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BALAJI RAVINDRA MORYE SUMMER INTEARNSHIP REVENUE GENERATION AND PROCESSING OF CARGO SECTION OF AIR INDIA

MENTOR

BIDU MADHAV KATTI FINANCE (CARGO AND MAIL) 2010-12

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DEPARTMENT : YEAR :

Acknowledgement

It gives me immense pleasure to express my sincere gratitude to those who are associated with this project as a partial fulfillment of the course, Master in Management Studies (MMS) from University of Mumbai.

I would like to thank Mr. Bindu Madhav Katti for giving me an opportunity to take up this project.

I am grateful to Mrs. Smita Survanshi (Assistant Finance Manager of cargo section) & Mr. B.B. Mehta (Assistant Finance Manager of Mail section) who has been a constant source of motivation, encouragement and guidance. Their valuable guidance and timely help has helped me in completing the project. Their continuous help and encouragement has showed me the right way to complete the project.

Above all, I would like to thank all the employees of Air India for their help and motivation in the making of my project.

Index
1. NO 1 2 3 4 2. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 OBJECTIVES OF THE PROJECT INTRODUCTION AIR INDIA PRESENT OPERATIONS AMALGAMATION OF AIR INDIA AND INDIAN AIRLINES- NACIL IATA FINANCE DEPARTMENT OF AIR INDIA WORKING OF FINANCE DISCUSSION OF AIR CARGO MARKET IN INDIA OPERATION OF CARGO CARGO TYPE CARGO JARGONS AIR WAYBILL ACCOUNTING OF SALE DOCUMENTS ACCOUNTING OF CARRIAGE DOCUMENTS SETTLEMENT OF CLAIMS AND REFUNDS ACCOUNTING OF CHARGES COLLECT TRANSACTIONS RECONCILIATION OF AIRLINES COLLECT ACCOUNT AND ACCOUNTING OF UNACCOUNTED SALES ACCOUNTING OF POSTAL MAIL TRANSACTIONS. ERP RECOMMENDATION CONCLUSION BIBLIOGRAPHY TITLE page NO

4 5 6 10 11 12 13 15 20 22 23 27 29 31 36 41 45 47 51 56 58 59

OBJECTIVES OF THE PROJECT

The summer training is undertaken with the aim of fulfilling the following objective:

To study various functions in finance department.

To understand the working of cargo section.

To understand the cargo operations.

To Study the working of cargo sub sections.

To understand the concept of cargo and mail revenue.

To study the procedure of obtaining data from outstations and other departments.

To get the practical knowledge of working with the corporate.

To find solution make cargo procedure faster.

INTRODUCTION
Air India had its beginning as Tata Airlines in 1932, a division of Tata Sons Ltd. (now Tata
Group) by J. R. D. Tata. The first flight flew on October 15, 1932 with the founder, J. R. D. Tata

himself and single engine De Havilland Puss Moth registered VT-and carrying air mail (postal mail of Imperial Airways) from Karachi's Drigh Road Aerodrome to Bombay's Juhu Airstrip via
Ahmadabad on 29 July 1946 under the name Air India. Regular commercial service was restored

in India and Tata Airlines became a public limited company. After getting permitted for government participation, Air India International launched its first international service on June 8,
1948 from Bombay bound for London via Cairo and Geneva. This marked the airline's first long-

haul international flight, soon followed by service in 1950 to Nairobi via Aden. In 1952, the planning commission recommended the nationalization of Air transport industry. This resulted in creation of two nationalized corporations-Air India International that retained its identity and international flag carrier status and Indian Airlines to operate in domestic region On 1 August 1953, the Government of India exercised its option to purchase a majority stake in the carrier and Air India International Limited was born as one of the fruits of the Air Corporations Act that nationalized the air transportation industry. At the same time all domestic services were transferred to Indian Airlines. In 1954, the airline took delivery of its first L-1049 Super
Constellations and inaugurated services to Singapore, Bangkok, Hong Kong and Tokyo.

Air India International entered the jet age in 1960 when its first Boeing 707, named Nandadevi and registered VT-DJJ, was delivered. Jet services to New York via London were inaugurated that same year in May 1960. On 8 June 1962 the airline's name was officially truncated to Air India. On 11 June 1962 Air India became the world's first all-jet airline.

AIR INDIA
History

Air India Cargo was set up in 1954, and started its freighter operations with a Douglas DC-3 Dakota aircraft, giving Air India the distinction of being the first Asian airline to operate freighters. Services A member of IATA, Air India carries all types of cargo including dangerous goods (hazardous materials) and live animals, provided such shipments are tendered according to IATA Dangerous Goods Regulations and IATA Live Animals Regulations. At the warehouse in Mumbai, Air India has developed a system of inventory management for cargo handling of import/export functions. This takes care of the management of cargo, supports Electronic Data Interchange (EDI) messages with Indian Customs and replaces to a great extent paper correspondence between Customs, Airlines, and the custodians. This also replaces manual handling and binning of cargo at the warehouse in Mumbai by Air India.
Expansion

Air India Cargo Airbus A310-304F Air India is converting eight of its Airbus A310-300 into freighters in Dresden, Germany, at a cost of $7 million each. The first four are now operating for Air India Cargo with two services are routed via Dammam, to a total of 13 destinations. The merger of Indian Airlines and its domestic subsidiary Alliance Air led to the acquisition of one Boeing 737-200C aircraft from Alliance's fleet, plus 10 Boeing 737-200s. Three of these were phased out of service, while five have been converted to freighters in the United States. One of these also operated for Indian Airlines Cargo division for a brief period. All six aircraft are now flying Air India Cargo domestic routes, while the remaining two 737-200s might be

converted as well.In November 2007, Air India partnered with GATI, a leader and pioneer in express distribution and supply chain solutions for a dedicated freighter Service.
Ending of Freighter services

With rising competition from local cargo airlines as well as financial issues, Air India Cargo have put up all four A310F for sale and will soon be adding the six 737s to the list, thus putting an end to dedicated cargo freighter subsidiary once again.
The Maharajah

'AIR-INDIA 'calls him a Maharajah for want of a better description. But his blood isn't blue. He may look like royalty, but he isn't royal.' These are the words of Bobby Kooka, the man who conceived the Maharajah. This now familiar lovable figure first made his appearance in Air India way back in 1946, when Bobby Kooka as Air India's Commercial Director and Umesh Rao, an artist with J.Walter Thompson Ltd., Mumbai, together created the Maharajah. The Maharajah began merely as a rich Indian potentate, symbolizing graciousness and high living. And somewhere along the line his creators gave him a distinctive personality: his outsized moustache, the striped turban and his aquiline nose. He has completed 56 years and become the most recognizable mascot the world over. His antics, his expressions, his puns have allowed Air India to promote its services with a unique panache and an unmatched sense of subtle humour. In fact he has won numerous national and international awards for Air India for humour and originality in publicity.

A corporate identity is the commercial visual image that a company projects to its public. It helps in achieving a cohesive and consistent image of the company worldwide. After the formation of Air India International in 1948, four Lockheed Constellations were ordered to commence international operations. The management began casting about for a symbol that would denote speed and simultaneously have universal appeal. Sagittarius, the archer, is the ninth sign of the Zodiac. The Greeks represented this constellation in the act of shooting an arrow. As it symbolizes movement and speed, the Centaur, a stylized version of Sagittarius, was selected as Air India's logo.

WHOLLY OWNED SUBSIDIARY COMPANIES

(A) HOTEL CORPORATION OF INDIA LIMITED As part of the disinvestment programme , an advertisement was issued in all the leading newspapers in India and abroad inviting bids from the prospective buyers for the remaining properties comprising of Hotel Corporation of India, a wholly owned subsidiary of Air India viz the Centaur Hotel Delhi Airport and Chef air units at Delhi and Mumbai. (B) AIR INDIA CHARTERS LIMITED (AICL) The activities of AICL have increased manifold. From providing security services at Mumbai, AICL has started providing total ground handling services at some Indian stations like Kochi, Mumbai, etc. though Air India has incorporated a separate subsidiary for ground handling activities viz. Air India Transport Services Limited (AIATSL), pending government approval, as an interim measure, it has been decided to undertake ground handling operations through AICL. The paid up capital of AICL is Rs. 30 crores. (C) AIR INDIA AIR TRANSPORT SERVICES LIMITED (AIATSL) Air India Air Transport Services limited was incorporated in June 2003 with an Authorized capital of Rs.100 crores. The board was of the view that outsourcing of the ground handling activity to a subsidiary company would result in greater efficiencies and synergy and would assist Air India in rendering cost efficient service of international standards at major airports in India.

(D) AIR INDIA ENGINEERING SERVICES LIMITED The board also decided to form Air India Engineering Services Limited with a Paid up capital of Rs. 10 crores. The company has been incorporated on 11 march 2004 and is waiting governments approval after which the certificate to commence business will

PRESENT OPERATIONS
The 21st century has seen Air India introduce new services to Shanghai in China, as well as two new US destinations, Los Angeles, California (LAX) and Newark, New Jersey (Newark Liberty). To expand its business into the low-cost sector, AI started a wholly owned subsidy, called Air India Express in May 2004. AIX has been operating exclusively on Persian Gulf routes, as well as to Singapore. Air India expanded its international routes to include non-stop flights from Ahmadabad's Sardar Vallabhbhai Patel International Airport.

Air India has officially merged with Indian Airlines to create a merged airline consisting of 200+ aircraft in October 2007. The new airline's headquarters will remain in Mumbai, and it now has a fleet of 130+ aircraft of both Airbus and Boeing airplanes. It also widely expected that Alliance Air and Air India Express will also to merge to create the new airline's low-cost arm.

The combined entity has also confirmed that has gained membership within the Star Alliance and will expand its own network to be one of Asia's largest carriers. The formal announcement was made at the annual Star Alliance meeting on the 13th of December 2007. Air India is set to become a full member of Star Alliance by 2012.

The current scenario of Indian aviation Industry has changed significantly over the last few years with the rapid increase in demand for domestic and international air services. The global aviation environment is currently undergoing consolidation wherein critical masses are a key success factor. This necessitated the merger of the two state owned airlines, namely Air India and Indian Airlines Limited to compete amidst fierce global and domestic competition.

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AMALGAMATION OF AIR INDIA AND INDIAN AIRLINES- NACIL

The merger of AIR INDIA & INDIAN AIRLINES was cleared by the Empowered Group of Ministers (EGM) on 21st February 2007. NATIONAL AVIATION COMPANY OF INDIA LIMITED (NACIL) was incorporated under the Companies Act, 1956 on March 2007. The merger became effective from 27 August 2007.

The need for amalgamation of Air India Ltd (AI) and Indian Airlines Ltd (IA) was necessitated due to the fact that both AI & IA, which were operating in a largely protected environment, were faced with fierce competition from domestic private and global airlines companies.

The declining market, operating & financial performance posed a serious threat to future survival of the two airlines on a stand-alone basis. It was felt that combining the two state owned airlines into a single merged entity would better equip them to survive and prosper amidst fierce global and domestic competition as it would provide an opportunity to leverage combined assets and capital better and build a stronger sustainable business.

The merger will provide an opportunity to leverage combined assets and capital revenue synergies will be driven by integration of the complementary networks of both the airlines

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INTERNATIONAL AIR TRANSPORT ASSOCIATION (IATA)

The International Air Transport Association (IATA) is an international industry trade group of airlines headquartered in Montreal, Canada, where the International Civil Aviation Organization is also headquartered. The executive offices are at the Geneva Airport in Switzerland. IATA's mission is to represent, lead, and serve the airline industry. IATA represents some 230 airlines comprising 93% of scheduled international air traffic. IATA is present in over 150 countries covered through 101 offices around the globe
History

IATA was formed on 19 April 1945, in Havana, Cuba. It is the successor to the International Air Traffic Association, founded in The Hague in 1919, the year of the world's first international scheduled services. At its founding, IATA had 57 members from 31 nations, mostly in Europe and North America. Today it has about 230 members from more than 140 nations in every part of the world Activities One of its core functions was to act as a price setting body for international airfare. In an arrangement going back to 1944, international fare prices have been set through bilateral governmental agreements rather than through market mechanisms. Airlines had been granted a special exemption by each of the main regulatory authorities in the world to consult prices with each other through this body. Originally both domestic and international aviation were highly regulated by IATA. Negotiations are underway since 2003 to create a completely deregulated aviation market covering European and US airspace. In recent years the organization has been accused of acting as a cartel, and many low cost carriers are not full IATA members. The European Union's competition authorities are currently investigating the IATA. In 2005, Neelie Kroes, the European Commissioner for Competition, made a proposal to lift the exception to consult prices. In July 2006, the United States Department of Transportation also proposed to withdraw antitrust immunity. IATA teamed with SITA for an electronic ticketing solution.
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FINANCE DEPARTMENT OF AIR INDIA

The primary function of Finance and Accounts Department is to ensure that all revenues are recorded properly and money is received and paid accordingly. Another primary function is to pay the taxes regularly as per Law of the country as well the company. The second most important function of this department is to handle the cost of fuel, staff salary apart from this it invests or transfers the excess funds to the required station situated abroad. In Air India the Finance department basically handles the revenue which consists of tickets, cargo, freight revenue, excess baggage etc.The basic things that needs to be maintained is that the Sales accounts should be updated time to time so that the actual revenue inflow and outflow is known. From this funds can be diverted time to time. Finance is very important for any organization. Aviation industry it is most important to concentrate on capital financing as most of its capital is locked in capital goods like aircraft. In aviation industry the major cost of the company is the cost of the fleet/aircraft. . So every organization should know how to minimize the cost & maximize the profit. Before few years Air Indias most of the cost of incurred in leasing of the aircraft. Therefore to increase the profit in long term the company has started buying its own aircrafts. For this the company cannot afford the money from by itself. Therefore the company is obtaining loan from international banks. These are all the core responsibility of the Finance Department. Apart from this it also handles various functions of different sections like taking care of bad debts, payments of salary, and remittances of cash, transfer of funds, banking, insurance, payments of income tax, service tax. Octroi. Also it performs its statutory duties like AGM, conducting Audit etc. It is again the duty of the Finance Department to present all the financial statements the Cash flow Statements before the directors to show the profits & losses of the company. On the basis of this repost budgets are prepared for the next financial year. All this information if not updated can create havoc in the organization. For better management of Finance the organization should see to it that it is properly managed and maintained.

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Director Finance Excucative Director Finance

General Manager

General Manager

General Manger

ORGANIZATION STRUCTURE
Deputy General Manager Deputy General Manager
Deputy General Manager Deputy General Manager Deputy General Manager

Deputy General Manager

Deputy General Manager

I AGM Senior Manager Manager Deputy Manager Ass. Manager AGM

AGM AGM

Senior Manager Manager Deputy Manager Ass. Manager

Clerk

Clerk

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WORKING OF FINANCE
Air India Limited carries its administrative, financial, HR activities from its office, situated at Santacruz referred as Old Airport. The marketing activities are carried out at its Nariman Point office. The finance department is divided into following sections. SECTIONS OF A FINANCE DEPARTMENT There are sections in a Finance Department of an Airline Company and they are as follows: 1. Fuel and Oil: It is one of the most important sections of Finance Department. This section deals with all the needs of oil and fuel required by each and every station of the corporation time to time. It also manages the payments made for the same. The main suppliers of the fuel are Hindustan Petroleum Corporation Limited, Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited, etc. All the payments to be made in Indian Rupees are done by Santacruz station, whereas all the payments to be made in USD are done by New York station.

2. MIS and Statistics: This section act as a bridge between Finance Department and Management. It prepares MIS reports on the basis of information available till date. These reports are sent to the Managing Directors to make future plans.

3. Financial Accounts: This section deals with the compilation of data from all sections. All ledger booking is done by the Financial Accounts section. The main function of this section is to prepare Annual Report. This section also keeps track on all the activities, legal chargers, donations, audit fees and deposits made to parties and deposits received from outside parties from time to time.

4. SER (Recording of Expenses) This section deals in recording all the expense apart from cargo expense occurred in the financial year. This section looks into where the flow of money is going as they have to prepare report on each and every item purchased.
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5. Insurance Insurance section as a whole deals with aircraft insurance and non-aircraft insurance. Aircraft insurance includes insurance only on the aircraft, whereas non-aircraft insurance includes insurance on the other assets owned by the corporation like vehicles, machinery and furniture. 6. Stores Accounts Stores are those products which are purchased by Air India to be provided on board to the travelers or for sale. Purchasing of such products is dealt by this section. 7. Capital Budget This section deals with the agreement / procurement of the asset, government formalities and bidding of the assets. 8. Administration This section deals into the day to day activity of the department. 9. Cargo and Mail This section is concerned with the revenues collected by the cargo. And also to look into if the collected data is accurate. 10. IATA IATA stands for all those cities where Air-India does not operate. It provides combined tickets for such cities. For example, we need to go to New York through London. So if Air India is not operational in New York, it issues its ticket only up to London and the concerned passenger travels to New York from London by the airline other than Air India. This kind of ticket is termed as combined ticket. The accounting and recording the issues of such tickets is dealt with by this section. This section settles the debts of such (creditors) airlines and maintains the dues of debtor airlines. 11. Banking Banking and cash section deals with the bank transactions of Air India. This department keeps track of the funds that Air India borrows from Banks. It deals with the treasury management and bank reconciliation statements.

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12. Taxation This section is concerned with the tax calculation. This department of Finance calculates taxes like Income Tax, Sales Tax, Service Tax, Octroi, Revenue Tax, etc. this section also controls the tax deducted from the salary of the staff. It also deals with the VAT charged by the Government of Maharashtra on all spare parts, aircrafts and stationary items sold by the corporation which bears a certain tax.

14. Pay Accounts. This department is concerned with the salary calculation of the employees taking into consideration the allowances granted to the staff, paid leave, leave without pay, increments, etc. Apart from this, the section is divided into Domestic salary and International salary.

15. Revenue Pool Section This section is concerned with interlinked settlement with different airlines. In this section expected revenue from all sources are known in advance and that are compared with the actual.

16. Provident Fund All staff provident deductions are maintained by this section. Amount recovered from staff is invested in a proper manner which is handled by a provident trust. The staff can take loans against provident fund as well as they can withdraw settlement of retirement of staff. Provident fund is 250 times of basic or 90% of contribution, whichever is less.

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EXPENDITURE CHART (Rs. in Million)

EXPENDITURE 200910 33567.2 914.7 50150.2 10604.4 4262.7 8031.5 11774.9 6045.5 4838.1 4083.7 4916.3 3136.4 13897.9 9583.2 165806.7 EXPENDITURE 2008-9 33388.5 861.8 70606.4 9290.9 5560.5 6910.8 13847.8 5290.6 4865.6 4360.5 4124.3 3604.7 12258.9 13993.2 188964.5 CHANGES IN RS 178.7 52.9 (20456.2) 1313.5 (1297.8) 1120.7 (2072.9) 754.9 (27.5) (276.8) 792 (468.3) 1639 (4410) (23157.8) ## IN % 0.54 6.14 (28.97) 14.14 (23.34) 16.22 (14.97) 14.27 (0.57) (6.35) 19.20 (12.99) 13.37 (31.52) (12.26)

particulars Salaries and others Insurance Fuel and oil Navigation, landing, housing and parking Aircraft material consume Hire to air craft Repairs and maintenance Handling charges Passenger Amenities Booking agency commission Communication charges Travelling expenses Depreciation (net) Other expenses TOTAL

## (CURRENT YEAR - LAST YEAR) / LAST YEAR * 100

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REVENUE CHART (Rs. in Million)

REVENUE REVENUE CHANGES IN 2009-10 2008-09 (RS) 91502.2 806.6 925.7 6911.9 10194 1154.2 1653.7 13662 Revenue share from Air -India charter Other 4275.9 2936.5 134022.7 92668.9 697.1 527.3 6622.1 10639.3 1452.6 2906.4 12448.2 4283.3 2548.6 134793.8 (1166.7) 109.5 398.4 289.8 (445.3) (298.4) (1252.7) 1213.8 (7.4) 387.9 (771.1) ## (IN %) (1.26) 15.71 75.55 4.38 (4.19) (20.54) (43.10) 9.75 (0.17) 15.22 (0.57)

PARTICULARS Passenger Excess baggage Mail Cargo Charter Pool Block seat arrangement Handling services

## (CURRENT YEAR - LAST YEAR) / LAST YEAR * 100

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Air cargo market in India

The Indian air freight market has been experiencing a strong growth over the past five years, driven by a booming economy and flourishing trade (both export and import).Domestic and International air cargo traffic has grown at a compounded annual growth rate (CAGR) of 12.6% and 13.0% respectively during FY-02-07.Building on this momentum, domestic and international air cargo traffic is expected to exhibit a compounded annual growth rate (CAGR) of 13.0% and 14.0% respectively during FY-07-10. The air cargo traffic is currently limited to low volume and high value products, including garments, pharmaceuticals, and perishable products (Flowers, vegetables and fruits). Absence of adequate facilities such as refrigerated trucks and ware houses has driven the export of perishable goods through air transport. With the objective of fuelling foreign investments in the air cargo industry, the government has proposed to raise the FDI limit in cargo airlines from 49% to 74% in January 2008.The current government policy does not allow any cargo airport to come up within a 150 Km radius of an existing airport. However, the Ministry of Civil Aviation (MOCA) is considering a revision of this regulation, and as a result, a number of specialty cargo airports are expected to be developed in the country. The growth potential offered has led to entry of foreign logistics and airline service providers, including Cathay Pacific, DHL and TNT. Indian companies have also decided to launch exclusive air cargo services in the country and abroad: these include Air India, Indian airlines and jet airways in addition to others. According to MOCA, three international companies FedEx, Malaysian Airlines and Australia based Heavy Lift cargo airlines have approached the ministry seeking details on setting up and expanding their operations in India.(Ref: Indian Aviation Sector March 2010 by Ernst & Young)

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Market Share Of Air lines

3% 2% 12% 14%
Kingfisher Airlines

28%
Jet Airways Air India

IndiGo

16%

25%

Spice Jet Go Air Paramount Airways

(Ref: Indian Aviation Sector March 2010 by Ernst & Young)

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CARGO OPERATION

Today, Air India's modern fleet of Boeing and Airbus aircraft carries just about everything. From emeralds to elephants, pins to pigments, shrimps to super computers. That's why when you think of trading with India, or from India, Air India is your logical choice. An option which Lakhs of corporate and international enterprises have made. We have the infrastructure and the network to ensure smooth transportation and delivery of cargo, worldwide.

Air India's cargo operations give you a capacity advantage, combined with a 13-city network in India alone. So you can arrange for hassle-free and direct Customs clearance both for your Export and Import cargo. In India, we fly to Mumbai, Delhi, Chennai, Thiruvananthapuram, Hyderabad, Bangalore, Kolkata, Ahmedabad, Goa, Kochi, Kozhikode and Lucknow.

Internationally, Air India has tied up with various foreign airlines and trucking companies. This enables us to carry your cargo between Helsinki to Sydney.... or between any two points on the globe that you can think of. To support our Cargo operations, we have a highly skilled and experienced team of professionals backed by our Training Division of international repute to constantly upgrade skills of our personnel. At our warehouse in Mumbai, we have developed an indigenous system of inventory management for cargo handling of import/export functions. This takes care of the entire management of cargo, supports Electronic Data Interface (EDI) messages with Indian Customs and replaces to a great extent existing paper correspondence between Customs, Airlines, and the custodians. This also replaces manual handling and binning of cargo at the warehouse in Mumbai by Air India in our role as custodian and helps to identify large number of pieces for one Air Waybill with different weights and commodities binned in separate locations, track and identify arrival of part shipments under the same Air Waybills on different flights and maintain information on House Goods for a consol Air Waybill at the House Bill level.
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CARGO TYPE
Air India's Cargo operation flies everything; to just about anywhere.

Not very surprising, when you consider how far and wide Indians have settled. Vast populations have settled in the Gulf, the US, UK, Africa and the Far East. It is to enable them to maintain links with their friends and families back home. And to let the entrepreneurs conveniently go about their business, that Air India has fine tuned its cargo services to their needs.

An active member of IATA, Air India carries all types of cargo including dangerous goods (hazardous materials) and live animals, provided such shipments are tendered according to IATA Dangerous Goods Regulations and IATA Live Animals Regulations respectively.

So if you have something you'd like to fly down to or from India, but aren't sure if we will, here's the complete list of the airline's cargo operations.

Personal Effects Air India entered the Guinness Book of Records for evacuating the largest number of civilians during the Gulf war in 1990. With them, logically came their bag and baggage in the form of unaccompanied baggage in the belly of our aircraft.

Foodstuff To book unaccompanied baggage, please contact any of our offices. For facilitating you in Customs clearance for your unaccompanied baggage at Indian airports, you or your representative should approach Indian Customs at the airport through our office with the following: a) Copy of Airway bill b) Passenger's passport c) Baggage Declaration Form (BDF), duly completed

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Sentimental Shipments We understand how traumatic it is to lose a dear one. That's why we make sure the mortal remains of the deceased are always carried with utmost care and concern. Besides passport of the deceased, the following documents are required for carriage of sentimental cargo : Death Certificate from a competent medical authority, Embalming and Packaging Certificate, Certificate issued by the Ambassador or his representative (Nationality of the deceased) with the deceased's full name, age at the time of death, place of death and photocopy of passport details. Photocopy of cancelled passport. It is necessary that the above documents are made in English, otherwise the same should be translated in English.

Postal Mail Air India is undoubtedly the major carrier of postal mail out of India. We have also successfully bagged postal contracts from various Foreign Postal Administrations for uplift of Postal mail from their countries. For any enquiries, you may contact our local offices in the countries concerned or mail us.

Odd-Sized Cargo Do you have any odd sized cargo or heavy pieces to carry? Don't worry. Like we handle valuables and livestock, we also possess expertise in logistics to carry heavy and odd-sized.

Dangerous Goods India being an industrial and nuclear power, we regularly carry Dangerous Goods such as flammable, corrosive, poisonous and radioactive substances. Our Cargo staff is qualified under Dangerous Goods Regulations, to handle such consignments.

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Valuables In order to ensure security of your valuables, we have provided a container with a security locker, on flight. In fact, the entire operation of loading and unloading is carried out under the vigilant eyes of our Security personnel.

India's largest foreign exchange earner is gems and jewellery, for which Air India gets its due share. White and yellow metals are our frequent flyers and a woman's best friend, diamonds, are our regular companions. Our carriage of valuables is not only restricted to gems and jewellery but also transportation of exquisite museum artifacts and paintings.

Among other valuables, we once had the privilege of carrying exquisite paintings, the Padshahnama from Queen Elizabeth's Windsor Castle collections, dating back to the 17th Century Mughal period.

But we never forget that your life is more precious than all the riches of the world. And, at all times, we adhere to the strictest security for transportation of cargo on our flights. Either we ensure that the cargo is retained in our warehouse for 24 hours before loading on the flight, or the cargo is physically checked or x-rayed.

Livestock Over the years, we have acquired considerable expertise in carriage of livestock such as elephants, tigers, leopards, horses, cattle and pets. Recently Air India transported two plane loads of high breed horses from Europe to India.

Tips for Unaccompanied Baggage To book unaccompanied baggage, please contact any of our offices. For facilitating you in Customs clearance for your unaccompanied baggage at Indian airports, you or your representative should approach Indian Customs at the airport through our office with the following:
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A) Copy of Airway bill B) Passenger's passport C) Baggage Declaration Form (BDF), duly completed

Mishandled Baggage Any loss or damage to baggage must be reported immediately on arrival. All mishandled baggage is traced through the worldwide computerized tracer system. Passengers can check the status of their missing bag on this site

Couriers Courier traffic is a rapidly growing market. Air India has been in the courier business transporting small packages and documents between destinations for years. As we now allow drop-off facility en-route, the on-board courier can carry courier loads to more than one destination, considerably saving on cost and time.

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cargo jargons

Airway Bill (AWB) The cargo equivalent of a passenger ticket which means the document made out by or on behalf of the shipper. It evidences the contract between the shipper and the carrier(s) for carriage of goods over routes of the carrier.

Cargo Goods carried by airline(s) on behalf of its customer.

Cargo Terminal A building or location where cargo is received, stored, Customs cleared and prepared for delivery and delivered.

Charter Contract A special agreement whereby carrier for an agreed operation places at shipper's disposition the entire capacity of an aircraft.

Charterer A person who has signed a charter contract with carrier.

Consignee A person whose name appears on the AWB as the party to whom the goods are to be delivered.

Consignor (Shipper) A person whose name appears on the AWB as the party contracting with the carrier(s) for carriage of goods.

Consignment (Shipment) One or more pieces of cargo accepted by the carrier from a single shipper, destined for one
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specific address moving on one AWB to one consignee.

Cut-off time The latest time cargo will be accepted for a specific flight prior to its departure.

Destination The ultimate stopping place according to the contract of carriage.

Embargo Refusal by carrier for a limited period to accept goods for transportation.

IATA International Air Transport Association - an Association that establishes international rules and standards for participating air carriers.

IATA member Indicates an airline being member of the International Air Transport Association.

Interline Agreement A contract between two or more carriers to expedite exchange of traffic between the parties to the agreement.

Minimum Connecting Time Perishables Time sensitive items needing specialized handling.

Unit Load Device (ULD) Pallet or rigid container used to hold cargo.

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Air waybill
Air Waybill (AWB) or air consignment note refers to a receipt issued by an international airline for goods and an evidence of the contract of carriage, but it is not a document of title to the goods. Hence, the AWB is non-negotiable. Description The Air Waybill (AWB) is the most important document issued by a carrier either directly or through its authorized agent. It is a non-negotiable transport document. It covers transport of cargo from airport to airport. By accepting a shipment an IATA cargo agent is acting on behalf of the carrier whose air waybill is issued. AWBs have eleven digit numbers which can be used to make bookings, check the status of delivery, and current position of the shipment. The number consists of:

1. The first three digits are the airline prefix. Each airline has been assigned a 3-digit number by IATA, so from the prefix we know which airline has issued the document.

2. The next seven digits are the running number/s - one number for each consignment 3. The last digit is what is called the check digit. It is arrived at in the following manner: The seven digit running numbers are divided by 7, by using a long division calculation. The remainder becomes the check digit. That is why no AWB number ends with a figure greater than 6. Air waybills are issued in sets of different colours. The first three copies are classified as originals. The first original, blue in colour, is the shippers copy. The second, coloured blue, is retained by the issuing carrier. The third, coloured orange, is the consignees copy. A yellow copy acts as the delivery receipt, or proof of delivery*. The other copies are all white. There are several purposes that an air waybill serves, but its main functions are:

Contract of Carriage. Behind every original of the AWB are conditions of contract for carriage Evidence of Receipt of Goods. When the shipper delivers goods to be forwarded, he will get a receipt. The receipt is proof that the shipment was handed over in good order and condition and
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also that the shipping instructions, as contained in the Shipper's Letter of Instructions, are acceptable. After completion, an original copy of the air waybill is given to the shipper as evidence of the acceptance of goods and as proof of contract of carriage

Freight Bill The air waybill may be used as a bill or invoice together with supporting documents since it may indicate charges to be paid by the consignee, charges due to the agent or the carrier. An original copy of the air waybill is used for the carrier's accounting

Certificate of Insurance The air waybill may also serve as an evidence if the carrier is in a position to insure the shipment and is requested to do so by the shipper

Customs Declaration Although customs authorities require various documents like a commercial invoice, packing list, etc. the air waybill too is proof of the freight amount billed for the goods carried and may be needed to be presented for customs clearance The format of the air waybill has been designed by IATA and these can be used for both domestic as well as international transportation. These are available in two forms, viz. the airline logo equipped air waybill and the neutral air waybill. Usually, airline air waybills are distributed to IATA cargo agents by IATA airlines. The air waybills show:

the carrier's name its head office address its logo the pre printed eleven digit air waybill number It is also possible to complete an air waybill through a computerised system. Agents all over the world are now using their own in-house computer systems to issue airlines' and freight forwarders' own air waybills. IATA cargo agents usually hold air waybills of several carriers.

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Cargo & Mail Section

INTRODUCTION

Cargo & Mail Section looks after the-accounting of. Cargo & mail revenue of Air-India. This section has been divided into six sub-sections.
I. II. III. IV. V. VI.

Accounting of Sales documents; Accounting of Carriage Documents; Settlement of Claims and refunds; Accounting of Charges Collect transactions; Reconciliation of Airlines Collect Account and Accounting of Unaccounted Sales Accounting of Postal Mail Transactions.

I] Accounting of Sale Documents:

This section deals with the following reports prepared by our offices, agents within their territories and by our General Sales Agents appointed in various places. The documents issued by Booking Offices are accounted in the format which is known as MAP-I (Mechanized Accounting procedure- Form I) - Annexure In the MAP I the following types of transactions are accounted. a) The stations' Cash/cheques sales; b) Stations' sales on local invoicing basis (Credit Sales). These statements are prepared by the' stations on the daily/ weekly/fortnightly/monthly basis depending upon volume of transactions at that place. The cash and cheque collections made at the station are lodged-into our collection account on day to day basis. In respect of credit transactions, the stations raise invoices on such parties and arrange recovery. The summary column o. MAP I indicates the balance of cash and cheque brought forward the collections made
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tor the reporting period, the amounts lodged in the bank account during the reporting period and the balance carried forward to the next accounting period. This Statement is supported by the stations with the bank lodgment skips which enables central 'Accounts office to check and ensure that the collections made at the station are deposited on day to day basis and accounted to Central Accounts office.
1) Cargo sales by agent:-

Cargo Sales Reports are submitted by the agents who are holding A*,IB stocks issued by AirIndia. The reporting period of the agent is fortnightly or monthly. These reporting periods have been laid down by IATA for various traffic conference areas. In Traffic conference area 1, the reporting period is a fortnight for Agents operating from less than 10 approved location & one month in case of others. In traffic conference area2,the reporting period is 1 month and in traffic conference 3, the reporting period is a fortnight. The agents report their sales in a form called Cargo Agents Sale g Report Form. The sale normally consists of prepaid and Charges Collect transactions. In respect of prepaid transactions, the agents reflect the amount recovered on the AWB in the relevant column of the sales report form. In respect of Charges Collect transactions, the agent mentions the AWB .No . and the value of the commissionable sale and amount due to agent in the relevant column. On the last page of the sales report the agent prepares a summary of the commissionable amount of sale, the commission due to' him, agents due charges on CC shipments payable by the carrier to the agent, and the net amount pay-able by the agent to Air-India. In some countries. IATA has introduced Cargo Accounting Settlement system. Under this system, the agents participating in the system submit their sales transmittals to the Settlement Office nominated/selected by IATA and effect settlement of the same with the Settlement Office 2) Cargo Sales by GSAs: In some of the sales territories, we have appointed General Sales Agents who look after the sale and accounting work of the station. The General Sales Agency Agreement entered into

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with the particular General Sales Agent lays down the procedure for accounting the transactions either on fortnightly or monthly basis. The General Sales Agent reports its sales in the format called General Sales Agents Reports .The General sales Agent is normally entitled to an over-riding commission of 2i% on the sales effected on Air-India services. The General Sales Agent remits the net amount due to Air-India after deducting from the prepaid sales, the amount due to him towards normal commission, Agents Due Charges and Over-riding commission. The Cargo Accounting Sales section is responsible for ensuring that the Cargo Sales Reports NAP-I and General sales Agents reports are received from all the stations within the prescribed time limit as per the laid down procedure To facilitate this, a control chart is maintained by the section and if there is a delay in receipt of these reports from the stations the matter is taken up with the stations concerned 3) Processing of transactions and internal' checks i) The section ensures that all the reports are received from all the stations on month to month and fortnightly basis as applicable to the stations. ii) The following points are checked by the Sales section : To ensure that all the AWBs listed in the statement are enclosed with the report. To ensure that the amount reflected on the AWB is correctly reported' in the MAP I or the sales Report. s To ensure that the commissionable amount reported in the Sales Report is correct To ensure that the agents due charges deducted by the agent from the sales Report are as per the amounts reflected on the CC AWB. To ensure that the amounts reflected in the Station's MAP-I forms in the summary column of the cash and banking transactions are also tallied with the bank pay in slips. If any discrepancies are noticed regarding any break in the series of the AWBs, the amount deposited, arithmetical inaccuracy and any other discrepancies noticed are referred to the station.

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4 )Accounting Entries In respect of charges collected on the AWB, these charges are credited to the respective accounts for example freight charges, Cartage, insurance, valuation charges etc. Consolidated entry in respect of these transactions is directly posted to Ledger by Management Services Department. The following debit allocation is given on the AWBs or the Stales Reports, GSA Sales Reports by this section. In respect of cash and cheque sales or local invoicing transactions reported through Cargo MAP I of the station, the amount is' debited to Outstation Office Collection account or Cargo Credit Sale Account. In respect of sales reported by the agent, the amount is debited to Cargo Credit Sales Account. In respect of sales reported by the General Sales Agents, the amount is debited to GSA Current Account 5) Cargo Refunds: Cargo refunds are reported by the stations through the statement called Mechanised Accounting Procedure form II (MAP-II) Annexure No.4 The refunds are normally affected for the following reasons: Non performance of the carriage. Change of status of AWB from PP to CC. Reduction in the charges due to change of destination, change of rate, change of weight. Trucking and storage charges. Cancellation of AWB. Settlement of agents' adverse report. Refund of deposits collected from the agents/parties such deposits are normally collected in respect of CC shipments and refund is affected after the amounts are collected at destination.

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8. List of Registers Register of CC AWBs :

These AWBs are sorted and entered into the register station wise before forwarding them to MSD. Adjustment Register :

In this register are entered the adjustments relating to the earlier period transactions and consolidated entry for the entire month is passed. Vigilance Register :

All the AWBs whose value is Rs.25, 000/-and above are checked by the officer and entered in this register. Vigilance report is submitted to the D.F.'s office every quarter on the basis of this report. MCO Register :

All the MCOs received with the Sales Report are entered in this register before forwarding them to the Passage Screening Section for accounting/ billing action. Bank Lodgment Register :

All the bank lodgments are tallied with the lodgments reported on the MAP and they are entered in this register. The register is sent to Banking Section. The lodgment slips are retained by the Banking Section. Debit Register :

All the debit notes raised on the stations, General Sales Agents for short accounting are entered in this register serially. A copy of the debit note is sent to Credit Control Section/GSA Section which acknowledges receipt of the pink copy of the Debit Note by countersigning the register.

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II) Accounting of Carriage Documents

The main function of Cargo Carriage Screening Section is to calculate the revenue accruing to AirIndia on each AWB carried on various Air-India flights and to pass journal entries in respect of monthly revenue earned by Air-India by carrying cargo on various flights. Cargo is carried on freighter services, on passenger services and on charter/Sub-charter services operated by Air-India. A list of various consignments/Bordereaux under which the .cargo is carried on various Air-India flights is forwarded to Central Accounts Office by all online stations. All on-line Stations have been issued instructions to forward Cargo Manifest on the first available flight in respect of cargo up-lifted ex that station, on all the flights operating through the station.
Even though no cargo load is carried on a particular flight a' certified. copy of 'NIL' Cargo Manifest

is required to be sent to Central Accounts Office. This procedure ensures that cargo carried on AirIndia. A service does not remain unaccounted.

PICTORIAL FORM OF FUNCTION OF CARGO CARRIAGE

MANIFEST /DOCUMENTS

CHECKING

ROUTING

SCREENING

AUDITING

TOTALLING

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A) Cargo Manifest It is a document prepared by the station from which theflight operates, which gives the following information :

Details of the Aircraft/Flight Etc. 1. Owner/Operator 3. Point of Loading2. Nationality/Registration. 4. Flight No. & Date.

Details of Cargo carried 1. AWB No./pallet No. 3. Nature of Goods 5. Origin/Destination 2. Number of Pcs. 4. Gross Weight 6. Remarks.

Control of cargo manifest Carriage screening section controls the receipt of all manifests through a chart. The chart is maintained on a week to week basis. The follow-up action is taken in respect of manifests which are not received within the normal time limit, and the matter is pursued till the manifest copy is received from the station concerned. After the receipt of the manifest is recorded in the control chart, the same is handed over to the checker.

B) CHECKING The checker's responsibility is to ensure that all the AWBs are mentioned in the Cargo Manifest and all the pages of the Manifest are received. A follow up action is taken with the stations concerned Ln respect of those AWBs or pages which are not received. If copies of certain AWBs are not received, by the time the manifest is sent for processing, a dummy copy is prepared for provisional accounting purpose and follow-up action is taken with the stations concerned and the copy obtained. After checking has been completed, the documents are handed over to the Route-Marking Section for further processing. 37

C) Route-Marking The Route-Marking staff segregates the AWBs received with the manifest on the following basis. 1. All Air-India P repaid' AWBs. 2. Other carriers Prepaid AWS s. 3. Air-India and other carriers CC AWBs

Each of the above group of documents is controlled by a slip called Air-India Cargo Document Control Slip which gives the information about the flight No. and the station as well as type-of documents to which it relates .e. g. Air-India prepaid, other carriers prepaid etc

After segregating the total number of AWBs, listed in the manifest as mentioned above, Cargo Document' Control Sheet is prepared which gives category-wise summary of the total number of documents pertaining to the particular manifest. This control sheet is as per Annexure - 4. After segregating the documents and preparation of control sheet, the Route-Marker notes the following information on each AWB.

a) Numerical Code No. of the Area of Sale. b) The sector for which the AWB is accounted. c) The Ex-flight reference wherever available, d) The reference of Cargo Transfer manifest. e) If a shipment is carried in part, the same is required to be entered in part shipment Register.

If the information about the subsequent carriage is available, the same is mentioned on the AWB. In case of those shipments where this information is not available, index of "TPX" is given to denote that the transfer particulars are not available; this information enables the screening staff to apportion the revenue more accurately. After the route marking is over, the manifests are sorted week-wise and are handed over to the supervisor for distribution among the staff for detailed calculation 38

D) Screening The following principles are observed by the screener while evaluating the revenue accruing on the AWB: 1. Check the sector marked by the Route-Marker 2. Check the race on the AWB by referring to ABC/TACTGOI Mandatory orders/Various tariff bulletins. 3. Check the arithmetical accuracy of the total freight collections (weight X Rate). 4. Check the Area of Sale marked by the Route-Marker 5. Compare the currency of collection with the area of sale marked. Mention commodity code on the AWB. 7. Check the accuracy of the volumetric/actual weight. 8. In case the shipment is being carried in parts, mention the weight of the part shipment and calculate revenue accordingly. 9. Check the correctness of the valuation charges. LIST OF REGISTERS MAINTAINED IN CARRIAGE SCREENING SECTION. 1. Part-shipment register record of part-shipment carried, for follow up action. 2. Diplomatic Mail Record 3. Debit Note Register 4. Mishandled Cargo Register 5. Attendance Register 6. Overtime Register 7. Job Allocation/Job Productivity Register 8. Flight wise Revenue Register

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9. Reference book like TACT Rule/Rates Book, ABC guide & APD Cargo & PFM Cargo etc.

E) AUDITING After screening is completed, the manifested and Screened AWBS are handed over to an experienced and a trained staff for the purpose of Audit. This process mentioned below ensure Accuracy of the work done by the screeners. i) Area of Sales corresponds with currency of issue ii) Correctness of AOS/Sector/right Number and date given by Route Marker. iii) Accuracy of Calculation of Freight charges and other charges. iv) Correctness of Accounting Allocation given by Screeners.

F) TOTALLING After the Audit job is over, documents are given to the computes for totaling. The total certified by computes serves as a control figure for detecting any mistakes which may be committed either by Screening Section or by M.S Dept. The Screened manifests are forwarded to the MSD for punching on a day to day basis. These are entered in dispatch Register and are delivered to MSD after obtaining an acknowledgement.

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III) Settlement of Claims and refunds

A] CARGO CLAIMS SETTLEMENT - IATA Interline claims arise as shipments are booked by one carrier but the transportation is done by another carrier or more than one carrier. Interline claims of carriers who are members 'of the IATA clearing house are settled every month through the IATA Clearing House. The necessary papers relating to claims for Cargo are received by the Passage Claims Settlement Section, who prepares 'a statement indicating net amount of claims processed on us by other carriers in the relevant IATA Clearance. The net amount is debited to IATA Cargo Claims Clearing A/b. This statement shows claims received carrier-wise. Passage Claims Settlement section also forwards us LON-ONE form. LON-ONE form is a summary of invoices processed by a carrier through IATA Clearing House where the amount claimed is shown in the currency of the country to which the carrier belongs as well as in the currency of zone to which that country belongs. Besides in the class column of this form the word 'C' is indicated for claims in respect of cargo along with the invoices. On receipt of the statement, the same is checked with LON-ONE Cargo forms received form the Passage Claims Settlement section. It is further checked whether all invoices, credit notes included in LON-ONE form have been received. The total of the LON-ONE form is tallied with the total of the statement. In case any invoice or credit note is missing the same is called for, from the carriers concerned. The carriers bill Air-India for the following types of transactions: i) Air-India AWBs on prepaid basis. ii) AWBs transferred to Air-India at any point when these Airway bills are on Charges Collect basis. iii) Wherever it is on Al Air waybill on C.C. basis and the consignee has not taken delivery, the delivering carrier bills Air-India quoting reference of their IRP(property irregularity this connection. iv)'The delivering Airline bills Air-India for total Charges for GBL shipments when AWBs are issued by Air-India by supporting their claim with GBL Waiver etc. (Govt. Bill of lading AUS. Govt. Documents) v) The delivering airline bills Air-India for Al Airway--bills which were originally on CC. basis but status of which is subsequently changed to P.P. 41

vi) Other carriers' airway bills which were originally on PP basis, but changed to CC basis,the issuing carrier bills us for total charges when Al is the delivering airline. vii) Carriers for whom Al is acting ds handling Agent. viii) Wherever AI stores (Corporation, stores) shipments are carried by other carriers. ix) Carriers' rejection out of our claims on them. x) Carriers send their claim not only towards freight charges but also for miscellaneous charges such as Handling Charges, Forwarding Charges, Transshipment Fees etc. which are allocated to the respective accounts by this section. When a station is debited for collection of freight charges, and the station informs the recovery particulars, IATA Claims Section passes the necessary entry to withdraw debit on the station. Rejections received from other carriers, are investigated tor the following reasons:(i) (ii) Duplicate billing. Other carriers getting billing from two different carriers.

(iii)Additional information such as copy of AWB, CTI, Carriage manifest Pest, etc_ (iv) (v) (vi) Proration Mistake. Time-barred Items. Billing on IRP basis (Charges Collect transaction :)

(vii) CCA basis. (viii) Billing on wrong carrier- because of wrong Transshipment particulars given. (ix) (x) (xi) (xii) Passing on other carriers billing on us. Other carriers rejecting our claim on IRP basis. Application of wrong rate of exchange on AWB. No record letter basis (After 2 months).

(xiii) Our first billing on wrong carrier in respect of CC shipment.

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CARGO CLAIMS SETTLEMENT - NON IATA.

The carriers whose claims are not settled through the IATA Clearing House but are settled bil-iternlly interims of Interline Agreements between them and Air.-India In these cases the air uuts debited by such carriers are compiled and the total figure along with the statement is pas:3ea on to us by Misc. Section together the invoices from the carriers. The total of net claims is debited to Non--IATA Cargo Clearing Account. The rest of the procedure is similar as stated for carriers who are members of the IATA Clearing House. The settlement of A/c is normally effected by remitting net balance in favour of the creditor party.

1. Forward-Sales-Caro--(F.S C.) The freight charges collected on P.P. shipments are split up between Air-India Revenue and other carriers share. The amounts due to the other carriers are retained in Forward Sales Cargo Account. AWB wise listing of such items is prepared by MSD on month to month basis. In order to segregate the items pertaining to various accounting periods a new FSC account for each financial year is opened by Revenue Accounts. The claims received from other operating companies on Air-India prepaid shipments are met out of the balance amount available in FSC: Account. As per the existing policy, this account is kept open, for two years and at the end of two years, the balance available in this account is transferred to Prior Period Revenue. 2. Freight Charges Payable Account (FCP) In respect of amounts indicated on the Charges Collect AWBs ,the amounts due to Air-India are on account of freight charges, storage charges, cartage etc. are worked out and the balance available is credited to Freight Charges Payable Account. A new FCP account is opened every financial year to segregate the transactions relating to that particular financial year. The claims received from other carriers who have carried consignments booked on Air-India CC AVMs .are settled out of amounts available in FCP Account. The M.S Department provides to Cargo and Mail Accounts AWB wise monthly listing of such AWBs. 3. Treatment of Rejected Claims When carriers claim against a particular AWB is rejected totally or partially on certain grounds such as inadequate details, excess billing etc. the unacceptable amount is debited to Recharge to Airlines Account. This suspense account 'is cleared by debiting the Airline concerned and crediting Recharge to Airline Account through the medium of Rejection Memo. All such memos are entered in the Billing 43

Advice Register which is subsequently sent to MS Department for punching and raising invoices on the carriers. A summary of the billing Advice Register is received from M.S. Department and a consolidated entry is looked by this section debiting various carriers and crediting Recharge to Airlines Account.

Accounting-entries passed by the section

1. IATA & Non-IATA Claims: claims are debited year wise towards FCP, FSC, and recharge and debited to Cargo Claims, Commission earned, and difference in exchange.. 2. When we reject the carriers claim on certain grounds, carrier is debited ind Recharge to Airline account is, credited and entered in the billing advice register. 3. When a debit note is raised on a station, station is treated as Sundry Debtor, and is debited and respective FSC, or FCP account is credited and shown in Misc Column on credit side.

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iv) Accounting of Charges Collect transactions;

The function of this section is to reconcile the Charges Collect account. The Charges Collect account gets debited at the time of screening the carriage documents. These debits are raised on destination stations of Air-India or the carriers handling Air-India flights at those particular destinations e.g. Charges Collect Shipment originating in Bombay and destined to Frankfurt, the recoverable. amount will be debited to-Frankfurt Station's CC account. In respect of shipments destined to Mauritius, the recoverable amount will be debited to Air Mauritius account who are our handling agents in Mauritius. A list of stations and. The carriers on whom the bills are raised for such transactions is given in Annexure 16. All Air-India on-line stations, where Charges Collect facility is available, are required to forward a statement of import arrivals to Central Accounts on month to month. This statement is a flight-wise record of Charges Collect Shipments received at that station on various Air-India flights. The recoverable amount is indicated in local currency by the destination station. These amounts are converted into Indian Rupees at the following rates. In respect of Indian stations, since collection is made in Indian Rupees, the amounts are reported in Indian Rupees. Indian stations convert the foreign currencies reflected on the AWB ns, at the Bankers selling rate given by Tariffs Department. All other stations convert the values of the incoming shipments mentioned in the currency of the station if issue, at the applicable local selling rates. All the import arrival statements when received from the stations are forwarded to M.S. Dept, for. Matching against the debits raised at the time of screening the carriage documents. M.S._ Dept. after undergoing the process of matching, prepares the following three statements Statement No. I : This is a list of matched items. The items are matched on the basis of AWB no and amount reported on import Arrival statement.The excess debit or credit available on each AWB is separately shown in the Matched listing. Statement No. II: This is a list of unmatched carriage debits on account of partshipment, late processing of documents etc. Statement No. III : This statement reflects those items which are reported by stations through Import Arrival Statements, but which are not matched with carriage debits.

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The above three statements received from the M.S. Department are investigated by the Charges Collect Section.

Accounting entries passed by charges collect Section Most of the entries passed by this section are adjustment entries : a) Adjustment of excess debits/short debits booked at the carriage screening stage e.g. non-booking of part shipments. b) Adjustment entries to rectify the errors committed at the time of carriage screening e.g. application of wrong currency due to coding of wrong Area of Sale; c) Application of wrong conversion rate. d) Booking of part shipments as full shipments. e) Multiple bookings of due agent and due carrier charges on part shipment AWBs. f) Adjustment to the debits raised on account of payment received in the form of MCO. g) Adjustment of deposit collected on CC shipments against the freight charges recoverable. h) Rectification of wrong Charges Collect stations' codes. i) Adjustment in respect of diplomatic mail wrongly debited to the destination station instead of debit being raised on the embassy concerned. j) Adjustment of Thai Airways credit notes against debit raised on Bangkok station. k) Booking of local charges on CC shipments destined to London. l) Booking of CC fee in respect of stations where the amount is reported by GSAs through GSA statements/collection statements. m) Booking entries in respect of collections made at Sharjah and Seyschelles. n) Booking entry for difference between the values of shipments reported in Import Arrival statement converted at.21 F rate and the applicable booking rate advised by Financial Accounts.

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v) Reconciliation of Airlines Collect Account and Accounting of Unaccounted Sales

I. AIRLINES COLLECT ACCOUNT

This is a sort of suspense account operated at the time of screening Cargo. Carriage documents. 1. Actual Operation :

This account is operated in case of Charges Collect Shipments only. When on-carriage details or transfer details are not available at the time of Carriage Screening, the Airlines Collect Account is debited instead of debiting the Charges Collect Station code or carriers account code. This is a sort of suspense account which will have to be reversed subsequently by .debiting the appropriate account and crediting the above account. When the shipment is .in-carried on subsequent Air-India flight,, the carriage screeners credit Airlines Collect Account being the charges for the previous portion. Thus, it will be observed that when shipment is carried on more than one Air-India flights, both the debits and credits are given by the carriage screeners concerned. However, the amount debited and credited may not be the same in some cases for reasons such as (1) Difference arising out of exchange rate. (2) Screening procedures (3) Offloading advices not connected prior to screening etc. As this account has to be brought to nil balance all such differences will have to be investigated and the entry will have to be passed by the Airlines Collect Section. All stations to which CC shipments are destined are required to forward a statement of reconciliation of Charges Collect Account to Central Accounts along with the Import Arrival Statement. This statement has been introduced since the decentralization of Charge Collect Sundry Debtors Account. The following information is given in the Statement. 1. The opening balance of the Charge Collect account. (This is the closing balance of the previous month) 2. Add: Total value of CC shipment included in the Import arrival statement. 3. Less: recoveries effected by the station for Charges Collect shipments during the month. 47

4. Add and subtract : Adjustments on account of advice received from Central Accounts office or issued by the station and value of shipments not reported earlier. 5. Closing balance.

CCs

The recoveries reported in this reconciliation statements are checked with the figures reported in Form 'E' Col.Nc,.,2 of the station.

2. Accounting Entries a) Entry to bill airlines for CTMs Matches. 1) DR Sundry Debtors 2) DR Difference in Exchange 3) DR Cargo Rev 4) DR Commission earned 5) CR. Airlines Collect 6) CR F.C.P. 7) CR Valuation 8) CR Miscellaneous Receipts 9) CR Cartage 10) CR Insurance Being the entry passed in respect of items debited to Airlines Collect Account at the screening stage in the month of but subsequently reversed by debiting to various Airlines concerned as per the statement received from computers

2) Entry to clear Debit items. DR Sundry Debtors Station wise DR Cargo Rev DR Commission CR Airlines Collect CR. F.C.P. Being the entry passed to clear the debits' in Airline Collect Account on various AWBs for the month of are adjusted against the credits available in statement no. I and Statement No. III in the same month and subsequent months. 48

3) Entry to clear credit items. DR Airlines Collect. DR Cargo Rev. CR Commission Earned CR Sr. Debtors Station wise Being the entry passed to clear the duplicate debits,, wrong debits and excess debits in Sr. Debtors Account as against the credits in Airlines Collect Account

Unaccounted Sales -- Charges Collect AWB:

II. 1. Unmatched list of CC shipments: The Computer and Communications Services Department prepares a list of Charges Collect

AWBs reported. by the stations in their Sales Report but which was not matched with Carriage records. that list is prepared after matching particular month's CC Sales documents with the previous month's, the current month's and the subsequent months Carriage listing. The unmatched items are listed by Computer and Communications Services Dept. in a statement called list of Charges Collect Shipments not arrived on Air India flights. AWB s are physically traced from the monthly lots sent to Computer and Communications Services Dept. A station wise list of such AVE s is prepared. The items remain unmatched for the following reasons: Punching errors. Items carried but not manifested. Prepaid AWBs reported as Charges Collect in Cargo Sales Report. Al Shipments entirely carried by other carriers. AWBs voided after they are accounted in Sales Report.

2.

Method of Investigation:

All shipments listed are verified with the Carriage register and Sales register for the next 4 to 5 months to check probable late accounting. 49

 The listing is checked with the CTM listing, Carriage listing and unmatched listing I.e. Statement No.III to trace the carriage particulars. The unsolved items are referred to the stations for furnishing on carriage or transfer particulars. Verification of Charges Correction Advices from the register maintained by Charges Collect section relating to such AWBs.

3) Accounting Action; n respect of shipments transferred at an intermediate pointtake billing action on the subsequent carrier. In respect of items transferred at origin, take computerized billing action by including these AWBs in the current month's sales transactions. The AWBW are screened to indie t a c the carrier billed, commission due etc. List of Charges Collect shipments not carried on Al flights. (a) AWB No. (b) Station Code - Issuing Office. (c) Accounting month. In respect of items appearing in Statement No. I. unmatched extra credit listing, the items are checked to establish that extra credit is available and such credit is used to adjust the debit raised against the station This happens in case of Charges Collect items accounted as prepaid at the carriage stage and items not manifested but carried.

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vi) Accounting of Postal Mail Transactions

MAIL PROCESSING 1. INTRODUCTION: Mail Section is responsible for accounting of the revenue & collection from debtors for Postal mails uplifted by Air - India. The work of the mail section pertains to billing and accounting of postal mail carried by air our service on monthly basis. The mail is divided into 3 categories. I. II. III. P.O.- ordinary mails /postal mail EMS - Airmail& Speed mail Surface Airlifted mail (SAL

For the purpose of billing postal mail is split into the following types I. II. Indian origin mail - Mail originated from India destined for foreign destinations. Foreign origin mail - Mail originated in foreign location destined to India.

Mail rates are set by the universal postal union (UPU). the currency used in special drawing rights (SDR) the value of which is determined by the IMF . 2. CARRIAGE OF MAIL & MOVEMENT OF DOCUMENTS a. The basic document prepared by the department of post is the postal way bill AV7's re handed over to the traffic staff at the airport of uplift. The Traffic staff in the from of a manifest called M-1 prepares a flight /dates sector wise summary of the AV7s. This M-1 along with AV7s is sent to the manager mail promotions to the cargo commercial division. b. The traffic staff at destination station has to deliver the mail bags to the airport sorting office after receiving stamped receipt on copies of AV7s received along with mail bags. These AV7s are summarized in from M-2and sent to manager mail promotion. c. A matching of the M-1 received from uplift station and M-2 received from destination station is done as actual proof of carriage of mail by air India on its section.

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d. The manager - mail promotion at the cargo commercial office enters details as per postal mail type on a floppy. This floppy is then sent to the finance department for the purpose of raising the invoices. 3. RAISING INVOICES & BILLING All the claims for Air Conveyance Charges of Indian Origin mail are to be raised on the Indian postal department. Air Conveyance Charges of Foreign Origin mail are settled directly with the various foreign postal administrations Forms AV-3 & AV-5 are generated from the system. AV-3 contains the sector wise details of mail. AV-5 contains sector wise summary of weight, rates applicable in SDR & amount in SDR. A monthly AV-5 summary is also prepared divided into Regular, Supplementary & Regular for countries with which there is no agreement. A dummy ledger is maintained where the entries pertaining to Indian mail, foreign mail, Rejections & Recharge are passed. In countries where Air India has its own office, the invoices are sending to these offices which then forward this to the respective department of post. The Payment is then send by the department of post to the respective Air India office which then reports the amount through ERP.

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BILLING:

MAIL DATA FOR BILLING

Indian

Foreign

Regular

suplimentry

Recharge

Regular

Recharge

suplimentry

MAIL DATA FOR BILLING:For the purpose of billing postal mail is split into the following types Indian origin mail - Mail originated from India destined for foreign destinations. Foreign origin mail - Mail originated in foreign location destined to India. 1. Indian mail data for billing: This type of billing process carried out in India. Air India carrying postal mail to abroad and they bill to Indian post office. Indian post office gives mail to the Air India for carriage . Their are mainly three types of billing a) Regular Billing b) Supplementary Billing c) Recharge Billing a) Regular billing:

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Regular billing is carried out on monthly basis. Invoice raised on India Post. India post settles after verification for the same. b) Supplementary billing: Supplementary billing is mainly based for late receipt of the documents . c) Recharge billing: When disputed amount of the original billing is being verified by the company and wish to maintain reclaim for amount rejected as recharge actions.

1. Foreign mail data for billing: This type of billing process is carried out for foreign mails. Air India carrying mails from international stations to India and bill to post offices of county concerned or airline if agreed. Their are three types of billing a) Regular Billing b) Supplementary Billing c) Recharge Billing a) Regular billing: Regular billing is carried out on monthly basis. Invoice raised on post offices of county concerned or airline if agreed. Concerned postal administrations settles after verification of the bills. b) Supplementary billing: Supplementary billing is mainly based for late receipt of the documents. c) Recharge billing: When disputed amount of the original billing is being verified by the company and wish to maintain reclaim for amount rejected is treated recharge actions.

PROCESS OF MAIL SECTION:STEP -1 Download data from commercial department. STEP-2 Prepare file called REG16*. Complete detail of postal mail carried by the airline for the billing purpose. 54

*REG16 = Origin, destination, sector, type of mail , bag no, weight, flight no, date ,month of invoice and class of invoice i.e. either Regular. Suppl. or Recharge STEP-3 Prepare file called REG15*. This is the actual invoices, containing sector wise and type of mail carried by the airline which support file REG 16. *REG15 = class of invoice, month of invoice, sector carried, total weight, rate per kg and total value of invoice. STEP-4 Prepare list -register /summary. STEP-5 Prepare file for advice to DIT department. Credit advice is to be incorporate for AOS (mail sales )in statement called CS-75,ie' Traffic Performance Report '. This information is provided for regular and supply. Invoice only. STEP-6 Print hard copy of file REG16 and REG15. STEP-7 To generate mail invoice manually in ERP system from summary statement prepared in step- 4 as DR- Mail Receivable A/C 14780 CR - Mail Revenue A/C 42103. Step -8 When payment / rejections received from foreign post offices. Input in in house programme through menu and generate dummy standard receipt operating account no 21696 i.e. receipt on behalf of other stations. DR- A/C 21696 (for payment) DR- A/C 42103(Rejection) DR-A/C 44571(Rejection) CR-A/C 14780 Miscellaneous. Receipt created by the station for the collection amount would nullified - A/C 21696 as under. DR- Bank/Cash CR -A/C 21696. Above actions are required for preparation of invoices for presentations as well as to provide required information to the management on regular nature.

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ENTERPRISE RESOURCE PLANNING (ERP) IN AIR INDIA:

In January 2006, Air India implemented a range of Oracle E-Business Suite applications as the basis of an integrated enterprise resource planning (ERP) system. Although Air India had used IT packages in the past, this was the first time the organization had implemented a commercial off-the-shelf enterprise resource planning (ERP) solution. Although the concept of multiple users interacting on the same platform was not new to Air India, usage of a true ERP solution was new to the organization. In the past, the company had relied on manual, paper-based processes to manage its inventory, purchasing, and budgetary control and monitoring. This simplified keeping data in synchronization across the enterprise, it simplified the computer infrastructure within a large organization, and it standardized and reduced the number of software specialties required within larger organizations.

Advantages :
One of the main benefits of ERP at this point in time is that it allows a company to replace old, non-year 2006 compliant applications and hardware. It eliminates the need for inhouse developed software that was originally designed to function independently and not communicate with other applications. When applications were developed in the past for areas such as manufacturing and financials, in order for them to communicate and transfer data back and forth, it was necessary to have complex, extensive links and architecture. ERP also can eliminate that expense because having one common system written in the same language is easier and costs less money to maintain. Having one common system and single data model will reduce the duplication of effort, therefore resulting in greater efficiency.

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Disadvantages : Problems with ERP systems are mainly due to inadequate investment in ongoing training for involved personnel, including those implementing and testing changes, as well as a lack of corporate policy protecting the integrity of the data in the ERP systems and how it is used. Disadvantages Re-engineering of business processes to fit the "industry standard" prescribed by the ERP system may lead to a loss of competitive advantage.

ERP systems can be very expensive leading to a new category of "ERP light" solutions

Many of the integrated links need high accuracy in other applications to work effectively. A company can achieve minimum standards, then over time "dirty data" will reduce the reliability of some applications.

Once a system is established, switching costs are very high for any one of the partners (reducing flexibility and strategic control at the corporate level).

Resistance in sharing sensitive internal information between departments can reduce the effectiveness of the software.

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Recommendation
Air- India should undertake rationalization of certain loss making routes: Redevelopment of staff to curb infructuous expenditure. Leveraging of the assets of the company to increase revenue from the company's real estate properties. Air- India should undertake up gradation of IT - Infrastructure & implementation of quick IT solution like SAP Cargo section should evaluate processing of other Air- lines which are currently processing faster & accurate as compared to that of Air- India; & try to implement this procedure in their system. For Mail Processing over dependency on individual person. This may lead to some problem in future. So Human Resource dept, should appoint staff in that department. Performance Appraisal, Promotion, rewards, & Training programme should be implemented properly.

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Conclusion of project
Cargo and mail section in Air India, the workings are as per the guidelines laid down by IATA and all other airlines have to follow similar procedures. Cargo's revenue is increased by 4.38% and mail's revenue increase by 75.55%. But it has also

lead to increase in Expenditure, where the company needs to concentrate on its expenses.

At present and in future there is a vast improvement in their workings. This is mainly due to implementation of ERP system. With the help of ERP the level of efficiency has improved

Currency rate of 25 th of month is applicable for collection of next month. This makes easy claim settlement and provides protection from currency rate fluctuation.

Still Air- India is a dominating Airline in carriage of Mail in India.

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Bibliography Books Refereed:

The air cargo tariff manual: - IATA Prorate manual cargo:- IATA

Engines search:
Air India manuals- cargo & mail manual, budget report, Revenue report, IATA manuals. Air India annual report. www.wikipedia.com www.google.com www.Airindia.com

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