Industrial Report

on

INDIAN AIRLINES

Submitted in partial fulfillment of the requirement for

the award of

Bachelor of business administration

(BBA)

By

AJAY SHARMA

BHARATI VIDYAPEETH UNIVERSITY, SDE

ACADEMIC STUDY CENTRE; BVIMR,

NEW DELHI

2010
 STUDENT DECLARATION

I AJAY SHARMA, BBA student, BVU, SDE, Academic Study Center: BVIMR,
New Delhi hereby declare and understand that the project on Industrial Exposure
submitted by me titling “INDIAN AIRLINES” under the guidance of Miss
NEHA in partial fulfillment for the award of any diploma/degree in any university
elsewhere to the best of my knowledge and belief. Any material quoted from
others sources has been duly acknowledged at appropriate places in the text. I am
solely responsible for any duplication.

AJAY SHARMA
 ACKNOWLEDGEMENT

Project work is never the work of an individual. It is more a combination of ideas,

suggestions, contribution and work involving many jobs. One of the most
important part of writing a report is the opportunity to thank all those who have
contributed to it. The list of expression of thanks, no matter how extensive, is
always incomplete and inadequate. This acknowledgement is no exception.

I want to express my sincere gratitude towards Miss NEHA who provided me all
the expert guidance and invaluable suggestion.

I would like to thank my classmates and all those who directly or indirectly
helped me in one or the other way in the successful completion of the project.

AJAY SHARMA
 CERTIFICATE

To whom so ever it may concern

This is to certify that the project on Industrial Exposure entitled “INDIAN

AIRLINES” is an original piece of work done by “AJAY SHARMA” in the
partial fulfillment of the requirement for the award of the degree of “BBA” from
“BVU, SDE, Academic Study Centre: BVIMR, New Delhi”. To the best of my
knowledge, data and information presented by her in the project has not been
submitted earlier.

Miss NEHA

( INTERNAL GUIDE )
 CERTIFICATE
To whom so ever it may concern

This is to certify that the project on Industrial Exposure entitled “INDIAN

AIRLINES” is an original piece of work done by “AJAY SHARMA” in the
partial fulfillment of the requirement for the award of the degree of “BBA” from
“BVU, SDE, Academic Study Centre: BVIMR, New Delhi”. To the best of my
knowledge, data and information presented by her in the project has not been
submitted earlier.

Dr. SACHIN VERNEKAR

( DIRECTOR )
 INDEX

CHAPTER-1 INTRODUCTION
o Introduction to INDIAN AIRLINES
o History of Indian airlines
o Nature of Business
o Type and Ownership Pattern
o Vision
o Mission
o Board of Directors
o Registered office

CHAPTER-2 MARKET ANALYSIS

o Brand
o Products
o Product Mix
o Product Line
o Fleet Details
o Netwrok
o Competitors
o Market share
o Market Strategies
CHAPTER-3 FINANCIAL ANALYSIS
o Auditing company and auditors report
o Financial; and physical performance
o Balnce sheet
o Profit and loss statement

CHAPTER-4 ORGANIZATIONAL STRUCTURE

o Organization structure
o Organization chart
o Recruitment section
o Training
o Training section
o departments

CHAPTER-5 SWOT ANALYSIS

MY LEARNINGS FROM THE PROJECT

BIBLIOGRAPHY
 CURRENT INDUSTRIAL SCENARIO

The current growth rate in domestic and international travel exceeds 25%, the
highest in the world. In the period April-September 2006, the total aircraft
movements witnessed an increase of 29.6% year-on-year to 494.92 thousand
aircraft movements, as compared to 318.89 thousand during April-September
2005. The Indian domestic market grew at almost 50% in the first half of 2006.
On average, full service carriers are shedding a remarkable 1.5% of market share
every month to low cost carriers
 FUTURE INDUSTRIAL SCENARIO

The aviation industry is expected to grow at a compounded annual growth rate of

25% till 2010. Also, by 2010 Indian airports will be handling between 90 and 100
million passengers per year, as against the current 34 million passengers. It is
expected that nearly 80% of this growth will be driven by the low cost carrier
segment (LCC). By 2008, the LCCs would capture 65% of the direct on-line air
ticket market from 61% in 2005.

International Domestic Total

No. in Percentage No. in Percentage No. in Percentage
millions growth millions growth millions growth
1999- 13.29 2.90% 25.74 6.90% 39.04 5.5%
00
2000- 14 5.40% 28.01 8.80% 42.02 7.70%
01
2001- 13.63 (-)2.7% 26.36 (-) 5.9% 39.98 (-)4.9%
02
2002- 14.82 8.80% 28.9 9.60% 43.72 9.40%
03
2003- 16.65 12.30% 32.04 10.09% 48.69 11.40%
04
2004- 19.45 17.00% 40.1 25.00% 59.54 22.30%
05
2005- 22.36 15.10% 50.98 27.90% 73.34 23.70%
06
 CHAPTER-1

INTRODUCTION
INTRODUCTION TO INDIAN AIRLINES

Indian Airlines was founded in 1953. Today Indian Airlines, together

with its fully owned subsidiary Alliance Air, is one of the largest regional
airline systems in Asia with a fleet of 62 aircraft(4 wide bodied Airbus
A300s, 41 fly-by-wire Airbus A320s, 11 Boeing 737s, 2 Dornier D-228
aircraft and 4 ATR-42).

It has many firsts to its credit, including introduction of the wide-bodied

A300 aircraft on the domestic network, the fly-by-wire A320, Domestic
Shuttle Service, Walk-in Flights and Flexi-fares.

The airlines network spans from Kuwait in the west to Singapore in the
East and covers 75 destinations - 57 within India and 20 abroad. The
Indian Airlines international network covers Kuwait, Oman, UAE, Qatar
and Bahrain in West Asia, Thailand, Singapore, Yangon and Malaysia in
South East Asia and Pakistan, Nepal, Bangladesh, Myanmar, Sri Lanka
and Maldives in the South Asian sub-continent.

Indian Airlines is presently fully owned by the Government of India and

has total staff strength of around 18562 employees. Its annual turnover,
together with that of its subsidiary Alliance Air, is well over Rs.4000 crores
(around US$ 1 billion).

Indian Airlines flight operations centre around its four main hubs- the main
metro cities of Delhi, Mumbai, Calcutta and Chennai. Together with its
subsidiary Alliance Air, Indian Airlines carries a total of over 7.5 million
passengers annually
HISTORY OF THE COMPANY

In 1953, a new dream took shape - to air link the vast South Asian 14subcontinent
by a single, modern and efficient airline. The airline was Indian Airlines. As per
Air corporations Act 1994, the entire undertaking of Indian Airlines was
transferred to and vested in “Indian Airlines Limited”, with effect from 1.3.1994.

Indian Airlines came into being with the enactment of the Air Corporations Act
1953 and was entrusted with the responsibility of providing air transportation
within the country as well as to the neighboring countries.

This national domestic airline came into being with the amalgation of the
following eight private airlines:

1 Airways (India) Ltd.

2 Himalayan Aviation Ltd.
3 Kalinga Airways Ltd.
 4 Bharat Airways Ltd.

5 Air India Ltd.

6 Air Services of India Ltd.
7 Deccan Airways Ltd.
8 Indian National Airways Ltd.

At its birth in 1953, Indian Airlines had to absorb eight separate airlines with
varying organizational structures, operations and administrative set ups, 99
aircrafts with headquarters and maintenance basis in 6 cities and a total of 7017
men working in 8 organizations.

The task of molding these into one single organization with a common standard of
operation and administration was indeed difficult. Not only that fixing uniform
scale of pay and condition of services and at the time rationalizing the routes and
ground organization, reducing cost and improving efficiency all round were other
tasks to be performed. The job was tackled with remarkable confidence and
ability and pushed through great determination. Now it has been transformed into
a homogeneous and increasingly efficient organization. The management has
been integrated streamlined and operational standards have been progressively
raised.

The airlines began its operation on 1st August, 1953. At the time of
nationalization, Indian Airlines inherited a fleet of 99 aircraft consisting of
various types of aircraft which were gradually replaced by Viscount, F27 and
HS748. Nineteen hundred and sixty four (1964) was the beginning of the jet era in
Indian Airlines when the Caravelle aircraft was inducted into the fleet. Between
1970 and 1982 Indian Airlines started inducting first batch of wide bodied Airbus
A320 aircraft (19 aircraft) in June, 1989. Latest acquisition in IAL’s fleet, the
Airbus A319, was inducted in December, 2005.

Indian Airlines has been setting the standards for civil aviation in India since its
inception in 1953. It has many firsts to its credit, including introduction of the
wide bodied A300 aircraft on the domestic network, the fly-by-wire A320,
domestic shuttle service, walk in flights and easy fares. Its unique logo
emblazoned on the tails of all its aircraft has become synonymous with service,
efficiency and reliability.

The Airlines’ network spans from Kuwait in the west to Singapore in the West
and covers 76 destinations - 58 within India and 18 abroad. The Indian Airlines
international network covers Kuwait, Oman, UAE, Qatar and Bahrain in West
Asia; Thailand, Singapore, Malaysia and Mayanmar in South East Asia and
Pakistan, Afghanistan, Nepal, Bangladesh, Sri Lanka
and Maldives in the South Asia sub-continent.
Indian Airlines is presently fully owned by the Government of India and has total
staff strength of around 19300 employees including that of Alliance Air. Its
annual turnover, together with that of its subsidiary Alliance Air, is well over
Rs.6000 crores (around US$ 1.4 billion).
Indian Airlines flight operations centre on its four main hubs the main metro cities
of Delhi, Mumbai, Calcutta and Chennai. Together with its subsidiary Alliance,
Air Indian Airlines carrier a total of over 7.5 million passengers annually.
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 indicated movement while the second emphasized on
reliability.
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 his replica of
the sun now symbolizes Indian Airlines.It depicts that the “sun” may set but it
will rise

By 1990, Airbus A320s were introduced. The economic liberalisation process

initiated by the Government of India in the early 1990s ended Indian Airlines'
dominance of India's domestic air transport industry. Indian Airlines faced tough
competition from Jet Airways, Air Sahara (now Jet Lite), East-West Airlines and
ModiLuft. As of 2005, Indian Airlines was the second largest airline in India after
Jet Airways while Air Sahara controlled 17% of the Indian aviation industry.

East-West Airlines and ModiLuft discontinued flight operations but the entry of
several low-cost airlines in India, such as Air Deccan, SpiceJet and others like
Kingfisher Airlines continue to give competition in its market, forcing Indian to
cut down air-fares. However, as of 2006, Indian Airlines was still a profit making
airline.

Indian Airlines Limited is wholly owned by the Government of India through a

holding company and has 19,300 employees as of March 2007.[4] Its annual turn-
over, together with that of its subsidiary Alliance Air, is well over Rs.4000 crores
(around US$ 1 billion). Together with its subsidiary, Alliance Air, Indian Airlines
carries a total of over 7.5 million passengers annually.[

On 22 February 2007, the Group of Ministers (GoM) approved the merger of

state-owned carriers, Air India and Indian Airlines.[5] Operating under the name
Air India, the two airlines formally became one entity on 15 July 2007 upon
receiving the new Boeing 777-200LR with the new livery of the merged airline.
The new airline's headquarters will remain in Mumbai, and will have a fleet of
over 130 aircraft. In December 2007, Air India was invited to join the Star
Alliance. Since Indian Airlines is in the midst of merging with Air India, it too
will effectively be a member

1.4 Nature of the business

INDIAN AIRLINES comes under Tertiary sector of the economy.

1.5 MISSION

To become a world-class Airline & to provide the finest services in the areas we
operate.

OBJECTIVES OF INDIAN AIRLINES

With the socio-economic aspect in consideration, the main objective of Indian

Airlines is to operate on commercial basis and earn profits. Policies are made and
decisions are taken keeping in view of these objectives.

1 To meet the demand for reliable, economic and efficient air transport services
to customer and passengers.

2 To maintain essential and strategic communications within India in times of

national emergencies and also a reliable second line of defense.

3 To maximize customer satisfaction by continuously improving passenger-

cargo service and other amenities.

4 To enhance the corporation’s contribution to the national economy by

securing a reasonable return on capital consistent with its social objectives.

5 To stimulate domestic tourism and international trade by air in order to

develop and broaden the Indian Airlines market.
6 To foster international tourism to India and improve the national balance of
payments.

7 To share in the promotion of the social, cultural and emotional integration of

India and to participate in the process of redressing regional economical
imbalances.

8 To encourage self impression and participation in the activities of the

corporation by all the employees and to encourage their legitimate aspirations
for growth and self development

9 To participate in the development of national aircraft and ancillary industry.

10 To promote the good image of public sector in consonance with national

aspirations.
 CHAPTER-2

MARKET ANALYSIS

2.1 BRAND
Brand is the heart and soul of an organization. It centers on uniqueness and
dramatic difference.

A brand is more than just a logo or a name, it is a complex and dynamic set of
consumer beliefs entrenched in consumers' hearts and minds. Building a strong
brand requires understanding consumer needs and developing a point of
difference that is meaningful and sustainable in generating customer loyalty.

A strong brand can take a lifetime to build. It can take moments to destroy. But
properly executed, it helps build trust and a preference for a specific company. A
customer who trusts and likes a certain brand is more likely to buy additional
products or services based on loyalty alone.

Explaining the significance of the wheel in the new logo, Praful Patel (Patel),
Minister for Civil Aviation, Government of India (GoI) said, "The wheel
symbolises timeless motion and trust that has stood the test of time."5

On December 7, 2005, a brand new A-319 aircraft adorned with a new 'Indian'
look joined the Indian Airlines Limited's (IA) fleet in New Delhi. IA, the state-
owned airline company in India became 'Indian' on December 7, 2005.3

The new brand name was accompanied by a new logo, a partly visible blue wheel
on an orange background (Refer Exhibit I and II for old and new logos of IA).
The blue wheel of the logo was a graphic representation of the wheel of the Sun
Temple at Konark4 which represented "timeless motion, convergence and
divergence." Commenting on the new IA logo, Ajit Shah, executive director at R
K Swamy BBDO, the advertising agency which created the new logo, said, "It
signifies motion and represents the Indian image perfectly."6

The 'new look' aircraft was one of the four A-319 aircraft that the company had
leased from Airbus Industrie (Airbus) during 2005. IA was to acquire another 43
new aircraft from Airbus, as per a deal struck in 2005.

Said Patel, "The new aircraft signals a new era for Indian Airlines and the airlines
would induct one new plane every month from the latter half of 2006."7

The makeover of the existing aircraft and the arrival of new fleet of aircraft were
expected to be completed over a period of 16-18 months beginning from 2006.
The re-branding was to be comprehensive - covering features in-flight and on the
ground too.

The aircraft seats, crew uniforms, crockery as well as customer contact points
would bear evidence of the new brand 'Indian' and its new logo. Until the
liberalization of the airline industry in the early 1990s, IA enjoyed a monopoly in
India's domestic air transport. After liberalization, many private air carriers
entered the Indian domestic airline industry and began gaining more and more
market share. IA's bureaucratic management style caused it additional problems.
The airline began making losses in 1989-90, but recovered to post profits from
1997-98. However, in 2000-01, IA again slipped into the red.8 By the early 2000s,
there was new competition in the form of low cost carriers.

By this time, IA was just one of the players in the industry. Battered by the
competition from low cost carriers, full service airline companies like IA started
looking for new ways to attract passengers. During the early 2000s, IA undertook
various measures to enhance its position in the industry. For instance, IA
embarked on an ambitious fleet replacement program to replace its aging fleet.

To improve the quality of the services being offered, the company conducted
training programs for its cabin crew, upgraded the quality of food being offered
on board, etc. When faced with competition from low cost carriers, IA reacted by
cutting its fares and offering a variety of promotional schemes.

IA became profitable in 2003-04 after posting losses for three years. The re-
branding exercise of IA was another move to counter the competition. According
to analysts and industry observers, re-branding alone will not help IA beat the
competition. Opined R Krishnan, an aviation analyst, "The new name and brand
looks expressive, the colour looks impressive.

Overall, the makeover is good. Still, it is only cosmetic. Inside-the-flight and on-
ground service levels, punctuality, stability of schedules should improve
significantly."9 In the words of Kapil Kaul (Kaul), CEO, Center for Asia Pacific
Aviation (CAPA),10 Indian Subcontinent and Middle East, "The airline needs to
restructure itself to face competition...
2.2 SERVICE MIX

Product mix is a combination of products manufactured or traded by the same

business house to reinforce their presence in the market, increase market share
and increase the turnover for more profitability. Normally the product mix is
within the synergy of other products for a medium size organization. However
large groups of Industries may have diversified products within core competency.

To explain, Bajaj Electrical a household name in India, has almost ninety products
in i8ts portfolio ranging from low value items like bulbs to high priced consumer
durables like mixers and luminaries and lighting projects. This product mix
contains product lines and product items .In other words it’s a composite of
products offered for sale by a firm.

One of the realities of business is that most firms deal with multi-products .This
helps a firm diffuse its risk across different product groups. Also it enables the
firm to appeal to a much larger group of customers or to different needs of the
same customer group .Tata Indicom product mix includes mobile phones, internet
and broadband, landline phones and wireless phones . It seeks to satisfy the needs
of individuals, students, business man, business houses and also households.

PRODUCTS
The noun product is defined as a "thing produced by labor or effort" or the
"result of an act or a process", and stems from the verb produce from the Latin
prōdūce (re), (to) lead or bring forth. Since 1575, the word "product" has referred
to anything produced. Since 1695, the word has referred to "thing or things
produced". The economic or commercial meaning of product was first used by
political economist Adam Smith.

In marketing, a product is anything that can be offered to a market that might

satisfy a want or need. In retailing, products are called merchandise. In
manufacturing, products are purchased as raw materials and sold as finished
goods. Commodities are usually raw materials such as metals and agricultural
products, but a commodity can also be anything widely available in the open
market. In project management, products are the formal definition of the project
deliverables that make up or contribute to delivering the objectives of the project.

In general usage, product may refer to a single item or unit, a group of equivalent
products, a grouping of goods or services, or an industrial classification for the
goods or services.
2.3SERVICES OFFERED BY INDIAN
AIRLINES LIMITED
Indian Airlines provide services in different areas to become an excellent airline.
In recent years, customers have enhanced expectations from the service provider
by virtue of being exposed to world-class services and products of competitors.
Eventually, Indian airlines services upgrade and the following is the brief of some
of its imported as regulated by the regulations of DGCA such as.

(i) RESERVATION

IA’s computerized reservation system at Delhi; a state of the art mainframe is

accessible to all major computerized reservation system of the world. There are
also 1600 approved travel agents all over India at the service of passengers.

Passengers can also make reservation over telephone on time limit basis and
purchase the ticket before the expiry of indicated time limit.

Special assistance is offered to passengers who require special handling over and
above normal attention like the disabled, those on wheel chair, stretcher or
unoccupied minors.

(ii) FARES

IA’s domestic fares are quoted in Indian Rupees as well as US dollars (USD).

Besides, there are some special fares and discounts for senior citizens, students,
the armed forces personnel, war disabled personnel and many others.

Details of all concessions and the special fares are available at IA’s booking
offices and Travel agents.

(iii) CANCELLATION CHARGES

To allow flexibility to passengers in their travel plan, they do not levy any
cancellation charge provided the cancellation is effected at least one hour before
the scheduled departure.
Rebooking and refund charges may be applicable on a few specified routes during
peak season to avoid fictitious booking and help availability of seats to bonafide
passengers.

(iv) RECONFORMATION PROCEDURE

Passengers are advised to reconfirm their return or onward reservation if they

break their journey for more than 72 hours at any of the stations on their itinerary.

(v) CHECK-IN-PROCEDURE

At all major metros, IA offers computerized check-in facilities for domestic

flights, the following facilities are available.

(vi) TELE CHECK-IN

Executive class passengers and members of ‘flying return’ are offered the facility
of tele check-in at six major metros provided they travel without checked
baggage.

City Check-in, Return Check-in and Through Check-in are certain other check in
facilities provided by the company.

Along with the above services, certain other major services provided by the
company are:

1 Passenger Service
2 Baggage Allowance
3 Cabin Baggage
4 Security Regulation Service
5 In-flight Services
6 Liability for the loss of baggage
7 In case of delayed flights

The above services and commitment will be honored without the citizen having to
pay any bribe. Vigilence cell takes care of that
2.4 PRODUCT LINE

A product line is "a group of products that are closely related, either because they
function in a similar manner, are sold to the same customer groups, are marketed
through the same types of outlets, or fall within given price ranges."

Many businesses offer a range of product lines which may be unique to a single
organization or may be common across the business's industry. In 2002 the US
Census compiled revenue figures for the finance and insurance industry by
various product lines such as "accident, health and medical insurance premiums"
and "income from secured consumer loans". Within the insurance industry,
product lines are indicated by the type of risk coverage, such as auto insurance,
commercial insurance and life insurance.
Fleet Details
The total aircraft on order are 111 (68 from Boeing and 43 from Airbus)

"Aircraft on order include eight B777-200LRs, fifteen B777-300ERs, twenty

seven B787 Dreamliners, eighteen B737-800s, nineteen A319s, twenty A321s and
four A320s. Of the 111 aircraft ordered, twenty three Boeing (five B777-200LRs,
five B777-300ERs, thirteen B737- 800s) and nineteen Airbus (ten A321s and nine
A319s) have been in the fleet so far. "

Aircraft Type Owned Leased Total

B777 10 4 14
B747 3 3 6
A310 0 9 9
A319 9 5 14
A321 10 0 10
A320 30 18 48
A330 0 2 2
B737-800 13 7 20
ATR 0 7 7
CRJ 700 0 3 3
B737-800 5 0 5
B737 Freighters 6 0 6
A310 Freighters 4 0 4
TOTAL 90 58 148
Including five B777-300ERs

THE NETWORK

Table of National Network

EAST WEST NORTH SOUTH

Kolkatta Mumbai Delhi Chennai

Bhuvaneshwar Ahmedabad Jaipur Bangalore
Bagdogra Goa Khajuraho Hyderabad
Guwahati Pune Jammu Calicut
Patna Nagpur Leh Trivandrum
Ranchi Aurangabad Agra Coimbatore
Aizwal Mangalore Varanasi Trichi
 Dibrugarh Vadodara Udaipur Madurai
Jorhat Bhavnagar Jaisalmer Vizag
Dimapur Rajkot Srinagar Tirupati
Portblair Indore Bhopal Agati
Tezpur Jam nagar Gwalior Puttaparthy
Imphal Bhuj Lucknow
Agartala Shimla
Silchar Kullu
Amritsar
Chandighar
Raipur
Jabalpur
Dharamshala
Dehradun

Table of International Network

SOUTH ASIA WEST ASIA SOUTH EAST ASIA

Kathmandu Sharjah Singapore

Dhaka Bahrain Bangkok
Karachi Muscat Kuala Lumpur
Colombo Kuwait Yangon
Male Doha
Rasal Khaimah
Fujairah
Dubai
• Operations to West Asia and South East Asia region cover bulk

of the markets, major regional hubs.

• Own sales/ticketing outlets at all stations, airports, distribution

 reach through nine GSAs.

• Own IBM reservations and check in host, support about 2000

terminals.

• Exclusive airport terminals at Delhi and Mumbai.

• Wide network size.

• Strong schedule, appropriate aircraft, high frequency, well

timed, direct and non-stop flights.

ROUTE MAP
Competitors

1 JET AIRWAYS

Jet Airways, which commenced operations on May 5, 1993 has, within a short
span of 14 years, established its position as a market leader. The airline has had
the distinction of being repeatedly adjudged India's 'Best Domestic Airline' and
has won several national and international awards.
Under the guidance of its Chairman, Mr. Naresh Goyal, Jet Airways won the
‘Best Domestic Airline’ award for the fourth consecutive year and the fifth time
in the past six years at the 18th annual TTG Travel Awards 2007. Jet Airways has
also been voted the Best Airline in Central/South Asia and India in an annual
Global Traveler magazine survey in January 2008.
Emerging as a world-class international airline, Jet Airways offers economical
air fares, a high quality of service and reliable and comfortable operations. From
smart and proficient crew to in-flight convenience, the airline offers many other
services including in-flight meals and in-flight entertainment, several check-in
options, such as Tele Check-in, Web Check-in, Kiosk Check-in at select domestic
airports and many other customer friendly facilities and services. Operating three
classes of service - First Class, Première and Economy, Jet Airways has a wide
cross section of partnership and alliances, and members of its award-winning
frequent flyer program, JetPrivilege, can enjoy special benefits and earn JPMiles
with carefully chosen program partners such as some of the leading International
airlines, hotels, banks, lifestyle, retail, telecommunication, car rental and
publishing partners.

2 SAHARA AIRWAYS

Air Sahara, presently known as Jet Lite is a privately owned airline based in
Delhi. Air Sahara or Jet Lite operates scheduled services connecting all the
major metropolitan cities and other key destinations of India. Air Sahara offers
international standards of in-flight services to provide you with a comfortable
journey.
Air sahara was previously the part of the huge Sahara India Group headed by Mr
Subroto Roy. It commenced its journey on 3 December 1993 with two Boeing
aircrafts 737-200 with Delhi and Mumbai as its major hub. Air Sahara has now
been acquired by Jet Airways and has been renamed as JetLite.

It is a privately owned airline operating scheduled services connecting all

metropolitan centres in India. The airline also provides helicopters which are
available for charter services and aerial photography. Its main base is Indira
Gandhi International Airport, New Delhi, with hubs at Begumpet Airport,
Hyderabad, Chatrapati Shivaji International Airport, Mumbai, Chennai
International Airport, Chennai and Netaji Subhash Chandra Bose International
Airport, Kolkata. The uncertainty over the airline's fare has caused its share of the
domestic Indian air transport market, from approximately 11% in January 2006 to
a reported 8.5% in April.

Sahara Airlines is part of the multi-crore Sahara India Pariwar. Air Sahara
connects to 24 domestic and 4 international destinations with 134 daily direct
flights and offer 13900 seats per day.

3 KINGFISHER AIRWAYS

Based in Bangalore, Kingfisher Airline is a private airline owned by Dr. Vijay

Mallya. It started its operations on May 9, 2005 with a fleet of 4 leased Airbus A-
320 aircrafts. Presently it covers destinations like Agartala, Ahmedabad,
Bangalore, Bhubaneswar, Chennai, Coimbatore, Delhi, Dibrugarh, Guwahati,
Goa, Hyderabad, Jaipur, Jammu, Kochi, Kolkata, Mangalore Mumbai Nagpur,
Pune, Srinagar , Udaipur, Varanasi, Vijayawada and Visakhapatnam

It offers several specialized services to its customers like personal valet at the
airport to assist in baggage handling and boarding, exclusive lounges with private
space, audio and video on-demand, extra-wide personalized screens in the aircraft
and three-course gourmet cuisine.

Currently operating aircraft like Airbus A320, Airbus A319-100 and ATR-72,
Kingfisher was the first airline in India to operate with all-new aircrafts.
Kingfisher Airlines has notched up several firsts to its credit like being the first
Indian airline to order the new Airbus A380.

In June 2005, it hit the headlines by placing an order for 5 A380s, 5 A350-800
aircraft and 5 Airbus A330-200 aircraft in a deal valued at over $3 billion.

At the Dubai Air Show in November 2005, Kingfisher Airlines placed an order
for 20 ATR 72-500s in a deal estimated to be worth $500 million alongwith an
order to acquire 30 more A320s in a deal estimated to be worth $2 billion.

The Airbus A380-the largest passenger liner in the world visited India as part of
Kingfisher Airlines' Second Anniversary celebrations from May 7, 2007 to May
10, 2007. Kingfisher has set high standards in terms of product and service
offering and has been constantly innovating.
Its vision is to constantly deliver a safe, value-based and enjoyable travel
experience to all its customers. It has placed a strong emphasis on safety.

2.7 MARKET SHARE

According to the figures on market share of various scheduled airlines

in the same year, Jet Airways topped the list with 46.7 % in 2003-04,
followed by Indian Airlines (IA) and its subsidiary Alliance Air together
at 39.3%, Air Sahara at 13% and Air Deccan 1 %
MARKETING STRATEGIES

Over the years, Indian Airlines has been proactive in the introduction of
various marketing initiatives to provide improved
services to the passengers and thereby retain competitiveness in the
market. The initiatives seek to stimulate the
market by creating new market segments and to provide value-enhanced
services to our passengers.
In line with its status as the national carrier of the country, IAL offers
various discounts on domestic fares on a permanent
basis. Such concessions are extended to the Armed forces personnel,
War Disabled persons/War Widows, Para military
forces, Recipients of Gallantry awards-Civilians, Students, Senior Citizens,
Cancer Patients, Blind Persons, etc. Similar
concessions are also extended to Sports persons participating in national
sports events and to Arjuna awardees.
There are various other promotional fares and schemes available to the
public at large. Some of the efforts, taken in
this direction during the year which were aimed at offering an enhanced
product value to passengers as well as
increasing awareness about our brand in the market, are listed hereunder:

1 Corporate help desks have been set up at the metros to facilitate

corporate clients.

2 A Bumper Super Saver Scheme was introduced during the year offering
16 coupons for Rs 65,000/- in Economy Class and Rs 100,000/- in
Executive Class.

• The Smart Super Saver Scheme was introduced to offer multiple coupon
tickets for a fixed price for those who aim to travel extensively in a short
period of time

• The Super Saver International Scheme was introduced which offered

multiple coupons at a fixed price to foreign nationals and non-resident
Indians.

• The Joint Frequent Flier programme of IAL and Air India called 'Flying
Returns' was further strengthened by launching a dedicated micro-site
www.flyingreturns.co.in. The programme has been further extended to Sri
Lanka, Bangladesh and Nepal during the year.

• IAL offers single window holiday packages under the name of 'IA
Flyaways'. These Holiday Packages were further strengthened during the
year and now are 30 in number covering more than 80 destinations
spanning 8 other countries apart from India giving a choice of more than
200 hotels.

• The Advance Purchase Excursion Fares (APEX) schemes continued

during the year and were available for sale within India at INR fare level as
well as world-wide on USD fare level. Apart from the already existing D-7,
D-21 fares, new Apex Fares under D-28 and D-45 were also launched
during the year.

• Effective 1st April 2004 Positioning Flight Fares were introduced on

certain select sectors, which have brought down the fares on these
sectors to the level of almost AC Chair Car levels. These fares were
available on 24 sectors of the domestic leg of international flights.

• lA's special promotional fares under the name of Fly Select Fares were
launched w.e.f 15th September 2004. These were lower than the normal
published fares and were available at two levels for limited seats on first
come first served basis.

• Effective 5th July, 2005, Indian Airlines has introduced lower fares called
'Easy Fares' on specified domestic sectors for travel in economy class.
These fares are lower than the normal published fares and are available
on a maximum of four levels on rupee fare. The levels vary between 1 and
4. With the introduction of 'Easy Fares", the APEX Fares, Positioning
Flight Fares and Flight Select Fares have been withdrawn.

• Bookings through IDBI Bank ATMs introduced w.e.f. 27,th October,

2005.

• The Pay Smart Scheme launched in collaboration with ICICI Bank offers
ICICI Credit Card holders to pay for their travel in 10 monthly installments.
This facility is currently available only at the six IA Major Metros and is
effective till March 2006.

• Various Co-Branded Cards of IA also continued during the year viz. lA-
Amex Gold Card, lA-Amex Green Card, IA - Amex credit card, IA-ABN
Amro Debit Card.
• The Bid and Fly Scheme as well as the Website and on-line booking of
tickets also continued during the year offering tickets at attractive prices as
well as making available various interactive features .

• The Net Ticket facility launched during the year enables passengers to
log on to the IA Website and reserve, buy and print ticket image.

• The IA Access facility launched during the year is an information service

for passengers where they can send an'SMS' to the number "67671407"
and get arrival and departure information of any flight of the same day,
previous day or next day.

• The J Smart Scheme launched during the year is a short term

promotional scheme which offers a passenger paying full fare on business
class, a ticket for a companion at 50% discount on the full business class
fare.

.
• The IA Family Ticket Scheme launched effective 1st Nov'04 offers a
maximum of two children under the age of 12 years of age to travel free
with two full fare paying adult passengers.

• Indian Airlines Call Centre is now accessible from anywhere in the

country on a Single Toll Free Number 1800-180-1407 from any landline
or Mobile of MTNL/BSNL. The user of landline or Mobiles other than
MTNL/BSNL atBangalore, Chennai, Delhi, Hyderabad, Kolkata and
Mumbai can access IA Call Centre on 1407. Similarly, passengers using
any landline or Mobile other than MTNL/BSNL from places other than six
cities mentioned above, , can access 1407 with prefixing the STD code of
any of the six cities mentioned above.

,
• To keep pace with the changing aviation scenario in the market place
and with a view to offer value added services to our esteemed
passengers, a new facility called 'Dial - a - Ticket' (DAT) has been
introduced from 21st October2005 through IA Call Centre. Using this
facility a passenger can call any time, from any part of India, and make a
reservation on real time basis and pay for the same through credit card
and receive the equivalent of ticket termed
as "Itinerary Receipt" (ITR).
 CHAPTER-3

FINANCIAL ANALYSIS
 (Rs
Balance sheet crore)
Mar ' 06 Mar ' 05 Mar ' 04 Mar ' 01 Mar '
Sources of funds
Owner's fund
Equity share capital 107.14 107.14 107.14 105.19 105
Share application money - - - -
Preference share capital - - - -
Reserves & surplus -440.80 -440.80 -506.19 -118.44 37
Loan funds
Secured loans 313.43 313.43 406.89 91.28 51
Unsecured loans 118.56 118.56 283.90 1,336.53 1,627
Total 98.33 98.33 291.74 1,414.57 1,821
Uses of funds
Fixed assets
Gross block 5,497.00 5,497.00 5,458.74 5,484.50 5,369
Less : revaluation reserve - - - -
Less : accumulated depreciation 3,931.82 3,931.82 3,665.83 2,933.60 2,660
Net block 1,565.18 1,565.18 1,792.91 2,550.89 2,709
Capital work-in-progress 12.62 12.62 3.69 5.35 13
Investments 112.40 112.40 66.35 2.36 2
Net current assets
Current assets, loans & advances 1,276.64 1,276.64 1,149.30 1,091.57 1,005
Less : current liabilities & provisions 2,868.51 2,868.51 2,720.51 2,235.61 1,909
Total net current assets -1,591.87 -1,591.87 -1,571.21 -1,144.04 -903
Miscellaneous expenses not written - - - -
Total 98.33 98.33 291.74 1,414.57 1,821
Notes:
Book value of unquoted investments - - - 2.25 2
Market value of quoted investments - - - 1.32
Contingent liabilities - - - 65.83 33
Number of equity sharesoutstanding (Lacs) - - - 1051.94 1051
 CHAPTER-4

ORGANIZATIONAL
STRUCTURE
4.1 ORGANIZATIONAL STRUCTURE

The form of an organization that is evident in the way divisions, departments,

functions, and people link together and interact. Organization structure reveals
vertical operational responsibilities, and horizontal linkages, and may be
represented by an organization chart. The complexity of an organization's
structure is often proportional to its size and its geographic dispersal. The
traditional organization structure for many businesses in the 20th century was the
bureaucracy, originally defined by Max Weber. More recent forms include the
flat, network, matrix, and virtual organizations. These forms became more
prevalent during the last decades of the 20th century as a result of the trend
toward restructuring and downsizing and developments in telecommunications
technology. According to Harold J. Leavitt, organization structure is inextricably
linked to the technology and people who perform the tasks. Charles Handy has
shown that it is also directly linked to corporate culture.
 ORGANISATION CHART

Chairman
&
Managing Director

Dy. Managing Director

Dy.Managing Director

Director Director Director Direct Director Director

Director Director Director Director Director GM GM Director Planning Flt. Corpt
JEOC Ground or
Systems Cargo Training HRD (IT) (Med) (Civil) Egg. & Safety Affairs
Support Oprns.
Projects

Director
Regional Director Director Director Director Director Director Chief Vig.
Pers.&
Directors Inflt. Sves. Finance Audit PR Comml. Security Officer
IR
RECRUITMENT SECTION

In Indian airlines, recruitment is mainly done for three categories-

 Flying crew
 Technicians
 Non technical

Here the recruitment is done in three ways

o Direct recruitment
o Promotional recruitment
o Deputation

Direct recruitment

In this the person is supposed to go through the actual procedure of

recruitment and selection according to the different eligibility criteria.
Entrance tests, group discussions and interviews are the methods of
selection in IAL.

Promotional recruitment

In this, the already employed employee is promoted on the basis of

appraisal, service, conduct etc.
The employee is given proper training to perform the new job in the
best way.

Deputation

It is a process of hiring an employee for specific purpose. The

employee can be hired from some other department or branch for a
certain time period according to the requirement.
In such cases, the employee is paid for his original post and apart from
this he is given certain deputation allowance. Once the requirement is
fulfilled, the employee reports back to his original department or
branch.
3% reservation is made for handicaps. Three categories of handicaps
have been identified which are
--Visually impaired
--Hearing problem
--Orthopedic problem

The selection board constitutes of three officers which are the General
Manager (Personnel), nominee of the concerned department and a
SC/ST/OBC officer.

GM (personnel) and departmental officer are the competent authority

for grade ½ and the selection of the employees of this cadre are done
through interviews only.

Employees, who have applied through sports quota, are exempted for
any written tests and group discussions
TRAINING:

Training is generally defined as “Change in behavior”.

According to Edwin B.Flippo, training is the act of increasing the

knowledge and skills of an employee for doing a particular job.
Training refers to the methods used to give new or present employees
the skills they need to perform their jobs. Training is a hallmark of
good management, and a task manager ignore at their peril. Having
high-potential employees doesn’t guarantee they will succeed.
Instead, they must know what you want them to do and how you want
them to do it. If they don’t, they will do the jobs their way, not yours
and do nothing productive at all. Good training is vital.

Employee training is the most important sub-system of human

resources development. Training is a specialized function and is one
of the fundamental operative functions for human resource
management.
Training is an act of increasing knowledge, skill, behaviour and
attitude. It bridges the differences between job requirements and
employee’s present specifications. Organizational objectives like
viability, stability and growth can also be achieved through training.
Training enhances 4Cs viz. competence, commitment, creativity and
contribution for the organization.

GENERAL BENEFITS FROM EMPLOYEE

TRAINING AND DEVELOPMENT

1. Increased job satisfaction and morale among employees.

2. Increased employee motivation.
3. Increased efficiencies in processes, resulting in financial gain.
4. Increased capacity to adopt new technologies and methods.
5. Increased innovation in strategies and products.
6. Reduced employee turnover.
7. Enhanced company image.
8. Risk management, e.g., training about sexual harassment, diversity
 training.
9. Increase in profitability.
10. Improve health and safety.
11. Improves labour-management relationship.

Need for training:

Training needs are identified on the basis of organizational analysis,

job analysis and manpower analysis. Training needs are those aspects
necessary to perform the job in an organization in which employee is
lacking attitude, aptitude, knowledge and skill.

Specifically the need for training arises with to following objectives:

1 To match employee specifications with the job requirements
and organizational needs.
2 Organizational viability and transformation process
3 Technological advancement
4 Organizational complexity
5 Human relations

Training needs can be assessed by using the following tools:

1. Meet with the management:

Since most supervisors are involved with the planning of projects and
the future of the company, they know what will be needed. They
should be able to communicate where their employee’s current
abilities lie and what is needed to get them to the next level for new
project on the horizon.

2. Meet with the employees:

Discussion can be done with the employees regarding what struggles

they may be facing from day-to-day and what would make their job
easier and more efficient. Care should be taken to keep them focused
on what they need rather than what they want.
3. Conduct surveys:

Surveys are beneficial because many people can be polled in a short

period of time. Additionally, surveys provide employees with the
opportunity to confess a need on paper that they may be too
embarrassed to admit needing in a face-to-face meeting.Surveys can
be performed in the form of a questionnaire and can include close-
ended or open-ended questions, or a series of both. Close-ended
questions require the respondent stay within certain perimeters, so the
answers are limited, tabulating the data is simple. Open-ended
questions allow an employee to provide more feedback and introduce
new ideas that may not have been considered initially.

4. Conduct focus group:

Focus groups allow for small group interaction, allowing the assessor
to uncover details about their target audience. Brainstorming is
encouraged allowing for an exchange of new ideas and a revelation of
what training may be needed.

5. Review company goals and mission statement:

A brief review of the company’s past and where they are headed for
the future may reveal valuable information for training. A comparison
should be made of what employees are currently doing and what will
be expected of them as the company continues to grow and change.
METHODS OF TRAINING:
The various methods of training may be classified into the following
categories:

(i) On-the-job training.

(ii) Off-the-job training.
(iii) Vestibule training.

On-the-job training:

On-the-job training is considered to be the most effective method of

training. Under this method, the worker is given training at the work
place by his immediate supervisor. The worker learns in the actual
work environment. It is based on the principle of ‘learning by doing’.
This method is suitable for imparting skills that can be learned in a
relatively short period of time. It has the chief advantage of strongly
motivating the trainee to learn. On-the-job training methods are
relatively cheaper and less time consuming.
There are four methods of on-the-job training described below:

(i)Coaching

The trainee is placed under a particular supervisor who functions as a

coach in training the individual. The supervisor provides feedback and
offers suggestions for improvement.

(ii)Position rotation

This type of training involves movement of the trainee from one job to
another. The trainee receives job knowledge and gains experience
from his trainer in each of the different job assignments.
(iii)Job instruction

The trainer explains to the trainee the way of doing the jobs, job
knowledge and allows him to do the job. The trainer appraises the
performance and corrects the trainee.

(iv)Committee assignments

A group of trainees are given and asked to solve an actual

organizational problem. It develops team work.

Off-the-job training:

It requires the worker to undergo training for specific periods away

from the work-place. Off-the-training methods are concerned with
both knowledge and skills in doing certain jobs.
There are several off-the-job methods of training described below:

(i)Special lecture cum discussion.

It is also known as ‘class room training’. It is associated with

imparting knowledge. The special lecture may be delivered by some
executives of the organization from vocational and professional
institutes. Many firms also follow the practice of inviting experts for
special lectures for the staff. The lecturer communicates his thoughts
in such a manner as to interest the class and cause the trainees to
retain what he has aid. This method can be used for providing
instruction to large groups. Thus, the cost per trainee is low.

(ii) Conference training

In this method the members tries to develop knowledge and

understanding by oral participation. It is conducted in a big hall where
the participants are allowed to exchange their views and raise queries.
The proceedings of the conference are conducted by the chairman
who is also responsible for summing up the proceedings of the
conference.
(iii) Case study

Under this method, the trainees are given a case which is more or less
related to the concepts and principles already taught. They analyse the
problem and suggest solutions .This method gives the trainee an
opportunity to apply his knowledge to the problem.

(iv) Programmed instruction

The subject matter to be learned is presented in a series of carefully

planned sequential units. These units are arranged from simple to
more complex levels of instruction.

Vestibule training:

The term ‘vestibule training’ is used to designate training in a class-

room for semi-skilled jobs. It is most suitable where a large number of
employees must be trained at the same time for same kind of work.
Here the emphasis tends to be on learning rather than production. In
this method an attempt is made to duplicate, as nearly as possible, the
actual material, equipment and conditions found in the real workplace.
TRAINING SECTION

Training section coordinates with various departments and outside

faculty for organizing the programs. Training and development
programs were initiated almost 30 years ago with the establishment of
management training centre at corporate level and regional training
centers at regional level.
Training programs are basically for job knowledge, induction of
company information, personal growth and supervisory management
and development.

IAL carries out the training programs on the basis of following

policies:

1. Needs are identified at various levels in the organization and

organize programs to meet these needs.

2. Nomination to be made on the basis of individual need for personal

growth and career progression in the company and requirement of the
job.

3. Training to be a continuous activity.

4. New entrants to be included through special orientation program.

5. Participants on return from training are expected to share learning

with colleagues.

6. Development of team works and inter department relations.

7. To develop more people from within as faculty resource in training

effort.

8. Communication of plants and policies of the company at different

levels
DEPARTMENTS IN INDIAN AIRLINES
Indian Airlines has a well defined classification of the services on the
establishment. The services are classified in accordance with their functional
groups into departments. Each department is further classified into cadres based
on the sub-functional groups. This classification of the establishment strength
achieves the professed objectives of the Air Corporation Act of 1953, namely
‘efficiency and safety in operations’. The classification defines the objectives and
functions of the personnel on the establishment strength and achieves a well
defined structure of focused responsibility contributing significantly to the
achievements of the organization. The departments on the establishment are:

1. Flying operation
2. Ground operation
3. Central Training Establishment
4. Voice communication cell
5. Engineering
6. Engineering Facilities And Plant Maintenance
7. Engineering (Non Tech.)
8. Civil Work
9. Ground Support
10. Surface Training
11. Commercial
12. Catering
13. Public Relation
14. Finance
15. Internal Audit
16. Electrical data processing
17. Medical
18. Personnel
19. Vigilance/ security
20. Planning
21. Canteen
22. Flight safety
23. Store & Purchases
 A brief description of few departments, which were visited, is
as follows:

--Internal audit
--Medical
--Finance
--Public relations
--Avionics Complex A-320

INTERNAL AUDIT DEPARTMENT

Traditionally Internal Audit was confined to the verification of accounting data

and to determine the accuracy and reliability of accounting statement and report.
With the increasing size of business having diversified range of product spread
over the vast geographical areas, because of economic competition with the fast
pace of globalization and government regulation, the role of Internal Audit had to
change in order to provide continuous support to management in identifying areas
for improvements & to review the system to ensure adequacy of internal controls,
greater transparency & to better corporate governance

Today, the role of Internal Audit in emerging as business consultants where in it

has to perform multifunctional audit which meets the requirements of the
organization not only for various compliances but also to provide value added
suggestion for the overall improvement.
Internal audit in IAL has also been changing its role to meet the need of the
company & emerging as an aid to input to make the business more efficient &
effective by adopting the best business practices. A minimum audit program is
drawn in advance & is carried out keeping in mind the convenience & availability
of staff of the audit. Audits are performed by the audit committee, statuary
auditors & government auditors.
MEDICAL DEPARTMENT
All employees of IAL are eligible to get treated free of cost at hospitals and
medical centers which have a tie-up with IAL. Until the employee is working with
the organization, his treatment and his spouse’s treatment are 100% reimbursed or
credited towards the company while after retirement the benefits for the employee
remains the same but not for the spouse.
Medical benefits for children is provided up till the age of 30 years or until they
get employed or until get married.
While selecting the suppliers, purchase orders are made and the suppliers with the
best required quality & lowest quotation is finalized.
Medical claim & leave system for different employees are different depending on
their work profile. Every station of IAL in India has a medical department set up
for the convenience of the employees.

FINANCE DEPARTMENT

The Finance department in IAL, Northern Region has 6 functions:

i. Payroll processing

The salary of any employee consists of a fixed part, which is the basic
salary, & variable part. A program has been designed in such a way
where few variable quantities when entered results in the attainment
of final figure of the salary. These variables can be overtime;
holiday’s etc. promotion of an employee is also a case, which is
considered while processing of the payroll.

ii. Final settlement

When an employee gets retired or expires while in service the finance

department pays all his dues.
iii. Provident fund

Every employee of IAL maintains a provident fund account updating

which is the function of finance department. 10% deduction in the
salary is made for provident fund purpose.

iv. Revenue by handling

IAL has been assigning the flight handling duties for all the airlines at
Palam Airport. The revenue generated by this is also collected &
taken care off by the finance department. On an average, 5 to 10% of
the total revenue is generated by the handling.

v. Finance and budget

The finance department supports strategically decisions involving

financial issues like investment. Budgeting is also a major function of
finance department where capital & revenue budgets are made
considering the requirements of each department. The rules and
regulations made by the government are followed while making the
budget. The budget is made in February each year and revised after 9
months. The revenue for the period 2005-2006 was 6048 crores &
expenditure for the same period was 5965.50 crores.

vi. Banking

The finance department has a bank section whereby all the cheques
are cleared & payments are made. The signing authority for the
cheques is not any employee of the bank section. At least two officers
above the grade of Dy.Manager are necessary for clearance of any
cheque. This is a provision made to check and avoid any sort of fraud
or mal practices.
PUBLIC RELATIONS

The role of Public Relations department is to identify, establish &

maintain relations between organization & various policies. The
public to the organization include customers, suppliers, agents,
general public and the employees. The Director of Public Relation has
to report everything to the CMD of IAL, as he is the one answerable
to the public.

There are three units I the PR department namely:

1. Media relations
2. Advertising
1. Publication

The functions of media relations are:

• Interaction with journalists

• Scanning of news papers, magazines & other advertisements
• Press releases
• Press conferences

The functions of advertising unit are:

• Inform about schedule changes

• Inform about promotional schemes
• Institutional advertising

Publication unit of PR department handles the publishing of

“SWAGAT” which is the in-flight magazine, “IMAGE” which is the
in-house publication, annual reports, timetables, company brochure
etc. the PR department is also looking after community relations as
well. It also organizes cultural evenings, meetings with trade &
commerce etc.
The budget allotted to PR department is about 12 crores.
 CHAPTER-5

SWOT ANALYSIS
SWOT ANALYSIS OF THE ORGANISATION
For a country of continental size like India, a strong reliable and efficient civil
aviation sector goes a long way in promoting and sustaining tourism. Indian
Airlines being the undoubted leader in this industry cannot operate in a vacuum. It
needs to keep its eyes and ears open to survive in the liberalized economy of our
country, which has paved a way for any private airlines to operate along with it.
The internal and external environment contained various strengths, weaknesses
,opportunities and treats which need to be identified well in advance to take care
of various situations arises out of them. We shall now try to focus on the above
mentioned factors in context with present scenario none by one.

STRENGTHS

The major strength of Indian Airlines is its vast infrastructure support built
over last four decades. We shall now identify the major strengths of Indian
Airlines.

FLEET’S STRENGTH

 Indian Airlines is one of the largest regional airlines the world and is equipped
with modern fleet of airbus A-300, A-320, and Boeing 737 Aircrafts.
 As compared to the fleet of Indian Airlines the total fleet of all private
Airlines combined together is just half of that Indian Airlines which clearly
shows the superiority of Indian Airlines over this factor.

VAST COMPUTERIZED NETWORK

 All the domestic stations of Indian Airlines each of linked with computer
network, which provides an instant reservations and up to date information
of each station instantly. This is no doubt a great achievement, which
proves that Indian Airlines has realized its potential.

 Hence acquired the needed technology quite earlier. However a private

airlines is still a way far behind in this regard.
 LARGEST NETWORK

 Over the last 46 years, the airlines have built up a reliable and stable
services schedule one that today links 73 destinations including 16 in the
neighboring countries. From the gateway cities of Delhi in the north,
Bombay in the west and Calcutta in the east and Madras in the south, the
passengers can take off in an Indian Airlines flight to any places of his
choice, so wherever you are Indian Airlines is within easy reach. In
comparison of this each private airline operates to maximum of 30.
 Destinations, which is no way near the destinations provided by Indian
Airlines.

MOST MODERN FLEET

 Indian Airlines has been regularly updating its fleet. Starting from Viking
and Dakotas it has now acquired Airbus A-320 the modern aircraft having
a technology of fly by wire and is now in now in the process of phasing
out Boeing 737 or other smallest aircraft, which are becoming obsolete
and uneconomical too.

MAINTENANCE FACILITIES

 In aviation industry, maintenance plays a vital role. It is the backbone of

the organization and no organization can survive unless and until it has
good maintenance facilities, Indian Airlines have understood this very
well and have maintenance facilities in Delhi, Hyderabad and Calcutta.
The engineers here are well qualified and hold a reputation of one of the
best aviation industry. Private airlines are quite dependent upon their
foreign collaborators to maintain their aircraft, which is a costly affair.
WEAKNESSES

LACK OF PERSONALIZED AND CUSTOMER FRIENDLY

SERVICES

 This is one of the major findings of the study .Almost every passenger has
found that Indian Airlines staff needs to be more customer friendly and
more professional in his approach. In service industry, it s a kind of that
matters and leaves its impression in the mind of the passengers and is the
measurement of the quality of product. Indian Airlines needs to take
immediate steps in this regard to change the public opinion.

OVERSTAFFING

 The total staff of IOL is 20945. On an average 21000-22000 people daily

travel on IOL on its 230 flights daily which mean that there is no staff
recruited against every passenger traveling. This is no doubt a bad sign.
IOL has understood his weakness now as a result which there is no major
recruitment for last 5 years. Also there are around 2000 employees retiring
with in next 2 years, which will trim the staff size automatically.

UNDER UTILISATION OF CAPACITY

 IAL sells space, which is highly perishable. An empty space means an

opportunity lost. By capacity, we mean the total no. of seats offered by
Indian Airlines daily to its passengers, it has observed that Indian Airlines
offers around 34000 seats daily where as on average 22000 seats are
utilized meaning an average seat factor of about 64%, it is imperative to
improve upon the situation before it is too late. M ore marketing efforts is
required to attract large passengers.
OPPURTUNITIES

GROWTH OF AVITION INDUSTRY

 The recession in the west, the gulf war and Surat outbreak /Kargil war all
these slowed tourist growth and consequently affected the airlines
revenue. However, these were transit setbacks as has been proven by the
recovery of global tourist activity. Aviation industry is growing at the rate
of 10% per year. This is no doubt a good sign and IO must exploit this
opportunity and take maximum benefits out of it.

CLOSING DOWN OF VARIOUS PRIVATE AIRLINES

 Private airlines started operations with great zeal and enthusiasm after the
revival of OPEN SKY POLICY. Their history is only few years and we
are already findings the signs of their decline. The private airlines like
Dalmania, East, West, Modiluft, UP Airways, Archana Airways have all
ceased to exit. This clearly indicates that aviation is not an easy business
or a child’s play.

 IAL should take it as an opportunity and try to fill this space by

expanding its market share but it has to serious efforts in this regards
by taking out various attractive schemes of discounts and wider
advertisement.

CLEARANCE BY THE GOVERNMENT TO OPERATE AN

INTERNATIONAL ROUTE

 Earlier IOL was not allowed to operate on international sectors, as Air

Indian took it. With the liberalization of Indian economy, government of
India gave Indian Airlines a green signal to operate on long routes and it is
only this attraction Indian Airlines has branched out to operate on 17
international sectors.
NET PROFITS AFTER A GAP OF 7 YEARS

 Indian Airlines has been running in red from the year 1989-90 to 1996-
97 for one reason or the other. It has started earning profits since then,
(profits for the year 1997-98 47.27 crores for the year 1998-99 Rs.14.5
crores and the tentative profits for the 1999-2000 is also expected to be
more than Rs.50 crores).

CREATION OF PROFITS CENTERS

 Due to its size Indian Airlines in unable to be nimble, as it ought to be

in terms of decision-making, customer services and employee
motivation. Consequently, an integral part of turn around strategy was
to hype off certain activities into separate profit.
 Centers, to make them more focused, flexible and accountable. It was
with this in mind that Indian Airlines created the following profits
centers.
 Central training establishment.
 Jet engine overhaul complex.
 Alliance Air.
 Ground support
 Cargo
 Auxiliary power unit
 The profit centers have already made useful contribution in the
improved performance of Indian Airlines.

PROPOSED DISINVESTMENT IN INDIAN AIRLINES

 The government of India has recently announced its decision to

disinvest 51% of the government equity would be given to a joint
partner who will have the functional autonomy in running the airlines.
The remaining 25% would be done within the framework of Domestic
Air Transport policy, which at present permits foreign equity up to
40% & non resident Indian/Overseas corporate bodies investment up
to 100% in domestic air transport services.
THREATS

COMPETITION ITSELF

 Ever since the inception of Indian Airlines it had never tasted

competition, as it was a protected monopoly. When the private airlines
entered this field of way to tackle, it started condemning the
government policy and thoughts it as a threat to its existence. It is only
recently that it realized that private airlines are here to stay.

INSTABILITY IN THE POLITICS OF INDIA

 For the last 4-5 years there has been a great uncertainty in the politics
of India. Since majority of Indian Airlines policies requires the
approval of government, hence uncertainty in the political circle
hinders the decision making of Indian Airlines. Every government has
its own perception about aviation industry resulting in the change in
the policy under short intervals. This not only results in the low morale
of the management but also makes it indecisive which is not good for
the organization.

INDUSTRIAL UNREST

 Strike is a familiar word for Indian Airlines. Every now and then we
hear the call of strike either by pilots, engineers, or ground staff, which
result not only in huge losses but also causes lot of inconvenience to
the passenger resulting in loss of image and credibility in the market.
Indian Airlines must take a serious view about it and sort the things
before it is too late.

These were the strengths, weaknesses, opportunities and threats. Indian Airlines
must try to evaluate each of them with regards to its internal and external
environment.
MY LEARNINGS FROM THIS PROJECT

While preparing this project report I learned lots of facts about Indian Airlines
Limited which I never knew before. It was a great experience making this project
report as it taught me the following:

How did it developed its business?

Its market share

Its distributional channel

Its brands, product mix and product lines

The marketing strategies

The strengths, weaknesses, opportunities & threats

Training & development policies.

Recruitment & selection procedures

 BIBLIOGRAPHY

References:

www.indianairlines.nic.in
www.google.com