CASE STUDY ON AIR INDIA

INTRODUCTION
Air India is the flag carrier airline of India, headquartered at New Delhi. It is owned by
Talace Private Limited, a Special-Purpose Vehicle (SPV) of Tata Sons, after Air India
Limited's former owner, the Government of India, completed the sale. Air India operates a
fleet of Airbus and Boeing aircraft serving 102 domestic and international destinations. The
airline has its hub at Indira Gandhi International Airport, New Delhi, alongside several focus
cities across India. Air India is the largest international carrier out of India with an 18.6%
market share. Over 60 international destinations are served by Air India across four
continents. The airline became the 27th member of Star Alliance on 11 July 2014.The airline
was founded by J. R. D. Tata as Tata Airlines in 1932. Tata himself flew its first single-
engine de Havilland Puss Moth, carrying air mail from Karachi's Drigh Road Aerodrome to
Bombay's Juhu aerodrome and later continuing to Madras (currently Chennai). After World
War II, it became a public limited company and was renamed as Air India. On 21 February
1960, it took delivery of its first Boeing 707 named Gauri Shankar and became the first Asian
airline to induct a jet aircraft in its fleet. In 2000–01, attempts were made to privatise Air
India and from 2006 onwards, it suffered losses after its merger with Indian Airlines. Another
privatisation attempt was launched in 2017, which concluded with ownership of the airline
and associated properties reverting back to the Tatas in 2022. Air India also operates flights
to domestic and Asian destinations through its subsidiary Air India Express.

SITUATIONAL ANALYSIS
POLITICAL FACTOR

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. The political situation in a
country may influence the minds of the air travellers. The unstable political conditions in
India, creating an ambiguity in the minds of the passengers, travelling to India. It affects Air-
India, indirectly. Major political issue of the decade, which affects the air-line 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.
ECONOMIC FACTOR

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. 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.

COMPETITION

Threats from the competitors for Air-India is very high. The competitive rivalry within the
airline industry is very intense, as many major airlines are operating the flights to the same
destinations, all over the world. Air-India is facing major threats from the industry
competitors like emirates, indigo and Air Asia etc. The major airline 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.

STATEMENT OF THE PROBLEM

 Air was a state-owned company. Heavy control and interference of the government
affected decision making.
 Air India’s checked in baggage policy
 Unnecessary routes
 Issues with its fleets.
LISTS OF CRITICAL FACTORS OR FACTS
Factors Significance

a state-owned company. Heavy control and
interference of the government.
Air India’s checked in baggage policy.
Unnecessary routes
Issue with its fleets
Air India is under huge debt and loss due to
government ownership. Privatisation is the best
solution.
They are incurring losses due to their current
checked in baggage policy.
They are providing services on various
unnecessary routes which is causing huge loss
every day.
They need to upgrade or sell their ageing fleets
which will save unnecessary maintenance
works and money.

ASSUMPTIONS
 Air India had an unsuccessful merger with Indian airlines.
 Air India had reported a net loss of Rs 7,017.42 crore during financial year 2020-21.
 They are reporting losses of approximately ₹20 crore every day.
 Air India is one of the worst run airline companies.
 Air India has a bad service quality flights are often delayed.

SWOT ANALYSIS
STRENGTHS
 Huge fleet strength
 National carrier status
 Highly recognized brand name
 Huge Airport Infrastructure
 Skilled Resources

WEAKNESSES
 Enormous wasteful expenditure
 Involvement of politics
 Discontinuation of profitable routes
 Giving away of best timing slots.
 Non professionalism

OPPORTUNITIES
 Huge market size and rapidly growing market
 Growing tourism
 Rising income levels.
 Liberal Environment
 Economic Growth

THREATS
 Rising fuel prices.
 Competition from the other operators
 Terrorism.
 Political instability

SOLUTIONS
  As Air-India was a state-owned company, it has to face many issues in order to make
a decision, as the decision has to processed through various levels of management. the
company has to undergo various government processes for making any important
decision starting from aviation minister. As the company has been recently bought
back by their original owner the tata group. Things are looking to be on the right track
for air India as the tata group have an excellent record in management of their
companies. Air India used to be the world leader in aviation industry when it was
owned by tata. hopefully its privatization may solve many of its issues.
 Air India’s baggage policy is one of the worst among the domestic as well as
international aviation companies. Air India's checked in baggage allowance is 25
kilograms in economy. The checked in baggage allowance of remaining domestic
airlines in 15 kilograms per passenger. Airlines charge INR 500 per kilogram of
excess baggage. Air India needs to revise their current baggage policy as it suffers a
loss of INR 5000 per ticket in extra baggage allowance provided. Decreasing its
baggage allowance may certainly help them in reducing their losses.
 Air India is operating on many routes even when its making losses in name of service.
Out of its close to 100 routes only 21 routes including nine domestic and 12
internationals are profitable. 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 major issues with its fleets which is aging and is very difficult to
upgrade and maintain as Safety should the prime concern. 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 give them for rent or have to sold them, in order to generate some
revenues and to reduce the maintenance costs.

CONCLUSION
Air India has enjoyed the unique position of being considered the National Carrier of the
country. This is in spite of the fact that there are many other Indian Carriers today who are
operating both domestic and international flights better. In spite of this advantage, it is also a
fact that Air India is no more the favoured airline of passengers, both Indian as also
international. The services and criteria that benchmark a favoured and popular airline are
perceived to be absent in Air India. The discerning passenger who may be a corporate,
businessman, tourist or civil servant who has to spend long hours in flight looks for a
comfortable, luxurious and salubrious environment. Attentive, efficient, pleasant and
courteous service from the crew on board is an added attraction. They certainly need to works
in all departments from top to bottom and resolve all their major issues if they once again
want to be a key player in aviation industry.

REFERENCE

 www. wikipedia.org/wiki/Air India

 www.airindia.in
 Explained: What happens after the Tata Group gets control of Air India today?". The
Indian Express. 28 January 2022.
 Air India: Problems run deep in India's national airline". BBC. 16 May 2012