A Report on Indian Airlines

8/8/2019 A Report on Indian Airlines

1/7

A Report on INDIAN AIRLINES- HR ISSUES14/12/2010

Group- 04

Rezwana Ferdous ID# 082011058

Riva Afros ID# 082011076

MahmudaRahman ID# 082011089

Arnab Chandra Dey ID# 073011013

Md.Shafiqul Islam ID# 072011093


2/7

Page 2

f7

LETTER OF AUTHORIZATION

14th

December, 2010

Taposh Kumar Roy

School of Business

University of Liberal Arts Bangladesh (ULAB).

Subject: Submissionofthe Term Report HRproblemsofIndian Airlines

Dear Madam;

Here we are submitting our report on HR ProblemsofIndian Airlines prescribed by you in your

course Developing Managerial Skills. For the purpose we have gone through internet, Indian airlines

HR activities and class lecture sheets for the relevant information of the assigned topic.

Please call us for any further information at your convenient time and place.

Yours truly,

Group: Four

Section 2, Fall-10

Developing Managerial Skills

University of liberal arts Bangladesh


3/7

Page 3

f7

Executive Summary

The I dia Ai li es case i v lved with the m st challenging t ics blems in uman

esou ces Management. The oblemssta t through all of the years in 1990s. nnecessary

interferenceofCivil Aviation, three times change d in management,huge changes brought in

ways to manage things and the rewards with beneficiaries changed many times which

created a lot of losses in the balance sheet of Indian Airlines. At last, in mid 2001 lans

worked out endlessly.

Introduction

The Indian Airl ine wasset u under the Air Corporations Act, 1953 with an initial capital of

s. 32 million and started operationson 1 August 1953. And it dominated the Indian aviation

sectorduring the 80's and 90's.

owever the rules of monopoly were deregulated in 1994. Following which many carriers

entered the market. owever,only twostrong competitorsemerged during the 1990s which

were the Jet Airways and AirSahara. This competitionfrom thenew private carriersrequired

the airline to adapt to the new order, a process which was difficult due to the fact that

management did not have complete commercial freedom, and thegovernment was unwilling

to invest in the airline. Anotherbigreason was the uman esource Management problems

including the inefficient manpowerplanning , unproductive deployment manpower (resultsof

ad hoc job analysis), and unwarranted increase in salaries and wages caused a numberof

strikes by thestaffs and the ultimateresult is losing customers and the losses inrevenue.

Between 1999 and 2003, the carriersfleet did not increase by a single aircraft during the

same period the private carriers fleet almost doubled to 53. Inevitably, Indian Airlines

market share declined,from 100% in 1994 to 40% by 2004 and just 20% by 2007.

Background of IA

Indian Airlines is one of the prime airlines in India. It is based in Mumbai and focuses

primarily on domestic routes, alone with a few international services toneighboring Asian

countries. The airline isstate -owned and also administered by the Ministry of Civil Aviation.

Along with Air India, it is the flag carrier of India. The airline came into existence by the

enactment of the Aircorporations act in 1953. It has beenrenamed as 'Indian' on ecember


4/7

Page 4

f7

7th 2005. It started with about 99 aircrafts and was theoutcomeofa mergerofsorts among

several formerindependent airlines.

In 1964, Indian Airlines moved into the jet era with the introductionof Caravelle aircraft and

also inducted a Boeing 737 -200 in early 1970. In a fresh wave of deregulation, nine new

independent airlines were launched in India in theearly 1990s. Vayudoot, thestate -owned

feeder airline, itself collapsed in 1993. On 1st March 1997 Indian Airlines became a Public

imited Company.

Presently, it has about 70 aircrafts including Airbu s A300, Airbus A319, Airbus A320and an

ATR-4. Some of the foreign destinations that are included in its directory are Kuwait,

Singapore, AE, Qatar, Thailand and many more South East Asian countries. This airline

was thefirst to introduce wide -bodied A300 aircraft in the domestic circuit. There are a total

of75 exclusive destinations covered by this airline, 59 within India and 16 abroad.

HR Issues

When thegovernment open up thesky by privatize the industry,oneof thestart-ups, East-

West Airlines, offered such attractive wages that they prompted a pilots' strike at Indian

Airlines in ecember1992 during the winter tourist season. Indian Airlineshad 570 pilots at

the time, making an averageofRs30,000 ($962.00) a month. The airline lost Rs2.11 bil lion

($64.34 million)forthe year.

Chairman and managing director . Vasudev had beenhired in July 1992,filling a position

vacant since theprevious chairmanhad resigned due to thehandlingof yet anotherstrike.

Mr. Vasudev also resigned in May 1993 b laming the aviation ministry for undermininghis

authority.

Russy Mody was named chairman of both Indian Airlines and Air -India in late 1994. e

resigned two years later, also citing a lackofauthori ty. uring 1998 both Indian Airlines and

Air-India were losing money and needed torestore theiragingfleets by theend of the year,

the Civil Aviation Ministry had dismissed a joint board of directors from the two airlines .

All ofthe chaoshappened becauseof -

y Therecruitment process wasnot done by scientificallyy Job analysis in IA wasnot done by scientificallyy Performance appraisal and reward systems were not scientifically done


5/7

Page 5

f7

Findings

y ackofpropermanpowerplanning

y nderutilizationofexiting manpower

y Without properscienti fic analysis

y Increased staffcost during 1994 -98

y nnecessary interference by the Ministry ofCivil Aviation

y nscrupulous methods use

y Strikes,go-slow agitation and wage negotiations

y In 1993- 46 daysstrike by pilots

y nethical (false) medical claims

y Pilots didnt workovertimeeven though they got more money

y Maximum numberofemployeesperaircraft

y ackofgovernment decisionpolicy

y nethical practiceofserviceonproductivity liked incentives

y 30 full time directors and theirretinueofprivatesecretaries, drivers and orderliness

SWOT ANALYSIS

STRE GTHS

y argefleet.

y Experienced staff.

y Adequate infrastructure and largenetwork.

y People are loyal towards thenational carrier.

y Government Backing.

WEAK ESSES

y Highoverheads and huge workforceresulting in loweroutput.

y Attitudeofthestaff (The nions)

y Political/Bureaucratic unnecessary interference.

y Indian Airlineshas itssocio -economic responsibility of catering to the inaccessibility

areas at subsidized rate affectingoperational expenses.

y Job security toohigh.


6/7

Page 6

f7

OPPORTUNITIES

y Tourism industry isgaining momentum.

y Inductionofnew aircraftson lease.

y Response tosomeof thepromotional fares (schemes) is encouraging.

y

ShelvingoftheprivatizationplansofIndian Airlines by the Government ofIndia.y Weakeningof the dollarrate in comparison to therupee.

THREATS

y Perceptionofthe betterproduct in comparison to that ofthe competitor

y Recent world eventshitting the tourism industry badly

y Increase in the capacity ofvarious ai rlines

y Falling market shareof Indian Airlines to that ofJet Airways

Recommendation

From 1997, to till now IA had only emphasized on distribution, with marketing as a non-

issue. Since the company was faced with increasing competition, lack of resources and

mounting losses, it had toformulate and implement scientifically proved HRstrategies .

The best way toprevent unionstrike is to work with the union and developpolicies that avoid

a clash between companies and itsemployees.

Unions in projects is different, unions in large corporate is different. We can contain and

curtail thestrikes in corporateoffices but containing it plantsneed some analysis.

1. Check was there any change in theHead ofHR department

2. Theearlierhead wasremoved orretired or left onhisown

3. Union leaders are localsoroutsiders

4. Were there any simmering issues which werependingfora long time ?

5. Theearlieragreement is dueforrenegation?

1 and 2 are most important tofind thereason and reactions. 3 are toknow how theouts iders

involved in the local union and so we can divide the union. 4 and 5 it is always better to

keep theprocessof thenegotiationson thego, and try throwing the ball in their court asfa r

as possible instead of keeping the issue pending with company. And have discussions,

deliberations and best method is to divide theemployees into department wise - by telling

them that it isforclose contacts with the all employees .


7/7

Page 7 f7

Implementations

To implement the decisions taken during the mid 2001, IA followed stepsstated below.

1. As the first step free and frank discussions with a cross section of the employees

were held. Top management undertook extensive tours of all stations to

communicate the details and vision behind all majorpolicy initiatives and toget their

response to them.

2. Focuson trainingofpersonnel wasenhanced to increaseeffectiveness.

3. A greater transparency was built intorecruitment and transferpolicies with a view to

boosting theirtrust and confidence.

4. In interactions with unions and Associations a firm but fairattitude was taken.

5. Productivity ined Agreements, where the inflows exceed the outflows despite the

fact that market wages were beinggiven, were entered into.

References

http://www.indiamarks.com/guide/Indian -Airlines-/653/

Indian Airl ines td. - Company Profile, Information, Business escription,History,

Background Informationon Indian Airlines td.

http://www.referenceforbusiness.com/history2/65/Indian -Airlines-Ltd.html#ixzz180kRxs00

http://www.linkedin.com/answers/management/labor -relations/MGM_LBR/748455-30768088

A Report on Indian Airlines

Documents

Transcript of A Report on Indian Airlines