MERGING OF INDIAN AIRLINES AND AIR INDIA

A Clear Power Point Presentation about Merging of Indian Airlines and Air India Prepared by MBA Student RAJESH GANDHAM

1. WELCOME RAJESH GANDHAM (PR)

2. INDIAN AIRLINES

3. INDIAN AIRLINES FLIGHT

4. Established Head Quarters Slogan : : 01-08-1953 New Delhi : “Have You Tried The New Air India?” Logo : Initial Capital : Rs3,20,00,000/-

5. Chairman & Managing Director Rohit Nandan

6. Indian Airlines focused primarily on Domestic routes. Indian Airlines was state-owned, and was administrated by the Ministry of Civil aviation. It was one of the two flag carriers of India, other being Air India. Eight pre-Independence domestic airlines, Deccan Airways, Airways India, Bharat Airways , Himalayan Aviation, Kalinga Airlines, Indian National Airways and Air Services of India and the Domestic wing of Air India, were merged to form the new domestic national carrier Indian Airlines Corporation. Key Points

7. + = On July 15, 2007 Air India (AI) and Indian Airlines (IA) were merged to form a new company called Air India under the National Aviation Company of India Ltd. (NACIL)

8. “Your Palace in the Sky”

9. Founder Jahangir Ratanji Dadabhoy Tata : Founded : 15-10-1932 Head Quarters : New Delhi Brand Ambassador : Maharaja

10. Ashwani Lohani Chairman & Managing Director V. Hejmadi Finance Director N.K.Jain Personnel Director

11. LOGO 1932-1940 : 1941-2007 : From 2007 :

12. Primary Hubs Chhatrapati Shivaji International Airport (Mumbai) Indira Gandhi International Airport (Delhi) Secondary hubs Chennai International Airport (Chennai) Netaji Subhash Chandra Bose International Airport (Kolkata) Focus cities Bengaluru International Airport ( Bengaluru) Cochin International Airport (Kochi) Rajiv Gandhi International Airport (Hyderabad) Sardar Vallabhai Patel International Airport (Ahmedabad) Hubs

13. Subsidiaries Air India Cargo Air India Regional Air India Express Air India Charters Limited Air India Air Transport Services Involvement in sports Air India football Club Air India cricket team Air India hockey team

14. In the year 1938 Tata Air Services was renamed as Tata Air Lines. After World War II regular commercial service was restored in India and Tata Airlines became a public limited company on 29 July 1946 under the name Air India On 25 th August, 1953 all domestic services were transferred to Indian Airlines. On 27 February 2011 , Air India and Indian Airlines merged along with their subsidiaries to form Air India Limited. Key Points

15. Destinations Air India serves 49 domestic destinations and 26 international destinations in 19 countries across Asia, Europe and North America. Its capacity has increased to 1312 destinations. Any passenger can travel to any of the destinations within the member airlines, having ticket from Air India . No. of passengers have increased from 37000 per day ,to 50,000 passengers per day.

16. Reasons Leading to Merger Escalating costs of Aviation Turbine Fuel (ATF) Immense competition from private and low cost airlines Increased cost pressures due to acquisition of additional aircraft Leadership crisis due to frequent change of the chairman-cum-managing director Air India could not fully use the bilateral rights unlike foreign airlines which took maximum advantage Declining passenger traffic in the premium class

17. What the merger tried to achieve Economies of scale in areas such as maintenance, ground operations, the use of landing slots and parking rights etc Volume Discounts in areas such as fuel purchase, insurance Increased fleet size such that the combined fleet was of over 120 aircraft, currently over 150 aircraft, placing it among the top 10 airlines in Asia, and the top 30 in the world Hub and spoke system which could be achieved by the merger of the international and domestic airlines Leverage and pool-in of resources such as manpower, infrastructure and assets, better aircraft and resource allocation Star Alliance membership (Air India has been invited to join the 21 member consortium)

18. Challenges and Obstacles Employee opposition due to fear of retrenchment, and redundancy of roles. Union issues and distrust as both companies had strong unions which would oppose any kind of wage and operational changes. Operational differences as both the airlines followed completely different pay structures and airline routes which could result in a conflicts of interests situation. Different fleet compositions of the airlines would create complications in inventory management, maintenance, repair establishments, and pilot training.

19. Post Merger Problems Incomplete integration of official positions, of IT systems and as well as infrastructure due to different aircraft flown by the two companies, and inability of employee unions to accept merger Decline of customer service due to integration issues Ballooning of losses due to increasing prices of ATF decreased passenger traffic during recession unnecessary and costly acquisition of aircraft fleet Leadership crisis continues due to frequent change of CEOs (4 different CEOs in last 2 years) Increased competition from domestic airlines as well as international airlines due to unfavorable government policies

20. Pre and Post Merger Profit and Loss

21. Annual Loss from Financial Year 2009

22. Growth Policies I n annual budget 2012, central govt. announced Rs 30,000 Crore for rejuvenating he company from recession up to year 2020. Air India received: Rs 12000 cr in 2013 Rs 6000 cr in 2014 Air India has deducted 25% of the salary of each & every employee. All types of programs, ceremonies and functions has been declined. Finance is being planned to be utilized on infrastructural developments.

23. Future Policies On September,2014 it was decided to form a trust called ‘ Real estate investment trust ’ which shall manage the all the static property of the Air India . Air India has property of worth Rs 18500 Crore spreader all over the world. R. E. I. T shall give its property on lease or rent to private owners to raise income on regular basis. According to Airport officials, it will certainly help to maximum utilization and regular maintenance of available resources ( and properties) and increase the revenue.

24. Model : Air India Flight 855 D ate : 01-01-1978 Place : Arabian Sea, near Bombay Passengers : 190 Crew : 23 Survived : Flight Accident

25. Model : Air India Express Flight 812 Date : 22 May 2010 Summary : Runway overrun due to pilot error Place : Mangalore international Airport Passengers : 160 Survivors : 8 Flight Accident

26. Institutional Structure CMD JOINT MD FUNCTIONAL DIRECTOR EXECUTIVE DIRECTOR GENERAL MANAGER AGM AT DEPARTMENT LEVEL Senior Manger Manger Deputy Manger Assistant Manger Asst. Manger Officer Asst. Officer Supervisor Asst. Supervisor Employees

27. Departments Personnel D epartment C ommercial Department F inance Department M edical Department S ecurity Department Material management D epartment E ngineering Department I nflight services D epartment Planning Department Corporate Affairs V igilance Department

28. Pilots

29. Swot Analysis

30. Strengths Strong Backing by the government of India Brand New Fleet of aircraft. 108 fleets. Known for its unique and high quality "Maharaja" advertising. Weaknesses Poor Management decisions Labour Problems Financial Crisis leading to payment issues of employees High Cost structure

31. Opportunities Domestic Market Growth Dedicated set of customers. Expansion of routes and international destinations Target low income groups Threats Rising Labour Costs Rising Fuel Costs Price Wars Terrorist Threats

32. Services Flying Returns is Air India's frequent flyer programme. The programme is also shared by all other Air India Limited carriers. Business Class seats on board the Boeing 777-300ER Premium lounges High Class Cabins In flight entertainment

33. Awards And Recognitions World's first all-jet airline- June 1962 World's largest operator of Airbus A310-300 Air India's security department became the first aviation security organisation in the world to acquire ISO 9002 certification (31 January 2001). Preferred International Airline award for travel and hospitality from Awaz Consumer Awards 2006

34. Prepared By RAJESH GANDHAM (PR)

35. THANK YOU……