The document outlines strategic insights for improving Air India's financial and operational challenges, emphasizing the need to reduce costs and revamp its market perception as a government airline. It compares Air India's performance with competitors like Indigo and suggests solutions such as adjusting fares, enhancing service differentiation, and eliminating unnecessary expenses. The aim is to create a more competitive, customer-friendly image while maintaining quality services.

1. Strategic insights
By
Dr. Vikas Gupta - 9619184867
MBA, Strategic Consultant
Dated 25/06/2017

2. Objective
• This is a sincere professional unbiased attempt to look into a
national asset associated with our identity.
• Looking into the business where national wealth has been
invested over the years
My Introduction
• I am a qualified and experienced strategist primarily
experienced in Pharmaceuticals, investments (as an investor)
and a regular traveller using various air lines

3. Executive Summary
• Financial issues
• Operational issues and opportunities
• Marketing issues and opportunities

4. Financial issues
Is Debt the only issue ailing
our Air India in financial
statement ?

5. Financials
Major variable components of fuel and other operating expenses to Revenue
ratio is 43% and 41% respectively
Controlling variable cost makes business viable for long term not just debt
reduction by asset or stake sale

6. Comparison with Indigo
Major variable components of fuel and other operating expenses (including
lease rentals) to Revenue ratio is 29% and 40% respectively
Wish to highlight that Whole Indigo staff has become very 2 strict on extra baggage in
last two years

7. Operational issues and opportunities
Some of the world class facilities
– Excellent food from “TajSats” A Taj group company
– Extra baggage carrying facility
– More comfortable and spacious seats
– Caring staff with facilities like cushions and shawls for passengers
– Excellent lounges on airports (which are mostly unoccupied)
– Star alliance Reward programme – overshadowed by Jet Miles in
last one decade
Weaknesses clouding our strengths
– Tag / image of Govt. company
– Doesn’t feature as lowest cost carrier in major routes because of all in
built facilities

8. Marketing issues and Opportunities
Marketing is a world of
perception
• What is the current
perception
• What it should be in future

9. Current perception
Air India
• Govt. Airlines
• Old Airlines
• Govt. Style of
functioning
• Suffer with delays due
to VIP travellers
Indigo
• Low Cost Airline
• On time arrival
(highlighted in every
flight before landing)
• Young and active staff
• Good services ( A
misnomer as compared
to Air india in reality)
Indigo and spice has lighter Seats as compare to Air India that helps in improving
efficiency but not noticed by many travellers

10. Possible Solutions
• Revamping Perception
– “Experience in the Air” or something
highlighting services along with food from Taj
Group of hotels
– Image Revamp - Changing color pattern or even
logo
– Highlighting “on time” arrivals
– Broadening our reward and lounge programme
with the help of credit cards, e-commerce and
other possible partners to reduce costs and
generate extra revenue if possible

11. Capturing Frequent domestic business travellers
• Frequent domestic business travellers look for lowest
possible fares on major routes as a company policy
or save their cost
Solution - Air fares to be shown without food, it will
bring down Base Air fare & will make it more
competitive on major routes
– Addition of “Food from TAJ group of hotels” at nominal
extra cost, Anybody will proudly pay Rs. 500 for that and
market it to those who don’t pre-book the meals as a
strategy to create a differentiator.
It will help in reducing variable cost, additional revenues
and most importantly “Creation of a Differentiator”

12. Possible Solutions
• Removing “Muda” a Japanese word for wastefulness
• Removing all the extra expenses which are not
associated with the USP of Air India
– Extra baggage carrying facility on domestic routes,
frequent travallers don’t need it
– No Complementary food in domestic airlines
– Lighter weight seats to improve fuel efficiency
– Lesser cushions and shawls for passengers in domestic
airlines
– Not to offer anything which does not add value
in our business & in the consumer’s mind
Bringing down variable cost near Indigo and creating a
differentiator going forward

13. Thank You