AIR INDIA

HISTORY OF AIR INDIA

AIRLINES
J. R. D. Tata founded Tata Airlines in 1932.
It was the first to provide commercial Airline services.
After World War II in 1946, Tata Airlines became a public limited
company under the name of Air India.
Under the Air Corporations Act of 1953, the Government nationalized
the Air transportation industry and Air India International Limited was
born.
In 1960, Air India flew its first international flight to New York via
London.

INTRODUCTION TO AIR
INDIA
First it serves as domestic air lines, which serves between the Indian cities of
Mumbai, Delhi, Chennai, Ahmadabad etc, later it starts the services to
pakistan.
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 .
By the year of 1960 the Air-India got the international routes for Singapore,
Malaysia, New York, Moscow and Sydney
In the year of 1962, the company was entitled as Air-India International and it
became the worlds first All Jet air line.
Air-India was ranked as 19th biggest air line in the world.

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

Logo
The logo of the new airline is a red coloured flying
swan with the `Konark Chakra' in orange, placed
inside it.
The new logo would feature notably on the tail of the
aircraft. While the aircraft will be ivory in colour, the
base will retain the red streak of Air India.
The painted on red palace style carvings on the
outside of the windows refer to their slogan "your
palace in the sky" which is written on the back of the
aircraft.

The Maharajah

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.

This was began as an attempt to take Air India's sales and promotional
messages to millions of travellers across the world.

He has completed 56 years and become the most recognizable mascot all
over the world.

In fact he has won numerous national and international awards for Air India
for humour and originality in publicity.

The Maharajah began merely as a rich Indian emperor, symbolizing

politeness and high living.

He has a distinctive personality by having outsized moustache, the striped

turban and the curved nose.

VARIOUS SCHEMES FOR

TICKETS
Special Schemes:
1.

2.

Stopovers
.

The Air-India stopovers, specially designed for the convenience of tourists and
business travellers who would normally overfly India, provide them an excellent
opportunity to enjoy a complete holiday at budget rates.

In India stopover packages are offered at the four metro cities of Delhi, Mumbai,
Calcutta and Chennai.

India Super Summer Saver Scheme

.

To make India a year-round destination by increasing traffic, in the lean summer

months period of April through September, Air-India introduced Super Summer
Savers in 1992.

This special scheme is on with the collaboration of the Department of Tourism, Indian
Airlines, and leading hotel chains, and helps use the summer months underutilized
hotel capacity.


1.

Other Schemes:
Air India American Express Gold Card
.

2.

Pay 10% less on full fare Business Class tickets and 15% less on full
fare Economy Class tickets - every time, on any domestic or
International sector on Air India.

Complimentary upgrades to Business Class

.

Get a complimentary upgrade voucher to Business Class the moment

you become an Air India American Express Gold Card member. These
vouchers can be used on any of Air India destinations.

PROMOTION & OFFERS

Frequent flyer
programme

Flying Returnsis Air India's frequent flyer programme. It

is Indias first frequent flyer programme and is claimed to
be one of the most rewarding programmes in the
region.

A member can earn mileage points and redeem them for

award travel. On higher fares, such as full fare economy,
and on Business/First Class, passengers will also earn bonus
miles, and clock mileage points. The points can also be
used for awards travel onLufthansaandSingapore
Airlines.

Air India has partnered with UNICONNECT as its telecom partner, to all
members of "FLYING RETURNS".

It reduce their mobile expenditure by more than 70% on roaming charges.

UNICONNECT specializes in providing the most cost effective global

roaming solutions across the globe through its wide portfolio of country
specific SIMS & Global SIMS with coverage across 200 countries.

Premium lounges:
TheMaharaja Lounge is offered to First and Business class passengers. Air
India shares lounges with other international airlines at international airports that do not
have a Maharaja Lounge available.There are sixMaharaja Lounges, one at each of the
six major destinations of Air India:International
John F. Kennedy International Airport(New York)
London Heathrow Airport
India
Bengaluru International Airport (Bangalore)
Chhatrapati Shivaji International Airport (Mumbai)
Indira Gandhi International Airport (Delhi)
Rajiv Gandhi International Airport(Hyderabad)

 Mobile check-in :
The mobile check-in
facility is available to
all domestic
passengers from the
six major metro
cities viz. Delhi,
Mumbai, Chennai,
Kolkata, Hyderabad
and Bangalore and
will be subsequently
extended to other
stations and
international flights.

Other promotional offers

TV promotion : Air-India, In association with the Department of Tourism

and the Taj Bengal, Calcutta, sponsored a promotional programme through
the popular MW channel network. The programme focused on Calcutta.
Calcutta being the gateway to Eastern India, this promotion generated good
publicity for this key metropolis and enhanced its position on India's tourism
map.

Health camp
Northern Region Medical Department had organized a Diabetes Awareness
Week from May 9 to May 13, 2011. The camp was held for two hours daily
to screen, educate and guide AI employees on the health problems
triggered by increase in blood glucose (sugar).

International Womens Day : Celebrations started a day earlier in Western

Region in Mumbai.A greenery drive was organised at the New Engineering

Indian Crafts Exhibition in Austria

The exhibition featured a display of contemporary Indian handicrafts. The
event was organized jointly by Air-India. ICCR, the Crafts Museum, and the
Department
of Tourism.

Food & Culture Festivals

Following the popularity of the Goan Food and Cultural Festivals organised
in Singapore and Kuala Lumpur in 1992, Air-India is planning to
organise more such events. These festivals will feature other Indian states
like Rajasthan, and will be organised in collaboration with the respective
tourism bodies involved.

The Corporate Environment

Policy

This policy talks about the

green measures taken by
AI as a part of their social
responsibility.

It also talks about the AIs

goal to be an organization
whose practices make it
one of the most
environmentally sensitive
company in the aviation
industry.

INTERNAL CONTROL SYSTEMS

The Company continues to ensure proper and adequate internal

control systems and procedures commensurate with its size and nature
of business. These control systems ensure that all assets are
safeguarded and protected against loss from unauthorized use
and that transactions are authorized, recorded and reported correctly.

The Company has an extensive system of internal controls which

ensures optimal utilization and protection of resources, IT
security, accurate reporting of financial transactions and
compliance with applicable laws and regulations as also internal policies
and procedures.

The Company has a well defined manual on delegation of authority and

administrative powers, based on which, the authorities exercise their
powers.

The Company has independent internal audit systems to monitor

the entire operations and services spanning over all locations,
business and functions on a regular basis. The Company has also
employed outside consultants in its various areas of functioning in order
to reduce/monitor its cost platform.

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.
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.
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 cover up the losses:

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 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.

REVENUE BREAKDOWN 2011-12

REVENUE :

Total Revenue increased from Rs.140,620.1 million in 2010-11 to

Rs.147,138.1 million (an increase of Rs.6,518.0 million) during
2011-12.

Operating Revenue was Rs.146,753.0 million as against previous

years revenue of Rs.139,760.3 million (increase of Rs.6,992.7
million).

Passenger Revenue increased from Rs.104,438.2 million last year

to Rs.114,236.9 million (an increase of Rs.9,798.7 million) which
was mainly due to increase in yield per PKM from 3.46 to 3.74 and
increase in Passenger Load Factor from 66.1 to 67.9

EXPENDITURE

The total expenditure incurred during the year was Rs.234,594.8 million
as compared to the previous years figure of Rs.213,215.9 million (an
increase of Rs.21,378.9 million).

Operating Expenses increased from Rs.180,808.0 million to

Rs.198,139.9 million (an increase of Rs.17,331.9 million) mainly due to
the following :

Increase in fuel price by Rs.23,996.1 million i.e. 39.3%;

Increase in interest on working capital loans by Rs.4,533.1 million

Measures Taken By Air India

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 crore in FY12.

 AI has a cost base of nearly Rs 24,000 crore out of which nearly

Rs 14,000 crore is variable and this includes fuel cost of Rs
9,500 crore."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.
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,

BUDGET ALLOCATION TO
AIRLINE INDUSTRY
Government of India has taken several steps to tide over the
crisis," the statement said mentioning that the government in the
federal budget 2011-12 had allocated Rs 2,000 crore for the
airline and that another Rs 1,200 crore was expected to be
infused
this
year".
Currently the airline, which is laden with a cumulative debt of Rs
40,000 crore it incurred over aircraft acquisition and as short-term
loans to maintain its operations, expects a fresh equity infusion of
Rs 1,200 crore in July. The cash-strapped carrier is also seeking a
total infusion of Rs 17,000 crore, which includes Rs 5,000 crore for
this fiscal year alone, the report pointed out.

Case Points

In 2007, the Government of India announced that Air

India would be merged with Indian Airlines.
As part of the merger process, a new company called the
National Aviation Company of India Limited (NACIL) was
established.
Around 2006-2007, the airlines began showing signs of
financial distress. The combined losses for Air India and
Indian Airlines in 2006-07 were 770 crores (7.7 billion).
On 27 February 2011, Air India and Indian Airlines
merged along with their subsidiaries to form Air India
Limited.

Employee Strike
Demand:
Better salary, promotion and increment.
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

THE CHRONOLOGY OF THE 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)

MANAGEMENTS VIEW
Efforts are being made to resolve the situation.
Appeal to the pilots that they should think about the
passengers.
As per Rule 42 (2) of the Aircraft Rules, 1937: Pilots
who have claimed sickness for two months have
been asked to submit medical reports. But
verification of the two-month long sickness and
related tests and reports may catch pilots on the
wrong foot

 An interview with the former executive

director of Air India: Jitender Bhargava
Why so many pilot strikes taken place in Air India
lately?
Successive managements have also been
insensitive to issues raised by the unions. This is
because of a weak HR setup, lack of structured
policies and their inconsistent application. The
management has taken decisions under duress,
appeasing one section of employees at the expense
of others.

How it End?
The 58-day protracted strike by Air India pilots
was called off on 4th July after the Delhi high
court asked them to join duty within 48 hours
and the management to sympathetically
consider their grievances.
"The AI management shall sympathetically
consider the grievances of the pilots including
the aspect of reinstatement of those pilots whose
services were terminated as a consequence to
their strike," Justice Khetrapal said while
disposing of the pilots' plea for a direction to the
AI management to take back the 101 sacked
pilots, including 10 IPG office bearers.