- Air India was formed in 2007 through the merger of Air India and Indian Airlines. It is now part of the Star Alliance and aims to integrate Alliance Air and Air India Express. - Air India is facing major financial troubles with annual losses of Rs. 7000 cr and total debt of Rs. 49000 cr. Poor management decisions, lack of accountability, union strikes, and purchasing new planes have contributed to its debt crisis. - The government has proposed a Rs. 30000 cr bailout package for Air India including equity infusion and loans. Operational and personnel changes aim to cut costs through route restructuring, pay rationalization, and asset sales to repay loans.

2. Company Perspectives
• Air-India is India's finest flying Ambassador.
The do to excel and the enthusiasm which
characterized Air-India's first flight way back
on October 15, 1932 is quintessential even
today--thanks to eighteen thousand Air
Indians who have kept alive the tradition of
flying high!

4. Obviously, opening the skies was
not the reason!

5. IInn 22000077,,
• Air India and Indian Airlines merged into one
airline, with its name remaining Air India. Air
India is now a part of Star Alliance and is
supposed to be joined by Alliance Air and Air
India Express soon.
• This is fact was the starting point of all the
trouble

6. Reason for Air India Crisis
The real reasons behind the present
financial crisis are the interest
burden , repayment and overhead
expenses.

7. Problem Statement
Annual Losses of Rs. 7000 cr and total
accumulated loss of Rs 49000 cr.
It compensation Rs. 1400 cr to state own
airport operator.
Air India has 10% of total global airlines
revenue losses

8. Air India is facing a tight financial situation and is
in talks with leaders to restructure its debt of Rs.
40k cr.
As of March 2014, Air India has accumulated a
debt of Rs. 48,570 cr and an operating loss of Rs.
22,000 cr, and is seeking Rs. 42,920 cr from the
government. For the past three months (June, July,
August, 2013), the carrier has been missing salary
payments and interest payments
A report by the Comptroller and Auditor General
(CAG) blamed the decision to buy 111 new planes as
one of the major causes of the debt troubles in Air
India.

9. The causes
 Bad management and unreliably
policies has brought Air India crisis level
Complete lack of ownership
 Lake of responsibility for results and
failures.
 Deeply ingrained corruption in all
levels.

10. Unionized strike with political financial
support has physical disability of Air India.
The Top Boss of Air India not having
decision power as there will be ministry
interventions which leads to lake of
cohesiveness, focused, proactive and long
term business planning.

11. Government Turnaround
Strategy of Air India
 Bail Out plan for Rs.30000 cr – Rs. 5000
cr. as equity infusion and the balance as
soft loan with long term repayment period
and subsidized interest rate.
 Improved defined work methods which
could lead to substantial cost reductions

12. Operational Improvement
• 13 Long haul international routes accounted
for 80 percent of losses in the long haul
routes
• Cash cost of 3 domestic and 5 international
routes were not met
• 60 international routes meeting cost of jet
fuel, but not total cost

13. Operational Improvement
• Three loss making long haul routes be
discontinued, and 10 to be replaced by 787
dreamliners
• New destinations like Australia, Moscow and
Paris started with dreamliners
• Reducing service time of the aircrafts high on
agenda

14. Operational Improvement
• Re route traffic based on priorities of star
alliance
• Make IT infrastructure foolproof

15. Personnel Policies
• Rationalize pay packages and promotions of
all employees, regardless of their original
employer- Be it Air India or Indian Airlines
• Hold Open House meetings with employees

16. Personnel Policies
• Act Tough on Striking pilots.
• Dispense the government approved funds so
that resources are paid well and vendors
cheques do not bounce
• In short, operations should not be affected

17. Asset Monetinisation
• Needs to fine tune asset monetinasation
• Target would be to sell or lease Rs 5000 Cr
worth of assets in order to meet targets
• Amount to be used for repayment of loans

18. Marketing options
• Co Branded credit cards to be launched for
this option
• Allow reward points to be directly brought
from the website. Pricing to be done
competitively
• Tier upgrades to be made more rigorous and
benefits to be evenly spread out

19. Marketing options
• Direct booking of hotels to be made available
from the company portal
• Applying for transit visas be made available
from the website
• Prepaid option for cabs from major airports
be made available from the portal
• Commercials must target every demography

20. Instead of focusing on our services

23. Thank
You