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Marketing case study: Air India



Introduction Services Passenger operations Cargo operations Awards and recognition History Marketing strategies The jet age The challenging 1990 2000-present Some more marketing strategies Air India in trouble sky A problem peculiar to Air India In royal mess Reason of current breakdown Air India first flights

Marketing Management Project Case study of Air India

Introduction:Air India is the only state-owned airline in the country. It is Indias finest flying ambassador. It is the oldest and

the largest airlines of India. It is part of the Indian government-owned Air India Limited (AIL). Its corporate office is located at the Air India Building at Nariman point in south MumbaiIt is the 16th largest airline in Asia. The airline operates a fleet of Airbus and Boeing. Air-India Limited operates passenger and cargo flights from Bombay to destinations in the United States, Europe, the Middle East, Africa, the United Kingdom, Russia, China, Japan, and other countries. Air India has two major domestic hubs at Indira Gandhi international airport and chatrapati shivaji mahraj international airport... An international hub at Dubai International Airport is currently being planned. It holds the distinction of being the world's first all-jet airline. Founded as a small, private, domestic carrier in 1932, Air-India is now government owned. Once regarded as a "little jewel" of an airline, its reputation became somewhat tarnished as service and profits slipped. Significant changes, however, have rejuvenated the airline, put it back in the black, and restored its ranking among the better airlines of the world. Three million passengers a year fly Air-India. Now a day it is working with burden of huge amount of debts, so Government is planning its privitisation.

, it continues to be Indias National airlines. Now a days it is facing a huge debt crisis and Government is planning its privatisation The airline is bleeding Rs 600 crore every month and is burdened by over Rs 40,000 crore in debt. Working capital loans of the carrier have also crossed Rs 21,000 crore, which is just Rs 1,000 crore less than their entitlement on their equity base of Rs 3,145 crore. Its losses total around Rs 20,000 crore. Having recently merged with Indian Airlines suffering huge debt days. Government has recently finalized a package of Rs.1,200 crore for the airlines but that is not sufficient for highly debt backed industry. The current debts of Air India amounts to 33,000 crore, which is impossible for the maharaja[symbol of Air India used for its advertising and commercialising purpose, it used to make people feel like rich while travelling] is now facing his downs. Air India chairman and managing director arvind Jada resigned, though his 3 year term was to end in the year 2012, now Rohit nandan has been appointed its new chairman cum managing director.


Air India operates the following services (at January 2005):

Domestic scheduled destinations: Ahmedabad, Amritsar, Bangalore, Chennai, New Delhi, Goa, Hyderabad, Kochi, Kolkata, Kozhikode, Lucknow, Mumbai and Thiruvananthapuram. International scheduled destinations: Abu Dhabi, Al Ain, Bahrain, Bangkok, Birmingham, England, Chicago, Dammam, Dar es Salaam, Doha, Dubai, Frankfurt, Hong Kong, Jakarta, Jeddah, Kuala Lumpur, Kuwait, London, Los Angeles, Muscat, Nairobi, New York, Osaka, Paris, Riyadh, Salalah, Shanghai, Seoul, Singapore, Tokyo and Toronto.

Passenger Operations Air India currently caters approximately 44 destinations throughought the world. It also has code-sharing agreements with many international airlines to expand coverage. The airline ferried 3.39 million passengers during the financial year ending March 2003 and achieved a load factor of 71.6 per cent, substantially higher than the 66 per cent load factor recorded in the preceding year. The airline strives to achieve the best in-flight standards and receives a 4 star rating for cabin safety procedures from skytrax airline quality review. Three classes of seats are offered - First class, Executive class and Economy class. Flatbed seats are offered for first class passengers. The airline also offers a frequent flyer programme alone and in collaboration

with many of its alliances. The airline also offers luxury lounges in its ground terminals for its First and Executive class travellers in select destinations within India. Air-India has duty free sale on board its flights effective June 1, 2003 named 'sky bazaar', meaning Market in the sky. Cargo Operations In 1954, Air-India commenced its freighter operations with a Douglas DC-3 Dakota aircraft, giving Air-India the distinction of being the first Asian airline to operate freighters. Currently, the airline operates regular Cargo flights to many destinations of the world. The airline also has ground truck-transportation arrangements on select destinations. 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. At the warehouse in Mumbai, Air India has 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. Awards and Recognition The Airline entered the Guinness Book of World Records - The largest evacuation by a civil airliner, involving evacuation of over 111,000 people from Amman to Mumbai - a distance of 4,117 km, by operating 488 flights in association with Indian Airlines, during August 13 - October 11, 1990, lasting a total of 59 days. The operation was carried out during Persian Gulf War in 1990 to evacuate Indian expatriates from the region . The airline received The Mercury Award for the years 1994 and 2003, from the International Flight Catering Association, for finest in-flight catering services. Air India's security department became the first aviation security organisation in the world to acquire ISO 90021994 certification(January 31, 2001). The Department of Engineering, Air India, has obtained the ISO 9002 for its Engineering facilities for meeting international standards. Trivia The Indian Prime Minister's flight operated by Air India is called AI 001.

Dates back to 1932 : The aviator Neville Vincent had an idea to run mail flights from Bombay and Colombo that connected with the Imperial Airways flights from the United Kingdom. He found a supporter for his plans from J. R. D. Tata of the Tata Iron and Steel Company. After three years of negotiations Vincent and Tata won a contract to carry their mail in April 1932. Then J. R. D. Tata founded Tata Airlines in 1932 as a division of Tata Sons Ltd. (now Tata Group). It was started as a mail service over the route Karachi to Bombay and on south to Madras. In July 1932 Aviation Department of Tata Sons Ltd. was established. It begun operations with the first Karachi Madras (via Ahmedabad, Bombay and Bellary) mail service to connect with Imperial Airways' London Karachi services. The first flight on October 15, 1932 was operated by a De Havilland Puss Moth VT-ADN flown by J R D Tata, carrying air mail [Postal mail of Imperial Airways], pioneer aviator and industrial tycoon, from Karachi to Bombay and by Neville Vincent from Bombay to Madras arriving there on October 16. Tata Airlines initially consisted of one puss moth aircraft, on Leopard moth, one palm-thatched shed, one

whole time pilot assisted by Tata and Vintcent, one part-time engineer and two apprentice-mechanics.Initial service included weekly airmail service with a Puss moth aircraft between karachi and Madras via Ahmedabad and Bombay, covering over 1,300 miles. In 1933, in its very first year of operation, Tata Airlines flew 160,000 miles, carrying 155 passengers and 10.71 ton of mail.[2] In the next few years, Tata Airlines continued to rely for its revenue on the mail contract with the Government of India for carriage of surcharged mail, including a considerable quantity of overseas mail brought to Karachi by Imperial Airways. The same year, Tata Airlines launched its longest domestic flight Mumbai to Trivandrum with a six-seater MilesmerlinThe Aviation Department of Tata Sons Ltd. became Tata Air services in the year 1938 and in the same year it was renamed as Tata Airlines. Then Tata Air Lines converted into a public company and was renamed Air India Limited. In 1946, at the conclusion of World War II, the airline became a public company and was renamed Air-India Limited. In just two years, with the government having a 49 percent share in the company, the airline was flying further outside of India, with regular flights to Cairo, Geneva, and London. The line's name changed

again to reflect its new scope of operations, becoming Air-India International Limited. 1948 was a very significant year in the history of the airline as 49% of the airline was acquired by the Government of India, with an option to purchase an additional 2% at any time and a new entity Air India International was incorporated as designated flag carrier means In return, the airline was granted status to operate international services from India as the designated flag carrier under the name Air India International. On June 8, 1948 a Lockheed Constellation L-749A named Malabar Princess and registered VT-CQP took off from Bombay bound for London via Cairo and Geneva. This marked the airline's first long-haul international flight, soon followed by service to Nairobi via Aden. On 1 August 1953, the Government of India chose to exercise its option to purchase a majority stake in the carrier and Air India International Limited was born as one of the fruit of the Air Corporations Act that nationalised the air transportation industry. It becomes exclusive airline for external services. 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 as its first Boeing 707 named Nandadevi and registered VT-DJJ was delivered. Jet services to New York via London were inaugurated that same year. On June 8, 1962 the airline's name was officially truncated to its current form of Air India. On June 11, 1962 Air India became the world's first all-jet airline. With its main base at Chhatrapati Shivaji International Airport, Mumbai and Indira Gandhi International Airport, Delhi, Air India connects 146 international and domestic destinations around the world, including 12 gateways in India with Air India Express, a fully-owned subsidiary of Air India. Air India plans to join Star Alliance and has ordered 27 Boeing 787 (+7 options), to be delivered after 2009.


India enjoyed more success in the airline industry than most other developing countries for a number of reasons. Whereas others had to rely on foreign pilots to fly their planes, Air-India used mostly native-born pilots. Similarly, skilled Indians were plentiful enough to maintain India's fleet as well as to train and supervise its personnel; many other countries had to go outside for this kind of expertise. Air-India benefited from these advantages along with its sister carriers. Air-India first encountered competition for its routes in the early 1950s. Many new airlines were forming, propelled into business by the availability of inexpensive, war-surplus DC-3s. No fewer than 21 airlines had been established, with 11 of them licensed to fly the skies of India. A 1985 article in the Economist cited Tata's foresight of what this plethora of airlines could lead to: "The scene was well and truly set for the ultimate debacle." Air-India first encountered competition for its routes in the early 1950s. Many new airlines were forming, propelled into business by the availability of inexpensive, war-surplus DC-3s. No fewer than 21 airlines had been established, with 11 of them licensed to fly the skies of India. A 1985 article in the Economist cited Tata's foresight of what this plethora of airlines could lead to: "The scene was well and truly set for the ultimate debacle." To prevent that debacle from

occurring, the Indian government in 1953 took control of all of the airlines within its borders. Along with the nationalization the government created two corporations. Indian Airlines Corporation, which merged Air-India Limited with six smaller lines, served the country's domestic travel needs. Air-India International Corporation flew routes overseas. By 1960 the international airline had routes to Singapore, Sydney, Moscow, and New York. By 1962, when the name was shortened to Air-India, it had become the world's first all-jet airline.

The Jet Age Air India International entered the jet age in 1960 when its first Boieng 707-430 named Gauri Shankar (registered VT-DJJ), was delivered. Beginning in the 1970s, however, Air-India saw difficult times. It suffered a net loss in three of the years between 1976 and 1985. The downturn in the world economy had a significant effect on air travel throughout the world, and India was no exception. In addition, the government kept a number of unprofitable routes open simply for prestige purposes--a strictly commercial airline may have closed those routes. Its flights to New York, for example, resulted in losses for a number of years, even though many of those flights were full. At one point an

airline official estimated that only about ten percent of Air-India's passengers to New York were business travellers who would buy the more expensive seats. Flights to Canada were even less profitable, flying at around 55 percent of capacity. Another factor in the airline's financial problems was that, to compete for American and European travellers with American and European airlines, Air-India had to discount many of its fares. In addition, the airline depended heavily on local citizens--"ethnic traffic"--which generally meant lower fares. The routes that had proven to be most profitable for Air-India had been those to the oil-producing nations. Flights to the Persian Gulf accounted for 35 to 40 percent of Air-India's traffic in the mid-1980s. Working with Gulf Air, Air-India operated 60 flights each week between the Gulf and India. But even these routes saw profits fall, as revenue in the Gulf States declined. Another problem was the shortage of tourists traveling to India. Communal violence and the assassination of Indian Prime Minister Indira Gandhi in 1984 kept tourism down. In addition, to combat the terrorism that was becoming a major problem at many of the world's airports, the government imposed heavy restrictions at airports, giving tourists another reason to stay away. The darkest note in Air-India's history was the tragedy that took place in June 1985 when one of its 747s, on a flight from Toronto to Bombay, crashed to the sea with 329 passengers aboard. A Canadian Safety Board

Report, addressing an inquiry by Indian High Court Judge Bhupinder Nath Kirpal, concluded that an explosive device was the probable cause of the crash. The board reported that an X-ray machine at Pearson International Airport in Toronto broke down before the entire luggage had been checked. Nonetheless, the effect on the reputation of Air-India was severe. Despite these problems, Air-India's productivity was high. By acquiring large-body airliners, its productivity almost doubled from the year 1974-75 to the year 198384. In terms of rupees, this productivity figure translated to a per-employee production of Rs 125,000 (US $16,000) in operating revenue in the 1974-75 year and Rs 439,000 in the 1983-84 year. In 1985 Air-India flew 8.1 billion passenger-kilometres (number of passengers times distance), a figure that prompted the International Air Transport Association to rank AirIndia 15th out of 136 member airlines in passengerkilometres on scheduled services. Nevertheless, Air-India lost US $23 million in the 1987-88 fiscal years. To stem such losses, Prime Minister Rajiv Gandhi named Rajan Jetley chairman of Air-India. Jetley took command of an airline that was overstaffed, mired in sticky negotiations with unions, and struggling under difficult working conditions. In addition, some bureaucratic meddling and high gasoline taxes interfered with procedures and made operating the airline expensive.

A number of these factors came together to have a significantly negative impact on the airline. Specifically, Air-India was flying many flights with intermediate stops, while competing airlines were flying the more attractive nonstop flights. One reason for these intermediate stops was the pilots' refusal to fly more than nine hours. A second reason was that, to minimize the effect of the high cost of fuel, Air-India did much of its refuelling outside of India's borders. Jetley dealt with these problems by convincing the government to reduce its gasoline tax and by convincing the pilots to fly longer flights. According to Jetley, as quoted in a 1990 New York Times article, the carrier was "packing the back of the bus" on many of its routes. In addition to selling coach fares, Jetley hoped to entice affluent fliers to purchase the more profitable business-class seats. Toward that end he bought new planes and changed the look of the airline, ordering a new logo and a redesign of the planes' decor and employees' uniforms and improving in-flight service and meals. He increased the number of flights to Europe, making Frankfurt, Germany, a hub and enabling passengers to connect to other European cities. In addition, he adjusted the timing of flights, making it more convenient for passengers to connect with other flights. Under Jetley's direction, Air-India turned the loss of the previous year into a profit of US $23 million. The airline rose to number 22 on the International Air Transport Association's list of the

world's most profitable airlines. The revitalized AirIndia saw record profits of US $41 million in the year 1989-90, then topped that the following year with profits of US $42.7 million. These accomplishments were all the more startling because they came at a time when many of Air-India's flights to the Persian Gulf had to be suspended because of the conflict between Iraq and Kuwait and the ensuing Persian Gulf War. The airline, though, did experience activity during the conflict, launching a massive airlift to help 110,000 Indians flee war-torn areas. Ravi Mani, deputy general director of cargo for Air-India, was quoted by the Journal of Commerce as saying that compared with this airlift, "the Berlin airlift was chicken feed." Air-India was intent on continuing its success of the early 1990s. Although it controlled 28 percent of air passenger traffic out of India that was a drop from 32 percent just a few years before. Subbash Gupte, acting chairman after Jetley left his post, explained, as quoted by the New York Times: "The reason for the drop is simple. Other airlines have expanded, bought new aircraft; we haven't." Between 1982 and 1986 the airline had kept its capacity at a standstill. While Jetley was still in command, however, plans were implemented to increase capacity by six to eight percent each year from 1990 to 1995, reducing the average age of its fleet--13 and one half years in 1990&mdash about four and one half years by the turn of the century.

Succeeding Jetley was Chairman and Managing Director Yogesh Deveshwar, who outlined the airline's direction for the 1990s. As reported in Travel Weekly in 1992, Deveshwar said: "We want to make Air-India a boutique carrier, as opposed to a department store." Parts of those plans called for expanding the carrier's United States routes to include Chicago, Los Angeles, and Newark. Flights to Los Angeles, it was hoped, would attract many ethnic Indians, who were using other carriers to other points in the Far East and then transferring to Air-India. New aircraft, including longhaul 747-400s, would help to bring those plans to fruition. In addition to passengers, cargo has always been a large portion of Air-India's business. Its major cargo markets are the Persian Gulf countries, Europe, the United States, the United Kingdom, and Japan. In 1989 (the last year for which figures were available) Air-India ranked 19th among all International Air Transport Association carriers in scheduled international freight tons. The carrier handled 66,000 metric tons of cargo that year. One of the major goals of Air-India for the 1990s was to increase its cargo operations still further. At the beginning of the decade Air-India had about 30 percent of the country's air cargo market, while more than three dozen airlines from other countries carried the balance of the country's cargo. The airline planned to lease additional jet freighters to increase its capacity to carry

exports. The International Airports Authority of India improved the infrastructure and ground handling at the gateways it operates, making them more attractive to carriers and freight forwarders. With these changes under way, cargo revenue for fiscal 1990 amounted to US $195 million, 21 percent of Air-India's revenue. The Challenging 1990s Air-India lost $171 million in the three years beginning with 1994-95. The airline gained a reputation for poor service and poor on-time performance. The company initiated a generous incentive program to motivate employees, which proved successful. In addition, a computerized flight system and updated lounges and cabin interiors were added to update the company's image among customers. Management cut fares drastically and provided two-for-one discounts. In the summer of 1997 the carrier negotiated codesharing deals with Air France and Singapore Airlines. Streamlining the carrier's route network became an ongoing process. In fact, Air-India was notorious for constantly adding and dropping routes. Its network dropped Canada, Australia, and South Africa in an attempt to cut losses. Air-India sought to offer its $150 million annual North American income streams as debt securities, pending the approval of a hesitant Indian government. The company also planned to raise cash (it already had

reserves of more than $110 million) by selling its Hotel Corporation of India subsidiary, worth at least $220 million, as well as some older Boeing 747-200s, valued at $60 million. Still, the company owed $900 million on new aircraft purchases. In spite of this impressive sum, Air-India found itself chronically short of medium-sized long haul aircraft, reported Air Transport World. Most of its planes were too large to be profitable on their particular routes, a liability previously covered by an especially profitable Persian Gulf market. A recovery seemed to be in place upon the announcement of a quarterly profit of $10 million in the fall of 1997. More positive results were projected. Operating revenue was expected to reach Rs 4,189 million in 1997-98. It was later announced that these results had been overly optimistic; the $10 million profit was in fact a $10 million loss. Managing Director Michael Mascrenhas announced the news after taking over from Brijesh Kumar, whose two-year term had just expired. Mascrenhas colored the news in the best possible light, noting in Air Transport World that Air-India had lost money only "six times in the last 43 years." A planned merger between Air-India and Indian Airlines was canceled in spring 1998. Nevertheless, closer ties between the two carriers remained after the

aborted deal. As Air-India cut routes, it maintained code-sharing deals with Air France, SAS, Singapore Airlines, and Austrian Airlines. Still, market share fell from 35 percent to 20 percent in 1997-98. Reducing its annual payroll costs of $40 million was a top priority for Air-India, which had not found sufficient productivity increases to match its generous incentive programs. Air Transport World reported that Mascrenhas trimmed $23 million in other areas. In spite of these savings, Mascrenhas predicted AirIndia would not pull out of the red for another two years after projecting a 1997-98 loss of $44 million. To raise desperately needed cash, the airline offered its hotels and two 747 airliners for sale. As the carrier planned for its $150 US/Canada security issue, the Indian government also was considering a rescue plan.

2000 Present In 2000, Air India introduced services to Shanghai and to its third US gateway at Newark Liberty International Airport in Newark. In May 2004, Air India launched a wholly owned low cost airline called Air-India Express. Air India Express connecting cities in India with the Middle East, Southeast Asia and the Subcontinent. In 2004 Air India launched flights to its fourth US gateway at Los Angeles International Airport in Los Angeles (which has since been terminated) and

expanded its international routes to include flights from Ahmedabad, Amritsar, Bangalore and Hyderabad. On 1 December 2009, Air India introduced services to its fifth US gateway at Washington Dulles International Airport in Washington, D.C., accessed via a stopover at JFK Airport in New York City. This service has been terminated. Re-privatisation plans In 2001, Air India was put up for sale by the then NDA government.[8] One of the bids was by a consortium of Tata Group-Singapore Airlines. However the reprivatisation plans were shelved after Singapore Airlines pulled out and the global economy slumped.[9] Merger with Indian In 2007, the Government of India announced that Air India would be merged with Indian. As part of the merger process, a new company called the National Aviation Company of India Limited (NACIL) was established, into which both Air India (along with Air India Express) and Indian (along with Alliance Air) will be merged. On 27 February 2011, Air India and Indian Airlines merged along with their subsidiaries to form Air India Limited.

Some more Marketing strategies

Air India in Sep 2010 launched its 'Happy Hours' scheme which offered an additional discount of 5 percent over and above the 10 percent discount for all bookings made on the Air India website between 12.01 am and 04.00 am. In addition, flight-specific executive class fares on select sectors or flights were introduced either in one or both directions and the return fares scheme was also introduced in the executive and economy class on select sectors. The increased passenger carriage following the strong marketing strategy and various new schemes caused 10 percent growth in Oct 2010 in comparison with Oct 2009. The load factor of these flights has also gone up to 69.17 percent against 67.7 percent in Oct 2009 To Ancash the rise in traffic during the festive season, Air India and its low-cost carrier Air India Express plan to increase the fares by 10 to 15 percent on various sectors. The 10-15 per cent increase is all because of the peak season. This is

normal for the entire aviation industry which goes by the market demand across the world Star Alliance announced on 13 December 2007 that it had invited Air India to join as a member. After several delays, the final joining date was set at 31 July 2011.[2][3][4] Air India failed to meet the minimum standards for membership for that deadline and as a result Air India's invitation to join the Star Alliance has been suspended.[5] After 9/11 [September 11 2002] attacks on world trade centre The opening of the New York Stock Exchange (NYSE) was delayed after the first plane crashed into the World Trade Center's north tower, and trading for the day canceled after the second plane crashed into the South Tower. NASDAQ also canceled trading. The London stock exchange and other stock exchanges were also evacuated. The New York Stock exchanges remained closed until the following Monday. This was the third time in history that the NYSE experienced prolonged closure, and first time since March 1933, though the NYSE also shut down for a few months at the beginning of World War II.[2] Trading on the United States bond market also ceased, with the

leading government bond trader, Cantor Fitzgerald based in the World Trade Center.[2] The New York Mercantile Exchange was also closed for a week after the attacks. The 9/11 attacks compounded financial troubles that the airline industry already was experiencing before the attacks. Share prices of airlines and airplane manufacturers plummeted after the attacks. Midway Airlines, already on the brink of bankruptcy, shut down operations almost immediately afterwards. Other airlines were threatened with bankruptcy, and tens of thousands of layoffs were announced in the week following the attacks. To help the industry, the federal government provided an aid package to the industry, including $10 billion in loan guarantees, along with $5 billion for short-term assistance A number of airlines across the world were so adversely affected that some of them actually folded up. However, the impact on Air India was not as severe. It was under these circumstances that during May 2002, the Management took these decisions :

a) to reach out to the market. b) To say thank you to the community. c) To undertake projects under the umbrella of corporate social responsibility. Special programmes and projects were lined up and launched in the States of Kerala, Karnataka, Tamil Nadu, Goa, West Bengal, the North East States viz. Assam, Bihar, Jharkhand etc. giving an opportunity for our customers to interface with AI. A concentrated effort was made to target those passengers who were members of the FF club [now called as crotia airlines miles and more] and had stopped flying on AI. Valuable feedback was received and, appropriate marketing strategies were introduced, based on this feedback from our customers. The Reaching Out Projects was endorsed and continued during the year 2003-2004, 20042005, 2005-2006, 2006-2007 and has just been approved for 2007-2008, to be eventually institutionalized. They have given the long shot in deciding their target as in their effort to

reach out to the community, the students (future) and the teachers (the custodians of future) formed the target group. The students that they touch would be their future customer base; the teachers would be in a position of influence, this future customer base. Kerala was chosen as a pilot state the issue before the airlines was how could they reach across to every segment of society and, do so in a cost cutting manner. Air India approached Malayalam Manorama with the idea of introducing awards for the student and the teacher communities and, Malayalam Manorama very readily agreed to join hands with Air India. The outcome, Malayalam Manorama promoted the RANK awards for students and the BOLT awards for teachers. Through its publications, bids were invited from every district of Kerala. A panel of judges was formed consisting of distinguished personalities from society and this panel completed its judging activity at Kottayam on February 14/15, 2003. Over 5,000 bids were received from every nook and corner of the State. The awards were announced and the Honble Chief Minister of

Kerala, Mr A.K. Anthony personally handed over these awards to the winners at the public function, which was jointly organized by Air India and Malayala Manorama at Thiruvananthapuram. 97 awards were given and, this function received extensive coverage by the electronic and print media. With these words of encouragement several newspapers have come forward and joined hands with Air India. Today they have over 40 media partners covering every State of India. A large part of this success is because of the co-sponsors, who had made it possible to reach out to the community in a very cost effective manner. The Singapore ambassadorial visit A group of 112 individuals consisting of 35 media partners; 31 State BOLT Award Winners; 29 State RANK Award Winners accompanied by 17 of their friends and relations visited Singapore between October 10 and 14, 2006. The highlight of this visit was meeting with Singapore Press Holding [one of the worlds

largest publication house], courtesy call on His Excellency The Honble Mr. Alok Prasad, High Commissioner of India to the Republic of Singapore; National University of Singapore etc. His Excellency the Honble Mr. Nathan, President of the Republic of Singapore had very graciously agreed to meet with this group of Award Winners. However, due to flood conditions in several parts of India we had had to reschedule our visit to Singapore thus depriving ourselves of the privilege of this honour. Under the Reaching out Project Air India has the twin objectives of promoting the concept of Towards Responsible & Active Citizenship and Preserving a Crumbling Environment. This is the reason why we have chosen Singapore as a destination because Singapore is the only country in the world: a. where 4 ethnic communities live as one. b. where the practice of civic responsibilities is of the highest order. c. where great emphasis is on recycling and

preserving of the environment. d. which is an emerging centre of higher learning. A major benefit to the community and Air India At Singapore, the media partners took a decision to set up ROP blog sites on their web sites and to have these sites interlinked. The RANK & BOLT Award winners were invited to share their views, experiences through this site. The winners of 2005-2006 were also roped in. A synergy amongst individuals with fire in their belly has been created. An award winning teacher has declared his school as a no plastic zone. Others are following this lead. Simple activities are being taken up. One, encouraging people to switch off their electrical appliances instead of keeping them on standby mode; two, removing the cell

phone charges when not in use. These itself can save enough electricity to light up a midsized town!! And, Air India is getting credit for these initiatives. Today, the airline industry in on the cross roads just as the tobacco industry was a few years ago. The huge amount of fossil fuel that we burn is contributing to global warming. Planting tree is an anti-measure. We are looking at planting one million trees in one season! In tomorrows context, conservation is good business for today. The national selections were help at Mumbai on Ozone Day which is September 16, 2006. State winners from across India congregated at the Air India building. 18 panel of judges, distinguished individuals consisting of a Chief Justice of the High Court, Chairman & Managing Director of one of Indias largest banks, the Vice Chairman of the

Port Trust, lawyers, chartered accountants, industry heads, renowned journalists and other were personally welcomed by Mr. V. Thulasidas. The Air Indias Nariman Point hoarding carried a special message. The experience was beyond expectation. Here is what one of the judges had to say, I stopped traveling Air India long ago primarily because it did not meet my service expectations. But, after today, I am ready to give Air India another shot. When Air India was facing tough competition from full service airlines [Kingfisher and jet] and budget carriers [Indigo, spice and jet life]. Then it follows the following strategies in 2009 to increase its market share:Kingfisher and Jet raised fuel surcharge by up to Rs 300 in early April because jet fuel had become expensive. But Air India refused to follow their example. As a result, its fares are now up to Rs 300 below those of Jet and Kingfisher, and 5-10 per cent higher than the budget carriers. (The budget carriers too did not increase the surcharge.)

On top of that, Air India has come out with discounts of up to 70 per cent on 41 short-haul routes like Agartala-Guwahati, Agatti-Kochi, Chandigarh-Delhi, Mangalore-Mumbai and Hyderabad-Tirupati.The scheme is graded. Travellers who book 30 days in advance on these routes can get 70 per cent discount. Booking the ticket 20 days in advance can get 50-60 per cent discount. Lower discount is on offer if it is booked 10 days in advance. Air India has recovered market share from full-service as well as budget carriers in the last one year. At the end of March 2009, its share stood at 17.1 per cent, up from 15.7 per cent in March 2008. Travel companies say the move by Air India has been effective at least in the short term. its numbers have increased and there has been some shift from the other full-service carriers to its flights. Advance bookings have also improved.

In 1946 Air India invited Genell Moots of TWA came from Kansas City to train India's first batch of Air Hostesses. Air Hostesses were provided proper training on how to deal with Indian Passengers in the flight. It was successful investments as Air India hostess got lot to learn.

Frequent flyer programme Flying Returns is Air India's frequent flyer programme. The programme is also shared by all other Air India Limited carriers. Frequent flyers were offered the following facilities under this programme The Maharaja Lounge (English: "Emperor's Lounge") is offered to First and Business class passengers. Air India shares lounges with other international airlines at international airports that do not have a Maharaja Lounge available.[20] There are five[21] Maharaja Lounges, one at each of the five major destinations of Air India, which are as following: In-flight entertainment Air India's Boeing 777-200LR/-300ER as well as some refurbished Boeing 747-400 aircraft uses the Thales TopSeries IFE systems[22] for onboard inflight entertainment. Airbus A310s do not have personal LCD screens. Airbus A330s have widescreen displays in Business and Economy

classes but no personal IFEs.

Air India : In Troubled Skies

The Indian national carrier is in a serious crisis and banking heavily on government-sponsored revival packages. But it may not be an easy flight ahead for Air India, as it is in the midst of violent cross winds. Air India (AI), the only domestic carrier that had retained domestic monopoly for a long time, has lost its dominant position in recent yearsits losses mounted and market share plummeted precipitously in the last two years. A string of problems starting from the botched merger with Indian Airlines, total management failure, lack of vision to develop responsive strategies, a

change in the long-term strategic situation, current market pressures and, not the least, the high wage bill in the form of salary and incentives have placed the national carrier in a spot of bother. Now it is crashing down in almost all areas. All the vital signs productivity of technical personnel (two-fifth of international standard), employee-to-plane ratio of about 210 employees, compared to an industry average of about 150, number of working hours per week of cabin crew (50-55 hours, compared with 70 in other airlines), to cite just a feware indicating that the airline is suffering from chronic sickness. Now, AI is contributing around 10% of global airline losses, with just 0.35% of global traffic, and virtually is in abyss.

A problem peculiar to AI In fact, airline business in the entire world is now bleeding profusely due to a variety of reasons, starting from rising oil prices to a slowing world economy. But in India, the problem is more acute. Last year, in India, the aviation industry lost more than $2.5 banalmost one-fourth of total global airline lossesdespite accounting for merely 2% of the global traffic. Kingfisher Airlines, India's largest airline in terms of market share, which reported a net loss over 2.43 ban ($51 MN) in the quarter to June, owes more than $199 MN in unpaid fuel bills and is surviving on bank loans. Jet Airways recorded a net loss of $47 MN in the same

period. The rising aviation fuel prices, burdensome taxes and overcapacity should be blamed for why India's private airlines are suffering heavily. In order to raise the market share at any cost ,the airlines priced tickets well below cost. Moreover, according to some estimates, they purchased twice as many aero planes as the market could support. In addition, as competing air lines poached pilots and mechanics, staff costs escalated, adding to the industry's woes.

But the problems faced by government-sponsored AI are different from the problems faced by the other players in the industry. Though, AI has been battered by ballooning fuel bills and falling demand, its crisis is largely its own making and management-related. Now, the government has decided that it would do whatever it could to turn AI around, and plans are on the anvil to

infuse equity and soft loan into the airline. But it may not be an easy task.

In royal mess AI, which is the offshoot of Tata Airlines founded by legendary JRD Tata in 1932, has for long adorned the number one position among the Indian carriers. Even in the 1980s, AI was touted as the biggest and the brightest aviation prospect in Asia. Nevertheless, things began to deteriorate for AI since the mid-2000s, and in 2006-07, it reached serious proportions. In2006-07, AI made a loss of Rs 541 cr and Indian Airline's loss was Rs 230 cr. In about two years, from March 31, 2007 to March 31, 2009, when AI and Indian Airlines merged, the losses rocketed to a mind-boggling Rs 7,200 cr. Aviation experts opine that the staggering eightfold increase in its losses in two years can be attributed to the manner in which aircrafts were leased, capacity was allocated to foreign carriers under bilateral agreements, ground-handling in important airports was given to a proposed joint venture, flights were withdrawn from profitable routes and pilots weren't sent for proper training, and not the least how AI and Indian Airlines were merged.

Reasons current breakdown:-

The crisis at AI has been fueled by three factors: a change in the Long-term strategic situation, a failure to develop a responsive strategy, and Current market pressures. AI's privileged position in Indian aviation stands eroded in the new emerging strategic situation. It had operated as the national carrier in a highly restricted environment and thus, for a long time, retained its domestic monopoly. However, it has been too slow in responding to competitive pressure from domestic players such as Kingfisher and Jet. On international routes, it has struggled against more service-oriented foreign rivals, especially from the Gulf States. The absence of a responsive strategy is highlighted by a cost structure that has remained bloated. For example, it has an employee-to-plane ratio of about 210employees, compared to an industry average of about 150. Also, the current overhang of a significant fleet purchasing/leasing program needs to be reviewed when there is a decline in passenger numbers. However, current market pressures associated with the wider crisis in India's Aviation industry over the past year has pushed the carrier close to breaking point . Plunging passenger numbers and soaring fuel prices led to crushing Accumulated losses in the past financial year

The merger between AI and Indian Airlines has not been immediately successful. The marriage of an internationally-oriented carrier with a domesticallyoriented one poses significant challenges. The key thing will be whether the successful aspects of each carrier can be reflected in the other one. In hindsight, it might have been better for AI to be taken over by a very commercially-oriented carrier to allow that commercial focus to be rolled into the DNA of the nation's flag carrier.

The Government has provided a package of 1,200 crore to Air India, which is not enough for an Airlines having a debt of around 40,000 crore. It is now very difficult to manage the Airlines for Government. Recently Government has removed Arvind jadhav as its chairman. Now Rohit nandan has been appointed as its new chairman cum Managing director. He will have a burden of maintaining the huge debt ridden airlines. Government is now fed up with providing funds to the Airlines which is continually causing loss to the exchequer that is the Government, so they are now again planning its privatization. Lets see who will purchase this

Airlines and how its future will be. Will it be able to recover the losses and debts, it is a question which people thinks now cant be answered in a positive way because 40,000 crore is not a less money.

1948 Jun 8

Air India First Flights 1950 Jan 21 1950 Oct 17 1954 Jun 19

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via Cairo, Geneva Constellation via Aden Super Constellation

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