introduction air india
TRANSCRIPT
INTRODUCTION AIR INDIA
Air India is India’s national Airline. Air India’s history can be traced to October 15,
1932. On this day J.R.D. Tata, the father of Civil Aviation in India and founder of
Air India, took off from Drigh Road Airport, Karachi, in a tiny, light single-engine de
Havilland Puss Moth on his flight to Mumbai via Ahmedabad. Air India was earlier
known as Tata Airlines. At the time of its commencement, Tata Airlines consisted
of one Puss Moth, one Leopard Moth, one palm-thatched shed, one whole time
pilot, one part-time engineer, and two apprentice-mechanics. Tata Airlines was
converted into a Public Company under the name of Air India in August 1946. On
March 8, 1948, Air India International Limited was formed to start Air India’s
international operations. On June 8, 1948, Air India started its international
services with a weekly flight from Mumbai to London via Cairo and Geneva with a
Lockheed Constellation aircraft. In early 1950s due to deteriorating financial
condition of various airlines, the Government decided to nationalize air transport.
On August 1, 1953 two autonomous corporations were created. Indian Airlines
was formed with merger of eight domestic airlines to operate domestic services,
while Air India International was established to operate the overseas services. The
word 'International' was dropped in 1962. With effect from March 1, 1994, the
airline has been functioning as Air India Limited. Air India's worldwide network
today covers 44 destinations by operating services with its own aircraft and
through code-shared flights. Important destinations covered by Air India are
Bangkok, Hong Kong, Jakarta, Kuala Lumpur, Osaka, Singapore, Tokyo, Seoul, Dar-
es-Salam, Nairobi, Frankfurt, London, Paris, Birmingham, Abu Dhabi, Al Ain,
Bahrain, Dammam, Doha, Dubai, Jeddah, Muscat, Riyadh, Kuwait, Los Angeles,
Chicago, Newark, New York, and Toronto. Air India’s fleet consists of 38 aircrafts.
These include 12 Boeing 747-400, 1 Boeing 747-400 COMBI, 2 Boeing 747-300
COMBI, 19 Airbus 310-300, and 4 Boeing 777-200
Incorporation
• Established in 1953 under Air Corporations Act
• Became Public Limited Company in 1994
• Registered Office: New Delhi
• Head Office: Mumbai
• Authorized Capital: Rs 500.00 Crores
• Paid-up Capital: Rs 153.84 Crores
INDIAN AIRLINES The erstwhile Indian Airlines Limited or currently known as
Indian, was India’s first state owned domestic airline. Indian Airlines was set up
under the aegis of federal Union Ministry of Civil Aviation and based in New
Delhi. Its main bases were the international airports in Chennai, Mumbai, Kolkata
and New Delhi. It has now been merged with Air India for corporate purposes,
though for now, continues to issue its own tickets.
.Indian Airlines came into being with the enactment of the Air Corporations Act,
1953. It was renamed "Indian" on December 7, 2005. Indian Airlines started its
operations from 1st August, 1953, with a fleet of 99 aircraft and was the outcome
of the merger of seven former independent airlines, namely Deccan Airways,
Airways-India, Bharat Airways, Himalayan Aviation, Kalinga Air Lines, Indian
National Airways and Air Services of India. The year 1964 saw the Indian Airlines
moving into the jet era with the introduction of Caravelle aircraft into its fleet
followed by Boeing 737-200 in the early 1970. Along with its wholly owned
subsidiary Alliance Air, it flies a fleet of 70 aircraft including Airbus A300, Airbus
A320, Airbus A319, Boeing 737, Dornier Do-228, ATR-4, Airbus A319, A320 &
A321. Along with Indian cities, it flies to many foreign destinations which include
Kuwait, Singapore, Oman, UAE, Qatar, Bahrain, Thailand, Singapore, Malaysia,
and Myanmar besides Pakistan, Afghanistan, Nepal, Bangladesh, Sri Lanka and
Maldives.
Indian Airlines Flight free run over the Indian skies ended with the entry of private
carriers after the liberalization of the Indian economy in the early 1990's when
many private airlines like Jet Airways, Air Sahara, East-West Airlines and
ModiLuft entered the fray. The entry of low-cost airlines like Air Deccan,
Kingfisher Airlines and Spice Jet has revolutionized the Indian aviation scenario.
Indian has been a pioneer in the aviation scene in India. It was the first airline in
India to introduce the wide-bodied A300 aircraft on the domestic network, the fly-
by-wire A320, walk in flights and easy fares. It flies to 76 destinations - 58 within
India and 18 abroad. It has a total employee strength of around 19,300 employees
along with Alliance Air and carries over 7.5 million passengers annually, along
with Alliance Air. The main base of the Indian airlines are Chatrapati Shivaji
International Airport, Mumbai; Indira Gandhi International Airport, Delhi; Netaji
Subhash Chandra Bose International Airport, Kolkata; Chennai International
Airport, Chennai. After being granted permission from the Government of India,
on 15 July 2007, Indian Airlines and Air India merged and started to operate as a
single entity. Post-merger the new airline will be renamed as Air India. This new
airline is also a member of the Star Alliance, the largest airline alliance. The
government allowed the formation of a few new limited service airlines in the
1970s: Air Works India, Huns Air, and Golden sun Aviation. None of them had
long life spans. Around 1979, IAC dropped the word "Corporation" from its name.
Britain's Financial Times described Indian Airlines as the world's third largest
domestic carrier in the mid-1980s. With business growing at better than ten percent
a year, it was increasing its capacity as part of a plan to merge Indian Airlines with
Air-India, the state's international carrier, two leading young industrialists were
appointed to chair the boards of the two companies in autumn 1986. Neither these
plans nor the new chairmen lasted very long. In 1987, Indian Airlines carried 10
million passengers and earned a profit of Rs630 million ($48 million). However,
the quality of its service was facing criticism, to be heightened by the coming entry
of new carriers into the market.
SHARE CAPITAL 2.1.1 As per the latest audited accounts on March 31, 2006
the capital structure of the Transferor Companies is as under: A. Transferor
Company No 1 – AIR INDIA AUTHORIZED SHARE CAPITAL AMOUNT
42, 56, 36,820 Equity Shares of Rs. 10 each Rs. 425, 66, 38,200/- 74, 36,318
Redeemable Preference Shares Rs. 100 each Rs. 74, 36, 31,800/- Total Rs. 500,
00, 00,000/- ISSUED, SUBSCRIBED & PAID-UP SHARE CAPITAL
AMOUNT
15, 38, 36,427 Equity shares of Rs. 10 each fully paid Rs. 153, 83, 64,270/-5 | P a
g e
As on April 1, 2007 the Authorized Capital, the Issued, Subscribed and Paid up
Share Capital of AI remains the same. B. Transferor Company No 2 – INDIAN
AIRLINES AUTHORIZED SHARE CAPITAL AMOUNT 94, 99, 58,200
Equity Shares of Rs. 10 each Rs. 949, 95, 82,000/- 50, 04,180 Redeemable
Preference Shares Rs.100 each Rs. 50, 04, 18,000/- Total Rs. 1000, 00, 00,000/-
ISSUED, SUBSCRIBED&PAID-UP SHARE CAPITALAMOUNT 43, 21,
36,489 Equity shares of Rs. 10 each fully paid Rs. 432, 13, 64,890/- As on April 1,
2007 the Authorized Capital, the Issued Subscribed and Paid up Share Capital of
IA remains the same As on April 1, 2007 the capital structure of the Transferee
Company is as under:
Mutual Distrust and strong unions The distrust between the two sides of Air
India and Indian Airlines is almost palpable. For sure, many jobs will become
redundant when functions are unified. Many of those appointed are from Indian
Airlines, fuelling resentment among Air India employees. Integration has become a
tightrope walk for the management. Strong opposition from unions against
management’s cost-cutting decisions through their salaries have led to strikes by
the employees/ Increased Competition The flux at the top has led to delays in
decision-making at a time when demand for air travel has dropped around 8-10%
over the last year and competition has heated up in the sector. The national
carrier’s domestic market share has been under pressure ever since budget carriers
and new private airlines took wing. Air India’s domestic market share dropped
from 19.8% in August 2007, when the merger took place, to 13.9% in January
2008 before rising to 17.2% in February 2009. Lower load factor Though the
overall operating performance has been steady, Air India passenger load factor of
63.2%, which was the company’s record, lags the industry average of 75% in
2006-07.The load factor difference is even greater when compared to other low
fares carriers such as Air Deccan. The company’s load factor is decreasing year by
year, in 2005- 06 load factor is 66.2% which is more than present load factor. Air
India load factor is likely to be low because of the much higher frequency operated
on each route. Lower load factor could decrease the company’s margines.
Indian Airlines
In an earnest attempt to pave way for the emergence of a single
entity as India's National Flag carrier, Indian Airlines and Air India, India's
premier airlines were merged to form Air India to provide an integrated
international and domestic footprint, for the advantage of travelers. This
Indian Airlines and Air India merger has brought seamless integration of
domestic and international flights, allowing passengers to check in for their
international flight from any domestic point in India.
Indian Airlines, in its new avtar of Air India can be identified with its key
color as orange and a contemporary graphic representation of a flying
swan with the Konark Chakra placed inside it, the imagery depicting
traditional Indian hospitality and service.
Indian Airlines or the new Air India has an improved frequent flier programs
Indian Airlines Sector
Air India connects 146 international and domestic destinations around the
world, including 12 gateways in India with Air India Express, which is a
fully-owned subsidiary of Air India. Some destinations are through code
share. With the commencement of the merger, all sectors covered by the
erstwhile Indian Airlines are now covered by Air India. AI has a network that
spans from Asia to America covering Gulf, Africa and Europe. In all, it
covers 89 destinations ? 49 within India and 40 abroad. AI flies to various
destinations in India, which include important cities like Delhi, Bangalore,
Mumbai, Kolkata, Lucknow, Hyderabad, Pune, and Chennai along with
regional destinations like Ahmedabad, Gorakhpur, Allahabad,
Bhubaneshwar, Ranchi and others. For cheap airfares and great deals on
international and domestic air tickets, including popular.
Indian Airlines Fleet
Air India, together, has a fleet of more than 200 aircrafts, which includes 3
wide bodied airbus A300s, 47 fly-by-wire airbus A320s, 3 Airbus A319s, 11
Boeing 737s, 2 Dornier Do-228 aircraft, 4 ATR-42 and others. Air India has
placed orders for 67 new aircrafts, which includes 4 Boeing 777-200LR's,
12 Boeing 777-300LR's, 27 Boeing 787-8's, 15 A321 Airbuses and 9 A319
Airbuses.
The new fleet has brought in a product and service level, that is the best in
class, which includes in-flight entertainment, better seats and enhanced in-
flight service. A combined schedule enables better connectivity to the
largest international airline in India as well as improved service to various
domestic points in India.
Indian Airlines Baggage Rules
According to Indian Airlines baggage policy, luggage of different weights
are permissible for different classes – Economy (20 kgs), Executive Class
(30 kgs) and First Class (40 kgs). Linear luggage dimensions for checked
shouldn’t exceed more than 158 cms. Indian airlines cabin baggage policy
restricts the cabin baggage size to 115 cms and its weight to 8 kgs. Also, it
must be noted that infants travelling on an Indian airlines flight are allowed
10 kgs of baggage. However they aren't entitled to a seat.
Indian Airlines Flight Tickets at lowest Airfares! Book Cheap Indian Airlines Air Travel Ticket at
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'Air India merger on paper only'
By: Bipin Kumar
Singh
Date: 2012-
02-01
Place: Delh
i
Sources within aviation
ministry react to Justice
Dharmadhikari's report
that mentions five years
after Air India and Indian
Airlines were merged into a
single entity, both airlines
continue to function separately with few
steps being taken to form a single unit
Justice DM Dharmadhikari, with his three-
member panel, submitted their report on the
integration of the Air India employees with
erstwhile Indian Airline employees to Civil
Aviation minister Ajit Singh yesterday, five years
after the two airlines were merged with each
other.
Fresh Findings: (Retired) Justice Dharmadhikari
presents the report on
Air India HR issues to the Union Minister for Civil
Aviation Ajit Singh, in
New Delhi yesterday.
According to top sources inside the civil aviation
ministry, the 100-page report has mentioned
that since 2007 when the two state-run airlines
merged, the two have not functioned as a single
entity.
The findings reflected that five years on, no
concrete steps have been taken towards staff
integration or for operations. "Justice DM
Dharmadhikari, submitted his report on Tuesday.
On the basis of its findings it has made some
serious recommendations on various aspects
including staff integration in the country's
national carrier.
The report has categorically asked Air India
management to focus on staff integration on the
basis of recommendations made," said a ministry
official on condition of anonymity.
Sources inside Air India too agree with the
findings of the report stating that both the
airlines function as two different entities. "The
merger is only on paper not in operation. On the
ground despite being merged, the airline
functions as two different entities. In fact, the
pilots from the Indian Pilots Guild (IPG) that
operate Air India flights continue to operate on
the Boeing aircraft while Indian Airline pilots from
the Indian Commercial Pilots Association (ICPA)
operate on the Airbus fleet. Not a single pilot has
been changed and it's the same story with cabin
crewmembers and personnel from other
departments. Moreover, Air India staff work for
five days whereas Indian Airlines staff members
work for six days," said a source.
When MiD DAY contacted Justice Dharmadhikari,
he refused to comment. "I am busy with
something, I cannot talk now," he said. While
Civil Aviation Minister Ajit Singh said, "We've
received the report. We'll study the
recommendations and do whatever that needs to
be done."
Expertspeak
Captain Mohan Ranganathan, a former Air India
pilot and aviation expert said, "I believe that no
concrete step was taken by the management to
address the problems including staff integration,
which further increased the problem. The
mismanagement increased after the merger and
the people who were responsible for the entire
mess were never held accountable."
Captain D S Mathur former MD of Air India said,
"First of all there was no need to do it as both
airlines were owned by the government. Instead
they should have made it a holding company
bringing the two airlines under the same
umbrella where the two airlines would have
operated with two different tasks."
Air India (AI) has sustained huge losses in the last three years and
is getting crushed under aRs. 40,000 crore debt. Staff indiscipline,
mismanagement and ministerial malfeasance have all done in an
airline. It was one of the best aviation companies in the world
even after nationalization.
Today, however, indiscipline is rife and has manifested itself as
poor on-time performance (65.5% against industry average of
85%) and the highest cancellation rate (2.9% against industry
average of 1.2%) for domestic flights. Mismanagement was quite
apparent when the airline went in for expansion of its fleet even
as it did not have money to pay its staff, resorting to Marie
Antoinette’s eating the cake option. The staff union’s claim that AI
was stripped of profitable routes and convenient timings of its
flights to favour private airlines, by ministerial mandate, does look
genuine and needs further investigation. Thus, AI’s pathetic
performance highlights the axiom that running business is not the
business of government.
Graphics by Jayachandran/Mint
Recent data (2010) shows that
both AI and Jet Airways had
comparable revenues of
about Rs. 10,000 crore. Both had
around 100 aircraft. But Jet had a
operating loss of Rs.550 crore. while AI had a operating loss
of Rs. 3,000 crore. Jet has around 13,000 employees, and
spends Rs. 1,300 crore on them, while AI has 29,630 employees
and spends Rs.3,400 crore on them. Salaries as reported by
industry source for a cabin crew member in Jet
average Rs. 30,000 a month; for AI it is Rs. 40,000 a month. Jet
spends Rs. 3,200 crore on fuel while AI, for the same revenue,
spends Rs. 5,000 crore.
AI has been engaging a plethora of consultants: Booz Allen
Hamilton to suggest cost-cutting; three other foreign firms for
operational restructuring and a Texas-based technology company
Sabre Holdings Corp. to help redraw its flight network and save on
fuel costs. It appointed SBI Capital Markets for financial
restructuring and Deloitte Consulting to advise on macro issues
and review restructuring. With such heavy reliance on
consultants, the internal management, down from the CMD (a
bureaucrat, not an airline professional) was weak. Bringing
outside professionals—as chief operating officer and chief of
training—at high salaries, but under a bureaucrat CMD, also did
not help, and AI’s losses continued to grow.
The merger of AI with domestic carrier Indian Airlines (IA)—
incidentally the better of the two—was, probably, a mistake in
retrospect. In September 2006, Accenture was hired, and it
suggested a merger on the ground that “consolidation can help
companies increase efficiency and scale and serve customers
more effectively”. It added that “the key to realizing these
advantages, however, is planning for pre- and post-merger
activities and integration”. That the pay disparity between the
higher-paid AI and the lower-paid IA staff should have been
smoothed out seems to have escaped the attention of both
consultants and the company, though Accenture seems to have
covered itself with a caveat in this direction.
AI’s unpunctuality record has taken a toll on its business class
flyers with business folks, with fixed meeting schedules, deserting
it in droves and opting for other punctual airlines. The low-cost
airline IndiGo boasts the best punctuality ratings; and it is one of
the few profitable ones. Interestingly, Singapore Airlines, also a
national carrier, has a premium even over many other private
international airlines because of its punctuality, cleanliness and
efficiency of service. Of course AI, too, charges rates higher than
competitors, but that is because it is insensitive to its demand
since it is a spoilt child of the government, which funds its
inefficiency. AI reciprocates the favour by delaying departures for
government VIPs and reserving seats in the first row of business
and economy class for pass-holding politicians, much to the
chagrin of paying customers.
For an international airline, its Web booking portal is awful, its use
of the entertainment system indifferent, its frequent flyer
programme management highly flawed with a number of
mistakes and irrationalities and its customer sensitivity poor.
From online ticket booking to seat allotments (some are always
reserved for a politician and other “influential persons”) to
seniority (age)-based assignment of on-flight service personnel on
luxury routes, AI continues to lag its private sector counterparts.
Having said these, it must be said that once in the air, it is really
one of the most loveable airlines. Its food is good, leg space is
better and in-flight service quite hospitable. It has lower than the
average number of complaints; IndiGo and GoAir have
significantly higher number of complaints. Its pilots are safe and
achieve smooth landing.
What is the remedy? Immediately, sell its real estate property in
prime locations and raise money. Next, professionalize the
management and bring in private sector business practices,
including removing job security.