Air India Busu

8/2/2019 Air India Busu

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AIR INDIA

By:-

BHUSHAN KUMAR


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ABOUT AIR INDIA:-

Air India was founded by J. R. D. Tata in July 1932 asTata Airlines, a division of Tata Sons Ltd. (now TataGroup). On 15 October 1932

In 1932 Air India was based out of a hut with a palm

thatched roof at Juhu Aerodrome and had 1 pilot and 2apprentice mechanics along with 2 piston enginedaircraft

Following the end of World War II, Tata Airlines becamea public limited company on 29 July 1946 under thename Air India.

On 25 August 1953, the Government of India exercisedits option to purchase a majority stake in the carrier andAir India International Limited was born as one of thefruits of the Air Corporations Act that nationalised the airtransportation industry. At the same time all domesticservices were transferred to Indian Airlines


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Merger with Indian Airlines:

In 2007, the Government of India announced that Air

India would be merged with Indian Airlines. As part ofthe merger process, a new company called the NationalAviation Company of India Limited (NACIL) wasestablished, into which both Air India (along with AirIndia Express) and Indian Airlines (along with AllianceAir) will be merged.On 27 February 2011, Air India and

Indian Airlines merged along with their subsidiaries toform Air India Limited.


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Financial crisis: Around 20062007, the airlines began showing signs of

financial distress. The combined losses for Air India andIndian in 2006-07 were Rupee 770 crores. After themerger of the airlines, this went up to Indian Rupee7,200 crores by March 2009. This was followed by

restructuring plans which are still in progress. In July2009, SBI Capital Markets Ltd was appointed to preparea road map for the recovery of the airline. The carriersold three Airbus A300 and one Boeing 747-300M inMarch 2009 for $18.75 million to survive the financialcrunch. As of March 2011, Air India has accumulated a

debt of Rs. 42,570 crore and an operating loss of Rs.22,000 crore, and is seeking Rs. 42,920 crore from thegovernment.


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Subsidiaries:

Air India has three subsidiaries. Together Air India, AirIndia Cargo, Air India Express and Air India Regional formthe Air India Limited.

Organization:The company's head office is in the Air India Building inNariman Point, Mumbai. The registered office is in theAirlines House in New Delhi. RohitNandan CMD.


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Competitors: Jet Airways British Airways

KingFisher

Emirates

Challenges: Shortage of trained employee

Regional connectivity

Rising fuel prises

Declining yields

Gaps in infrastructure


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CURRENT AFFAIRS:

DATE NEWS TYPE OFBUSINESSENVIRONMENT

IMPACT ANALYSIS REMARKS

10-01-2012

Air india a/cfrozen

political AI will have to facefinancial crisis and willhave difficulties in

making otherexpenditures.

13-02-2012

CBI in-house probeinto AI dealpayoffchargestakes off

political AI may loose itscredibility along with itsmarket share.

15-02-2012

AI losesexclusiverights on

bilateraltraffic

political Competition willincrease, so AI will haveto fight with private

airlines for marketshare.


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DATE NEWS TYPE OFBUSINESSENVIRONMENT

IMPACTANALYSIS

REMARKS

11-04-2012 Rising airfaresstump summerholidaymakers

micro It will givemoreopportunities toAI to generaterevenue.

13-04-2012 AI turnaroundplan gets govtnod

political It will help AI inrestructuringits business.

16-04-2012 Pilots maymake govt losesleep over AIs

dreamliner

micro Pilots may goon strike and AIwill have to face

difficulties inoperating itsbusiness.


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DATE NEWS TYOE OFBUSINESSENVIRONMENT

IMPACTANALYSIS

REMARKS

16-04-2012 govt wants

low bondinterest for AI

political It will help AI to

generate morecapital on lowerbond rate.

14-04-2012 Air india to beimproved

political It will help AI tohandle the

problem of highfuel cost andotherexpenditure

16-04-2012 AI to increasecapacity on

Kashmirroutes

internal It will increaseAIs market

share andrevenue.

17-04-2012 Invitedapplicationfrom banks

and financialinstitutions

micro Would enable AIto bring down itsinterest servicing

cost of workingcapital.


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SWOT ANALYSIS:

STRENGTH 1. Strong Backing by the government2. Brand New Fleet

WEAKNESS 1. Labour Problems

2. Controversies

OPPORTUNITY 1. Dedicated set of customers.2.Can leverage on brand new fleet.

THREATE 1. Rising Labour Costs2. Rising Fuel Costs3. Losing Marketshare due to other carriers


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Possible decisions to be

taken:- Cut loss making routes Define the long-haul networks hub strategy to exclusively

focus on Mumbai and Delhi

Instead of routing the majority of flights via both Delhi andMumbai, create a shuttle between Delhi and Mumbaiairports

Use smaller sized aircraft ( this is where the 787 wouldhelp) to operate frequent nonstop services out of both Delhiand Mumbai to key business destinations

Cut services to U.S till the rest of the networks

performance improves Avoid any kind of scissor-hub activity at any cost, and make

the flights to U.S destinations go nonstop


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Cont

Increase the flying activity to key regional destinations

Focus on the trunk routes by using larger capacityaircraft

Create focus cities with two to three based narrow-bodyaircraft to operate services to major regional points, this

will enable AI to counter the competitors better

Increase Air India Express flying on key routes withintensified competition

Expand services into Southeast Asia and try to attract asmany new tourism opportunities as possible

Focus on improving connecting traffic


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THANK

U

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