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

1. RAJESH GANDHAM (

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 25th 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
o increasing prices of ATF
o decreased passenger traffic during recession
o 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
In 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.

27. Model : Air India Flight 855
Date : 01-01-1978
Place : Arabian Sea, near
Bombay
Passengers : 190
Crew : 23
Survived : 0
Flight Accident

28. 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

29. 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. OfficerSupervisorAsst. SupervisorEmployees

30. Departments
Personnel Department
Commercial Department
Finance Department
Medical Department
Security Department
Material management Department
Engineering Department
Inflight services Department
 Planning Department
Corporate Affairs
Vigilance Department

31. Pilots

32. Swot Analysis

33. 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

34. 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

35. 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

36. 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

37. Prepared By
RAJESH GANDHAM (PR)

38. THANK YOU……