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AKNOWLEDGEMENT

The making of any report calls for contribution and cooperation from many others, besides the
individual alone. It is the result of meticulous efforts put in the by many minds that contribute to
the final report formation. Several eminent people at National Aviation Company of India
Limited (NACIL) have made valuable contributions to this report through their inputs. I duly
acknowledge my gratitude to each one of them.
At last, I would like to acknowledge all those who helped, directly or indirectly, at
various areas in completing my project and related study and made my training a wonderful
experience.

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TABLE OF CONTENTS

S.No
Particulars Page No.
1. Executive summary 3
2. Introduction to the topic 4-10
3. Introduction to Airlines Industry and company profile
11-18
4. Benefits provided to employees 19-32
5. Productivity Linked Incentives 33
6. Comparison of different Airline companies with34-36
AIR INDIA
(NACIL)
7. IT section in AIR INDIA (NACIL) 37-39
8. Corporate Objectives. 40
9. Research Methodology. 41-43
10. Data Analysis 44-68
11. Findings and Analysis 69
12. Conclusion 70
13. Recommendations 71
14. Limitations 72
15. Bibliography. 73
16. Appendices 74-76

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EXECUTIVE SUMMARY

This Project aims to study: the strategies that AIR INDIA (NACIL) is implementing to retain its
employees, and to compare CRM strategies of NACIL with other Airlines Companies.

My study was confined to HR and Commercial Department of AIR INDIA. Under HR


department I was studying all policies that NACIL is implementing to retain its employees and
under Commercial department I studied CRM strategies related to customers. This study has
conducted to know the effectiveness of CRM strategies for internal as well as external customers
of AIR INDIA (NACIL).This study focuses on improvement in existing CRM strategies of the
company. It also aims to study the success of existing policies towards relationship building,
internal marketing, most preferred policy, satisfaction level of employees.

This project has started with study of the organization to have a fair idea about work
culture. I conducted a survey through questionnaire, interview and also got information from
collecting the secondary data available. A structured non-disguised, questionnaire was
formulated in order to gather primary information from the employees. The first approach to find
out the right information about different policies is through verbal talking to employees whether
that person is related to my area of study or not. Then after collecting all the information
employees further gone through to fill up the questionnaire.

In the present time, AIR INDIA (NACIL) is a very good employer as it has just 6%
attrition rate. Most of the employees are satisfied with the organization. But work culture of
NACIL should improve to overcome with so many hurdles that this company is facing now a
days.

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INTRODUCTION TO THE TOPIC

AIR TRAVEL INDUSTRY:

Aviation Industry in India is one of the fastest growing aviation industries in the world. With the
liberalization of the Indian aviation sector, aviation industry in India has undergone a rapid
transformation. From being primarily a government-owned industry, the Indian aviation industry
is now dominated by privately owned full service airlines and low cost carriers. Private airlines
account for around 75% share of the domestic aviation market. Earlier air travel was a privilege
only a few could afford, but today air travel has become much cheaper and can be afforded by a
large number of people.

The origin of Indian civil aviation industry can be traced back to 1912, when the first air flight
between Karachi and Delhi was started by the Indian State Air Services in collaboration with the
UK based Imperial Airways. It was an extension of London-Karachi flight of the Imperial
Airways. In 1932, JRD Tata founded Tata Airline, the first Indian airline. At the time of
independence, nine air transport companies were carrying both air cargo and passengers. These
were Tata Airlines, Indian National Airways, Air service of India, Deccan Airways, Ambica
Airways, Bharat Airways, Orient Airways and Mistry Airways. After partition Orient Airways
shifted to Pakistan.

In early 1948, Government of India established a joint sector company, Air India International

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Ltd in collaboration with Air India (earlier Tata Airline) with a capital of Rs 2 crore and a fleet
of three Lockheed constellation aircraft. The inaugural flight of Air India International Ltd took
off on June 8, 1948 on the Mumbai-London air route. The Government nationalized nine airline
companies vide the Air Corporations Act, 1953. Accordingly it established the Indian Airlines
Corporation (IAC) to cater to domestic air travel passengers and Air India International (AI) for
international air travel passengers. The assets of the existing airline companies were transferred
to these two corporations. This Act ensured that IAC and AI had a monopoly over the Indian
skies. A third government-owned airline, Vayudoot, which provided feeder services between
smaller cities, was merged with IAC in 1994. These government-owned airlines dominated
Indian aviation industry till the mid-1990s.

In April 1990, the Government adopted open-sky policy and allowed air taxi- operators to
operate flights from any airport, both on a charter and a non charter basis and to decide their own
flight schedules, cargo and passenger fares. In 1994, the Indian Government, as part of its open
sky policy, ended the monopoly of IA and AI in the air transport services by repealing the Air
Corporations Act of 1953 and replacing it with the Air Corporations (Transfer of Undertaking
and Repeal) Act, 1994. Private operators were allowed to provide air transport services. Foreign
direct investment (FDI) of up to 49 percent equity stake and NRI (Non Resident Indian)
investment of up to 100 percent equity stake were permitted through the automatic FDI route in
the domestic air transport services sector. However, no foreign airline could directly or
indirectly hold equity in a domestic airline company.

By 1995, several private airlines had ventured into the aviation business and accounted for more
than 10 percent of the domestic air traffic. These included Jet Airways Sahara, NEPC Airlines,
East West Airlines, ModiLuft Airlines, Jagsons Airlines, Continental Aviation, and Damania
Airways. But only Jet Airways and Sahara managed to survive the competition. Meanwhile,
Indian Airlines, which had dominated the Indian air travel industry, began to lose market share to
Jet Airways and Sahara. Today, Indian aviation industry is dominated by private airlines and
these include low cost carriers such as Deccan Airlines, GoAir, SpiceJet etc, who have made air
travel affordable.

Airline industry in India is plagued with several problems. These include high aviation turbine
fuel (ATF) prices, rising labor costs and shortage of skilled labor, rapid fleet expansion, and

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intense price competition among the players. But one of the major challenges facing Indian
aviation industry is infrastructure constraint. Airport infrastructure needs to be upgraded rapidly
if Indian aviation industry has to continue its success story. Some steps have been taken in this
direction. Two of India's largest airports-Mumbai and New Delhi-were privatized recently. Two
Greenfield airports are coming up at Bangalore and Hyderabad in southern India. Investments
are pouring into almost all aspects of the industry, including aircraft maintenance, pilot training
and air cargo services. The future prospects of Indian aviation sector look bright.

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CRM IN AVIATION

“CRM is a customer-focused business strategy designed to optimize profitability, revenue and


customer satisfaction."

Why should Airlines do CRM?

Anything else ?

 50 60% of customers are not profitable and customers providing less than 20% of the profit
potential consume 60 80% of front office support
 The cost of acquiring a new customer is 6 times the cost of selling to a current customer
 69% of customers leave because of poor service. Only 13% left because of product
dissatisfaction and 9% because of price.

The Aviation horizon in India is becoming increasingly competitive. Airlines need to stay more
customers focused and employ effective CRM regardless of whether they are PSUs, full-service
providers, Low-Cost Carriers (LCCs) or innovators.

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Need for a Customer-focused Initiative

(i) Travel is becoming a ‘Commodity’

Increased economic activity has meant that more and more people are travelling for
business as well as leisure purposes. The situation today is such that travel, overseas
as well as domestic, has become so common and prevalent that it can be easily termed
a ‘commodity’.

(ii) Mass Marketing is ‘Dead’


The vast number of options and choices available to a Customer and the explosion of
information have meant that every customer is having individualized needs which are
unique and cannot be generalized. Today, every customer expects the Marketer to
cater to his / her own needs. Hence, the era of Mass Marketing is almost dead. The
need of hour is one-to-one marketing wherein every customer is taken care of for his /
her special needs.

(iii) Mass Marketing is the ‘Easy Bit’


The comforts which Marketers have enjoyed in the earlier times were mainly because
of the generalizations which were made while addressing customer needs. One
advertising message or campaign was thought to be sufficient for reaching the
masses, making it easier for the Marketers.

(iv) Its about ‘Revenue’ and ‘Competitive Edge’


The increasing demands of customers and the stakeholders has meant that costs as
well as prices have to be contained on one hand and on the other the revenues need to
be increased for gaining a sustainable competitive advantage over the competitors.

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360 Degree Customer view: Source – Magazine

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ABOUT “SIMPLIFYING THE BUSINESS” (StB)

In this rapidly changing world the biggest challenge an Industry face is to keep pace with the
increasing customer’s demands for services and at the same time achieving the targets of cost
reductions which are so much essential for revenue maximization.

The Aviation Industry has been both the driver as also the sector, which has been affected most
by the sweeping waves of globalization. Today, more than ever before, the passenger traffic is
touching new highs as business / leisure travel is rapidly increasing.

To face the challenges, more than anything else, the Air Transport Industry needs change.
Mounting losses, high oil prices and lower fares have forced Airlines to rethink current models
and re-engineer the business. Efficiency is the battle cry as air transport races to become a low
cost Industry. The challenge to find cost savings in the Industries complex process, whilst, at the
same time, enhancing convenience for the consumer.

As a result, in 2004 the CEOs of IATA’s member Airlines mandated its association to lead in
Industry wise programmes designed to ease the transport of passenger and freight and deliver $
6.5 billion in annual Industry savings.
It’s called “SIMPLIFYING THE BUSINESS”
‘Simplifying the Business’ is comprises of five projects that together form an end-
to-end simplified travel process : -

1. 100% Electronic Ticketing by the end of 2007 (ET)


2. Common use self-service kiosks for check-in (CUSS)
3. Bar-coded boarding passes (BCBP)
4. Radio frequency identification for baggage handling (RFID)
5. IATA e-freight – freeing cargo of paper by the end of 2010

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Out of the five I.T. initiative taken by IATA, Electronic Ticketing (ET) is the most critical it of
huge importance to passengers, will deliver US $ 3 billion in savings, and has a fast approaching
deadline. The ease of issuing tickets changing travel plans, making last minute travel decisions
and the elimination of lost tickets are compelling consumer benefits. E-Ticketing is the basis of
other passenger services such as common use self-service check in and the ability to print bar
coded boarding passes via the internet.

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INTRODUCTION TO AIRLINES INDUSTRY
AND COMPANY PROFILE

During the 1980s and 1990s, the airline industry underwent significant change. The industry,
which had been heavily regulated and controlled, was liberated fro m governmental oversight
and released to the vagaries of the marketplace in 1978. What followed was a period of evolution
and metamorphosis that changed the nature of flying forever. At the same time, serious safety
questions arose.

DEREGULATION:
When the firsts airlines appeared after World War I, fewer than six thousand passengers a year
traveled by air. By the 1930s, the Big four- Eastern Airlines, United Airlines, American Airlines,
and Trans World Airlines (TWA) - dominated commercial air transport. These companies had
garnered exclusives rights from the federal government to fly domestic airmail routes, and Pan
American (Pan AM) held the rights to international routes. The hold of these four airlines on
their lucrative contracts was virtually unchallenged until deregulation in 1978. Even after the
formation of the Civil Aeronautics Board (CAB) in 1938, formed to license new airlines, grant
new routes, approve mergers, and investigate accidents, the Big Four and Pan Am continued to
be guaranteed permanent rights to these routes. Infact, no new major scheduled airline was
licensed for the next four decades.

In October 1978, Congress passed the Airline Deregulation Act (49 U.S.C.A. § 334 et seq.),
ending the virtual monopoly held by the Big four and Pan Am. The government’s goal was to
promote competition within the industry. The act gave airlines essentially unrestricted rights to
enter new routes without CAB approval. The companies could also exit any market and raise and
lower fares at will.

The immediate effect of deregulation was a drop in fares an and increase in passengers. New cut-
rate, no-frills airlines, such as People Express Airlines and New York Air offered travelers the

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lowest fares ever seen in the industry. Forced to compete to fill their planes, the larger companies
lowered their prices as well. Then the oil-producing countries in the Middle East formed a cartel
and raised the price of jet fuel 88% in 1979 and an additional 23% in 1980. Combined with
tumbling fares and increased passenger loads, the higher cost of jet fuel caused airlines’ profits to
drop.

Labor strike also affected the industry in the early days following deregulation. In 1981, after
years of working under stressful conditions made worse by deregulation, the professional Air
traffic controllers Organization (PATCO) called a strike, demanding shorter working hours and
higher pay. The union expected support and cooperation from the Reagan administration because
of a sympathetic letter President Ronald Reagan had sent to PATCO when he was campaigning
for the presidency. In the letter, he pledged to whatever was necessary to meet PATCO’s needs
and ensure the public’s safety. But Reagan ordered the strikers to return to work within three
days or be fired. Most did not return. The Federal Aviation Administration (FAA) ordered all
carriers to temporarily reduce their number of flights by one-third. Newer and smaller carriers
found themselves increasingly unable to gain access to lucrative routes. Rebuilding the air traffic
controller force took years during which landing slots at 5he largest airports remained restricted
and small carriers unable to compete, simply abandoned their attempts to break into the larger
markets.

To some extent, competitive pricing actually had the opposite effect of what the deregulators
intended. When the small “upstart” companies offered extremely low fares, the larger companies
responded aggressively. For example, in 1983, People Express announced $99 round –trip fare
between Newark, New Jersey and Minneapolis-St. Paul. Northwest Airlines, which had always
dominated the Twin Cities market, undercut People by instituting a$95 fare for the same
destination and scheduling extra departures around People’s. As a result, people decided it could
not compete and withdrew from the market. Passengers enjoyed the benefit of lower fares, but
only for a short time before the competitive effect faded and high fares returned.

When deregulation brought competitive pricing, the large carriers began to realize that it was not
profitable for them to do business the way they had in the past. The first major change they made
was to abandon the practice of crisscrossing the continent with nonstop flights to many different
cities. Instead the major airlines scheduled most of their flights into and out of a central point of
hub, where passengers might need to change to different flight to complete their journey. One
airline controlled most of the reservation desks and gates at a particular hub- for instance. United

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in Chicago, Northwest in Minneapolis-St.Paul, America in Dallas–Fort worth, and Delta in
Atlanta. For this reason, and because passengers tend trod is like changing carriers in the middle
of a trip ,the dominant company in a hub had a tremendous advantage over the competition in
influencing what carrier a passenger would choose .By 1990, two-thirds of all domestic
passengers traveled though a hub city before arriving at their final destination .of those
passengers, eight out of ten remained on the same airline throughout their journey .By 1992 ,
there were at least twelve “fortress hubs” or airports where one airline controlled more than 60
percent of the traffic .Passengers who flew out of these hubs paid over 20 percent more than they
would have for a comparable trip out of an airport that was not a hub.

After deregulation, the air lines also came to realize that needed a more efficient way to book
reservation and issue tickets. It is difficult to imagine, in these days of highly sophisticated
computers and split-second communications, that until the late 1970s and early 1980s airline
schedules were contained in large printed volumes, reservations were taken over the telephone
and tailed manually at end of each day , and tickets were written by hand . to streamline this
process the large companies initially proposed a joint computer system , listings schedules and
fares .the justice department objected on the grounds that such a system would be
anticompetitive and would violate the Sherman Anti-Trust Act (15 U.S.C.A. § 1 et seq. [1890]).
Instead, each airline developed its own computer system and entered data in a manner that
unfairly biased travel agents ‘choices in favor of the carrier that owned the system. Though
skillful manipulation of the data, the airlines were able to put competitors at a disadvantage. For
example, the airline that owned the system might enter the data so that all its flights to a
particular destination appear on the screen before any flights of a competitor.

In a future attempt to win loyalty from passengers, the large airlines instituted frequent-flier
programs, which awarded free tickets to travelers after they logged a certain number of miles
flown with the company.

The combination of hubs, central computer reservation systems, and frequent-flier programs
made the major airlines almost invulnerable in large markets.

Deregulation also brought a period of financial upheaval and an epidemic of “merger fever”. A
number of companies ceased doing business between 1989 and 1992, and still other merged with
stronger, more aggressive companies. Among the companies that disappeared from the skies
were Eastern. Pan Piedmont and Midway Airlines. USAir and Northwest required cash
infusions though cooperative arrangements with foreign airlines. Even financially strong carriers

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such as United and American lay off employees and abandoned plans to p0urchase new aircraft,
which added to the woes of the depressed aerospace industry.

By 1993, the industry began to rebound. Continental Airlines and TWA emerged from
bankruptcy, and a few small carriers, such as Kiwi International, formed by former Eastern
Pilots, responded to the public’s demand for low fares and began to make incursions into the
established markets, although they generally shied away from directly challenging the giants.
Older carriers for the most part chose to stay with their hub-and-spoke systems, and several,
including Northwest, Continental, and TWA, gains concessions from their unions that helped
them emerge from apparently imminent financial ruin.

The mergers and buyouts of the 1980s were often accomplished in an atmosphere of hostility and
distrust. Charges of predatory pricing and other unfair business practices were leveled by one
carrier against another. During the 1980s, the Justice Department’s Antitrust Division made a
number of grand jury investigations into alleged anticompetitive activity by the major airlines,
but no indictments were handed down. However, the companies that survived did not emerge
unscathed. Many of the acquisitions were leveraged buyouts that left the reconstituted companies
heavily in debt. With profits insufficient to cover their enormous debt loads, the companies
frantically competed for business, engaging in fare wars that produced a dizzying array of
pricing plans with equally numerous and confusing restrictions. Some of the tactics were
questionable, but, again, not clearly illegal. In 1993, American Airlines was sued by Continental
and Northwest for alleged predatory pricing during a 1992 fare war. The jury took just over two
hours to return a verdict in favor of American.

By 1993, a creative new solution to the airlines’ financial woes began to emerge. Northwest
avoided bankruptcy when its unions agreed to wage concessions in return for part ownership of
the airline. Then, in1994 after seven years of negotiating, employees of United gained majority
control of their company in return for deep pay and benefits cuts. Secretary of Labor Robert B.
Reich commented that other financially troubled companies would undoubtedly follow suit:
“From here on in, it will be impossible for a board of directors to not consider employee
ownership as one potential business strategy”. However, dome industry analysts doubted that
employee ownership would be effective in the long run because of inherent conflicts between
labor and management, or between different labor groups. “It can’t work,” declared former
Chrysler chairman Lee A. Iacocca. “What do you think will happen when n it’s a choice between
employee benefits and capital investment?”

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Proponents of deregulation are confident that the changes accompanying it will result in a
stronger, more stable, and efficient industry, better reequipped than ever to serve the needs of the
flying public. Others maintain that at least some degree of regulation is needed to guarantee
safety and fair competitive practices.

SAFETY:
In troubling criticism of deregulation is that aggressive competition has forced airlines to cut
corners, resulting in safety lapses. In 1990, Eastern Airlines was handed a sixty-count federal
indictment charging it with shoddy and dishonest maintenance practices. The indictments came
after years of complaints by mechanics for the financially troubled airline who claimed that
pressures to cut costs led to maintenance shortcuts and falsification of maintenance records. In
January 1991, Eastern ceased operation.

Critics contend that Eastern was hardly alone in its cavalier approach to safety. They charge that
the FAA is understaffed and poorly managed and that money shortages have caused all the
airlines to relax safety standards. They point not only to increased pressured on the labor force
but also to companies’ reluctance to replace their aging fleets, the congestion of airspace caused
by increased air travel, crowded hub airports that create security risks ,and overworked and
sometimes poorly trained air traffic controllers. Yet, statistically, passengers are no more likely
to die in a plane crash since deregulation than they were before it. Still, critics maintain that,
despite the airlines’ and government’s efforts to assure the traveling public to the contrary, air
safety is in need of substantial improvements.

Many critics feel that at least part of the problem lies in the dual role of the FAA. Charged
simultaneously with promoting the economic health of the aviation industry and fostering safety,
the agency is often at odds with itself. In addition, the FAA’s budget was cut and the number of
inspectors reduced in the 1980’s, the same period which the number of passengers multiplied and
the number of air traffic controllers was reduced. Furthermore, unions, which stand to benefit
from the increased scrutiny and higher standards imposed by the FAA continue to be major
instigators foe a change. However, even neutral commentators have suggested that it is time to
impose some degree pf regulation in the form of stronger FAA oversight, on the industry. In fact,
the FAA has been accused of suffering from a “tombstone mentality” that caused the agency to
delay acting on safety concerns until negative publicity generated by a crash forces the issue.
Even after safety measures are recommended by the National Transportation Safety Board
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(NTSB), the agency charged with investigating accidents, the FA has been criticized for not
always following through.

Aging aircraft became a major concern during the late 1980s and early l1990s. In 1988, an Aloha
Airgroup Boeing 737-200, purchased in 1969, lost the top of its fuselage while flying at twenty-
four thousand feet. A flight attendant was immediately sucked out of the plane and plunged to
her death. The plane made a harrowing emergency landing, but not before sixty-five passengers
suffered injuries, some serious. Congress responded in 1991 by passing the Aging Aircraft
Safety Act (49 App.>S>C>A 1421 note), which requires airlines to demonstrate that their older
planes are airworthy. Critics claim that enforcement of the law has been lax and that it ignores
other compelling reasons to replace aging aircraft, such as the availability of newer fire –
retardant seat and of updated seats designed to be more resistant to the impact of a crash.

Concerns over airline safety became even more acute in the early 1990s with a series of fatal
crashes. The Boeing Company, a major producer of aircraft predicts that the number of jet
crashes worldwide could double by the year 2010 if accident rates of the early1990s continue.
Such a projection strikes fear into the hearts of the flying public. However, according to David
R. Hinson, the federal aviation administrator, flight safety is not a simplistic science that lends
itself to easy solutions.” Flight safety experts point out that all and flight attendants, most airlines
now prohibit smoking on all domestic flights and on many international flights as well. Air
quality was again questioned in 1993 when it was revealed that, as a cost saving measure, many
airlines were circulating fresh air into their aircraft less frequently than they had in the past. This
led to complaints by passengers and crew of headaches, nausea, and the transmission of
respiratory illnesses. Although the FAA conceded that circulating more fresh air would be
beneficial, it backed off from requiring airlines to do so because of the cost involved.

The Safety of babies and toddlers on airplanes was investigated after it was shown that a number
of them suffered injuries, some serious or fatal, during incidents that did not injure their parents.
Unlike adults and their luggage, children under age two are not required to be secured on an
airplane but rather may be held on an adult’s lap. These “lap babies” are often ripped from the
adult’s grasp during turbulence or crashes. In 1994, Representatives Jolene unsoeld, D-wash.,
and Jim Ross Lightfoot, R-Iowa, introduced a bill that would have required the use of child
safety restraints on commercial flights .however, the measure, which was supported by the
Association of flight attendants. NTSB, Air Transport Association, Aviation Consumer Action
Project, and Air Line Pilots Association, was opposed by the FAA and eventually defeated. An

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FAA spokesperson, testify in opposition to the bill, said the FAA’s research indicated that if all
children who needed them were placed in child safety seats, the airlines would save
approximately one life over a ten –year period, and the children’s families would save about $2.5
billion. A study conducted at Harvard Medical School estimated that one infant a year could be
saved through the use of safety seats. The sponsors of the bill vowed to continue to press for
more stringent safety standards for babies.

Safety concerns will continue to plague the airline industry, even though the FAA assures the
flying public that, statistically, at least, flying a major airline in the United States is far safer than
driving on an interstate highway. Questions persist about the FAA’s effectiveness in overseeing
air safety. And financially strapped airlines, which posted $12.8 billion in losses from 1990 to
1994, must make difficult risk-benefit analyses when contemplating new safety measures.

Some critics such as Ralph Nader, who initially supported deregulation, are now calling for
limited government intervention to ensure safety. However, experts warn that the U.S airlines
system. Which is already extremely safe, probably can never be completely without risk.
According to Stuart Matthews , president of the flight Safety Foundation,” if the public
absolutely demands that flying be totally safe, you are going to have to ban flying.” Given the
taking a calculated risk and not flying at all, Americans, who take their lives into their hands
each time they drive, will probably continue to trust the statistics and take their chances. What
form the industry will assume when the deregulation dust finally settles remains an open
question.

ABOUT INDIAN AIRLINES:

HISTORY:

Indian Airlines was constituted as a corporation under Air Corporation Act, August 1953.It is
wholly owned corporation of the government of India and is a product of nationalization of the
existing private airlines operating scheduled air services within India and between India and

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Burma, Nepal, Ceylon, Pakistan and Afghanistan. The Airlines, which merged and integrated to
form Indian Airlines, were:

 Airways (India) Limited.


 Air India (operating domestic service only)
 Air services of India Limited
 Deccan Airways Limited
 Himalayan Airways Limited
 Bharat Airways Limited
 Indian National Airways
 Kalinga Airways Limited

Before 1953, i.e., before these Airlines merged to form Indian Airlines, there were no set rules and
standards of operations of the Airlines. The operations mainly were competition oriented and the
result of which was that every Airlines wanted to be the cheapest one. Thus resulted in almost all
the Airlines did not have enough money to maintain the Aircrafts. They were presented an
excellent example of unhealthy competition. Ultimately the Govt. took over by passing the Air
Corporation Act and Indian Airlines come into being. The affairs of the corporation are conducted
by a board of Directors.

Indian Airlines is one of the public sectors corporations in India. A statutory corporation like
Indian Airlines is formed with definite objectives in th interest of the public through based on pre-
set principles.

OBJECTVE FUNCTIONS OF INDIAN AIRLINES:

It shall be the function of the corporation to provide safe, efficient, and adequate, economical and
properly co-ordinate air transport services whether domestic or international or both.

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Corporation shall so exercise their power as to secure that air transport service are developed to the
best advantage and in particular, so exercise their power as to secure that the services are provided
at reasonable charges. The Act provides for the constitution of a Board of directors, which may
exercise all such power and do all such acts and things as may be exercised or done by the
corporation under this act. The Board of Directors shall consist of a chairman cum Managing
Director to be appointed by the Central government and not less than eight and not more than
fourteen other Directors to be appointed by the Central government.

Indian Airlines is a public utility service under the Industrial Disputes Act 1947 has to work in the
interests of the public. In view of this, the corporation is accountable to the public through the
Govt. and parliament for its activities. This control is two fold:

 To see that corporation does not deviate from its objectives.


 To have financial control because the funds of the corporation are derived from public funds.

The credit of launching the first real effective internal air services in India goes to Tata sons who
from 15 October 1932 began operating air mail services between Karachi and madras once a week
with a single engine aircraft. Indian National airways established in December 1934 an air service
between Karachi and Lahore linking with imperial airways service at Karachi. In 1934 Tata sons
doubled its weekly frequency on the Karachi-madras route and a weekly service between Bombay
and Trivandrum with a halt at Goa and Cannannore in Kerela. In 1937 a bi weekly service was
operated between Bombay and Delhi via Indore, Bhopal, and Gwallior. India national airways
launched their venture by establishing an air link from Calcutta to Dhaka and Rangoon. A third
company, air services of India came into existence in 1937-38.

In 1960, the logo for Indian airlines was selected which was based on golden section of ancient
Greeks. “A” had been italicized to suggest speed and the truncation of first stroke indicates
movement while the second emphasized on reliability.

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The forward surging of the symbol was intended to show the “looking ahead” characteristic and
the orange colour gave vibrancy and purity.

The Logo has now been changed and the “Wheel of konark” which is replica of the sun now
symbolizes Indian Airlines.

Amalgamation of Air India Limited and Indian Airlines Limited with National Aviation
Company of India Limited:

The Government of India, on 1 March 2007, approved the merger of Air India and Indian
Airlines. Consequent to the above, a new Company viz National Aviation Company of India
Limited (NACIL) was incorporated under the Companies Act, 1956 on 30 March 2007 with its
Registered Office at Airlines House, 113 Gurudwara Rakabganj Road, New Delhi.

It has been decided that post merger, the new entity will be known as “Air India” while
“Maharaja” will be retained as its mascot. The logo of the new airline will be a red coloured
flying swan with the “Konark Chakra” in orange placed inside it. The flying swan has been
morphed from Air India’s characteristic logo “The Centaur” whereas the “Konark Chakra” was
reminiscent of Indian’s logo. The Corporate Office of NACIL will be at Mumbai

This new AIR INDIA is………

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……here in international and domestic market with this new image and logo.

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BENEFITS TO EMPLOYEES

National Aviation of India Limited provides benefits to its employees under two categories:

I) STATUARY BENEFITS:

a) Workmen Compensation Act, 1923 :


In case of a temporary or permanent injury, caused to an
employee while in service, the organization has to provide the compensation to the employee.

b) Provident Fund Act, 1925 :


This benefit is given to the employee after retirement from the
organization.

c) Wages Act,1936 :
Earlier wages were not paid on time. According to this act, the wages and
salaries will be paid on fixed time and all the deductions dine would be told to the employees.

d) Industrial dispute Act,1947:


According to this act, a committee known as works
committee is formed which deals with the welfare of the employees at the grass root level. The
members of this committee are 50% from the employer’s side and 50% from the employee’s
side.

e) Employees State Insurance Act, 1948:

23
According to this act, if the employee or his family
members are sick then the company looks after their health i.e., most of the money is given by
NACIL.

f) Factory Act, 1948:

This act takes care of the service conditions, work environment etc. given to
the employees. It also keeps a check on the working hours and action is taken whenever the
regulations are violated.

g) Air Corporation Act, 1953:

A new enactment was made in 1953 where there was a provision for
problems regarding labor relations. Here 50% participants are employer’s side and 50% from
employee’s side.

h) Provident Fund Miscellaneous Act, 1953:

In the previous provident fund act, there was no


provision for drawing money before retirement. According to modified act, if the money is
refundable, six times of the provident fund salary can be withdrawn which can be recovered in 3
years in 36 installments.

i) Payment of Gratuity Act,1972:


NACIL can pay a maximum of 3.5 lakhs as gratuity. This is
statutory and deviation is possible.

II) NON STATUTORY BENEFITS:

24
a) Scholarships:
These are provided to the wards of the employees. It basically starts from class
II till the post graduation level e.g. MBA, Engineering etc. The amount of scholarship given to
the employees for their children is on yearly basis which is shown in the table below:

Particulars Amount (in RS.)

Class II - Class IV 125


Class V – Class VIII 250
Class IX – Class XII 375
For Graduates 500
For Diploma Holders 625
For Engineering/MBA etc. 750

b) Air passage:
This Non-Statutory welfare facility is entitled for free and discounted passage to
travel. It is given to three types of staff:

1. For Permanent staff:


It starts after the completion of 1 year. Air passage for the permanent
staff is shown in the table below:

Years for service Free Air Tickets Discount (95%) Discount (85%)

1–5 2 - 3
5–7 2 1 2
7 – 10 2 2 1
10 – 20 2 3 -
20 – 25 2 4 -
25 & Above 2 5 -

25
2. For Retired staff:
Retired employees with minimum 15 years of service are eligible for this
Air passage benefit. This non statuary benefit is shown in the table below:

Years for service Free Air tickets Discount (95%)

15 – 20 1 2
20 -25 1 3
25 & above 2 4

Retired Employees are also given this benefit:

 Passage for SOL (Staff On Leave)


This passage is for the employees and his family.

 Passage for SOD (Staff On Duty)


SOD is granted additional passage for the purpose of any official
work.

3. For Decease Employees :

 If any employee dies while service then, he will get Air Passage benefits half of what he was
actually getting while working.

 If any employee dies after retirement then, he will get Air passage benefits half of what he was
actually getting after retirement.

26
For deceases employees, Air Passage benefits will be given only to employee’s spouse
or children

Note:

• Family is inclusive of spouse& children


• Spouse- Husband/ wife
• Children- Daughter/Son/Daughter-in-law/Son-in-law.
• Passage year for the 2 years can be combined.
• Passage year starts from 1st August – 31st July.
• Food facilities are included in the passage.

c) Housing Colonies:
NACIL provides Housing facilities to their employees on the basis of
their grades and as per their seniority level which is shown in the table below:

Designations Grades Type of flat No. of houses

Peons/helper ½ Flat A1 200


Office Assistants
/Senior office 3/6 A 288
assistant 7/8
Superintendent 9 B 48
Officers 9A-15 C 88
Directors 15 & above D 22

Procedure of giving the Housing Facilities:

 A notification or a form is distributed to all the employees according to their grades.

Note:

27
 For the employees who came under grades 1 to 9:-
• Employees for this grade will get Type of flat A/B as shown in the above table.

 For the employees who came under grade 9A:-


• Employees for this grade get the House facility on the basis of their Joining date for the
particular post.

 For the employees who are having their grades 15 &above:-


• Type of Flat D is given to them.

CRITERIA FOR THE OUT OF TURN ALLOTMENT:

 Requesting applications
 Authority is approved by Executive Director

For Retired Employees:

After three months of retirement, employees have to vacate their houses. But if due to some
reasons, they are not able to vacate their homes, then, some amount of rent is deducted from their
money as per the market rates. But after some point of time, letter A is given to them in advance
for vacating their homes. But if they are still not ready to vacate their homes then Letter B is given
to them. And after some point of time Letter C is given to them. If an employee is still not ready
then strict action against them is taken.

d) Holiday homes:
Holiday homes have been established at a number of hill resorts and places
of tourist interest. Staff is required to pay the nominal rent for the accommodation. Holiday Home
is providing in 4 different regions at different stations which is shown in the table below:

28
REGIONS STATIONS

Northern Region Nanital and Dharamshala

Eastern Region Gangtok

Southern Region Kodai Kanal

Western Region Goa

NOTE:

 Holiday Homes are given for the particular year only.


 Facilities for the Kitchen are included.
 In winters, Heater facilities are limited if an employee uses the facilities given beyond the limits
then certain amount is charged from them according to the rules and regulations of NACIL.

AVAILABILITY FOR THE ROOMS:

Particulars No. of Rooms

For Staff 1
For Officers (19 A) 2

Deductions/Charges for the Rooms:

Grades Amount per day (in Rs.)

½ 25
3-9 35
9A-19 75

29
 Maximum 5 days stay is given for Dharamshala
 Maximum 3 days stay is given for other stations.

e) Medical Facilities:
Employees are provided free medical facilities, both ambulatory and
hospitalization. Fully equipped medical clinics are functioning at all important work places at
base stations manned by competent Medical officers. The employees’ families are provided
medical facilities under Contributory Scheme on payment of nominal contribution.

f) Loans:
Basically three types of loans were given to the employees. But now this facility is not
given to the employees since 2003-2004 onwards.

 Housing Loans:
Employees are eligible for grant of housing loan subject to availability to availability of funds
after completion of 5years of service. Maximum housing loan can be granted up to Rs. 3 lakhs.

 Vehicle Loans:
Loans are granted to employees for the purchase of cars, scooters and
cycles, subject to the availability of funds. Vehicle loan limits are as under:

Vehicle Amount (in Rs.)

New car 75,000/-


Old car 50,000/-
New Scooter/ Motor cycle 15,000/-
Old scooter/ Old Motor cycle 6,000/-
Cycle 600/-

 Miscellaneous Loan:

30
Employees are also granted miscellaneous loans for meeting
various contingencies up to a maximum of Rs. 15,000/-

g) Group Insurance scheme:

On the death of an employee while in service, his family is paid the


group insurance, quantum of which depends on the pay drawn by the employee at the time of his
demise. This is a non- contributory scheme. The insurance amount varies from Rs. 15,000/- to Rs.
1, 50,000/-

h) Long service mementos:

Employees on completion of 25 years of satisfactory service are awarded


long service mementos in recognition of their service.

i) Festival Advance:

Festival advance is admissible to all employees on one occasion in calendar


year on Holi/Id-ul-fitr/Dusshera/X-mas festivals. Employees with less than six years of service can
avail festival advance only after they furnish a surety of another employee of NACIL who has put
at least six years in service in NACIL. The advance payable is Rs. 3,000/- and Rs. 4,000/-
depending upon the employee’s basic pay and is recovered in 10 monthly interest free installments.

j) Financial assistance to Employees pursuing higher Studies:


Employees who wish to pursue higher
studies are granted financial assistance subject to a maximum of two courses in the entire service
of the employee. Employees are reimbursed tuition fee, admission fee, examination fee and an
amount up to Rs. 300/- for the purchase of books.

k) Cooperative Thrift & Credit society/ Fair price shop/ Death benefit society:

31
The company grants various facilities, to
the above societies, formed by the employees from time to time.

l) Employees working at the airports at Delhi, Mumbai, and Kolkata are provided free/subsidized
transport from various rallying points.

m) Retirement gifts :
A gift of worth Rs.3000/- is given to the employees at the time of their retirement only
after the completion of their 25 years of satisfactory service.

n) Community centers:

NACIL has its own community centers at IA colony (Vasant vihar). It provides
community center facilities not only to the employees but also to their relatives and family
members at the nominal charges mentioned below:

Total charges for employee’s own family is Rs. 5250/- per day and for the other relations is Rs.
14000/- per day shown in the table below:

For employee’s own family:

Rent Rs. 1250


Electricity charges Rs. 1000
Water charges Rs. 500
Security (refundable) Rs. 2500
Total Amount Rs. 5250/-

For employee’s other relations:

Rent 5000
Electricity charges 1000
Water charges 500

32
Security ( Refundable) 7500
Total amount 14000/-

If an employee want community centre for 2 days or more than 2 days then he has to pay the
charges doubled for what he was actually paying for one day in both the above cases. But the
security amount remains the same.

A care taker is appointed for the proper supervision of the occasions. After the completion of the
auspicious occasion, an employee needs a NOC i.e. No objection certificate from the welfare
associations in order to prove that he has not done any harm during the time of get together.

o) Types of leaves given to the employees:

 Casual leave: An employee is eligible for Casual leave to the extent of 10 days in a financial
year either for the private affairs or on grounds of sickness. This leave cannot be not be
accumulated. Normally not more than 3days casual leave is granted at a time in two consecutive
months. Casual leave can be combined with extraordinary leave i.e. leave without pay and
allowances. Casual leave cannot be combining with any other kind of leave except when an
employee who has exhausted the full period of sick leave due to him requires more leave on
grounds of sickness he can be granted privilege/casual leave in continuation of sick leave.

Privilege Leave: An employee is eligible for 30 days privilege leave for every 11
months of service. This leave is accumulated upto 300 days. The leave account of an
employee is written up in the retrospect only once for each period of 11 months service
by adding 30 days to the opening balance as on first day of the period and deducting there
from total leave availed of during the period. Reckoning of leave on pro rata basis is
permissible during the currency of period of 11 months service if the balance at the
beginning of the period is less than the individual’s leave requirement. Leave on pro rata
basis is calculated at the rate of one day for every 11 days of service; fraction of a day is
ignored. The carry over of leave thus worked out and is restricted only to 3oo days and
the balance of leave, if any, will be lapse unless the employee has made application for
the grant of leave and the same was refused before the expiry of 11 months period. In
such cases the employee may be authorized to carry forward to the next leave period the

33
full amount of leave assessed above provided the number of days of privilege leave
carries over by him, and refused in writing owing to extengencies of corporation work.

An employee is allowed to encash Privilege leave in accordance with


the following conditions:

i) The encashment of Privilege Leave is allowed at the option of an employee.


ii) The maximum number of days for which leave can be enchased half of the privilege leave lying
at the credit of an employee on the date of encashment reduced by one years entitlement to be
retained at the credit of the employee.
iii)Encashment of Privilege Leave shall be allowed only once in a financial year.
iv)No encashment of Privilege leave is permissible to an employee during the period of
suspension from service
v) The period of Privilege leave permitted to be encashed is not reckoned for the purpose of
earning privilege leave or any kind of leave.
vi)The benefits of encashment is not admissible to:
a) Employees on contract
b) Temporary employees
c) Apprentices and training
d) Employees appointed for specific period/project.
e) Employees who resign or whose services are terminated on disciplinary grounds.
f) Employees on deputation.

A temporary employee although he earns his privilege leave from the date of his appointment, is
eligible to avail of the leave only after he has completed 1 year’s service.

For the purpose of determining privilege leave entitlement, period of absence on the following
types of leave is count as service:

a) Casual leave
b) Compensatory leave i.e. day off in lieu of attending work on a normal ‘off’ day.
c) Sick Leave
d) Quarantine Leave

34
e) Special leave granted by the Managing Director to count towards service
f) Accident and disability leave on full day.
g) Special leave for injuries caused during sporting activities.

 Sick leave:
An Employee is eligible for sick leave of 20 days on half pay, which may
be commuted at 10 days on full pay for each calendar year. Sick leave may be accumulated upto
120 days with full pay for and may be availed of half pay for double the period i.e. upto 240 days.

In case of permanent employee who have completed 1 year of services, it


is permissible to grant the full period of sick leave i.e. 20 days on half pay or 10 days on full pay,
at any time during the year. Temporary Employees with less than a years service is eligible for
grant of sick leave on prorate basis.

Sick leave for period exceeding two days is supported by medical certificate from either the
Medical officer of the corporation or a medical practitioner (Allopathic) duly approved by
corporation

 Special Sick leave:


An employee suffering from:

a) Tuberculosis
b) Leprosy
c) Cancer
d) Organic heart disease requiring hospitalization and / or prolonged rest in bed.
e) Paralysis of vascular, infective or degenerative origin affecting one or more limbs ( but not
including paralysis like Ball’s palsy); or
f) Significant mental illness treated in government mental hospital ( in such cases a certificate
from the hospital superintendent or any other Competent authority of a Govt. Mental hospital
empowered to issue such certificate shall be accepted by the corporation subject to the approval of
the same by the Medical Officer of the Corporation.
g) On the recommendation of the Medical Officer of the Corporation, Special Sick Leaves may
also be granted in cases where the employee is suffering from the following diseases or ailments or
injury requiring hospitalization or prolonged rest in bed.

35
i) Renal (Kidney failure)

ii) Hepatic (liver failure)

iii) Chronic Corpulmonale

iv) Empyma theracis

v) Collagen diseases:

 Systemiculus reythemetosus
 Polar teritis nodose
 Progressive systemic disease
 Ploymycsitis
 Rheumatoid arthritis
 Jomyelinating disease
 Injuries to important internal organs
 Complication of fractures requiring prolonged hospitalization or rest in bed.
 Significant diseases of the nervous system.

Special sick leave on half basics pay may be granted on prorata basis for a fraction of a year4’s
service e.g. an employee with one and a half year’s service is eligible for 45 days Special Sick
Leave.

 Accident and disability leave:


A) An employee sustaining an injury caused by an accident arising out of and in
the course of his employment or by his illness incurred:

1) during the courses and in consequence of the due performance of the duties assigned to him.
2) in the performance of any particular duty which the effect of increasing his liability of illness
beyond the ordinary risk of attending the normal duties assigned to him; may on production of a

36
medical certificate in the prescribed form be granted accident and disability leave upto a maximum
of 120 days.

B) During the period of leave granted under sub regulation (A) the employee is entitled to his full
pay; provided that an employee who is unable to resume duty after the expiry of the leave
regulation, may be granted, at the discretion of the Managing Director, an extension of such leave
on dull pay for a period not exceeding 274 days, if a medical board constituted by the corporation
for the purpose, recommends such extension.
The grant of this leave is subject to the condition that the accident or illness is not due to
the employees’ negligence or default and that the employee obeys all instructions given by
the approved Medical Authority as to treatment during the period of absence.

 Study Leave:
An employee may be granted study leave by the Managing director at his
discretion on the merits of each case on such terms and conditions, as he may deem
necessary.

 Quarantine Leave:
An employee may, on a quarantine certificate be issued by a medical authority
approved by the Managing Director, be granted leave of absence from duty for a period not
exceeding 30 days. Quarantine leave is to be granted in cases of cholera, small pox, plague,
diphtheria, typhus fever, cerebrospinal meniflities and measles. Quarantine leave is not
admissible in cases in which an employee himself is suffering from an infectious disease.
In such cases the employee is given the normal casual, sick, privilege leave at his
credit.

 Maternity Leave:
A female employee is eligible for grant of Maternity Leave on full pay for a
period, which may extend upto 135 days.

 Paternity Leave:
A male employee is eligible for grant of Paternity Leave on full pay for a period of
15 days during the confinement of his wife.

37
 Extraordinary Leave:
In exceptional circumstances to be recorded by sanctioning authority and only
when other leaves are not admissible under these regulations, a permanent employee or a
temporary employee who has completed one year’s continuous service may be granted
Extraordinary Leaves i.e. Leave without pay and allowances , the period of which shall not
exceed 90 days at a time. This leave is granted at the rate of 30 days for every completed
year of service. The period of this leave shall, however not 270 days in the entire period of
service exceed. However, Managing director may on compassionate grounds permit any
part or whole of such leave to be treated as leave with pay debitable to the employee’s
future leave account. A temporary employee with less than one year’s service is eligible for
grant of extraordinary leave under the above circumstances upto a maximum of 15 days.
Any Employee suffering from:

 Tuberculosis
 Leprosy
 Cancer
 Organic heart disease requiring hospitalization and / or prolonged rest in bed.
 Paralysis of vascular, infective or degenerative origin affecting one or more limbs ( but not
including paralysis like Ball’s palsy); or
 Significant mental illness treated in government mental hospital ( in such cases a certificate
from the hospital superintendent or any other Competent authority of a Govt. Mental hospital
empowered to issue such certificate shall be accepted by the corporation subject to the approval of
the same by the Medical Officer of the Corporation.
 On the recommendation of the Medical Officer of the Corporation, Special Sick Leaves may
also be granted in cases where the employee is suffering from the following diseases or ailments or
injury requiring hospitalization or prolonged rest in bed.
 Renal (Kidney failure)
 Hepatic (liver failure)
 Chronic Corpulmonale
 Empyma theracis
 Collagen diseases:

38
 Systemiculus reythemetosus
 Polar teritis nodose
 Progressive systemic disease
 Ploymycsitis
 Rheumatoid arthritis
 Jomyelinating disease
 Injuries to important internal organs
 Complication of fractures requiring prolonged hospitalization or rest in bed.
 Significant diseases of the nervous system.

 Any other major illness or injury requiring hospitalization continuously for a period of 3 months
or more provided such hospitalization has the approval of the Medical Officer of the corporation.

PRODUCTIVITY LINKED INCENTIVE

PLI is provided for the performance of main revenue generation factors, these are:

 Number of customers travel during a time period.

 Number of flies.

On the basis of performance of these factors, a part of revenue is provided to its employees.
According to PLI:

 Employees of same level will get same level of incentives.

 It is based on service quality, timeliness and achievement of task within predetermined


time.

39
Main purposes of PLI are:

 To maintain discipline

 To avoid strike, walk-outs and other grievances.

 To avoid unrest conditions

PLI varies year by year, and has different criteria for different for different categories of
employees.

In relation to PLI settlement, a memorandum of settlement forms time to time and also some
agreements have been done periodically (around once in 3 years).These agreements consist all
terms and conditions along with amount has to be paid for employees for that period. Parties
signature and witness signature get putted at the end of the agreement.

These agreements have been formed with eight different unions under INDUSTRIAL
DISPUTES ACT 1947.

COMPARESION OF DIFFERENT AIRLINE COMPANIES WITH AIR


INDIA (JET AIRWAYS,JETLITE,KINGFISHER WITH AIR INDIA)

S.NO. FACTORS AIR INDIA JET AIRWAYS


1 DISCOUNTS:
INDIVIDUAL
TRAVELERS Armed force concession Senior citizen concession

40
Blind person discount Youth Fare
Senior citizen discount
Cancer patient discount
Student concession

National Sports person

Arjuna awardees
Companion free scheme

CORPORATE
HOUSES Corporate Super saver
2 SCHEMES: Super saver scheme Visit India Fares:
Discover India-7 days pass Unlimited Travel with our 3 fare plans
Discover India A week filled with wonder, for just USD 375
India Wonder Fair A two-week journey of discovery for only USD 750
Spot Fair Three weeks of enchantment for only USD 1,000
ABN AMRO Bank Debit
Card Jet kids
Amex Cobrand Card Jet Value Pass
Flight Specific Fares
Companion Free Scheme
Bid and Fly
IN-FLIGHT
3 SHOPPING: Sky Bazaar
4 CHECK Ins: E-check in is available

a variety of special foods


5 DINNING: are available on demand a variety of special foods are available on demand
IN-FLIGHT
6 ENTERTAINMENT: a variety of music, Special JetScreen
1st class:Personal
Entertainment Appliances music, movies, sports and much more.
Audio Vedio on
Demand,in few aircraft e-magazine
Y class:Personal
Entertainment device
Inbound theatre
Outbound Theatre
7 DIFFERENT CLASS F, C/J, Y Classes F, C/J, Y Classes

41
OF SEATES:
LOYALTY Friquent Flier
8 PROGRAMMES: Programmed Jet Privilege Scheme
customization facility is
9 CUSTOMIZATION: available customization facility is available

S.NO. FACTORS AIR INDIA KINGFISHER


1 DISCOUNTS:
INDIVIDUAL
TRAVELERS Armed force concession Group Travel
Blind person discount
Senior citizen discount
Cancer patient discount
Student concession

National Sports person

Arjuna awardees
Companion free scheme

CORPORATE
HOUSES Corporate Super saver Corporate Travel
2 SCHEMES: Super saver scheme Companion offer
Discover India-7 days pass
Discover India
India Wonder Fair
Spot Fair
ABN AMRO Bank Debit Card
Amex Cobrand Card
Flight Specific Fares
Companion Free Scheme
Bid and Fly
IN-FLIGHT
3 SHOPPING: Sky Bazaar Air boutique
4 CHECK Ins: E-check in is available

a variety of special foods are available on


5 DINNING: demand a variety of special foods are avail
6 IN-FLIGHT a variety of music,

42
ENTERTAINMENT:
1st class:Personal Entertainment Appliances music, movies, sports and much
Audio Vedio on Demand,in few aircraft
Y class:Personal Entertainment device
Inbound theatre
Outbound Theatre
DIFFERENT
CLASS OF
7 SEATES: F, C/J, Y Classes
LOYALTY
8 PROGRAMMES: Friquent Flier Programmed
9 CUSTOMIZATION: customization facility is available

43
IT SECTION IN AIR INDIA

Air India has a mainframe computer to store all information whether it is related to Domestic or
international market. This IBM ES9000 system works on DB2 and gather information related to
number of passenger travelled, free baggage, excess baggage, cargo, mail, departure time, delay,
cancellations etc. from every corner of the world. These data are entered by commercial
department in on-line mode through a mask generated on daily basis. The system automatically
generates messages to the stations which fail to report data. The information thus collected for
previous day is processed in IT on daily bases and made available to the user by means of a user
friendly Query system for retrieval, reference and extraction of various pre-formatted reports
based on a wide range of options. This MIS system provides support for DDR( Daily Departure
Report) and DFIC (Delayed flight information system). The user departments are Commercial,
Finance, Planning and engineering. It provides information for following queries:

 Seat factor information

 Load factor information

 Capacity utilization

 Flights delayed and cancellation

 On time performance

 Revenue Pax Travelled

 Flight uplifted

Daily, monthly and annual reports are also generated by the system. The database is available for
previous 13 months.

DATA SOURCES:

44
 Commercial department

 On-line data capture based on fill-in mask in PSS system on daily basis.

 Off-line data (missing data) on weekly basis.

 On-line flight schedule down loaded on daily basis.

 Master data maintained in system and updated as and when suggested by concerned
department.

 Delay codes provided by engineering department.

 Rate cargo, mail, excess baggage provided by commercial department.

 A/c validation table provided by commercial department.

 Flight sector distance provided by Commercial Department.

 Flight sector Distance provided by Planning department.

A hard copy of reports on monthly basis is send to user departments.

ON-LINE BOOKING SYSTEM:

IBM VHI IB
ES9000 SERVER E
LOAD
MAINFRAM
BALANCE
DBP IB
SERVER EE

ISP

WEBSIT
E

45
When a customer access to the website of AIR INDIA, through ISP he gets connected to IBE.
There are two ISP and two IBE in the system to reduce redundancy. This IBE then connects to
VHI Server. This VHI server has already stored data that a customer can access. On the other
hand there is a DBP server and it contains customer data such as booking details, fairs, ticket
printing. Data in DBP server is variable and changes according to customers but VHI server data
does not change according to customers.

LIMITED ACCESS TO MAINFRAME:

46
IBM ES9000

MAINFRAME

SNA

374
0

VHI
DBP

RESOURCE ACCESS CONTROL FACILITY

This system represents access control to mainframe database. To access Mainframe database
user must contain user-id and password.

This mainframe has 3740 server and then a SNA firewall to protect its data.

47
CORPORATE OBJECTIVES

 To meet the demand for reliable, economic and efficient transport services through high standards of
service customers and passengers.
 To maximize the essential and strategic communications within India in times of national emergencies
and to be reliable second line defense.
 To maximize passenger satisfaction by improving passenger/cargo services and amenities.
 To enhance their period by securing a reasonable return in capital, consistent with Social Objectives.
 To foster international tourism in India and contribute to national balance of payment.
 To stimulate domestic tourism and internal trade in order to broaden the Indian Air market.
 To participate in the development of national aircraft and ancillary industries.
 To promote good image of public sector in consonance with national aspirations.

48
RESEARCH METHODOLOGY

Research Methodology is a way to systematically solve the research problems. It has understood
as a science of studying how research is being done scientifically. In it we study the various steps
that are generally adopted by a researcher in studying his research problem along with the logic
behind them. It is necessary for the researcher to know not only he research method/techniques
but also the methodology.

As we know that for the achievement of any goal, a proper methodology should be adopted.In
the same manner for the success of a project, it is necessary to have a clear methodology.

Therefore, in the research methodology following terms are included:-

 Research Design

 Data at a Glance

 Data Collection

RESEARCH DESIGN:
A Research design is purely and simply the framework or plan for the guide’s collection and
analyzing of data.

49
Research design is a systematic way to achieve the desired objective in a right manner. It is a
blue print used to guide the future course of actions. It may be worthwhile to mention here that a
research design is nothing more than the framework for the study.

The Research Design decisions happen to be in respect of:

 What is the study about?


 What is the study being made?
 What will the study are carried out?
 What type of data is required?
 Were can the required data be found?
 How will that data be analyzed?
 In what style the report is prepared.

TYPES OF RESEARCH DESIGN:

Exploratory Research Design:


All marketing research projects must start with exploratory research
design. This is the preliminary phase and absolute in order to obtain a proper definition of
problem at hand. The Exploratory study is particularly helpful in breaking broad and vague
problems in to smaller, more precise sub problem statements, helpful in the form of
hypothesis for future research.

Descriptive Research Design:

One simply describes something such as demographic characteristics of


customers who use the products. The descriptive study is typically concerns determining
frequency with which something acquires. This study is typically guided by initial
hypothesis.

50
Experimental Research Design:

It is defined as a process where event requires in a setting at the


discretion of the experimental and controls are used to identically of the sources in subject’s
response.

DATA AT A GLANCE:

Primary Data

Secondary Data

DATA COLLECTION:

Observation Method

Experimentation Method

Survey Method

RESEARCH METHODOLOY USED

RESEARCH PROBLEM:

“To study the strategies that AIR INDIA (NACIL) is implementing to retain its employees and to
compare CRM strategies of AIR INDIA (NACIL) with other Airlines Companies.

OBJECTIVES:

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 To study retention strategies related to Employees.
 To study satisfaction level of employees towards retention strategies.
 To study CRM strategies those have been implementing for customers.
 To find out the effectiveness of those CRM stratégies.
 To study CRM strategies of other Airlines companies.
 To suggest best suitable CRM strategies after carefully analyzing its policies.
 To suggest areas in which NACIL needs to improve in terms of customer services.

SAMPLE SIZE:

Fifty respondents.

SAMPLE AREA:

HR and Commercial Department, AIR INDIA (NACIL), Delhi.

SAMPLE UNIT:

Existing employees of NACIL, Delhi.

SAMPLE TECHNIQUE:

Simple Random Sampling with modification to biased responses.

RESEARCH DESIGN:

Exploratory and Descriptive.

DATA COLLECTION:

PRIMARY DATA:

 Through Questionnaires
 Through Direct Interviews

SECONDRY DATA:
 http://www.airindia.in
 http://www.flyingreturns.co.in

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 http://www.google.com
 Company agreements & reports
 Company brochures, Statements & Circulars.

DATA ANALYSIS FOR


EMPLOYEE’S RESPONCES:
1. Frequencies:
Statistics

From how long are you with NACIL?


N Valid 50
Missing 0

From how long are you with NACIL?

Cumulative
Frequency Percent Valid Percent Percent
Valid Less than two yeares 2 4.0 4.0 4.0
Two to Six years 3 6.0 6.0 10.0
Six to twelve years 7 14.0 14.0 24.0
More than Twelve years 38 76.0 76.0 100.0
Total 50 100.0 100.0

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From how long are you
with NACIL?
Less than two yeares
Two to Six years
Six to twelve years
More than Twelve years

2. Frequencies:

Statistics
Are you satisfied with Welfare policies and PLI scheme of NACIL?
N Valid 50
Missing 0
Mean 1.3600
Are you satisfied with Welfare policies and PLI scheme of NACIL?

Cumulative
Frequency Percent Valid Percent Percent
Valid YES 32 64.0 64.0 64.0
NO 18 36.0 36.0 100.0
Total 50 100.0 100.0

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Are you satisfied with
Welfare policies and
PLI scheme of NACIL?
YES
NO

3. Frequencies:
Statistics

are you dssatisfied with less leaves?


N Valid 50
Missing 0
Mean 2.0000

are you dssatisfied with less leaves?

Cumulative
Frequency Percent Valid Percent Percent
Valid no 50 100.0 100.0 100.0

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are you dssatisfied with less leaves?

no

4. Frequencies:

Statistics

are you dssatisfied with more working houres?


N Valid 50
Missing 0
Mean 2.0000

are you dssatisfied with more working houres?

Cumulative
Frequency Percent Valid Percent Percent
Valid no 50 100.0 100.0 100.0

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are you dssatisfied with more working houres?

no

5. Frequencies:

Statistics
are you dssatisfied with less remuniration?
N Valid 50
Missing 0
Mean 1.8800

are you dssatisfied with less remuneration?


Cumulative
Frequency Percent Valid Percent Percent
Valid yes 6 12.0 12.0 12.0
no 44 88.0 88.0 100.0
Total 50 100.0 100.0

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are you dssatisfied with less remuniration?

yes
no

6. Frequencies:

Statistics

are you dssatisfied with lack of personal touch?


N Valid 50
Missing 0
Mean 1.8400

are you dssatisfied with lack of personal touch?

Cumulative
Frequency Percent Valid Percent Percent
Valid yes 8 16.0 16.0 16.0
no 42 84.0 84.0 100.0
Total 50 100.0 100.0

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are you dssatisfied with lack of personal touch?

yes
no

7. Frequencies:

Statistics

are you dssatisfied with working environment?


N Valid 50
Missing 0
Mean 1.8000

are you dssatisfied with working environment?

Cumulative
Frequency Percent Valid Percent Percent
Valid yes 10 20.0 20.0 20.0
no 40 80.0 80.0 100.0
Total 50 100.0 100.0

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are you dssatisfied with working environment?

yes
no

8. Frequencies:

Statistics

Up to what extent are you satisfied retention programs(PLI & Welfare)?


N Valid 49
Missing 1
Mean 3.0000

Up to what extent are you satisfied retention programs(PLI & Welfare)?

Cumulative
Frequency Percent Valid Percent Percent
Valid Dissatisfied 8 16.0 16.3 16.3
Somewhat Satisfied 33 66.0 67.3 83.7
Highly Satisfied 8 16.0 16.3 100.0
Total 49 98.0 100.0
Missing System 1 2.0
Total 50 100.0

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Up to what extent are you satisfied retention programs(PLI & Welfare)?

Dissatisfied
Somewhat Satisfied
Highly Satisfied
Missing

9. Frequencies:

Statistics

Do your suggeestions and complaints get attention?


N Valid 50
Missing 0
Mean 2.5400

Do your suggeestions and complaints get attention?

Cumulative
Frequency Percent Valid Percent Percent
Valid Never 9 18.0 18.0 18.0
Sometimes 14 28.0 28.0 46.0
Frequently 18 36.0 36.0 82.0
Always 9 18.0 18.0 100.0

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Total 50 100.0 100.0

Do your suggeestions and complaints get attention?

Never
Sometimes
Frequently
Always

10. Frequencies:

Statistics

Scholarship
N Valid 45
Missing 5
Mean 2.2667

Scholarship

Cumulative
Frequency Percent Valid Percent Percent
Valid Poor 14 28.0 31.1 31.1
Fair 10 20.0 22.2 53.3
Good 16 32.0 35.6 88.9
Excellent 5 10.0 11.1 100.0
Total 45 90.0 100.0
Missing System 5 10.0

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Total 50 100.0

Scholarship

Poor
Fair
Good
Excellent
Missing

11. Frequencies:

Statistics

Air passage
N Valid 49
Missing 1
Mean 3.0204

Air passage

Cumulative
Frequency Percent Valid Percent Percent
Valid Poor 4 8.0 8.2 8.2
Not bad 7 14.0 14.3 22.4
Good 22 44.0 44.9 67.3
Excellent 16 32.0 32.7 100.0
Total 49 98.0 100.0
Missing System 1 2.0
Total 50 100.0

63
Air passage

Poor
Not bad
Good
Excellent
Missing

12. Frequencies:

Statistics

Housing Colonies
N Valid 48
Missing 2
Mean 2.7708

Housing Colonies

Cumulative
Frequency Percent Valid Percent Percent
Valid Poor 6 12.0 12.5 12.5
Fair 9 18.0 18.8 31.3
Good 23 46.0 47.9 79.2

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Excellent 10 20.0 20.8 100.0
Total 48 96.0 100.0
Missing System 2 4.0
Total 50 100.0

Housing Colonies

Poor
Fair
Good
Excellent
Missing

13. Frequencies:

Statistics

Holiday Homes
N Valid 49
Missing 1
Mean 2.6939

Holiday Homes

Cumulative
Frequency Percent Valid Percent Percent
Valid Poor 5 10.0 10.2 10.2
Fair 12 24.0 24.5 34.7
Good 25 50.0 51.0 85.7
Excellent 7 14.0 14.3 100.0

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Total 49 98.0 100.0
Missing System 1 2.0
Total 50 100.0

Holiday Homes

Poor
Fair
Good
Excellent
Missing

14.Frequencies:

Statistics

Medical Facilities
N Valid 50
Missing 0
Mean 3.2600

Medical Facilities

Cumulative
Frequency Percent Valid Percent Percent
Valid Poor 2 4.0 4.0 4.0
Fair 4 8.0 8.0 12.0

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Good 23 46.0 46.0 58.0
Excellent 21 42.0 42.0 100.0
Total 50 100.0 100.0

Medical Facilities

Poor
Fair
Good
Excellent

15.Frequencies:

Statistics

Group Insurance
N Valid 45
Missing 5
Mean 2.2667

Group Insurance

Cumulative
Frequency Percent Valid Percent Percent
Valid Poor 11 22.0 24.4 24.4
Fair 14 28.0 31.1 55.6

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Good 17 34.0 37.8 93.3
Excellent 3 6.0 6.7 100.0
Total 45 90.0 100.0
Missing System 5 10.0
Total 50 100.0

Group Insurance

Poor
Fair
Good
Excellent
Missing

16.Frequencies:

Statistics

Long Service Mementos


N Valid 50
Missing 0
Mean 2.3800

Long Service Mementos

Cumulative
Frequency Percent Valid Percent Percent

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Valid Poor 7 14.0 14.0 14.0
fair 19 38.0 38.0 52.0
Good 22 44.0 44.0 96.0
Excellent 2 4.0 4.0 100.0
Total 50 100.0 100.0

Long Service Mementos

Poor
fair
Good
Excellent

17.Frequencies:
Statistics

Financial Assistance for higher Studies


N Valid 50
Missing 0
Mean 2.7200

Financial Assistance for higher Studies

Cumulative
Frequency Percent Valid Percent Percent
Valid Poor 2 4.0 4.0 4.0

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fair 17 34.0 34.0 38.0
Good 24 48.0 48.0 86.0
Excellent 7 14.0 14.0 100.0
Total 50 100.0 100.0

Financial Assistance for higher Studies

Poor
fair
Good
Excellent

18.Frequencies:

Statistics

Fastival Advance
N Valid 50
Missing 0
Mean 2.6000

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Fastival Advance

Cumulative
Frequency Percent Valid Percent Percent
Valid Poor 8 16.0 16.0 16.0
fair 11 22.0 22.0 38.0
Good 24 48.0 48.0 86.0
Excellent 7 14.0 14.0 100.0
Total 50 100.0 100.0

Fastival Advance

Poor
fair
Good
Excellent

19.Frequencies:

Statistics

Facilities provided after death


N Valid 48
Missing 2

71
Mean 2.7917

Facilities provided after death

Cumulative
Frequency Percent Valid Percent Percent
Valid Poor 3 6.0 6.3 6.3
fair 9 18.0 18.8 25.0
Good 31 62.0 64.6 89.6
Excellent 5 10.0 10.4 100.0
Total 48 96.0 100.0
Missing System 2 4.0
Total 50 100.0

Facilities provided after death

Poor
fair
Good
Excellent
Missing

20.Frequencies:

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Statistics

Retierment gifts
N Valid 50
Missing 0
Mean 2.4200

Retierment gifts

Cumulative
Frequency Percent Valid Percent Percent
Valid Poor 6 12.0 12.0 12.0
fair 20 40.0 40.0 52.0
Good 21 42.0 42.0 94.0
Excellent 3 6.0 6.0 100.0
Total 50 100.0 100.0

Retierment gifts

Poor
fair
Good
Excellent

21.Frequencies:

Statistics

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Community center
N Valid 48
Missing 2
Mean 2.5417

Community center

Cumulative
Frequency Percent Valid Percent Percent
Valid Poor 4 8.0 8.3 8.3
fair 19 38.0 39.6 47.9
Good 20 40.0 41.7 89.6
Excellent 5 10.0 10.4 100.0
Total 48 96.0 100.0
Missing System 2 4.0
Total 50 100.0

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Community center

Poor
fair
Good
Excellent
Missing

22.Frequencies:

Statistics

Different type of leaves


N Valid 50
Missing 0
Mean 3.0800

Different type of leaves

Cumulative
Frequency Percent Valid Percent Percent
Valid fair 6 12.0 12.0 12.0
Good 34 68.0 68.0 80.0
Excellent 10 20.0 20.0 100.0
Total 50 100.0 100.0

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Different type of leaves

fair
Good
Excellent

23.Freque
ncies:

Statistics

Productivity Link Incentives


N Valid 50
Missing 0
Mean 2.6000

Productivity Link Incentives

Cumulative
Frequency Percent Valid Percent Percent
Valid Poor 5 10.0 10.0 10.0
fair 16 32.0 32.0 42.0
Good 23 46.0 46.0 88.0
Excellent 6 12.0 12.0 100.0
Total 50 100.0 100.0

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Productivity Link Incentives

Poor
fair
Good
Excellent

24.Frequencies:

Statistics
Age of the respondents
N Valid 50
Missing 0
Mean 3.1800

Age of the respondents

Cumulative
Frequency Percent Valid Percent Percent
Valid 18 to 25 1 2.0 2.0 2.0
25 to 35 7 14.0 14.0 16.0
35 to 45 24 48.0 48.0 64.0
45 and above 18 36.0 36.0 100.0
Total 50 100.0 100.0

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Age of the respondents

18 to 25
25 to 35
35 to 45
45 and above

25.Frequencies:

Statistics

Designation
N Valid 50
Missing 0
Mean 1.8000

Designation

Cumulative
Frequency Percent Valid Percent Percent
Valid Top level 10 20.0 20.0 20.0
Middle level 40 80.0 80.0 100.0
Total 50 100.0 100.0

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Designation

Top level
Middle level

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FINDINGS AND ANALYSIS

HYPOTHESIS TESTING:

Less attention on complaints and suggestions, less will the level of satisfaction.

Correlations:

Do your
suggestions
and Up to what extent are you satisfie
complaints retention programs(PLI
get attention? Welfare)?
Do your Pearson
suggeestions and Correlation
1 .515(**)
complaints get
attention?
Sig. (2-tailed) .000
N 50 49
Up to what extent Pearson .515(**) 1
are you satisfied Correlation
retention
programs(PLI &

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Welfare)?
Sig. (2-tailed) .000
N 49 49
Correlation at .01 level of significance.

This hypothesis says that P is less than .01 so analysis is true because if P is greater than level of
significance, null hypothesis cannot be rejected. So in the given case alternate hypothesis cannot
be rejected.

CONCLUSION

Aviation Industry in India is one of the fastest growing aviation industries in the world. With the
liberalization of the Indian aviation sector, aviation industry in India has undergone a rapid
transformation. In this era where people want to get more and more facilities, AIR INDIA is here
with its full carrier airline services. AIR INDIA is providing all possible services and policies for
all its customers and employees. But still the market share of this company is going down day by
day. In the first quarter of this year market share of Air India was 14.7%. On the other hand
many private airline companies who learned, how to make business in the field of aviation, from
Air India have more market share. Such as, Kingfisher and Jet airways, they come just few years
back in the market but having higher market share and market value than this company. In the
first quarter of this year, market share of Jet Airways was 22.7% which is much more than the
share of Air India.

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After carefully analyzing this company I came to know the pros and corns of it and I want to
point it out that first Air India should modify its work culture. Air India has all resources
available with it but still they are not being utilized optimally.

In terms of employees’ satisfaction, 64% respondents are satisfied, the region behind it can be
job security. But as I moved further I came to know that 66% are somewhat satisfied but not
fully. But among dissatisfied employees 16% are dissatisfied due to lack of personal touch, 20%
are dissatisfied due to working hours and no one was dissatisfied with leaves and working hours.

When I asked about attention towards complaints and suggestion 36% said frequently and 18%
said never.18% among them responded that their complaints and suggestions always get
attention and 28% said sometimes.

35% find Scholarship as a good policy, 44% find Air passage as a good policy, 47% find
Housing colonies as a good policy, Holiday homes were rated as good by 51% respondents, 42%
and 47% find Medical facility as excellent and good respectively, 375 find Group Insurance
good.

RECOMMONDATIONS

As most of the employees find Retirement gifts poor, so I want to suggest modifying it. Group
Insurance and community centre should also be communicated among employees because I find
that most of the employees are unaware with it.

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Thus what I want to suggest that Air India should market all those facilities which are being
provided by the company to its employees. In this way employees will realize what their
company is giving to them and they will feel a sense of responsibility towards it.

I don’t find as such any big problem with this company except lack of motivation. So company
should work in this direction.

One thing for policy makers that they should assign task to employees with a deadline connected
with PLI.

I want to suggest something to Commercial department related to the scheme of corporate


houses. Currently for different corporate houses we have a discount scheme that we revise on
yearly basis. Every year new agreements form with new terms and conditions and rate of
discount, depending on the bargaining power of business house and company. We treat every
customer in a same manner whether it is with us from past one year or 15 years. We should
change the way of treating different customers, especially those who have been given a huge
profit from last so many years. For this we can have something like BEST CUSTOMER OF
THE YEAR or may be of three years. To give them honor we can display something about them
in our in-flight magazine, this will be a both way beneficial decision.

Same award treatment we can do with employees to motivate them.

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LIMITATION

Every research study has certain limitations. These could be due to sample size, sampling
techniques, time available, money etc. this study has also certain limitations. The following are
worth mentioning:-

1. As the subject under study involves large population size so generalizations can’t be
made.
2. Due to time and financial constrains the study is restricted to Northern region.
3. Sometimes respondents give altogether biased answers in responding to the different
questions.
4. Lack of time
5. Lack of financial resources

Still every effort has been employed in order to reduce the impact of these limitations.

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BIBLIOGRAPHY

BOOKS:

 Kothari C.R., Research Methodology


New Age International (P) Ltd., 2005

 Malhotra N.K., Marketing Research


Prentice Hall, Pearson Education, 2007

 Kotler & Keller, Marketing Management


A South Asian Perspective, 2007

 Gupta S.P., Business Statistics


Sultan Chand & Sons, 2005

MAGAZINES:

 SWAGAT, in flight magazine of AIR INDIA.

June 2008.

 XPRESSIONS, in flight magazine of Jetlite.

May 2008

 Namaskaar, in flight magazine of AIR INDIA.

WEBSITES:

 http://www.airindia.in

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 http://www.flyingreturns.co.in
 http://www.google.com

APPENDICES

QUESTIONNAIRE

Note: I am a summer trainee under NACIL, Delhi, and this survey is the part of my study. I

will be highly grateful if you would answer the following questions. Please tick across

preferred option.

1. From how long are you with NACIL?

Less than Two years

Two to Six Years

Six to Twelve Years

More than Twelve Years

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2. Are you satisfied with welfare policies and PLI scheme of NACIL?

Yes

No

(If no then move to Q NO.3, if yes then move to Q NO.4)

3. What is the reason of dissatisfaction?

Less leaves

More working hours

Less remuneration

Lack of personal touch

4. Up to what extent are you satisfied with these programs?

Highly dissatisfied

Dissatisfied

Somewhat satisfied

Highly satisfied

5. Do your suggestions and complaints get attention?

Always

Frequently

Sometimes

Never

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6. Please, rate them according to your preference:

Policies Excellent Good Fair Poor

Scholarships

Air Passage

Housing Colonies

Holiday Homes

Medical Facilities

Group insurance
scheme

Long Service
Mementos

Financial
Assistance for
higher studies

Festival Advance

Death Benefit
society

Retirement Gifts

Community
centers

Different type of
leaves

Productivity Link
Incentives

7. Any Suggestion (s)?

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Personal Details:

Designation:

Age:

18 to 25

25 to 35

35 to 45

45 and above

THANKS FOR YOUR COOPERATION.

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