A

Project Report
On
INDIAN AIRLINES
In partial fulfillment of BBA

Submitted by: VIPUL

Roll No.
University roll no.

Submitted to: MR. AMIT GUPTA

(Course co-ordinator)

Maharaja Agrasen Institute of Management

Studies
(Affiliated to Guru Gobind Singh Indraprastha
University)
2
 CERTIFICATE

It is to certify that Mr. VIPUL Studying in our institute of

management studies was allotted the project on “INDIAN
AIRLINES” by Guru Gobind Singh University has successfully
completed it under the guidance of Mr. AMIT GUPTA
(Course co-ordinater)

MR. AMIT GUPTA

(Course co-ordinator)

3
 ACKNOWLEDGEMENT

I take this opportunity to express my profound sense of gratitude

and respect to all those who helped me through out the duration of
this project.

It gives me immense pleasure to acknowledge my indebtedness

and sense of gratitude to Mr. AMIT GUPTA (Project guide) for the
project under taken.

I also immensely thank the other faculty members of the institute

under who continuous support and guidance I completed the
project.

4
 DECLARATION

I here by declare that the project work titled “INDIAN AIRLINES”

Is an authentic work carried out by me under the guidance of
(Project guide) for the partial fulfillment of degree of
BACHELOR OF BUSINESS ADMINISTRATION (Gen). And this
has not been submitted anywhere else for the award of any other
degree or diploma

5
 EXECUTIVE SUMMARY

The current millennium has unfolded new business rules most the
significant of them being that company has to constantly look into
minds of the customer. Customer loyalty plays a significant role
and today securing that loyalty requires quality right price and of
course last but not the least i.e. creating awareness about their
service. As a trainee, I was given knowledge about the way and
style of their working, their routine and their environment. It was a
great experience in getting under such a reputed company, which
has in it the ability to retain customer.

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 INDEX

CHAPTER – 1
• Preface
• Objective
• Research methodology

CHAPTER – 2
• Introduction
• Company profile
• Marketing strategy

CHAPTER – 3
• Analysis of data

CHAPTER – 4
• Questionnaire
• Suggestion
• Conclusion
• Limitation

BIBLIOGRAPHY

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8
 PREFACE

I feel great pleasure in doing my project “EFFECTIVENESS OF

VARIOUS PROMOTIONAL FARES OF INDIAN AIRLINES” with Indian

Airlines. The whole hearted support of the executives of the Indian

Airlines has enabled me to complete this project.

This project is all about the “Marketing initiatives taken by Indian

Airlines” with a rapidly changing technological, social, economic,

political-legal and the trend towards globalization of business and

industry, emerging of various private airlines; effective marketing

management has become a very challenging job.

In this project I have analyzed the different promotional fares

implemented by Indian Airlines and have given feedback regarding their

effectiveness and whether they should be continued or discontinued on

different sectors.

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 OBJECTIVE

 To identify the services offered by INDIAN AIRLINE.

 To study and analyze the customer perception and

preference about INDIAN AIRLINE.

 Finally to draw the various conclusion and recommendation

on the basis of study conducted.

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 RESEARCH METHODOLOGY

Managers need information in order to introduce products and services

that create value in the mind of the customer. But the perception of

value is a subjective one, and what customer’s value this year may be

quite different from what they value next year. As such, the attributes

that create value cannot simply be deduced from common knowledge.

Rather, data (information) must be collected and analyzed. The goal of

Marketing Research (analysis) is to provide the facts and direction that

managers need to make their more important marketing decisions.

The analysis involves the following steps:

 Define the problem.

 Determine research design.

 Identify data types and sources.

 Determine sample plan and size.

 Collect the data.

 Analyze and interpret the data.

 Prepare the research report.

For the purpose of study, data from the in-house survey conducted by

the marketing department (secondary data) has been used and also for

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coming out with the recommendation. It was also felt that mere

secondary data would not provide in-depth information for the analysis,

hence it was decided that interactive discussions with the managers and

the head of every department would help in an in-depth and true

understanding of challenges faced by the department.

The methodology adopted was to gather relevant information from the

appropriate department, correlate the information obtained and to

present the information in a logical and systematic manner.

AVIATION INDUSTRY
12
INTRODUCTION

Though the Open Sky Policy was announced 11 years back, for all

practical purposes, the Indian aviation industry actually took off with the

entry of as many as 6 companies in the first half of 1991 when the state

run Indian Airlines was facing industrial strife.

After reporting an Rs.11 crore profit in 2001, Indian Airlines suddenly

saw its market share drop and its supremacy challenged. Pilots let the

airline in hordes to more lucrative jobs with the private operators, which

resulted in under utilization of its Boeing fleet. Passengers, too,

suddenly realized that there were airlines willing to offer that little extra

bit that means so much, and Indian Airlines suddenly saw its market

share drop to 53 per cent from its earlier unassailable position.

The growing disenchantment with the services (or lack of it) of IA and

the frequent agitation by its employers prompted the “decision-markets”

to usher in private air-taxi operators (ATO’s). Nineteen others got no

objection certificates (NOC). By 1996, there were 12 operators in the

market, by their market share in domestic traffic was negligible.

By 1999, there were seven players who were operating with a

scheduled airline’s while 22 others were fling as non-scheduled or ATO.

The scheduled airlines included EAST-WEST AIRLINES, MODI-LUFT,

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DAMANIA, JET AIRWAYS, NEPC and ARCHANA. Companies such as

EAST-WEST leased several 100 plus seater aircraft and developed a

large network in a short span. Jet Airways grew slowly and not only

outlived competition, but established itself as the largest private sector

player.

While the market share of private operators soared to 41% from 1996 to

1999 (eating into IA’s share), the initial euphoria died out in 1997 when

the Air Corporation Act of 1953 was repealed and it became obligatory

for ATOs with three or more aircraft to become scheduled airlines and

operate according to certain guidelines (protocol). It became mandatory

for scheduled airlines to fly at least 10% of their capacity to the far flung

uneconomical areas such as north-east, Jammu and Kashmir and 50%

to non-trunk stations.

With this, came the realization that a whole lot of overheads associated

with the flying were involved and higher utilization of the leased aircraft

and better route planning was essential to survive. Obviously, when

there was a mismatch between the returns and the outgo, some of them

shut shop.

But, even before the guidelines were issued in 1997, DAMANIA, which

had created brand equity of its own as an elegant, passenger-friendly

14
airline, buckled under pressure and was purchased by NEPC in 1996.

UB AIR and RAJ AIR followed it. By the first quarter of 2000, three more

airlines suspended their operations due to non-availability of aircraft,

EAST-WEST in May 1999, MODILUFT in November 1999, and NEPC in

March 2000.

THE RESOURCE OF DOMESTIC AIRLINE

They came, some faltered, most fell by the side, but while they were

there, they managed to shake Indian Airlines from its monopolistic

complacency, and prepared it to battle for its tort with the likes of Jet

Airways and Sahara Airways as and when they fly.

After a fairly long bout of uncertainty, domestic airlines are on the

upswing again. And as aviation experts projected, only the players who

understood the rules of the game, have survived and are prepared to

make a comeback to this glamorous but highly capital- intensive

industry.

Jet Airways is on a fleet expansion spree, while Sahara Airlines is

preparing for a face life that should really gear up the domestic market.

Indian Airlines, despite its failure to phase out older aircraft, is regaining

lost ground.
15
Today, the Indian sky is left for Jet Airways, Sahara Airlines and Indian

Airlines to expand and grow…

16
 INDIAN AIRLINES – A PROFILE

Indian Airlines (IA) is the India’s largest government owned regional

airline systems in Asia, with a fleet of 62 aircrafts (i.e. Dornier D-228,

ATR-42, Boeing 737, wide bodied airbus A300s, one Fly-By-Wire Airbus

A320s). Indian Airlines became operational since its inception in the

year 1953 and celebrated its Golden Jubilee in the year 2003

completing its 50 years of transcendental service in air traveling.

Indian Airlines has been setting the standards for civil aviation in India

since its inception. It has many first to its credit, including the

introduction of the wide-bodied Airbus A300, Domestic shuttle service

and Walk-In Flights. Moving with time, Indian Airlines is one of the first

organizations in the country to establish a widespread computerized

network for reservations and ticketing.

Alliance Air is the fully owned subsidiary of Indian airlines. Indian

Airlines has total staff strength of approximately 19600 employees with

an annual turnover of more than Rs 4000 crores (1billion USD) including

that of Alliance Air. The passenger carriage, which was 0.5 million in

1954-55, has grown to 7.78 million in 1999-2000. Today Indian Airlines

17
together with its subsidiary airlines carries a total of over 7.8 million

passengers annually, which includes 64 national and 16 international

destinations with 35000 seats daily?

Indian Airlines have been divided into four regions i.e. Eastern region,

Western region, Northern region and Southern region. The Indian

Airlines international network spans over Kuwait, Oman, UAE, Qatar

and Bahrain in west Asia, Thailand, Singapore, Yangon and Malaysia in

south-east Asia and Pakistan, Nepal, Bangladesh, Myanmar, Srilanka

and Maldives in the south Asian sub-continent.

Its unique orange & white logo emblazoned on the tails of all its aircraft

is perhaps the most widely recognized Indian brand symbol that has

over the years become synonymous with service, efficiency and

reliability. It has state-of-the-art facilities for all aspects of maintenance.

The pilots are trained at Hyderabad where the commanders and

captains are trained in all types of aircraft in the Indian Airlines fleet.

State-of-the-art full flight simulators are available for A300, A320 and

B737 aircrafts.

The Airlines online facility provides services like Passenger Reservation,

Ticketing, Message Switching and fare display. An interactive voice

18
recording system for providing flight information is also integrated with

the reservation system.

Airline code:-

IC - Indian Airlines

CD - Alliance Air

Aircraft acquisition:-

A300 - Wide Bodied Airbus A300

A320 - Fly-By-Wire Airbus A320

737 - Boeing 737

ATR - ATR-42

228 - Dornier 228

154 - TU 154

62 - IL 62

Class:-

C - Business class

J- Executive class

Y - Economy class

Days:-

1 - Monday

2 - Tuesday
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 3 - Wednesday

4 - Thursday

5 - Friday

6 - Saturday

7 - Sunday

FLEET STRENGTH

AIRCRAFT TYPE STRENGTH AVG LIFE(YRS)

A-300 4 20.5

A-320 41 8.7

B-737 11 18.8

D-228 2 14.6

ATR-42 4 -

NUMBER OF SEATS IN VARIOUS AIRCRAFT

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AIRCRAFT TYPE J Y TOTAL

CAPACITY
BOEING-B737 - 119 119
AIRBUS-A320 20 125/126 145/146
AIRBUS-A300B2 33 215 248

AIRBUS-A300B4 32 215 247

DORNIER-D228 - 19 19
ATR - 50 50

AIRCRAFT UTILIZATION

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TYPE OF REVENUE FLYING HOURS UTILIZATION PER

AIRCRAFT AIRCRAFT PER

ANNUM(HOURS)
1999-00 2000-01 2001-02 1999- 2000- 2001-02

00 01
A-300 24886 24804 19629 2274 2400 2491

A-320 81680 84346 98042 2954 3048 3178

B-737 905 431 670 **** **** ****

**** B-737 has been given on lease to Alliance Air.

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 REVENUE FOR INDIAN AIRLINES

Today nearly 80%of the customers are provided by the travel agents to

the Indian Airlines and these travel agents are 2000 in number spanning

the whole country. Indian Airlines provides 5% and 7% commission on

domestic and international fares respectively to the travel agents.

SWOT ANALYSIS OF INDIAN AIRLINES

STRENGTHS

 Large fleet.

 Experienced staff.

 Dedicated departure terminal at Delhi.

 Connectivity with the reservation centers and agents is good.

 Adequate infrastructure and large network.

 People are loyal towards the national carrier.

 Government Backing.

 Indian Airlines has a modern and complete in-house training

facility.

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WEAKNESSES

 High overheads and huge workforce resulting in lower output.

 Preconceived image of PSU’s.

 Attitude of the staff.

 Ageing fleet.

 Inaccessibility of the staff over phone.

 Political/Bureaucratic interference.

 On the spot decision making flexibility not there.

 Ageing workforce (cabin crew).

 Indian Airlines has its socio-economic responsibility of catering to

the inaccessibility areas at subsidized rate affecting operational

expenses.

 Being a dedicated terminal all services rendered at the airport is

presumed by passengers to be done by Indian Airlines.

 Job security too high.

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 OPPORTUNITIES

 Tourism industry is gaining momentum.

 Induction of new aircrafts on lease.

 Response to some of the promotional fares (schemes) is

encouraging.

 Shelving of the privatization plans of Indian Airlines by the

Government of India.

 Corporates are showing interest in Indian Airlines.

 Weakening of the dollar rate in comparison to the rupee.

 Economic scenario is showing an upturn.

THREATS

 Perception of the better product in comparison to that of the

competitor.

 Recent world events hitting the tourism industry badly.

 Expectation of people from Indian Airlines is high, even some of

them are unrealistic.

 Increase in the capacity of various airlines.

 Falling market share of Indian Airlines to that of Jet Airways.

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 MARKETING STRATEGY OF INDIAN AIRLINES

The product that Indian Airlines sells are ‘SPACE’ it may be its seats or

cargo space. This product is highly perishable and costly. Airlines earn

revenue by selling this space. This means that higher the seats sold

more is the revenue generated. Thus if the plane goes in the air with

empty space, this means that much space has perished. Thus the life

cycle of the airline’s product begins and ends with each flight.

The marketing concept of building an organization around the profitable

satisfaction of customer needs has helped firms to achieve success in

high-growth, moderately competitive markets. However, to be

successful in markets in which economic growth has leveled and in

which there exist many competitors who follow the marketing concept, a

well-developed marketing strategy is required. Such a strategy

considers a portfolio of products and takes into account the anticipated

moves of competitors in the market.

AFTERMATH

To rectify the melody that has been slowly but surely creeping, resulting

in crippling results and damaging reputation. Indian Airlines took resort

to the Turn Around Strategy which constitutes the following:

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TURN AROUND STRATEGY:

On 1st March 1997 Indian Airlines became a Public Limited Company.

Till now IA had only emphasized on distribution, with marketing as a

non-issue. Since the company was faced with increasing competition,

lack of resources and mounting losses, it had to formulate and

implement a Turn Around Strategy. To find its place in the sun again, IA

has unleashed an aggressive marketing & advertising exercise backed

by service up gradation & customer friendly overturns. The new plan

consisted, of the following:

1. HRD Initiatives

As the first step free and frank discussions with a cross section of the

employees were held. Top management undertook extensive tours of

all stations to communicate the details and vision behind all major

policy initiatives and to get their response to them. Focus on training

of personnel was enhanced to increase effectiveness. A greater

transparency was built into recruitment and transfer policies with a

view to boosting their trust and confidence. In interactions with

unions and Associations a firm but fair attitude was taken.

Productivity Lined Agreements, where the inflows exceed the

outflows despite the fact that market wages were being given, were

entered into.

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2. Increased Utilization of Aircraft

With a view to increasing aircraft utilization, pilots needed to be made

to put in more flying hours and steps had to be taken to increase the

number of Commanders. Productivity of Engineers also had to be

linked to the daily availability of aircraft.

i. Enhanced Productivity and Availability of Pilots

The agreement signed with ICPA in 1996 resulted in the

increase in monthly utilization of Pilots from 50 to 63 hour.

With the promotion of 80 Pilots into the executive cadre

monthly utilization went up further to 75 hours.

Certain rationalization and changes in training patterns of

Commanders, due to signing of a landmark agreement with

pilots’ Association resulted in increased out-turn of

Commanders.

ii. Increased Productivity of Engineers

Productivity of Engineers has also significantly increased as a

result of other productivity-linked agreement thereby

increasing daily availability of aircraft as follows:

A-300 7-8 aircraft per day from 4-5

A-320 25-26 aircraft per day from 20

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3. Increased International Operations

(a) Indian Airlines went in for increasing the number of destinations to

neighboring countries. In 1997 Indian Airlines operated 12

international stations, which went up to 17 stations in 1999. The new

stations added are Doha, Kuala Lumpur, Kuwait, Bahrain and

Yangon.

(b) On the domestic front – IA is planning to start Shuttle type flights on

major metro routes like Mumbai–Bangalore, Mumbai–Chennai, and

Delhi-Bangalore. It has already started launching shuttles on the

heavy Mumbai–Delhi routes.

4. Creation of Profit Centers

While on one hand, Indian Airlines’ size is strength, it is also a major

disadvantage when it comes to operating in a fast changing and

competitive environment. It is not possible to take decisions specific

to small groups of employees without reference to the 22003 strong

work forces. The organization is unable to be as nimble as it ought to

be in terms of decision making, customer service and employees

motivation. Consequently, an integral part of turn around strategy

was to hive off certain activities into separate profit centers, to make

them more focused, flexible and accountable. Also a more direct

29
 linkage between productivity and emoluments has been created,

thereby reducing problems of industrial relations.

The first of such profit centers was the state-of-the-art Jet Engine

Overhaul Shop at Delhi.

Similarly the Central Training Establishment at Hyderabad was also

converted into a Profit Centre. On conversion as Profit Centre the

earnings of CTE from outside party jobs after fully meeting the

requirement of Indian Airlines, increased from Rs. 30 lakhs in 1997-

95 to Rs. 390 lakhs in 1999-97.

Recently the Auxiliary Power Repair Unit at Calcutta, the Ground

Support Department and the Cargo Department has also been

declared a Profit Centre.

Indian Airlines has also set up a subsidiary airline, Alliance Air. This

airline has helped in increased utilization of the Boeing aircraft by

inducting Commanders from the open market and focusing on

regional routes. It has also enabled the Commanders in Indian

Airlines to be utilized more optimally on A-300 and A-320 fleet.

5. Marketing Initiatives

Indian Airlines took a number of economic initiatives and brought

about significant improvements in its product. Sustained and

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meaningful campaign was launched to disseminate information about

these improvements. The marketing initiatives taken were:

I. PRODUCT IMPROVEMENT

1999-00

EXTRA SEAT-PITCH:

Extra seat-pitch in B-737 and Economy Class of Airbus A-300.

WIDER SEATS:

Wider seats provided in Executive Class of Airbus A-320

aircraft.

CHOICE OF MEALS:

Introduction of a choice of meals, bread/fruit baskets, soups,

damask linen tablecloth and napkins, hot and cold towels.

FREQUENT FLIER PROGRAMME:

IA has further strengthened its frequent flyers programme

(FFP), by entering into a reciprocal arrangement with Air

France and launching Joint Promotions with American

Express, Hertz Rent – a – car and the Welcome group. It also

launched a major drive to enroll more members to its FFP

program, with lucky draws for a luxury car, for which

passengers who had flown at least five times between mid-

December 2000 and mid-March 2001, tried their luck.

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SENIOR CITIZEN DISCOUNT:

Persons who have attained the age of 65 years on the date of

travel land who are resident citizens of India are entitled to

50% discount on the normal rupee Adult Fare.

WAIVING OF CANCELLATION CHARGES:

2000-01

Indian Airlines has waived of cancellation charges, provided

the reservation is cancelled one hour before the scheduled

departure of the flight. There will be a nominal refund fee of Rs.

100/- only in case the ticket is refunded /reissued.

CHECK-IN PLUS:

Assistance for minors, elderly and handicapped passengers.

BAGGAGE PLUS:

Baggage Allowance on all domestic flights enhanced by 10

kilograms. Infants also allowed 10 kilograms of free Baggage

Allowance.

DIET SPECIAL:

Light, low fat, easily digestible recipes made by new cooking

methods and mediums, sugar, salt, and fat free diet meals and

mineral water.

MEAL SPECIAL:

Better presented meals with weekly changes.

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 TRANSIT SPECIAL:

Special Transit Desks, through check-in of baggage and meals

during transit waiting time.

FESTIVAL FOODS:

Passengers were served special sweets on Diwali, Bengali

food on Durga Puja, Avadhi food on Holi and Plum Cake on

X’mas.

DIAL-A-CANCELLATION:

Passengers and Travel Agents can now effect cancellation on

telephone or through fax message.

REPORTING TIME:

Reporting Time reduced from 75 minutes to 60 minutes at all

the airports except Delhi, Srinagar, Leh and Jammu.

II. RESERVATION FACILITIES

• To facilitate reservation between any two stations of Indian

Airlines network, the instant reservation facility has been

extended to a total number of 69 stations.

• Of the 53 domestic stations where Indian Airlines flights are

being operated presently, 52 stations are equipped with

computerized reservation facility.

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 • All the 17 international stations, where Indian Airlines is

presently operating are equipped with CRT terminals.

• Computerized reservation facilities extended to about 750

agents spread over 38 stations.

• Indian Airlines and Air India jointly under National Marketing

Division (NMD) are distributing Systems Interface for Travel

Agents Reservations (SITAR), which is the state-of-the art

technology from SABRE.

6. Incentive Schemes

IA has realized that unless the distribution network is rejuvenated

with generous doses of incentives, the agents, who account for two-

thirds of the airline sales, will just not respond. The airline has

introduced a three per cent sector-linked – incentive-commission,

which can be deducted by agents at source. Even the bank

guarantees were frozen at last year’s level for all the agents and not

raised to match over trading. The guarantees were raised in

proportion of increasing business, which invariably discourage

agents from plumping for more sales. The airlines set up an “agency

help desk” to focus on problems of the trade. High – speed modems

are also being installed to facilitate faster transactions.

7. Price

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 In the year 1999, IA started a “make up strategy” i.e. slash in price for

the make up of losses. It was followed up by many airlines as a quick

penetrating strategy to draw in big crowds.

The General Managers in the four regions have been authorized to

extend a 15% bulk discount to passenger groups depending on

market conditions; point-to-point fares have been rationalized (a

special discount of 9% is offered on 135 specific routes) and excess

baggage payments are accepted in credit cards.

8. Promotion through Frequent Flyer Programme (FFP)

To add more value to its FFP, IA is talking to both American Express

and Citibank to issue a co-branded card, which will offer a host of

benefits against ticket purchase and entertainment expenses. It is

also signing up a ‘flying returns’ agreement with Citibank, which will

entitle users to redeem their credit card points against mileage points

and free tickets thereafter.

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 9. Offer of Free Pagers by Mobilink

It has also tied up with Mobilink to offer free pagers to some 70,000

frequent flyers at six major metros. The pagers will enable the airline

to inform the passenger about the changes in schedule, flight delay

etc. While the pagers service will be free in the first year, in the

subsequent years, Mobilink will levy a nominal user fee. The pager

Company will thus acquire a large chunk of customers and ‘sell

advertisements’ on the pager.

10. Customer Contact Programme

The airline is finally laying more emphasis on customer contact

programs. In order to design an ideal flight schedule, IA has hired

IMRB to meet a sample group of 10,000 frequent flyers at Delhi,

Mumbai, Chennai, and Calcutta. It is also roping in a direct marketing

agency to respond to passengers grievances.

11. Touchdown boards

The message to the passenger, obviously is, “we care”. To increase

customer awareness, the airline has put up “touchdown” boards at

the six major metros, to keep passengers informed about customer

relevant developments in the airline such as the monthly product

upgrade, value addition schemes, promotional efforts, lucky draws

etc. The airline has also launched advertisement cum media

36
 blitzkrieg to drive home its strengths: IA’s schedule advantage, same

day return facility, multiple options, etc.

12. Advertisement Cum Media Blitzkrieg

Designed, developed and executed by Nexus Equity Advertising,

now known as Enterprise Nexus Communications after its merger

with Enterprise Advertising, the marketing programme is a multi-

media communication module. The package aims at establishing the

strengths of IA, reinforcing its leadership and overall improving its

image amongst business travelers, as the primary target. It includes

press ads, posters, picture postcards, calendars and the “travel wise

consumer contact programme”.

The first campaign in 1998 highlighted IA’s tangible strengths. Using

an almost negative creative approach, through a confessional tone to

disarm the angry passengers, one of the ads said: “We admit Indian

Airlines does not give you the same choice as others do”, followed by

copy that read, “Indeed, no other airline offers such a wide choice of

aircraft, and not just a choice of seats. Overall, this campaign

highlighted IA’s fleet size, maintenance efficiency, infrastructure, leg

room, extra baggage allowance.

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 The second campaign in the same year was a progression of the first

but it adopted an emotional approach with lines such as: “I choose

my airline the same way I choose my doctor, on sheer experience”.

A third campaign, still ongoing, attempts to now bring out consumer

benefits that arise from IA’s strengths that were brought out in the

previous campaigns. While the visuals emphasis the reach and

spread of Indian Airlines, the tone is more assertive.

13. Cargo Handling

In the passenger segment, the IA cargo division – an independent

profit centre now-has launched an all-out drive to garner a large

share of the business. Unlike the passenger segment, the cargo cell

still retains about 80% of the market. But competition is slowly

catching up.

Interestingly, the ad campaign launched by the cargo division seeks

to highlight the changing face of business. It underscores the vast

network, its exclusive tie-up with GATI for door-to-door express

service, a special arrangement to go global with Air France and an

attempt to touch every nook and corner of the country with the Indian

Posts and Telegraphs Department.

IA has learnt to be a lot more flexible in its dealings with cargo agents

now. It is also working at automation of all the cargo officers.

38
 Consolidation of assorted cargo with bulk rates is now being allowed,

and freight rates are being revised instead of sticking to published

tariffs. What was unthinkable till some years aback has now become

a distinct reality.

Through all its efforts, IA is gradually trying to shed its monolithic

image. And its communication exercise has; at least, given it a

clearer face as far as the consumer is concerned. But this public

sector organization will have to keep its bootstraps pulled up if it

wants to retain leadership in the market place. For, private airlines

are not exactly sitting back on their haunches.

CONSEQUENCES OF TURN AROUND STRATEGY:

1. Aircraft utilization increases -

A good average utilization of aircraft is 2600 hours per aircraft per

annum, which was down to a low of 1600 hours in 1997. Efforts

were made to increase aircraft utilization by increasing the

productivity of engineers, pilots and by increasing the number of

commanders. Aircraft utilization now well exceeds the desired

norm of 2600 hours per annum.

2. Productivity of pilots rises -

39
 With the implementation of the turnaround strategy, pilot

productivity rose substantially. In fact, the monthly average flying

increasing from 50 to 63 hours initially, and then to 75 hours.

3. Productivity of engineers grows -

The number of aircraft made available for operation per day

measures engineering productivity. The aircraft availability

improved significantly over the last three years. The availability of

A300s went up from a mere 4 aircraft per day in 1997 to 8 in 2000

and A320 from 20 in 1997 to 27 aircraft in 2000.

4. Creation of Commanders -

Indian Airlines had lost 166 pilots to private airlines. After the

revised training pattern, the number of new commanders added to

the fleet strength each year rose dramatically, from 20 new

commanders added in 1997-95 to 67 in 1999-97.

5. International operations -

After 1997 five new destinations were added- Doha, Kuala

Lumpur, Kuwait, Yangon and Bahrain. Also, fifteen new

international city links were added.

6. Employee morale -
40
With increased training efforts and management-staff interaction, there

was a visible upsurge in morale and productivity among employees.

What is significant is that no man-days were lost in the last two years.

7. Creation of profit centers -

a. Establishment of Alliance Air

There was a dramatic increase in the utilization of B737, A320

and A300 aircraft with the hiring of new commanders and

pilots, which benefited both Alliance Air and Indian Airlines.

b. Jet Engine Overhaul Shop

As a result of the creation of separate profit centre, the

Overhaul Shop saves the company an amount of Rs. 2.85

crore in foreign exchange every year.

c. Central Training Establishment

Prior to its setting up as a profit centre, the annual revenue

was around Rs. 30 lakh. This increased dramatically, with the

revenue touching Rs. 390 lakh during 1999-97.

8. Passenger perception improves -

41
 From the ‘least preferred’ airline in 1997, IA has now become the

‘most preferred’ airline.

Image tracking studies carried out from amongst the airline

passengers by the reputed market research agency IMRB, over

the last three years, show that Indian Airlines is now ahead of the

private airlines.

Other surveys carried out by reputed organizations such as MARG,

MODE and MDRA also show that Indian Airlines is the most preferred

carrier presently.

Since this is a service industry with an intangible product, how do

you market it ?

Marketing the tangible aspects associated with the intangible product

does it. The tangible aspects include price, promotion and place. To

distinguish our product from that of others we have to maneuver the

4P’s of marketing i.e. Product, Price, Promotion and Place (place of

distribution).

Since the product of all the airlines is the same, why does one airline

fare better than the other? This is because of the positioning of the

brand in the mind of the customer. This approach is needed because

consumers are bombarded with a continuous stream of advertising. The

consumers mind reacts to this high volume of advertising by accepting

only what is consistent with prior knowledge or experience.

42
The easiest way of getting into someone’s mind is to be first. It is very

easy to remember who is first, and much more difficult to remember who

is second. Even if the second entrant offers a better product, the first

one more over has a large advantage that can make up for other

shortcomings.

In the eyes of the agents Jet Airways is the best placed in comparison to

that of Indian Airlines in the next place in the eyes of the customers.

They feel that same is the case in the eyes of the customers (this data is

based on the survey of 48 agents carried in Delhi, mostly South Delhi).

Indian Airlines was the first airline in the country but it is now positioned

at the second place.

43
CHOICE OF AIRLINES

160
140
120
100
IC
80
S2
60 9W
40
20
0
CUSTOMER AGENTS

IC – Indian Airlines

S2 – Jet Airways

9W – Sahara Airlines

44
 EFFECT OF ADVERTISEMENT S

60 51

50

40
27
22
30

20

10

0
Indian Airlines Jet Airw ays Sahara Airlines

DOMESTIC AIRLINES

45
This shows that people are generally aware of Indian Airlines (as

compared to Sahara and Jet and actually travel by it also). The most

preferred feature of the advertisement happens to be presentation for

Indian Airlines. As regards Jet Airways people are moderately aware of

it and also travel by it. Most liked feature of the advertisement is the

message. Similarly in Sahara Airlines the feature most preferred is the

media.

This shows that people who are aware of the airline are not just verbally

aware but also prefer to travel by that airline. This depicts that the effect

of advertisement of is directly proportional to the uses to the airlines.

Besides the high percentage of Indian Airlines travelers can be

attributed to the fact that for the government officials it is mandatory to

travel by IA.

Hence the question arises that how IA position itself?

46
Positioning of a service can be done either through promotional

schemes or through the level of service provided.

PROMOTIONAL SCHEMES-

Promotional decisions are those related to communicating and selling to

potential consumers. While coming out with the promotional schemes it

is worthwhile to note the profile of customers served.

PROMOTIONAL FARES-

Different types of promotional fares are introduced to attract more and

more passengers to travel in specific airlines to promote sales. With the

implementation of promotional fares the motive is to increase the

number of airline loyal passengers and of course revenue. Indian

Airlines follows dual fare policy for its domestic service. The two types of

fares are as follows:

1) USD FARE-

A. USD fare is applicable for all sales made abroad for domestic

travel within India.

B. USD fare is also applicable for all sales made in India for

domestic travel within India for following categories of

47
 passengers:

i. Foreign nationals.

ii. Indian nationals residing permanently outside India.

C. Unless and until specified otherwise, USD fare is applicable for

all sales made worldwide including India for domestic travel

within India against the following documents:

i. Sale against document of interlines patrons.

ii. Sale against IA international MCOs/PTAs.

iii. Sale against international credit cards and UATP card.

2) INR FARE-

INR fare is applicable for all sales in India for domestic

transportation wholly within India for the following category of

PAX:

A. Indian nationals permanently residing in India.

B. India, Nepal, Bhutanese, Tibetan refugees residing in India, Nepal

and Bhutan.

C. Foreign national studying in India and holding a resident permit.

D. Foreign nationals studying in India and who are otherwise eligible

for student discount under IA rules.

48
RESERVATION-

The Computerized Reservation System at Delhi, a state-of-the-art

Computer Main Frame, is accessible to all major computerized

reservation systems of the world. This enables the valued IA

passengers to make reservation on any Indian Airlines flight for any

sector all over the network from a single location in its booking

office at any station. Besides, there are nearly 2000 approved

travel agents all over India at the service of our passengers.

 Passengers can also make the reservation over telephone on

time limit basis and purchase the tickets before the expiry of the

indicated time limit.

 While making the reservation the passengers need to indicate all

there contact numbers, including their residence, business and

mobile numbers, where they can be contacted at all points of their

itinerary. This helps IA to inform the passengers wherever they

are in case of any schedule change or delay to their flight.

 Passengers also need to give their meal preference at the time of

making reservations.

49
  Also special assistance is offered to the passengers who require

special handling over and above the normal attention, like the

disabled, those on wheel chair, stretcher or unaccompanied

minors. Such requests for special attention may be made to the

airline’s office while making reservations.

FARES-

 IA domestic fares are quoted both in Indian Rupees (INR) as well

as US Dollars (USD). The INR fare consists of basic fare and two

governmental levied taxes, namely Inland Air Travel Tax (IATT)

and Passenger Service Fee (PSF). The INR fare is applicable to

resident Indians only while the dollar fare is applicable to foreign

nationals and non-resident Indians.

 Besides, there are some special fares and discounts for senior

citizens, students, the armed forces personnel, war disabled

persons and many others.

 Details of all concessions and special fares are available at all

Indian Airlines booking offices and travel agents.

50
CANCELLATION CHARGES-

 To allow flexibility to our passengers in their travel plan, we do not

levy any cancellation charge provided the cancellation is effected

at least one hour before the scheduled departure.

 Rebooking and Refund charges may be applicable on a few

specified routes during peak season to avoid fictitious booking

and help availability of seats to bona fide passengers.

 Although there are no cancellation charges, ‘No-Show’ charges

are applicable if a confirmed reservation is not cancelled at least

one hour prior to departure. No refund except IATT/PSF is

permissible on a ‘No-Show’ ticket.

 Passengers can effect cancellation on phone or fax to our main

booking offices and present the ticket physically for cancellation

within Twenty-four hours.

 Refund Administration Fee is levied while affecting the refund for

unutilized tickets. The details can be obtained from the Indian

\Airlines offices and travel agents.

 Passengers must keep their tickets in safe custody, as no refund

is permissible against lost tickets. However, for international travel

where passport control is possible, duplicate tickets can be issued

after completion of certain formalities.

51
VALIDITY OF TICKETS-

IA domestic tickets, issued on normal fare, are valid for one year from

the date of issue. International tickets are valid for one year from the

date of travel on the first leg of journey. Validity of tickets issued on

concessional and special fares may be different as governed by the

rules applicable to that particular concession.

DIFFERENT TYPES OF PROMOTIONAL FARES-

Different types of promotional fares are introduced to attract more and

more customers to travel in a specific airline. The promotional fares on

which I had worked are as follows:

 Promotional One -Way Fare (POW) - Promotional one-way-fare

is for travel introduced in one-way on a specific sector.

Eg: - Delhi-Mumbai sector.

Following table shows the number of passengers that traveled

in POW promotional fare scheme out of the total number of

passengers in the year 2003-2004 (April 2003–March 2004) in

few sectors:

52
 Round Trip Promotional Fare/Return Fare (RTP) – Round

trip promotional fare is for travel to & fro on a specific sector.

Eg: - Delhi-Mumbai-Delhi sector.

Following table shows the number of passengers that traveled in

RTP promotional fare scheme out of the total number of

passengers in the year 2003-2004 (April 2003–March 2004) in

few sectors:

 Flight Specific Fare (FS) – Flight specific fare is introduced on

that particular flight only.

Eg: - The Flight Specific Fare on IC-801.

Following table shows the number of passengers that traveled in

FS promotional fare scheme out of the total number of

passengers in the year 2003-2004 (April 2003–March 2004) in

few sectors:

53
 QUESTIONAIRE

Question No. Responses

1.
Brand Awareness – Top of the
Mind Recall
Indian airlines 57%

Jet Airways 24%

Sahara Airline 19%

2.
Airline Usage

Indian Airlines 62%

Jet Airways 20%

Sahara Airline 18%
3.
Awareness about Advertisement

Indian Airlines 51%

Jet Airways 27%

Sahara Airline 22%

4.
Most liked Feature of the
Advertisement

Indian Airlines
Presentation 56%
Message 15%
Media 19%
Others 10%

Jet Airways
Message 61%
Presentation 20%
54
 Media 19%

Sahara Airline
Media 50%
Presentation 30%
Message 20%

55
 SUGGESTION BY THE PASSENGERS

 Fare charges should be same for foreigners as for Indians.

 Debit/Credit cards should be accepted for reservation.

 There should be more transparency (clarity) in the announcement

of the flights.

 To open separate counters for single baggage and last minute

departure.

 Check-in time should be reduced.

 Security checks need improvement. Personnel need to be more

humane.

 Easy information should be available to passengers regarding

transit baggage.

 More decent, polite and cheerful staff.

 The baggage tags should have a solid glue system. The present

plastic tags are very easy to tamper with.

56
 RECOMMENDATION/SUGGESTION

The research study and the analysis of various aspects tapped lead to

the following recommendation:

 141 should be outsourced to a call center to deal with the

enquiries. Non-availability of help lines has been the most

common complaint of agents and passengers. IVRS should be

provided for the agents/passengers waiting for their call to be

attended by the operator. Some of the government organizations

have successfully done outsourcing help lines.

 With the oncoming of the Private Airlines on the country the

customer awareness and aspiration of quality of service has been

enhanced considerably. So Indian Airlines should emphasis on

providing more efficient services both on the ground and in the air

as done by Jet Airways to a large extent.

 Dedicated counters should be made to handle last minute

reservation, preferably for reservations being done on the day of

the flight.

 Ticket counters can be placed at major corporate houses which

have a substantial amount of travel budget: wherein all the

information about the schemes is available. These ticket counters

are to be maintained at the expense of Indian Airlines.

57
 There should be internal and external audits to look in to the

working of various departments.

 An incentive scheme should be launched for the people at the

front desk of the agency such as the ticketing agents. The

ticketing agents should be provided with a unique identity number

that they would have to quote on the tickets. The points would

automatically credited to their account. On the accumulation of

certain number of points they will be given FOC’s. This will also

help in checking false ticketing.

 Apex-7 and Apex-21 fare (scheme) should be continued on

account of its popularity.

 Scheme like Smart Apex fare scheme for business class

passengers can be introduced.

 Flexibility in Smart Apex fare scheme should be increased.

 All the promotional schemes and services should be extensively

advertised to bring awareness to make itself better known to the

potential customers. They should be advertised through e-mails,

corporate presentations and through road shows. Executive class

bonanza scheme should be started again.

58
 Holiday packages should be sold only through Indian Airlines

booking offices and not through agents, as there is every chance

of the agents offering parallel deals to the customers.

 Indian Airlines should schedule more number of flights to and

from stations like Mumbai, Delhi, Chennai, and Kolkata as these

sectors account for high Pax load.

 Indian Airlines can introduce late bird/night bird flights between

metros.

 The check-in time should be minimal. Wherever there is likely to

be long cues more counters should be opened.

 Indian Airlines as introduced by Sahara Airlines should adopt the

facility of valet services and it should be extended to all classes.

 Tele reservation and computerized check-in procedure should be

made mandatory.

 The process of ticketing and cancellation should be made more

easy, smooth and as flawless as possible as most of the

respondent are not happy with the present ticketing procedure.

59
 Delayed flight, which is a very painful experience for the travelers,

should be attended to as top priority because the main clientage

is business men and they are time bound.

 Indian Airlines should acquire (induct) new aircraft to upgrade

product quality in order to build brand image and retain

passengers.

 AASL should be given more autonomy so that it could conduct

some of the activities related to marketing at its own to add up

innovative schemes and generate in revenues.

 Alliance Air authorities should be made in easy approach to the

passengers for the grievance handling and complaints.

 The flight of Alliance Air should be made more attractive that can

be in the form of a booklet as it is of the Jet Airways.

 It is necessary for Alliance Air that it should reconcile the sectors

and the frequency at which it is operating so that it could reduce

costs and earn more profit.

 Alliance Air is required to add up more and more places, which

have the status of tourist places.

60
 Service innovations like automated flight schedules, over the

phones, provision for customizing meals, in-fight mail order

shopping etc. should be introduced to lure the passengers.

 Indian Airlines needs to undertake aggressive marketing.

 Alliance Air should consolidate its market share by further

improving its service standards and adding more routes to its

network

 Indian Airlines should undertake customer satisfaction surveys.

 IA should make provisions to add up more financial benefits for its

passengers.

 International desk of Indian Airlines should be made more

accessible.

 Flight status should be made available through SMS.

61
 CONCLUSION

The healthily competition of domestic airlines has set new trends in the

quality of service. Previously in the monopolistic environment of Indian

Airlines the quality and the desire to win over the constraints was totally

dismal. With the oncoming of Jet Airways and Sahara Airlines there is

sea change in the quality of service and the pride of the job.

Hence today it is a matter of great significance that the Indian Airlines

staff now cares about the passenger comfort and take pains to see that

the flight is on time. Indian Airlines so should try the high percentage

98% of on time service of Sahara Airlines is the hallmark of their quality

of service.

Advertisement has brought awareness among the people regarding

Indian Airlines (as compared to Sahara and Jet and actually travel by it

also). The most preferred feature of the advertisement happens to be

presentation for Indian Airlines. As regards Jet Airways people are

moderately aware of it and also travel by it. Most liked feature of the

advertisement is the message. Similarly in Sahara Airlines the feature

most preferred is the media.

62
This shows that people who are aware of the airline are not just verbally

aware but also prefer to travel by that airline. This depicts that the effect

of advertisement of is directly proportional to the uses to the airlines.

Besides the high percentage of Indian Airlines travelers can be

attributed to the fact that for the government officials it is mandatory to

travel by IA.

Customer grievance and prompt redressal should also be rated as top

priority as this will not only provide the necessary input and the feedback

but also would go a long way in improving the image of Indian Airlines.

63
 LIMITATIONS OF THE STUDY

 Due to constraint of time, a larger sample size could not be

chosen.

 The respondents may not have divulged their true feelings.

 Marketing strategy of a company is indeed a closely guarded

secret especially in the face of stiff competition as in the case of

the airlines sector in India. Therefore, to extract information on

the marketing strategy was a difficult task.

 Minor errors may have been introduced due to fatigue, etc.

64
 BIBLIOGRAPHY/REFERENCES

 www.indianairlines.com

 www.indianairlines.net

 www.indian-airlines.com

 www.indian-airlines.nic.in

 www.indianairlines.indiatimes.com

 www.jetairways.com

 www.airsahara.com

 www.airliners.com

 www.airsahara.net

65

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