoom/Google meet link will
be provided to the participants on the WhatsApp Group a day
prior to the event.
4. The participants are expected to enter the meeting 15 minutes
before commencement. Late entries will attract negative points.
5. Time allotment per team is as follows : a) Presentation: 10
minutes b) Q/A session : 5 minutes If any team exceeds the time
limit, they will attract negative points
6. Participants are requested to mail their presentations by 21th
January 2022 by 11:59 pm. Any delay in the submissions will
attract negative points. The submissions have to be mailed to
businessstrategyevents.arithmos@gmail.com
7. Presentations have no slide limit. However, participants are
requested to keep their presentations concise.
8. Plagiarism in presentations is not encouraged and would attract
negative points. Vulgar language and any kind of inappropriate
 behavior will not be tolerated at all and would lead to direct
expulsion.
9. The participants are free to submit any word file, excel sheet,
video, images or any other document supporting their
presentation.

INTRODUCTION:

As India’s oldest airline, Fly India has a long-standing history of serving

the Nation and its people, while leaving its mark on the global aviation
map. Fly India is the flag carrier airline of India, headquartered at New
Delhi. It is owned by Talace Private Limited, a Special-Purpose Vehicle
of Tata Sons.

Initially, the airline functioned as a mail carrier but grew quickly in its
operational capacity and began carrying passengers as well. The very
first flight of Tata Airlines was piloted by JRD Tata. A Bombay to
Madras flight ticket costed Rs. 256. In 1946, Tata Airlines was renamed
as Fly India and was also made a public limited company. After
Independence, Fly India also started international flights. The
Government of India nationalised Fly India in the year 1953 and made it
a public sector unit. Fly India was notoriously known as “Palace in the
Sky”: luxury travel, international food and top-notch hospitality. JRD
Tata himself, ensured the service standards were maintained well.
During the 1960s and 1970s, India wasn’t merely an airline, it was a
representation of India internationally.

2007 Fly India bore losses worth 541 crores. The Government of India
had purchased several new airlines during this period. Salary demands
increased, pilots went on strikes and the Government decided to merge
Fly India and Indian Airlines as National Aviation Co. of India Ltd
(NACIL).

Revenue from the passengers was decreasing due to upcoming, newer

airlines. Fly India had hired unnecessary crew members and they were
not given enough training. Management problems caused due to drop in
standards of the flight. In 2007, the Government spent millions on
advertising from Fly India. If Fly India wouldn’t have been a
government company, decision makers believe Fly India would have
flourished.

LATEST NEWS:

The US has ordered Tata-group owned Fly India to pay a whopping

$121.5 million as refunds and $1.4 million as penalties for extreme
delays in providing refunds to passengers due to the cancellation or
change in flights, mostly during the pandemic, officials said.

KEY FINANCIALS:

Fly India Limited, (a Government of India Company, hereinafter

referred to as AI/Company/AIL/Fly India) is a Company incorporated in
India, registered under the Provisions of Companies Act, 1956. The
Govt of India holds 100% of Equity Share Capital of the Company.
Debentures issued by the Company are listed on National Stock
Exchange and Bombay Stock Exchange. The Company provides
domestic and international air transport services, which includes mainly
passenger and cargo services and other related services. The aircraft
fleet of the Company consists of a wide range of aircrafts.

At the end of fiscal year 2021, the total income of Fly India stood at
over 121 billion Indian rupees. Meanwhile the net loss of the airline
reached around 71 billion rupees. Fly India was sold by the Indian
government to Tata Group in October 2021. The Total Expenditure
incurred during the year was Rs. 362,901.7 Million as compared to the
previous year’s figure of Rs. 349,625.2 Million (increase of Rs.13,276.5
Million)

At present, the airline has a domestic market share of 10 per cent and an
international market share of 12 per cent.

Fly India’s plan to increase its domestic market share from 8.5 per cent
currently to 30 per cent in the next five years is contingent on various
factors — including probable merger of all Tata Group’s airlines, speed
of airport infrastructure growth, load factors in forward cabins, and
growth of new airline Akasa Air and revamped Jet Airways.

Fly India Express services are a cut above the rest. Though Fly India
Express follows the market principles of a low cost carrier, we spare no
effort in ensuring guest comfort and quality of service while delivering
affordable air travel to our customers. In contrast to other LCCs, Fly
India Express offers complimentary snacks, tea / coffee on board. Also
included in Fly India Express facilities are affordably priced a-la-carte
meals which can be pre-booked online.

Complimentary Refreshments/ meals are served on all Fly India

operated flights.

Choice of Continental or Indian cuisine Non-veg/ Veg for our

international flights.

Improved illumination & temperature control systems.

Fly India's biggest competitive advantage is its ability to fly non-stop

from India to destinations like the United States and Europe, where it
enjoys lucrative landing rights. Foreign hub carriers such as Emirates
and Etihad Airways can only compete with one-stop options.

Fly India is Certified as a 3-Star Airline for the quality of its airport and
onboard product and staff service. Product rating includes seats,
amenities, food & beverages, IFE, cleanliness etc, and service rating is
for both cabin staff and ground staff.

Fly India is a Indian carrier. Frequent travelers give the airline an

average rating of 6.9/10.

The airline posted a net loss of Rs 72.33 crore in FY22, against a net
profit of Rs 98.21 crore in FY21, according to the documents it
submitted to the Registrar of Companies (ROC).
Fly Asia is a leading travel and financial platform company in Asia
Pacific, providing air transport, travel and lifestyle services, as well as
financial services. Fly Asia started as a low-cost carrier with operations
in Malaysia, Indonesia, Thailand, the Philippines, India, and Japan, and
has carried more than 600 million guests to over 150 destinations in its
network across Asia, Australia, the Middle East and the US. Recognised
for its world-class service, the airline has been named Skytrax World’s
Best Low-Cost Airline 11 years in a row from 2009 to 2019 and World
Travel Awards World's Leading Low-Cost Airline for seven consecutive
years from 2013 to 2019.

Fly Asia has since embarked on a transformation journey to become

more than just an airline, with the inclusion of hotels, holidays,
activities and online shopping on its travel and lifestyle platform Fly
Asia.com, integrated logistics through Teleport and digital financial
services via its money app, BigPay.

Fly Asia made it known to the public that their vision is to be the largest
low cost airline in Asia and serving the 3 billion people who are
currently underserved with poor connectivity and high fares.

In order to achieve this vision, Fly Asia focused their mission on :

● To be the best company to work for whereby employees are
treated as part of a big family;
● Create a globally recognized ASEAN brand;
● To attain the lowest cost so that everyone can fly with Fly Asia;
and
● Maintain the highest quality product, embracing technology to
reduce cost and enhance. service levels.

Their customer services includes offering a "Santan" menu, with options

to buy on board offering food, drinks, merchandise and duty free for
purchase. Pre-purchase of "Santan" meals is available at a lower price
than on board, and with additional options.
Fly Asia India became the first domestic airline to launch safe door to
door baggage service for its guests, branded Fly Asia FlyPorter. The
revolutionary FlyPorter service gives guests flying with Fly Asia India
the luxury of doorstep baggage pick up as well as the option to continue
their journey to their final destination within the city on arrival with the
freedom to travel without baggage.

Two years back, they had been shrinking its operations and operated
only 27 aircraft. It returned seven Airbus A320 planes to Fly Asia
Berhad in Malaysia in FY21. The first half of FY22 was significantly
impacted by the second wave of Covid-19, whereas the second half
enabled demand recovery, although high fuel prices continued to be a
challenge.

However, when we now look at the current operation of the company,its

committed to strengthen its presence and improving connectivity in
India, Fly Asia India launched six new routes connecting Mumbai -
Goa, Chennai - Ahmedabad, Goa - Chennai, Mumbai- Chennai,
Chennai - Visakhapatnam, and Jaipur - Kolkata. They have not only
progressed in terms of domestic routes but also in terms of international
routes. They have announced the launch of its first direct route from
Ahmedabad to Kuala Lumpur. The airline is expanding its international
reach with this new addition. Guests flying to Kuala Lumpur can now
fly at fares as low as INR 3399.

Fly Asia has managed this phenomenal growth because of their business
model, which focuses on creating cost and operational efficiencies in
everything they do, so that the savings can be passed on to their guests.
Also, this is achieved by as serving the underserved market and
archipelago landscape in Southeast Asia, focused management team,
rapid fleet expansion and its branding effort. This allows them to keep
to their promise of ‘Now everyone can fly’ – a promise that can be
verified by the 217 million guests who have flown with them.

Fly Asia India became the first domestic airline to launch safe door to
door baggage service for its guests, branded Fly Asia FlyPorter. The
revolutionary FlyPorter service gives guests flying with Fly Asia India
the luxury of doorstep baggage pick up as well as the option to continue
their journey to their final destination within the city on arrival with the
freedom to travel without baggage.

Key Financial Details

Fly Asia India’s loss grew 42 per cent on a YoY basis to Rs 2,178 crore,
while its revenue rose nearly 39 per cent to Rs 1,887 crore. The airline
had a negative reserve and a surplus of Rs 4,849 crore.The industry
standards of the airline industry’s quick ratio was reported as 0.4 for the
4th quarter of year 2022.

Fly Asia’s quick ratio of 1.05-1.31 is well above industry standards,

which means Fly Asia is able to protect its short-term creditors and
exhibit excellent liquidity.

The industry standard for total asset turnover for PY 21-22 is 0.9. Fly
Asia’s total asset turnover is below the industry standard. This was
likely caused by the purchase of assets in a frequent manner.

The ROE ratio indicated the earnings accruing to shareholders

decreased over the years FY 2021-2022.

Based on the table showing the % growth, the drastic fall of ROE in
year 2022 is contributed by the 72% decrease in profit after tax, despite
the growth in owner’s equity FY2021-2022.
 IQTARA OVERVIEW

Tata Sons Private Limited and Singapore Airlines Limited (SIA) have
partnered to create Iqtara,, in which Tata Sons owns a 51% partnership
investment and Singapore Airlines a 49% stake. The business is
officially known as TATA SIA Airlines Limited.

The joint venture's mutual objective is to transform air travel in India by

giving Indian passengers a smooth and individualized flying experience
that combines the service excellence and famous hospitality of Tata and
SIA. The vast, blue horizon that passengers see through an airplane's
windows, which they most often associate with a comfortable and joyful
journey, serves as inspiration for the brand. As it seeks to improve
travelers' flying experiences in India.

Iqtara launched its operations on January 9, 2015, with the first flight
from Delhi to Mumbai. Iqtara has substantially increased the size of its
network and service offerings in a short period of time. Using a fleet of
54 aircraft, including 41 Airbus A320, 5 Boeing 737-800NG, 5 Airbus
A321neo, and 3 Boeing B787-9 Dreamliner, Iqtara serves 43 locations
both inside and outside of India. Since it began operations, Iqtara has
flown more than 35 million satisfied customers.

IQTARA FINANCIALS-
FY 18-19 FY 19-20
Revenue 2999 crore 4738 crore
Profit and loss -831 crore -1814 crore
Revenue available per 3.64 5.05
seat kilometer
Cost available per seat 4.38 7.42
kilometer
Debt Equity Ratio 3.5 4.9

The above data shows an increase in revenue by 58% but also a huge
increase in loss which indicates that while their sales have risen, their
costs have also risen drastically.

Iqtara currently has 5000 employees and according to most of them, the
senior management of the firm is very rude and mean and doesn't
respect the employees. The salary of the employees is also low and the
working hours are very long. There is a lot of partiality and favoritism
in the company too.

As per customers, the airline provides good seat comfort, food and
beverages, and service but doesn't have a good inflight entertainment
system.

Synergies

The most awaited and the successful merger of the year is finally going
to happen. The TATA led Fly Asia & Fly India are going to merge with
Singapore Airlines Iqtara. The company is confident about the new
merger and hopes to increase its revenue soaring high. One of the top
airlines I.e Fly Asia has been generating great revenues from the very
start of the business. On the other hand Iqtara is a bit against the flow.
Now let's just analyse the synergies caused due to the merger.

Fly Asia has been famous for its punctuality and the customer service it
offers. This is due to the help of a TCS based app called Red Smart
Plus. This app helps the airline to monitor the loading - unloading time
and other essential works to be done between two trips.

After the merger, TCS based will surely start becoming beneficial to all
the newly joined companies.There will be a drastic change in the
punctuality of other two companies.The figure below shows the
probable changes that might happen in respective airlines:

Fly Asia Fly India Iqtara After merger

Cancellation 0.00% 0.05% 0.14% 0.03%
rate
Complains(p 0.1 2.4 4.3 1.4
er thousand
passengers)

One of the unique characteristics of the airline industry that has been a
consistent driver unprofitability is the existence of excess capacity in
the market. Capacity in the airline market is usually defined using the
common metric load factor". Load factor is defined as the percentage of
seats sold to passengers out of the total seats available to passengers on
all routes an airline has flown. The load factor of all the three airlines
were reactively high as compared to the other competitors in the market.
The merger will lead to further increase and will prove beneficial to the
TATAs.

Load Factor Fly Asia Fly India Iqtara After merger

January 80.5 60.6 67.6 -
February 83.2 84.1 87.1 -
March 81.3 85 86.1 -
April 79.6 79.5 82.9 -
May - - - 88.9

However one of the major setbacks which might affect the goodwill of
the company was the decision of Director General of Civil Aviation was
to deny Fly India preferential access to bilateral rights needed to operate
intenational flights. For the airlines of a particular country to operate
international flights to another country, the two sides have to negotiate
and sign a "bilateral air services agreement", which decides how many
flights (or seats) per week can be allowed to fly from one country to the
other.

Once such an agreement is signed, each country is free to allocate the

bilateral rights to its respective airlines. Even after such flying rights are
allocated to an airline, it must have slots at both the airports in order to
start flight operations.

A slot is a date and time at which an airline's aircraft is permitted to

depart or arrive at an airport.The slots are allocated by a committee that
consists of civil aviation ministry and DGCA officials, airport operators
and airlines, among others.

DGCA dropped the clause which gave Fly India an advantage over
other private airlines in its revised guideline issued.

However when we talk about the one the major positives about the
merger is the increase in the fleet. This increase of fleet will help the
Airline a lot in managing the traffic amongst the passengers.

The figure below shows that how has the passenger traffic is has been
gradually increasing over the past few years:
However after the merger the company will be really effective in
managing the passenger traffic as the fleet has increased and now the
airlines will be able to manage the demand quite well.

FLEET Fly Asia Fly India Iqtara

B737-200 - 9 5
B3215-650 6 5 -
B8585-768 5 14 -
C7498-543 1 7 8
CRJ-200 28 12 22
ATR-72 2 - 7
A30-300 11 8 2
TOTAL 53 45 42

The major efficiency and synergy comes because both the companies
use B3215-650 as their domestic fleet efficiencies. Iqtara CRJ-200 is
more than 10 years old and CRJ-200 which were taken on lease for
higher rentals. Fly Asia will have to rationalise the cost aspect of
operating and maintaining the fleet size. Since Airways does not have a
proper mix of aircrafts this would lead to higher maintenance cost for
the merged entity.

The merger of the three airlines will be one of the buzzwords in the
airline industry. Indigo, which has been acquiring one of the major
market shares in aviation , will be triggered by the merger as the three
companies now stand in competition with the then strong airlines.
According to DGCA report the Market Share of each airline before the
merger were as follows:

Indigo was acquiring around 40.3% share in the market whereas Fly
Asia, Fly India and Iqtara were acquiring 23.7%, 12.8% and 7.6%
respectively. Now after the merger the entire company stands at 44.1%.
Though the result seems in the favour of the company, one of the
dissenting reasons for the company is the individual performances of
the three companies before the merger. The following report shows the
performance of the three companies before merger:

Fly Asia Fly India Iqtara

PARTICULARS FY 18-19 FY 19-20 FY 20-21
Operating profit 33.20% 47.80% 26.80% 33.50% 12.62% 12.53%
margin
Gross operating 26.70% 40.80% 15.70% 22.60% 9.30% 11.70%
Margin
Net profit 13.00% 26.70% 12.60% 24.50% 8.50% 9.80%
margin
Return on capital 31.65% 39.80% 25.60% 18.70% 15.80% 13.90%
employed
Return on net 22.40% 21.10% 14.63% 11.70% 6.90% 5.30%
worth
Debt equity ratio 1.3 1.8 1.8 2.5 3.5 2.7
EPS 85 101 65 72 45 49
PE 22.6 19 27 23.2 31 35

However, according to industrial analysts and other financial advisories

also advise that the rather than merging all the three companies, Fly
India should also consider se other combination of merger i.e. with
either of the two airlines and not as a whole.

One of the prominent reasons why they advise considering other option
is the swap ratios. A swap ratio is a ratio at which an acquiring company
will offer its own shares in exchange for the target company's shares
during a merger or acquisition. A swap ratio tells the shareholders of a
target company how many shares of the acquiring company's stock they
will receive for every one share of target company stock they currently
own.

Swap ratios are important because they aim to ensure that the
shareholders of the companies are not impacted by the merger or
acquisition and that the shareholders maintain the same value as they
did before, with the hopes of further growth through the synergies of a
merged company.

Valuation of MV at the time EPS

 company(in of merger
crores)
Fly India 1173 100 15.5
Fly Asia 786 60 12.6
Iqtara 345 45 9

The predetermined swap ratios are as follows:

If Fly India and Fly If Fly Asia and Iqtara

Asia merges merges
Swap Ratios 1 upon 2 1 upon 2

However, the analysts also predict that by taking such partial merge into
consideration, will benefit the then formed company a lot greater than
the merger of all three companies. Here is the analysis if Fly India
considers partial merger.
Ratios Fly India Fly Asia Iqtara If all 3 If Fly If Fly
merge Asia and India and
Fly India Iqtara
merge merge
Working 2.3 1.6 1 1.3 1.9 1.4
Capital
Quick 1.1 0.7 0.9 1.3 1 0.9
Ratio
PE ratio 6.45 4.76 5 7.65 6.8 4.53
Debt to 1 upon 2 1 upon 1 2 upon 3 4 upon 6 2 upon 3 3 upon 5
Equity
ROE 19.27% 16.83% 14.55% 22.61% 17.87% 16.69%
WHY FLY INDIA, FLY ASIA, IQTARA MERGER SHOULD NOT
HAPPEN

Iqtara Airlines

Tata Singapore Airlines (SIA) Airlines Limited, popularly known by the

brand name ‘Iqtara’ registered a loss of `1,814 crores in the financial
year 2019–2020. This was the largest figure of loss for Iqtara since the
company’s inception of operations in early 2015. While many aviation
experts remain puzzled over the company’s business model and
strategy, the company’s management remains largely positive over the
company’s future growth prospects. The company’s financial health has
deteriorated considerably, with increased operating expenses
significantly affecting the company’s bottom line. The trends suggest
that the company has been losing money consistently, while consuming
huge amounts of capital per year, mostly funded by its parent
companies, Tata Sons and SIA.

Iqtara Promotion and Advertising Strategy

In its initial days, Iqtara had to face constraints due to a small marketing
team because of which it was not able to market itself effectively.
However, they soon realized their mistake and worked extensively on
brand promotion and advertising. Apart from the traditional forms of
marketing such as billboards, television or print media, Iqtara also
started focusing on social media marketing through creative and
innovative content. Another form of marketing was internal marketing,
where the employees were well trained and followed dress codes to
project an image of sincerity, discipline and a customer-friendly
attitude.
 Financial Analysis

Iqtara has been struggling continuously to generate positive returns due

to intense competition, volatility in crude oil prices and the depreciation
of the rupee against the US dollar. Although Iqtara’s revenues have
grown at 190% CAGR from 2016 (Figure 4), its earnings before
interest, taxes, depreciation and amortization, (EBITDA); earnings
before interest and taxes (EBIT); and profit after tax (PAT) margins are
constantly below zero even as its parent companies are continuously
pumping in equity capital y-o-y.

Aviation turbine fuel (ATF) costs, aircraft lease rents, and repair and
maintenance costs have also seen a higher increase as compared to the
increase in revenue. This is also observed in the per passenger metrics
of Iqtara from 2015–2016 to 2019–2020, where the revenue per
passenger and operating expense per passenger saw a decrease in the
gap till 2017–2018, but since then, the gaps have somewhat widened,
owing to increased losses for the airline company (Figure 5).

Iqtara somewhat benefitted from the downfall of Jet Airways in April

2019 as it got access to the latter’s airport slots and premium class
traffic. It also inducted seven Boeing 737 aircraft flown by Jet Airways
and increased its fleet from 22 to 40 by March 2020.

The number of destinations rose from 24 to 36, including 5 foreign

destinations by the end of financial year 2019–2020.
Coming to the financial aspect, it is startling to see that the company
recently took a lot of long-term debt, increas- ing the debt equity ratio
from 0 to 1.1 in financial year 2020.

Iqtara’s pre-tax losses rose to `18.14 billion in finan- cial year 2020 as
against `8.31 billion in financial year 2019, owing to higher operating
expenses. While revenue grew at 58% y-o-y to `47.38 billion due to
newer aircraft and network expansion, higher costs and reduced passen-
ger demand in 2019 Q4 that adversely impacted results. This is the
highest single-year loss for Tata Sons–SIA joint venture since it
commenced operations in 2015.
Iqtara also made heavy investments in long-term assets, most of which
included purchase/payment for more aeroplanes to be added to their
fleet. With a dismal financial perfor- mance, the company must look for
a strategy to overcome its losses so that it will be able to pay off its
long-term debts, which make 50% of its capital structure, or else it risks
falling into a debt trap that could affect its survival in the future due to
magnified losses, owing to financial leveraging. Profitability issues can
also be confirmed from the profitability ratios

Fly India

Background Since Fly India has been merged with Indian Airlines in
2007, it has been unprofitable (Kotoky, 2018, January 15). Fly India’s
losses widened to more than `75 billion in the financial year 2011–2012
(Figure 3 and Table 1) and stood at `38.367 billion at the end 2016,
which had prompted the NITI Aayog1 to propose the divestment of Fly
India to the Ministry of Civil Aviation (Usmani, 2017, June 28). The
Civil Aviation Ministry had discovered the options and methods to
turnaround Fly India, which was running on a bailout fund of `300
billion (Times of India, n.d.).

Reasons for Fly India Losses

Increase in competition: Substantial increase in competition due to

many players in the domestic and international markets.

The adverse impact of exchange rate variation: The dynamic

fluctuations in the exchange rates adversely affect the working of the
company.
Less income in passenger revenue: Passenger revenue earned by the
company was of `157.73 billion that is almost 20% lower than
forecasted `212.97 billion in FY16. The company failed to meet the
targets despite meeting load factor targets. So that implied that airline
lost revenue due to its inefficiencies like lack of aircraft availability,
faulty deployment, low utilization of human resources and lack of
ancillary revenue.
Low monetization of assets: Lack or faulty initiatives to monetize its
assets is one of the primary prerequisites of meeting the revenue
deficiency that led to a dip in the company’s fortunes.
Non-availability of the proper fleet: The audit finds that there has been a
mismatch in demand and availability of the airline imposes strategic
limitations. For instance, there was over-provisioning of wide-body
aircraft whereas it did not have the required number of narrow-body
aircraft. Liberalization in granting bilateral agreements with foreign
countries: The audit pointed out that more than required granting of
bilateral seats to carriers of foreign countries hurt Fly India’s prospects.
Mismatched international operation: Fly India can be on an expansion
drive to new international destinations but the audit says that most of
such routes burn a hole in the airline’s pocket as it fails to recovers the
cost.

India-based airline, Fly India (AI), a merged entity of international

carrier Fly India Limited (AIL) and domestic carrier Indian Airlines
(IAL), had been facing a profound human resource management and a
financial crisis from the time of its merger in 2007. AIL and IAL had a
history that was decades long and enjoyed a great reputation in the
Indian aviation sector. However, since the turn of the century, both had
been suffering losses due to competition from private airlines4 and the
growing popularity of low-cost airlines. The revenues of both entities
were severely affected since 2004.5 Their market shares declined.

To withstand the competition, the then civil aviation minister (2004-

2011), Praful Patel7 (Patel), put forth the idea of merging AIL and IAL.
Informal discussions toward this end began in December 2004.8 The
rationale for the merger was to boost the revenues of both the state-
owned airlines. In April 2007, AIL and IAL merged to form AI. Post
merger, AI was one of the top 30 airlines in the world with a fleet size of
more than 140 and an employee strength of 33,000. 9 But the merger
pushed both airlines into a non-recoverable financial crisis. From 2007,
AI's revenues started to dwindle and it faced severe problems in
managing its human resources. Several employees left the company.
Industry insiders opined that many of the employees had quit because of
the airline's poor management practices and the pay disparities among
the staff of the two merged entities.10 The employees went on a series
of strikes, which hampered the operations of the airline. With the strikes
leading to frequent flight cancellations, passengers were left fuming.
Industry insiders, who analyzed the instability and disturbances
prevailing in AI, expressed skepticism over AI's survival.

Fly Asia

Financial Position of Fly Asia

An analysis of the numbers shows the airline isn’t profitable even on a

single route it operates. The group earnings after tax show a tremendous
reduction from USD 254.78 million in 2010 to USD 133.3 million for
the year 2011. In addition, a downward trend of their recent net income
growth as portrayed in their statement of income is illustrated in the
figure 1 below:

THE TROUBLE IN THE SKY

India’s aviation minister said over the weekend that Fly Asia was
shutting up shop in the South Asian nation, though his office later
suggested the comment was taken out of context by media persons. On
the other hand, Fly Asia also suffered a set-back earlier that its Japanese
arm will cease flying immediately as the coronavirus outbreak continues
to roil the airline industry. Once the the leader in low cost air travel of
the region’s revolution, the financial position of the group is seeking as
much as RM2.5 billion to steer its way through the crisis.

Fly Asia Group suffered and facing daunting task for handling the crisis
and is filing with Bursa Malaysia that it was notified of the decision
taken by the board of directors of AAJ to permanently suspend its
operations with immediate effect.

Fly Asia group have agreed to the decision made by AAJ as this would
reduce the cash burn of AAJ and the company. This is amid the highly
challenging operating conditions in Japan, which have been aggravated
by the Covid-19 pandemic that has plagued the world since early this
year.

Thus considering the above reasons the merger should not happen

Alternatives of operation

1)Acquisition
One of the ways through which Tata can acquire fly Asia and
Iqtara is by buying the 49%stake that Singapore airlines owns in
Iqtara and by also buying the 16.66% stake that Fly Asia
(malaysia) owns in fly Asia (India).

Post the acquisition of Fly Asia and Iqtara by Fly India their
names will be nixed, meaning the employees and planes of the
two companies will now have the uniform of Fly India. the fleet of
Fly Asia will now be a part of fly India express which is low cost
subsidiary airline of Fly India that travel short distances and
doesnt offer free meals, inflight entertainment and wifi.

List of services offered by fly asia–

1. Fly Asia has a partnership with Avis car rentals to help
passengers commute to and from airports.
2. Fly Asia offers an ‘extra seat service’ to passengers who need
some personal space or are carrying bulky and fragile items
3. They also offer ‘premium flex service’ which gives passengers
free meals and priority boarding and check-in.

Post the acquisition all the passengers flying with fly India
express will now get to use these services too.

The fleet of iqtara will now be a part of fly India which is a full
service airline

List of services offered by Iqtara—

1. ‘Meet & assist’ is a service powered by airport so that helps

passengers with drop-off to the airport and provides lounge access
and priority check-in
2. Iqtara has a partnership with Starbucks to offer free hot coffee
in all flights
3. ‘Iqtara youngstar’ is a service provided for unaccompanied
minors where they are escorted through all the airport processes
and seated in the aircraft

Post the acquisition all the passengers flying with fly india will
also get to use these services too.

With this acquisition, the fleet of fly India will increase from 111
planes to 214 and connecting destinations will increase from 102
to 160 destinations across 43 countries. most of the top
managment of fly Asia and iqtara will be fired along with some of
the employees as too many employees will amount to unnessecary
expenditure and inefficiency although some of the existing
workers will be provided with raises or bonuses as a
compensation for the extra load of work given to them due to the
acquisition.

2) Merger-
Merger is an agreement that unites 2 or more existing companies
into one new company

One of the ways through which all Tata airlines can merge is by
giving fly Asia (Malaysiya), which owns 16.66% stake in fly Asia
(India), and by giving Singapore airlines, which owns 49% stake
in Iqtara, 7% and 15% stake respectively in the newly formed
company created by the merger.

The newly formed company created post merger will be named

Star India which will also have a subsidiary named Star India
express which will comprise of fly India express and fly Asia and
will be a low cost airline while Star India will comprise of fly
India and iqtara. It will be a full service airline.

Star India will have to spend a lot of money on advertisement,

promotions and branding through newspaper, social media,
billboards, televisions to make people aware of their new
company. they will also have to offer heavy discounts to attract
customers.
tier points can be used to avail discount on flight tickets of all
partner airlines of Star india

List of services offered by Star india will be–

1) Since Tata owns 50% of Starbucks India, they can also provide
complimentary hot coffee on all flights

2) ‘Star citizen’ is a type of service that helps senior citizens

travelling alone with check-in, boarding and also provides them
with a blanket, pillow and special meals which cater to their
dietary requirements for a nominal fee

3) ‘Star premium’ is a type of service which for a nominal fee will

provide the passenger with the most premium experience by
dropping the passenger to the airport in a luxurious car and a star
 India employee will stay with the passenger till the boarding and
will carry their luggage for them. the passenger will also be
provided with lounge access, priority boarding and check-in,
inflight wifi and any meal of their choice. the passenger will also
be the first to receive their baggage.

This merger is going to be a full restart for these tata airlines

hence the main objective of Star india will be to build its customer
base and expand their market share which will be expensive but
important.

With this merger, the fleet of Star India will consist of 214 planes
and will connect 160 destinations across 43 countries. some of the
top managment of the three old companies will be fired along with
most of the employees as too many employees will amount to
unnessecary expenditure and inefficiency although some of the
existing workers will be provided with raises or bonuses as a
compensation for the extra load of work given to them due to the
merger. the style and way of working of fly india wil be adapted
by all employees since its preffered by majority of them.

Do you think the merger should happen? And if it does

happen then how will the new company formed operate?
If you think the merger should not happen, then should it
operate in the same way as it's currently operating now?
Briefly explain.