Post on 06-Apr-2018
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8/3/2019 Air India Presentation
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Sachin Mittal
Supratim KunduShubham
Rithesh KothariPawan Kr Singh
Isha SinghVikash Kharb
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Introduction National Aviation Company of India Limited was
setup by the government of India underthe Companies Act 1956 on 30 March 2007.
Head Office located atAir India Building in NarimanPoint, Mumbai.
Air India has the fourth largest share in India's
domestic air travel market, behind JetAirways, Kingfisher and IndiGo.
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Company Profile The Company was created to facilitate the merger of
the two main state-owned airlines in India: Air India,with its subsidiary Air India Express and Indian,together with its subsidiary Alliance Air(now called AirIndia Regional).
Division
Air India Express Air India Cargo
Air India Charters Limited
Air India Air Transport Services
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Recent History 1993 - In 1993, Air India took delivery of the flagship of its f leet
when the first Boeing 747-400
1996 - In 1996, the airline inaugurated service to its second US
gateway at O'Hare International Airport in Chicago. 1999 - In 1999, the airline opened its dedicated Terminal 2-C at
the renamed Chhatrapati Shivaji InternationalAirport in Mumbai.
2000 - Air India introduced services to Shanghai and to its third
US gateway at Newark Liberty International Airport in Newark 2004 - Air India launched flights to its fourth US gateway at Los
Angeles International Airport in Los Angeles
2009 - Air India introduced services to its fifth US gatewayat Washington Dulles International Airport in Washington, D.C
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Indian Civil Aviation SectorPlayers Market Share
Kingfisher Airlines and Kingfisher Red (previously Air Deccan) 28%
Jet Airways and Jet Lite (previously Air Sahara) 25%
Air India and Indian (previously Indian Airlines) 16%
IndiGo 14%
SpiceJet 12%
GoAir 3%
Paramount Airways 2%
MDLR Airlines 0.004%
0%
5%
10%
15%
20%25%
30%
Market Share
Market Share
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Air India
Overview
AI
WEAKNESSES
Poor Strategies,
High Competition,
Loss of market Share,
High cost, poor cost control
Inefficient use of resources
Bad reputation, Poor services
Poor aircraft maintenance
Highest manpower ratio to aircraft
STRENGTHSStrong Brand Name
Oldest Airline
Monopoly in certain routes
Govt Backup
Established InfrastructurePrime parking space / lots
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FleetType No of Aircraft Age
Owned Leased Total Owned Leased Average
A310 2 13 15 17.1 15.9 17.2
B747-300 2 - 2 18.9 18.9
B747-400 6 3 9 13.3 17.3 13.8
B777 3 4 7 0.2 10.1 5.9
Total 13 20 33 49.5 43.3 55.8
Type of Staff No
Regular 14587
Local staff at foreigh stations 150
Trainees 439
Local Staff 341
Total Staff 15517
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Organizational Strategies Marketing strategy:- outreach, corporate social responsibility Outreach-Special programmes and projects were lined up and
launched in the different states of India.
Corporate social responsibility- malyala manorama, planting 1 milliontrees
Flying Returns Program- The flying returns is a frequent flyer program Aircraft Cabin Up gradation- The up gradation of its old carrier like
A310-300 by painting, seat refurbishment and upgrading entertainmentsystem
Medical Tourism-AI has tied up with M/s Vedic India to tap growingmedical tourism market, Medical packages including airfares areoffered to all those who are willing to undergo treatment in India
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Strategies
Cont..Growth Methods/ Operations : - The fleet size of AI in 2001-02 was 29 which have grown
up to 41 in 2005-06.
However in the present scenario on comparisons with itsfull service players like jet, the fleet size is less.Finance: Operating revenue in 2005-06 is Rs 8833.70 crores which
has increased from Rs. 4751.36 crores in 2001-02.
Operating expenses has increased from Rs. 4805.89 croresin 2001-02 to Rs. 9233.30 Total Debt has increased from Rs. 1261.96 cr. in 2005 to Rs.
3622.82 cr. in 2006,
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Financial Performance
0.9 1.3 2.23.2 5.2
8.8
10.2
68.3
Revenue Breakdown 2009-10
Pool
Ex Bag & Mail
Other Receipts
Revenue Sharing - AICl
FreightCharter and Code Share
Handling & Incidental
Passenger
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Revenue / Expenditure Total Revenue declined from Rs. 134,793.8 million last yr
to Rs. 134,022.7 million (reduction of Rs. 771 ml). Reductiondue to
a. Drop in yields coupled with global rescision
b. Due to policy on bi-lateral & ground handling
Expenditure incurred was Rs. 190,358.3 ml against lastyears Rs. 206,680.1 ml (diff of Rs. 16, 321.8 ml).
a. Decrease in fuel price by Rs. 19060 ml, i.e. 29%
b. Reduction in booking agency commission by Rs. 276.8 ml
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Problems Bloated Workforce 28,000 permanent staff, double of
Jets headcount. It operates 127 aircrafs compared toJets 115.
Highest Employees per Aircraft in the world 200:1where as desirable is 130-170:1
Deeply ingrained corruption; a culture of complete
sloth in administration. Poor marketing and campaign management as
compared to spicejet, jet or kingfisher.
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Recommendations
Adopt strict cost control measures :1. AI should improve their overall efficiency and try to cut
costs in all their operations
2. AI should focus on online ticketing andremove travel
agents to cut on commissions.3. Instead of hiring expatriates pilots AI should make its
own flight training schools and making the students havebonds with the company.
Limit Government control :1. Management of AI can barely take important descision
2. government can offer portions ofAI equity to the public.It can also divest 20 percentof .
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Recommendations Cont..
Increase Fleet SizeAI is in a vacuum, the market is growing, its fleet is aging,and other airlines have started flowing into India, itdesperately needs to acquire more fleet
Refresh and Rebrand the company Follow differentiation
1. It can differentiate by serving non stop flights to routeswhich are not provided by others, flights to wide range of
destinations . 2. They need to highlight customer service as their USPs by
provide best catering and good maintenance of rest room
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Recent Strategic ImplementationsAI launched an economy class package worth Rs.
30,000 and a business class package for Rs. 50,000which will allow passengers to enjoy unlimited flightswithin the country for a minimum period.
Long pending salaries of employees would bedisbursed by June 2011.
AI in talks with 26 banks to restructure debts The latest model would focus on hub-and-spoke route
model, cut costs by redeploying staff and unload non-core real estate.
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Strategic Implementations Cont.. Route Rationalization Services were withdrawn on
Calicut/Cochin-Muscat, Calicut-Kuwait/Doha/Bahrain