Air India

ORGANIZATION STUDY AT AIR INDIA LTD
This project report has been prepared after one month period of in plant training at Air India Ltd a study of Air India Ltd as a whole and its various departments in detail. The main objective of this study is to understand how the organization really works and to get a practical knowledge. The study started with company profile and organization structure of Air India Ltd. Each and every functional department studied individually in detail they are: Finance department, Personnel department, Commercial department, Ground support department, Operations department, Engineering department and Materials management department. Each department plays a very important role in every organization and they are dependent on each other. The study of functional departments started with Finance department. In Finance department the manager was cooperative and friendly. He gave me last 5 years annual report to understand the growth of the company and explained various functions and designation in Finance department. In Personnel department the manager explained various functions and policies. She also explained about various sections under Personnel department. Commercial department provides various services to passengers and cargo. It also includes public relations. The various promotion tools adopted by Air India Ltd were studied. During one month studied all the departments in detail with the help and co-operation of the employees of the company. I interacted with the employees of Air India Ltd and a lot of relevant information was collected for preparing this report. Based on this information SWOT analysis is prepared. The study gave me an insight about the work environment and the operations involved in the organization. It gave me an opportunity to know the working style of the organization and understand the subject which I have studied in my academic in a better way. During the project work many employees and officers in Air India Ltd helped me to know the organization very well. Finally this study helped me in improving my knowledge.
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INDUSTRY PROFILE
Air travel remains a large and growing industry. It facilitates economic growth, world trade, international investment and tourism and is therefore central to the globalization taking place in many other industries. In the past decade, air travel has grown by 7% per year. Travel for both business and leisure purposes grew strongly worldwide. Scheduled airlines carried 1.5 billion passengers last year. In the leisure market, the availability of large aircraft such as the Boeing 747 made it convenient and affordable for people to travel further to new and exotic destinations. Governments in developing countries realized the benefits of tourism to their national economies and spurred the development of resorts and infrastructure to lure tourists from the prosperous countries in Western Europe and North America. As the economies of developing countries grow, their own citizens are already becoming the new international tourists of the future. Business travel has also grown as companies become increasingly international in terms of their investments, their supply and production chains and their customers. The rapid growth of world trade in goods and services and international direct investment has also contributed to growth in business travel. Aviation plays an essential role in economic progress of a nation as it is viewed as a necessary link not only for international voyage and trade but also for providing connectivity to different parts of the country. It is a one of the vital part of the infrastructure of the country and has outcome for the development of tourism and trade, the opening up of inaccessible areas of the country and for providing stimulus to business activity and economic growth. With development of global aviation transportation, the international airline industry has been able to cover almost every country in the world since 1905s. Today the global airline industry consists of over 2000 airlines operating more than 23,000 aircraft, providing service to over 3700 airports. The growth of world air travel has averaged approximately 5% per year over the past 30 years, with substantial yearly variations due both to changing economic conditions and differences in economic growth in different regions of the world.
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The airline industry has always been an integral part of the world economy as it is a major economic force for transportation, manufacture, technology and many other sectors in modern society, thus it contributes a huge profit to world economy growth. According to the data from The International Air Transport Association (IATA), the global airline industry profit decreased to $4 billion in 2011. This would be a 54% fall compared with the $8.6 billion profit forecast last year and a 78% drop compared with the $18 billion net profit (revised from $16 billion) recorded in 2010. On expected revenues of $598 billion, a $4 billion profit equates to a 0.7% margin.
Figure 1: Global airline industry profit by Region 2011
Meanwhile the Global Airlines Industry Guide published by MarketLine also forecasts that the global airline industry will reach a value of $713.6 billion, which would be a 42.2% increase from 2010. And volume of the industry is forecast to top about 3 billion passengers in 2015, up by 28.4% from 2010. So far, domestic is the largest segment of the global airlines industry, accounting for 64% of the industry's total volume, and Americas accounts for 44.4% of the global airlines industry value.
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However, as IATA points out that the cost of fuel is the main cause of reduced profitability as each dollar increase in the average annual oil price; airlines face an additional $1.6 billion in costs. With estimates that 50% of the industrys fuel requirement is hedged at 2010 price levels, the industry 2011 fuel bill will rise by $10 billion to $176 billion. Fuel is now estimated to comprise 30% of airline costsmore than double the 13% of 2001.
Figure 2: World economic growth and airline profit margins: 1970 to 2010
Source: IATA Financial Monitor for Jan/Feb-2012 released on 01-Mar-2012, sourcing IATA, ICAO & Haver
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HISTORY OF AVIATION INDUSTRY
Modern aerospace began way back with Sir George Cayley in 1799 when he proposed an aircraft with a fixed wing and a horizontal and vertical tail, defining characteristics of modern airplane. The 19th century saw the creation of the Aeronautical Society of Great Britain, the American Rocketry Society, and the Institute of Aeronautical Sciences, all of which made aeronautics a more serious scientific discipline. The Wright brothers brought about the first powered sustained flight at Kitty Hawk, North Carolina on December 17, 1903. The launch of Sputnik 1 in 1957 started the Space Age, and on July 20th, 1969 Apollo 11 achieved the first manned moon landing. In 1981, the space shuttle "Columbia" launched the start of regular manned access to orbital space. A sustained human presence in orbital space started with "Mir" in 1986 and is continued by the "International Space Station". Space commercialization and space tourism are more recent focuses in aerospace. Early Years: Aircraft remained experimental apparatus for five years even after the Wright brothers first flight in December 1903. In 1908 the Wrights secured a contract to make a single aircraft from the U.S. Army, and also licensed their patents to allow the Astra Company to manufacture aircraft in France. Glenn Curtiss of New York began selling his own aircraft in 1909, prompting many American aircraft hobbyists to turn entrepreneurial. Manufacturing: Europeans took a clear early lead in aircraft manufacture. By the outbreak of the Great War in August 1914, French firms had built more than 2,000 aircraft; German firms had built about 1,000, and Britain slightly fewer. American firms had built less than a hundred, most of these one of a kind. Seven firms built more than 22,500 of the 400-horsepower Liberty engines, and their efforts laid the foundation for an efficient and well-concentrated aircraft engine industry -led by Wright Aeronautical Company and Curtiss Aero plane and Motor. National Advisory Committee for Aeronautics established was in May 1915 in the United States that spread the scientific information for explicit use to industry. Universities began to offer
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engineering degrees specific to aircraft. American aircraft designers formed a patent pool in July 1917, whereby all aircraft firms cross-licensed key patents and paid into the pool without fear of infringement suits. The post-war glut of light aircraft allowed anyone who dreamed of flying to become a pilot. During the 1920s, aircraft assumed their modern shape. By the mid-1930s, metal replaced wood as the material of choice in aircraft construction so new types of component suppliers fed the aircraft manufacturers. Customers of aircraft grew more sophisticated in matching designs to their needs and militaries formed air arms specifically to exploit this new technology. Air transport companies began flying passengers in the 1920s. European nations developed airmail routes around their colonies. Airmail Business: The United States was the only country with a large indigenous airmail system, and it drove the structure of the industry during the 1920s. The Kelly Air Mail Act of 1925 gave airmail business to hundreds of small pilot-owned firms that hopped from airport and airport. Gradually, these operations were consolidated into larger airlines. Many advances in aircraft design during the 1930s addressed the comfort, efficiency and safety of air travel - cabin pressurization, retractable landing gear, better instrumentation and better navigational devices around airports. In the six-year period 1940 through 1945, American firms built 300K military aircrafts compared to 20K in the previous six year period. In 1943, the aviation industry was America's largest producer and employer - with 1345K people working in aircraft manufacturing sector. New technologies prompted a massive restructuring of the industry. Established airframe firms shifted from manufacturing to research, while the military channeled funds to technologyspecific startup firms. Intercontinental ballistic missile programs, started in 1954, fueled the micro-level restructuring of the industry. ICBMs were touted as "winning weapons" to replace massive numbers of aircraft, so missile firms invested in smaller but better factories.
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Also revolutionary were the spacecraft and the rockets that lifted them into orbit. The neologism "aerospace" reflected the shape of the money that flowed into the industry following the Soviet launch of Sputnik in October 1957. International Industry: International politics has always played a role in aviation. Aircraft in flight easily transcended national borders, so governments jointly developed navigation systems and airspace protocols. Spacecraft overflew national borders within seconds so nations set up international bodies to allocate portions of near-earth space. INTELSAT, an international consortium modeled on COMSAT (the American consortium that governed operations of commercial satellites) standardized the operation of geosynchronous satellites to start the commercialization of space. International travel grew rapidly, and airlines became some of the world's largest employers. By the late 1950s, the major airlines had transitioned to Boeing or Douglas-built jet airliners -which carried twice as many passengers at twice the speed in greater comfort. The Boeing 747 took international air travel to a new level after its introduction in January 1970. Each nation had at least one airline, and each airline had slightly different requirements for the aircraft they used. By the 1990s more than thirty nations had some capacity to manufacture complete aircraft. Some made only small, general-purpose aircraft.
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Figure 3: Total number of airlines worldwide
HISTORY OF INDIAN AVIATION INDUSTRY

I. Indian Aviation Sector (till 1986):
In December 1912, the first domestic air route was unwrapped between Delhi and Karachi by the Indian State Air Services (in collaboration with Imperial Airways of the UK). This marked a new beginning in India. Then countries first air mail service was started by the Tata Airlines in 1912. Although Tata Airlines was started as an air mail service but later it endeavored in carrying scheduled passenger traffic. Tata Airlines was renamed as Air India in 1946. In early 1948, a joint sector company, Air India International Ltd., was established by the Government of India and Air India (earlier Tata Airline). There were eight companies were in service within and outside the country at the time of independence, namely Tata Airlines, Indian National Airways, Air service of India, Deccan Airways, Ambica Airways, Bharat Airways and Mistry Airways. In 1950, the Government formed an Air Traffic Enquiry Committee to consider the problems of the airlines industry. Some problems faced by the airline industry at that time included, the towering prices of aviation fuel, mounting salary bills and disproportionately large fleets. The financial health of companies declined even with liberal Government support, particularly from 1949, and an upward trend in air cargo and passenger traffic. The Committee, although found no justification for nationalization of airlines, it supported their voluntary merge. So, Government in the wake of vanishing financial conditions of the Airlines decided to take some actions and nationalize the air transport industry. Accordingly, two self-governing corporations were created on August 1, 1953. In 1953, the government nationalized the airlines via the Air Corporations Act, 1953, which gave birth to Indian Airlines and Air India. Indian Airlines came into being with the merger of eight domestic airlines to operate domestic services, while Air India International was to operate the overseas services. Furthermore, the Act gave monopoly power to Indian Airlines to operate on domestic scheduled services ruling out any other operator. Air India became the single Indian carrier to operate on international itinerary excluding some routes to the neighboring countries which were given to Indian Airlines.
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II. Industry from 1986-2003
The second phase of the sector began in the year 1986. In this period, the private sector players were granted permission to operate as air taxi operators. These private players who were allowed to operate as air taxi operators included Air Sahara, Jet Airways, Damania Airways, East West Airlines, Modiluft and NEPC Airways. In 1994, government of India revoked the Air Corporation Act. Consequently, in 1995, government granted scheduled carrier status to six private air taxi operators. But only four operators Jet Airways; Air Sahara; Jagsons and Spicejet (previously operated as Modiluft) started operations by 1997 and continued to operate. Eventually, by 1998, at least six private airlines, East- West, Modi-Luft, NEPC, Damania, Gujarat Airways and Span Air were closed and according to an estimate, the capital losses implicated after these closures were to the tune of Rs 10 billion. III. Airline industry from 2003 2006 By 2003, only two private carriers survived to see the sunrise of the new century, i.e. Jet and Sahara. But the duopoly of Jet and Sahara as private carrier was challenged in 2003 by Air Deccan. Air Deccan gave India its first Low Cost Carrier (LCC) or no frills Airline which was a turning point in the history of Indian Aviation Sector. It marked a shift from the stereo type economy fares & business fares to the era of check fares ; web fares ; APEX fares ; internet auctions ; Special discounts ; Corporate plans ; last day fares; promotional fares etc. With the arrival of Deccan, reformation and innovation began in the aviation sector. Air traffic since then had tremendous growth rates. On witnessing the success of LCC Model, other airlines also started to operate in the sector and opted for No-Frill Model. These airlines included; Kingfisher; Indigo; Paramount; Go Air which began operations in India. Some new carriers such as Star Airlines, Skylark, Magic Air, Air One and some others were given license to operate in the sector.
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IV. Aviation from 2006 onwards: Another milestone in the history of the Indian Aviation sector came in the year 2007. This was the year of mergers and collaborations in the Indian skies. In the year 2006, the merger of JetSahara & IA-AI was announced but it materialized only in 2007. After this, the Indian aviation sector has witnessed a series of M&A of airlines namely: Indian-Air India; the Jet-Sahara Deal; the Kingfisher-Deccan Deal.
Figure 4: Passenger traffic in Indian airports
Figure 5: Air traffic movement in Indian airports


PLAYERS IN INDIAN AVIATION SECTOR
At present, there is decent number of players compared to the one man army scenario prior to 1990s. They are as follows:
I. Air India:
Air India is the flag carrier airline of India. It is part of the government of India owned Air India Limited (AIL). The airline operates a fleet of Airbus and Boeing aircraft serving Asia, Europe and North America. Its corporate office is located at the Air India Building at Nariman Point in South Mumbai. Air India has the fourth largest share in India's domestic air travel market, behind Jet Airways, IndiGo and SpiceJet, as of May 2012
II. Jet Airways:
In May 1974 Jetair (Private) Limited was founded. In 1991, as part of the ongoing diversification programmer of his business activities, Naresh Goyal (founder of Jet Airways) took advantage of the opening of the Indian economy and the enunciation of the Open Skies Policy by the GOI, to set up the company for the operation of scheduled air services on domestic sectors in India. It started its International Operations in the year 2004 and carries more than 7 million passengers per annum. In May 2007, Jet Airways took 100% stake in Air Sahara it is being renamed as Jet Lite. Jet has intensions of converting Air Sahara in sync with LCC model to reach every segment of air travelers.
III. Kingfisher:
The King Fisher initiated its operations in May, 2005. It is a major Indian luxury airline operating an extensive network to 34 destinations, with plans for regional and long-haul international services. Kingfisher Airlines, through its parent company United Breweries Group, has a 50% stake in low-cost carrier Kingfisher Red. The airline has been facing financial issues for many years. Until December 2011, Kingfisher Airlines had the second largest share in India's
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domestic air travel market. However due to a severe financial crisis faced by the airline at the beginning of 2012, it has the lowest market share since April 2012.
IV. GoAir: GoAir is an Indian low-cost airline based in Mumbai. It was established in June 2004, the airline started its operations in October 2005 with a fleet of 20 leased Airbus A320 aircraft.
V. Indigo: IndiGo Airlines commenced its operations in 2006 and went on to swiftly establish itself as one of the premier budget airlines in the country. IndiGo Airways soon added IndiGo flights and destinations to its network. The unimpeachable services and timely performances of IndiGo flights added to the popularity of the airline.
VI. Spicejet: SpiceJet, a rebirth of ModiLuft marked its entry in service by offering fares priced at Rs.99 for the first 99 days since its inception in 2005. The carrier is giving tough competition to Railways.
Market share of scheduled domestic airlines

(as per July 2012)
IndiGo 26% Go Air 7% Spice Jet 18% Jet lite 7% Kingfisher 4% Air India 17% Jet Airways 21%
Figure 6: market share of scheduled domestic airlines
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CHALLENGES FACING AVIATION INDUSTRY
The growth in the aviation sector and capacity expansion by carriers has posed challenges to aviation industry on several fronts. Fuel prices: As fuel prices have climbed, the inverse Relationship between fuel prices and airline stock prices has been demonstrated. Moreover, the rising fuel prices have led to increase in the air fares Employee shortage: There is clearly a shortage of trained and skilled manpower in the aviation sector as a consequence of which there is cut-throat competition for employees which, in turn, is driving wages to unsustainable levels. Moreover, the industry is unable to retain talented employees Local connectivity: One of the biggest challenges facing the aviation sector in India is to be able to provide regional connectivity. What is hampering the growth of regional connectivity is the lack of airports Infrastructure: Airport and air traffic control (ATC) infrastructure is inadequate to support growth. While a start has been made to upgrade the infrastructure, the results will be visible only after 2 - 3 years Reserves routes: The entry of new players would ensure that air fares are brought to realistic levels, as it will lead to better cost and revenue management, increased productivity and better services. This in turn would stimulate demand and lead to growth. High participation expenditure: Apart from the above-mentioned factors, the input costs are also high. Some of the reasons for high input costs are:-Withholding tax on interest repayments on foreign currency loans for aircraft acquisition. Increasing manpower costs due to shortage of technical personnel.
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Airports in India (Domestic, International, operational, Non-operational etc.)
Figure 7
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HISTORY OF AIR INDIA
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. 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.
Origins Air-India began operating in 1932 as Tata Airlines, named after J. R. D. Tata, its founder. The line carried mail and passengers between the Indian cities of Ahmadabad, Bombay, Bellary, and Madras, and Karachi, Pakistan. Within a few years Tata Airlines' routes included the Indian cities of Trivandrum, Delhi, Colombo (in Sri Lanka), Lahore, and other locations in between. 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. 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." 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 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 travelers 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 travelers with American and European airlines, AirIndia 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 oilproducing 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 1983-84. 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-kilometers (number of passengers times distance), a figure that prompted the International Air Transport Association to rank Air-India 15th out of 136 member airlines in passenger-kilometers 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 refueling 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 Air-India 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, which 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.
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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 long-haul 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 code-sharing 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 Mascren has trimmed $23 million in other areas.
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In spite of these savings, Mascren has predicted Air-India 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.
Amalgamation of Air India and Indian Airlines with National Aviation Company of India Limited (now Air India Ltd)
The Government of India, on 1 March 2007, approved the merger of Air India and Indian Airlines. Consequent to the above, a new Company viz National Aviation Company of India Limited (NACIL) was incorporated under the Companies Act, 1956 on 30 March 2007 with its Registered Office at Airlines House, 113 Gurudwara Rakabganj Road, New Delhi. The Certificate to Commence Business was obtained on 14 May 2007. It has been decided that post merger, the new entity will be known as Air India while Maharaja will be retained as its mascot. The logo of the new airline will be a red colored flying swan with the Konark Chakra in orange placed inside it. The flying swan has been morphed from Air Indiascharacteristic logo The Centaur whereas the Konark Chakra was reminiscent of Indians logo. The Corporate Office of NACIL will be at Mumbai.
The new logo would feature prominently on the tail of the aircraft. While the aircraft will be ivory in color, the base will retain the red streak of Air India. Running parallel to each other will be the orange and red speed lines from front door to the rear door, subtly signifying the individual identities merged into one. The brand name `Air India' will run across the tail of the aircraft.

Financial Impact after Merger of Air India and Indian Airlines:
The erstwhile Air India had registered profit of Rs. 65.14 crores and Rs. 12.43 crores in 2004-05 and 2005-06 respectively. During the same period, the erstwhile Indian Airlines had also registered profit of Rs. 71.61 crore and Rs.63.00 crores. However, erstwhile Air India suffered a loss of Rs. 541.30 crore and the erstwhile Indian Airlines suffered a loss of Rs. 320.97 crore during 2006-07. The merged Air India has also suffered loss of Rs. 2226.16 crore in 2007-08, Rs. 5548.26 crore in 2008-09, Rs. 5552.44 crore in 2009-10, Rs. 6865.17 crore in 2010-11 and the estimated loss for 2011-12 is Rs. 7853 crore. Air India has completed integration of 74% processes and integration of 23% processes is in progress. The remaining 3% processes are yet to be initiated. The manpower integration is one of the important processes which are yet to be completed.
Corporate Vision
Vision To be among top five Asian airlines in terms of Yield, Profitability, Productivity, Size and Quality Focus on customer satisfaction.
Mission Focus on customer satisfaction. Grow with emphasis on sustained profitability. Provide exciting and satisfying work environment to retain and develop employees. Focus on social responsibility environment & community.
Objectives Achieve unit revenue, unit cost, profitability, productivity and service level targets, based on benchmarked parameters.
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SUBSIDIARY COMPANIES
I. Air India Air Transport Services Limited (AIATSL)
Air India Air Transport Services Limited (AIATSL) provides ground handling services (cargo, passenger, baggage) at various airports in India. The Chief Operating Officer (COO) of the company was Captain Gustav Baldauf .Captain Gustav Baldauf resigned as COO of AIATSL on 28 February 2011 because of his remarks against the government of India. The Company has authorized Share Capital of Rs.500 crores divided into 42,56,36,820 Equity Shares of Rs.10/and 74,36,318 Redeemable Preference Shares of Rs.100/- each and present paid-up capital comprises 15,38,36,427 fully paid equity shares of Rs.10/- each amounting to Rs.153.84 Crores. It employs all the staff on Contract basis.
II.
Air India Charters Limited (AICL)
This subsidiary of Air India operates low cost carrier Air India Express from India to the Gulf and Southeast Asia. AICL operates flights from airports in Kerala, Punjab and Mangalore to Dubai, Abu Dhabi, Al Ain, Muscat and Salalah in the Middle East and Singapore in the east. Air India Charters has charters flying throughout India. It works with other charter companies including Vibha Lifesavers for air ambulance and Hi Flying aviation for its general charters in India.
III.
Airline Allied Services Limited (AASL)
Airline Allied Services Limited is operating as Alliance Air. Airline Allied Services Limited provides air transportation services. The company was incorporated in 1983 and is based in New Delhi, India. Airline Allied Services Limited operates as a subsidiary of Air India Limited.
IV.
Hotel Corporation of India Limited (HCI)
It was incorporated on July 8, 1971 under the Companies Act, 1956 when Air India decided to enter the Hotel Industry in keeping with the then prevalent trend among world airlines. The

objective was to offer to the passengers a better product, both at the International Airport and at other places of tourist interest, thereby also increasing tourism to India. Presently HCI operates 2 Hotels, one each at Delhi and Srinagar under the brand name Centaur and 2 Flight Kitchens one each at Mumbai and Delhi under the brand name Chefair.
V.
Vayudoot Limited
Delhi-based Vayudoot was launched as a subsidiary of erstwhile Indian Airlines in January 1981 to serve the northeast region. Vayudoot grew to operating in 100 stations across the country. It ceased operations in 1997 and the airlines employees were absorbed by Air India. Air India plans to revive Vayudoot. In its new avatar, Vayudoot will be a feeder service bringing traffic from small towns to larger cities and state capitals and from there to other national and international destinations.
VI.
Air India Engineering Services Limited (AIESL)
This company was incorporated in the year 2006 to undertake engineering and allied activities. It undertakes Maintenance, Repair & Overhaul (MRO) activities.
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AWARDS AND RECOGNITIONS
Preferred International Airline award for travel and hospitality from Awaz Consumer Awards 2006.
Best International West Bound Airline out of India for three successive years by Galileo Express TravelWorld Award.
Best Corporate Social Responsibility Initiative by Galileo Express TravelWorld Award. Best Short-Haul International Airline by Galileo Express TravelWorld Award 2008. The Mercury Award for the years 1994 and 2003, from the International Flight Catering Association, for finest in-flight catering services.
Amity Corporate Excellence Award instituted by the Amity International Business School, Noida, Uttar Pradesh to honor Corporates with distinct vision, innovation, competitiveness and sustenance. Readers Digest Trusted Brand Award Dun and Bradstreet Award (D&B)- first in terms of revenue out of the top airline companies out of India.
Best South Asian Airline award by readers of TTG Asia, TTG China, TTG Mice and TTGBT Mice China, all renowned Mice and business travel publications.
Cargo Airline of the Year at the 26th Cargo Airline of the Year Awards. The airline entered the Guinness Book of World Records for the most people evacuated by a civil airliner. Over 111,000 people were evacuated from Amman to Mumbai.The operation was carried out during Persian Gulf War in 1990 to evacuate Indian expatriates from Kuwait and Iraq.
The Montreal Protocol Public Awareness Award was awarded to Air India by the United Nations for environmental protection, especially in the ozone layer.
World's first all-jet airline- June 1962 Air India's security department became the first aviation security organization in the world to acquire ISO 9002 certification (31 January 2001).
Air India's Department of Engineering has obtained the ISO 9002 for its Engineering facilities for meeting international standards.
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CURRENT FLEET
Air India has had a number of aircraft in its fleet. Below is a list of current Air India aircraft (includes leased aircraft):
Air India fleet (excl. subsidiaries) as of August 2012:

Current Aircraft Type Airbus A300 Airbus A310 Airbus A319 Airbus A320 Airbus A321 Airbus A330 Boeing 747 Boeing 757 Boeing 767 Boeing 777 Boeing 787 Dreamliner Douglas DC-8 Lockheed L1011 TriStar Total 101 0 30 0 20 3 2 24 28 20 2 5 15 1 3 4 1 7 3 3 1 Future Due To other Operator 5 22 3 1 Historic Stored Scrapped Written-Off Total 5 28 24 32 20 2 31 1 3 27
Active Stored On Order
27 15
27 15
1 66 7 9 3
1 216
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SERVICES
Premium lounges: 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. There are six Maharaja Lounges, one at each of the six major destinations of Air India: International

London Heathrow Airport John F. Kennedy International Airport (New York)
India

Bengaluru International Airport (Bangalore) Chhatrapati Shivaji International Airport (Mumbai) Indira Gandhi International Airport (Delhi) Rajiv Gandhi International Airport (Hyderabad)
In-flight entertainment: Air India's Boeing 777-200LR/-300ER as well as some refurbished Boeing 747-400 aircraft use the Thales TopSeries IFE systems for on board in-flight entertainment. Airbus A310s do not have personal LCD screens. Airbus A330s have widescreen displays in Business and Economy classes but no personal IFEs.
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MCKINSEY 7S MODEL The McKinsey 7S Framework is a management model developed by well-known business consultants Robert H. Waterman, Jr. and Tom Peters. The 7-S framework of McKinsey is a Value Based Management (VBM) model that describes how one can holistically and effectively organize a company. Together these factors determine the way in which a corporation operates. The 7S model can be used in a wide variety of situations where an alignment perspective is useful, for example to help you:

Improve the performance of a company. Examine the likely effects of future changes within a company. Align departments and processes during a merger or acquisition. Determine how best to implement a proposed strategy.
The Seven Elements: The McKinsey 7S model involves seven interdependent factors which are categorized as either "hard" or "soft" elements:
Hard Elements Strategy Structure Systems
Soft Elements Shared Values Skills Style Staff
"Hard" elements are easier to define or identify and management can directly influence them. These are strategy statements; organization charts and reporting lines; and formal processes and IT systems. "Soft" elements, on the other hand, can be more difficult to describe, and are less tangible and more influenced by culture. However, these soft elements are as important as the hard elements if the organization is going to be successful.
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The way the model is presented below depicts the interdependency of the elements and indicates how a change in one affects all the others.
Figure 8
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S1: STRUCTURE Business needs to be organized in a specific form of shape that is generally referred to as organizational structure. Organizations are structured in a variety of ways, dependent on their objectives and culture. The structure of the company often dictates the way it operates and performs. Traditionally, the businesses have been structured in a hierarchical way with several divisions and departments, each responsible for a specific task such as human resources management, production or marketing. Many layers of management controlled the operations, with each answerable to the upper layer of management. Although this is still the most widely used organizational structure, the recent trend is increasingly towards a flat structure where the work is done in teams of specialists rather than fixed departments. The idea is to make the organization more flexible and devolve the power by empowering the employees and eliminate the middle management layers. Being a statutory corporation; Air-India submits a yearly report of its activities to the Parliament through the Ministry of Civil Aviation. It enjoys functional autonomy and its management is through a Chairman and Managing Director (CMD) who works under a Board of Directors. The Board is re-constituted every two years by the Government. The Board of Directors is the highest governing body of Air-India. Chairman cum Managing Director (CMD) is the Chief executive of the corporation. The corporation has its headquarter in Bombay. Bombay headquarter has a big establishment with well defined divisions and departments. All the policy matters are decided at the headquarter level and executed through field and branch offices. The field stations and branch offices are spread in a large number of cities in India and abroad. Under the Managing Director there are the Deputy Managing Director and a host of Directors looking after various functions and departments. The following Chart represents the organizational structure.
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Figure 9
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BOARD OF DIRECTORS OF AIR INDIA LIMITED 1. Shri Rohit Nandan - Chairman & Managing Director 2. Shri Syed Nasir Ali - Jt. Managing Director Air India Limited 3. Shri S Machendranathan - Additional Secretary & Financial Advisor Ministry of Civil Aviation 4. Shri Prashant Sukul - Jt. Secretary Ministry of Civil Aviation 5. Shri Vipin K. Sharma - SBU Head-MRO (Eng. & Comp.) 6. Shri K.M.Unni - SBU Head-MRO (Airframe) Engineering Department 7. Shri S. Venkat - Director-Finance 8. Shri G.D.Brara - Director-Commercial Air India Limited 9. Shri N K Jain - Director-Personnel Air India Limited
INDEPENDENT DIRECTORS 1. Air Chief Marshal (Retd) - F H Major 2. Shri Harshavardhan Neotia
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ORGANIZATION CHART (REGION)
EXECUTIVE DIRECTOR
(NR,SR,WR,ER)
GM(FIN) GM(PER) GM(COM) GM( GS) GM(OPS) GM( ENG) GM( MM )
DGM(REV)
DGM(EXP)
Sr. mgr(sec)
Sr. mgr(med)
DGM(PER)
DGM( COM)
DGM(GS)
DGM(OPS)
DGM(ENG)
DGM(MM)
Figure 10
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S2: STRATEGY Strategy is the plan of action an organization prepares in response to, or anticipation of, changes in its external environment. Strategy is differentiated by tactics or operational actions by its nature of being premeditated, well thought through and often practically rehearsed. It deals with essentially three questions (as shown in figure): 1) Where the organization is at this moment in time, 2) Where the organization wants to be in a particular length of time and 3) How to get there. Thus, strategy is designed to transform the firm from the present position to the new position described by objectives, subject to constraints of the capabilities or the potential.
WHERE ARE WE NOW?
HOW DO WE GET THERE?
WHERE DO WE WANT TO BE?
Business Strategy of Air India
A Multi-pronged approach Capacity & Network Expansion to increase market share & garner competitive strength Achieve dominance in core markets (USA/UK/Gulf/SEA) Increase market access through strategic alliances
Product Upgradation: Deploy modern aircraft with state-of-art passenger amenities Operate customer friendly schedules with increased network connectivity
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Operations Improvement to reduce unit costs through Increased asset (aircraft & manpower) productivity Out-sourcing/hiving-off of non-core activities to subsidiaries Technology upgradation Benchmarking & adoption of Best Practices
S3: SYSTEMS Every organization has some systems or internal processes to support and implement the strategy and run day-to-day affairs. For example, a company may follow a particular process for recruitment. These processes are normally strictly followed and are designed to achieve maximum effectiveness. Air India has been following a bureaucratic-style process model where most decisions are taken at the higher management level and there are various and sometimes unnecessary requirements for a specific decision to be taken. TOP LEVEL MANAGEMENT: CMD SENIOR LEVEL MANAGEMENT: Directors MIDDLE LEVEL MANAGEMENT: Executive directors LOW LEVEL MANAGEMENT: Managers S4: STYLE It includes the dominant values, beliefs and norms which develop over time and become relatively enduring features of the organizational life. It also entails the way managers interact with the employees and the way they spend their time. Culture remains an important consideration in the implementation of any strategy in the organization. In Air India decision making involves discussions among cross section of departments and/or formal decisions by the Competent Authority on office notes in accordance with the Instrument of delegation of Financial and Administrative powers.
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In respect of decision making on day to day basis at airports/stations, all the Duty Officers/Station Managers take spot decisions in accordance with the Instrument of delegation of Financial and Administrative powers and the established practices. S5: SKILLS Skills refer to the capabilities of the staff within the organization as a whole. The employees of Air India Ltd possess different skills which are relevant for their work. They use both on the job and off the job training methods. On the job training: This kind of training is provided to specific employees like operators, engineers, technicians, security personnel, commercial etc. The period of training depends upon the nature of job. Off the job training: Under this method, employees are trained through lectures, written material etc. So the employees can place their entire concentration in learning rather than spending time in performing job. S6: STAFF Organizations are made up of humans and it's the people who make the real difference to the success of the organization in the increasingly knowledge-based society. The importance of human resources has thus got the central position in the strategy of the organization, away from the traditional model of capital and land. Air India has total staff strength of about 29,000. The selection procedure includes written test, group discussion and personal interview for non technical jobs and technical evaluation for technical jobs. The recruitments of job vacancies are made by publishing advertisement in newspaper, employment news paper, walk in etc.
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S7: SHARED VALUES All members of the organization share some common fundamental ideas or guiding concepts around which the business is built. These values and common goals keep the employees working towards a common destination as a coherent team and are important to keep the team spirit alive. Safety Service Excellence Teamwork Accountability Social responsibility
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I. FINANCE AND ACCOUNTS DEPARTMENT
In Air India the finance department basically handles the revenue which consists of tickets, cargo and freight revenue, excess baggage etc. The basic thing that needs to be maintained is that the sales account should be updated from time to time so that actual revenue inflow and outflow is known. From this information funds can be diverted from time to time. One very important function of the finance department in Air India is to arrange finance for purchase or leasing of aircraft and non aircraft items. Apart from this department also handles various functions of different sections like taking care of bad debts, payments of salary and remittances of cash, transfer of funds, banking, insurance, payment of income tax etc. FUNCTIONS OF DEPARTMENT OF FINANCE AND ACCOUNTS 1. Billing & Realization of Revenue 2. Liaising with various airports- domestic and international. 3. Dealing with Revenue Policies & Procedures 4. Cash Management including Investment of Funds 5. Compilation of yearly budget for Operational Revenue & Expenditure 6. Compilation of yearly budget for Capital Expenditure including projection of funding through internal, budgetary and extra-budgetary resources. 7. Finalization of annual accounts of the airline 8. Servicing of loans from Domestic / Foreign sources
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ORGANIZATION CHART OF FINANCE DEPARTMENT
GM
DGM(REV)
DGM(EXP)
Sr.mgr
Sr.mgr
Mgr
Mgr
Dr.mgr
Dy.mgr
Ass.mgr
Ass. mgr
AO
AO
VARIOUS SECTIONS UNDER FINANCE DEPARTMENT: Capital budget It involves procurement of asset including aircraft and non aircraft items and assigning priorities to different sections. 1. Financial accounts
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It includes ledger booking of each and every section and preparation of annual report. It keeps check on all the activities, legal chargers, donations, audit fees and deposits made to parties and deposits received from outside parties. Fuel and Oil Section It manages oil and fuel requirement of each and every station of the corporation time to time and its payments. It also manages the payments made for the same. Cash / Banking Section It deals with the treasury management and bank reconciliation statements. Credit Control This section is concerned with the Credits and Loans of Air India. 2 . Revenue Pool Section It manages interlinked settlement with different airlines. Cargo and Mail Section Manages revenues collected by the cargo. Taxation Calculates taxes like VAT, Income Tax, Sales Tax, Service Tax, Revenue Tax, etc. Pay Accounts Concerned with the salary calculation of the employees taking into consideration the allowances granted to the staff, paid leave, leave without pay, increments, etc. Internal Audit Section This section deals with the internal audit of accounts prepared by the Accounting section. 3 . Stores Accounts Section: Stores are those products which are purchased by Air India to be provided on board to the travelers or for sale. Purchasing of such products is dealt by this section. 4 . Insurance Section: Deals with aircraft insurance and also non-aircraft insurance like vehicles, machinery and furniture.

II. PERSONNEL DEPARTMENT
This department is responsible for hiring, training and placing employees and for setting hr policies. This department includes security and vigilance, medical and human resource.
SECURITY AND VIGILANCE DEPARTMENT This department is concerned with the discipline of all categories of employees and to curb corruption and malpractices in the organization. It also provides security to passengers who board the flight and the entire crew of the organization.
MEDICAL This is basically a welfare department for the employees. All the cockpit crewmembers are medically examined before they undertake flight. HUMAN RESOURCE DEPARTMENT This department involves recruitment, selection, training and placement of employees. It sets strategies and develops policies, standards, systems and processes that implement these strategies in a whole range of areas. It also handles the grievances of employees and act as a link between the management and trade union.
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GM(PER)
Sr. mgr(sec)
Sr.mgr(med)
DGM(hr)
mgr
mgr
Sr.mgr
Dy.mgr
Dy.mgr
mgr
Ass. mgr
Ass.mgr
Dy.mgr
AO
AO
Ass.mgr
AO
FUNCTIONS OF PERSONNEL DEPARTMENT 1. Personnel Policies. 2. Personnel Management. 3. Placement of Personnel. 4. Career Planning and Career advancement of the employees. 5. Welfare. 6. Management of Performance appraisal records. 7. Creation and review of requirement of manpower. 8. Human Resource Development (Recruitment, Training and Counseling). 9. Redressal of Grievances. 10. Implementation of Government Policies on weaker section of the society in personnel matter. 11. Industrial Relation. 12. Control, Discipline and Appeal of employees.

III. COMMERCIAL DEPARTMENT
The Commercial Department is responsible for the marketing & sale of the services provided by an airline, for creating and developing traffic, for securing and maintaining friendly relations with the travelling and trading public and for cultivating good public relations. The fixing of rates, fares and other charges and the correct collection, accounting and remittance of traffic receipts are also among its functions. PASSENGER HANDLING It includes all the services provided to the passenger from the moment he enters the airport till he boards the flight. This includes services such as:

Ticketing and reservation, X ray scanning Providing check-in counter services for the passengers departing on the customer airlines. Providing Gate arrival and departure services. The agents are required to meet a flight on arrival as well as provide departure services including boarding passengers, closing the flight, etc.
Staffing the Transfer Counters, Customer Service Counters, Airline Lounges. Passenger Facilitation Assistance (PFA) for outgoing and incoming passenger etc.
CARGO In line with various marketing and pricing initiatives taken in the field of passenger traffic, the company gave an equal impetus to the steps in the area of improving and upgrading cargo services. 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. PUBLIC RELATIONS This department is responsible for promoting the airline's corporate image, boost its reputation and stimulate demand for its services.

Following are the promotion tools undertaken by Air-India
Press /Media. Multilingual Advertisement. Sponsorship. Lucrative schemes for the customers. Less financial burdens on buyers. Product uniqueness propaganda. Easy accessibility of tickets. Hoardings and billboards.
ORGANIZATION CHART OF COMMERCIAL DEPARTMENT
GM
DGM
Sr.mgr
Mgr
Dy.mgr
Ass.mgr
AO
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MATTERS DEALT IN COMMERCIAL DEPARTMENT
Rates and fares. Claims for refund and for compensation. Prevention of Claims. Marketing & Sales. Passenger amenities. Traffic Surveys. Research and Development. Catering and Vending. Ticket checking. Commercial Statistics. Computerization of Reservation. Commercial advertising and publicity.
FUNCTIONS OF COMMERCIAL DEPARTMENT

1. To explore new areas for developing new streams of traffic and to improve the quality of service provided to traders by maintaining close liaison with them and to ascertain and solve their problems in connection with expeditious transportation of their goods. 2. To take up measures to arrest competition. 3. To give wide publicity to the various measures adopted to improve passenger services and facilities provided to the trading public. 4. To convey to the various departmental officers concerned public suggestions and grievances. 5. To correct misstatements made in the Press. 6. To educate staff about their duties and responsibilities as public servants, especially in the matter of courtesy to the public. 7. To educate the travelling public the rules of health, hygiene and courtesy, and co-operate with the airline staff in their measures for combating anti-social practices like ticketless travel begging and un-authorized hawking and causing damage to the property.
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IV. GROUND SUPPORT DEPARTMENT
This department undertakes servicing of an aircraft while it is on the ground and (usually) parked at a terminal gate of an airport. It includes cabin service and catering. CABIN SERVICE These services ensure passenger comfort. They include such tasks as cleaning the passenger cabin and replenishment of on-board consumables or washable items such as soap, pillows, tissues, blankets, etc. CATERING It includes the unloading of unused food and drinks from the aircraft, and the loading of fresh food and drink for passengers and crew. Meals are typically delivered in trolleys. Empty or trashfilled trolleys from the previous flight are replaced with fresh ones. Meals are prepared on the ground in order to minimize the amount of preparation (apart from chilling or reheating) required in the air. The caterers of Air India Ltd are Taj SATS Air Catering Ltd, Bangalore.
ORGANIZATION CHART OF GROUND SUPPORT DEPARTMENT

GM(GS)
DGM
Sr.mgr
Mgr
Asst.mgr
AO
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V. OPERATIONS DEPARTMENT
Operations Department is responsible for flight operations and also looks after navigational problems, training and licensing of air crew. The operations department liaises with Air Traffic Control, Meteorological department and Airports Authority of India to get clearance of aircraft after each landing and departure. It includes in flight services.
IN FLIGHT SERVICE: This department is responsible for all the services provided to the passengers on board. It attends to the needs and requirements of the passengers on board. Some of the services are: Trolley service in J class. Tray set up for J and Y class. Improved variety of welcome drinks on board. Amenity kits in J class on selection of international sector.
FUNCTIONS OF OPERATIONS DEPARTMENT Ensure a sound Safety Management System. Promote active participation of all departments in adopting optimum safety standards. Introduce methods which enhance safety awareness. Investigate Incidents / Accidents. Recommend safety measures within the Training environment, thereby addressing known / perceived threats and errors.
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ORGANIZATION CHART OF OPERATIONS DEPARTMENT
GM(OPS)
DGM
Sr.mgr
Mgr
Asst.mgr
AO
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VI. ENGINEERING DEPARTMENT
This department takes care of maintenance, repair and overhaul of aircrafts. It also manufactures simple equipments required for the aircraft. The prime objective of Air India's Engineering Department is to maintain all aircraft in its fleet in a continuous state of airworthiness in order to secure a high level of safety. This involves a system of preventive and corrective maintenance, including servicing, inspection, testing, overhaul, repair, modification and replacement of parts. The Engineering Department in Air India ensures maximum availability of airworthy aircraft without compromising on safety, at high Technical Dispatch Reliability and operating at an optimum cost in a competitive environment. Air Indias Engineering Facility is recognized as Certified Repair Shop both by the Federal Aviation Administration (FAA) of the USA and the European Aviation Safety Agency (EASA). Air India is certified by DGCA as approved CAR-145 (Civil Aviation Requirements) Maintenance Organization. Air India is also certified by CAAS (Civil Aviation Authority of Singapore) and holds ISO-9001:2000 (Bureau of Indian Standards) certification.
ORGANIZATIONAL CHART OF ENGINEERING DEPARTMENT

GM(ENG)
DGM
Sr.mgr
Mgr
Asst.mgr
AO
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VII. MATERIALS MANAGEMENT DEPARTMENT
This department takes care of all the purchases and maintenance of the stores. The requirements of all departments are procured by the Materials Management Department. There are occasions where department specific requirements are handled differently.
MAJOR PURCHASES UNDER THE PERVIEW OF MMD

AIRCRAFT PURCHASE This section deals with the procurement of Spare parts and components for all types of aircraft in Air India's fleet. The procurements are based on indents from MPD and classified as routines, WSP and AOG (Aircraft on Ground) nature. Whilst arranging to procure the spares and components, the section keeps continuous communications with our planners at MPD (Material Planning Division) of Engg. Dept., overseas purchase offices at New York and London and also with suppliers around the globe. COMMERCIAL PURCHASE This section deals with a wide range of items. Activities carried out are as under: Procurement of Hardware items, Paints. Abrasives Books and Periodicals (Except flight use) Medicines Office Furniture / Equipment Service Contracts for typewriters, duplicating machines etc. Industrial Gases, LPG for canteens Fuel and Lubricants Canteen Provisions Uniform Material Monsoon Equipment Tender Advertisement
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INFLIGHT SERVICE PURCHASE This Section deals with the procurement of items required for use on board. The Inflight Service material is categorized into the following two categories: 1. Consumable Items 2. Non-Consumable Items Consumable Items: Items of consumable nature such as hot drink cups, paper napkins, refuse bags, toiletries, etc. Food items like caviar, soft drinks, different types of sauce, cheese, biscuits etc. Bar sale items such as liquor and cigarettes. Newspaper and magazines.
Non-Consumable Items: Non-Consumable items consist of major galley inserts such as meal/bar carts, standard units, Oven cages, refuse containers, carry cots etc. Items such as crockery, cutlery, and linen items etc., which are of reusable nature, are also categorized as non-consumables. PRINTING PURCHASE This section deals with procurement of various kinds of printed and plain stationery items. These include passenger tickets, boarding passes, airway bills, thermal baggage tags and other flight related items as also publicity give-away items for Publicity and Cargo Section of Commercial Department. This Section also undertakes printing of timetables, calendars, visiting cards etc. This section also deals with procurement of Rubber Stamps, Computer stationery, Pens consumables, book binding jobs etc. TECHNICAL PURCHASE
This section deals with all technical requirements /procurement for various departments mainly Engineering Department, Ground Service dept, DIT, Properties and Facility Division etc. Their
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scope of activity is taking care of procurement of spares and services for the equipment used in various departments. These include: Transport spares such as tyres, tubes, batteries etc. Capital items of Ground Support Equipment like tractors, Step ladders, Vehicles, X-ray machines and electrical equipment. Procurement of tools both general and special. Electrical accessories, electronic goods. Spares for equipment. Servicing Contracts. Repair Jobs. Procurement of spares, tools and equipment from outstations. IT related products and services.
FUNCTIONS OF MATERIAL MANAGEMENT DEPARTMENT
1. Materials Planning. 2. Purchasing. 3. Store Keeping. 4. Inventory Control. 5. Receiving, Inspection and Dispatching. 6. Value Analysis, Standardization and Variety Reduction. 7. Materials Handling & Traffic. 8. Disposal of Scrap and Surplus, Material Preservation.
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ORGANIZATION CHART OF MATERIALS MANAGEMENT DEPARTMENT
GM(MMD)
DGM
Sr.mgr
Mgr
Asst.mgr
AO
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SWOT Analysis is the most renowned tool for audit and analysis of the overall strategic position of the business and its environment. Its key purpose is to identify the strategies that will create a firm specific business model that will best align an organizations resources and capabilities to the requirements of the environment in which the firm operates. In other words, it is the foundation for evaluating the internal potential and limitations and the probable/likely opportunities and threats from the external environment. It views all positive and negative factors inside and outside the firm that affect the success. A consistent study of the environment in which the firm operates helps in forecasting/predicting the changing trends and also helps in including them in the decision-making process of the organization.
STRENGHTS What do we do well?
WEAKNESS What could we improve? Where do we have fewer resources than other? What are the others likely to see as weakness?
What unique resources can we draw on?
OPPORTUNITIES What trends could we take advantage of? How can you turn your strengths into opportunities?
THREATS What trends could harm us? What threats do our
weaknesses expose us to?
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STRENGHTS
1. Strong financial Backing by the government of India. 2. Brand New Fleet of aircraft. 3. It is known for its unique and high quality "Maharaja" advertising. 4. Air India has its presence in nearly 19 countries. 5. It covers approximately 50 destinations in India. 6. It has a good reputation in both international and domestic markets, quality service and the age-old Goodwill that has still kept it alive in the interests of the rescue operators.
WEAKNESSES
1. Labor Problems and political intervention is a cause of worry. 2. Air India is operating across broad international and domestic markets competing with world leading giant airlines as well as local small operators. This lack of clarity on the strategic direction largely dilutes its capabilities and confuses its brand within markets. 3. Financial crisis leading to payment issues of employees. 4. Under utilization of capacity and resources. 5. Growing Competitor base and entry of Low-Cost Carriers (LCCs). 6. Poor maintenance of flights.
OPPORTUNITIES
1. India airline industry is growing faster and will continue to grow as the GDP increases, and the trend is predicted to continue once the slowdown recedes. 2. Dedicated set of customers. Can leverage on brand new fleet. 3. Expansion of routes and international destinations. 4. Solving internal issues regarding workforce can hugely boost image and operations.
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THREATS
1. Rising Labor Costs. 2. Rising Fuel Costs. 3. Losing Market share due to other carriers. 4. The Indian Railway Ministry has dramatically improved speed and services in their medium/long distant routes, attracting passengers away from air service, with prices almost at par with the low cost carriers.
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LEARNING EXPERIENCE
I gained so much knowledge from this organization study in Air India Ltd. It gave me an exposure to aviation industry. The employees and my guide were very cooperative. They spent their valuable time in explaining and guiding me throughout this study. This study will be very helpful in my career. During this exposure my objectives of the study as mentioned under were successfully fulfilled. I started my training under the guidance of Mr. Roop Kumar Victor who gave me an insight of how the organization works. My study started with industry profile and company profile. I studied Finance department and it helped me in understanding the various sections under finance department and how it works. The various functions and organization structure of Personnel department was studied. The nature and importance of all the departments in the organization was studied. It gave me an understanding as to how organization operates. I was given an opportunity to refer the organization records, where in I got to know about the documentation procedures involved and gained a fair idea of the functions in Air India Ltd. Importance of different management functions such as planning, organizing and staffing, directing and controlling was known which guide the organization in facing stiff competition from competitors. Importance of time management. The theoretical aspects we learn in class room were implemented here like recruitment process, training programs, human resource planning, performance appraisal etc.
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FINDINGS
The financial resource is allocated by the Union Government depending upon the requirement of the organization. There exists a good coordination and communication between different departments and it is highly hierarchical. Customer satisfaction is the main motto of Air India limited. Air India has global presence. Air India lacks the competency in dealing with its fellow competitors; revenue of the company has decreased to greater extent, ever since many private firms entered the aviation industry. The company believes in adopting latest technology. There are multiple trade unions, now a days strikes have become very common from the employees. The company is under financial crisis from past 5 years. Since the financial crisis aroused, Air India is not able to pay salaries to the employees on time. There is an increase in employee (particularly pilots) turn over. Since it is a government organization decision making is a very time consuming process. Air India fall Par behind than its competitors in promotional and aggressive marketing activities. Promotions to the employees are based on seniority and experience, rather than the efficiency and achievements of the employees. Major Key designations are occupied by the aged personnel, so it lacks creative ideas and thoughts to promote the organization. Air India is not using its resources in effective manner. There are more number of complaints regarding poor customer service and rude staff. Now a days Air India is hiring lower level and middle level employees on the contract basis. There is more number of employees than required.
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SUGGESTIONS
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CONCLUSION
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Air India

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Air India

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ORGANIZATION STUDY AT AIR INDIA LTD

CANARA BANK SCHOOL OF MANAGEMENT STUDIES

ORGANIZATION STUDY AT AIR INDIA LTD

CANARA BANK SCHOOL OF MANAGEMENT STUDIES

ORGANIZATION STUDY AT AIR INDIA LTD

Figure 1: Global airline industry profit by Region 2011

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ORGANIZATION STUDY AT AIR INDIA LTD

CANARA BANK SCHOOL OF MANAGEMENT STUDIES

ORGANIZATION STUDY AT AIR INDIA LTD

ORGANIZATION STUDY AT AIR INDIA LTD

CANARA BANK SCHOOL OF MANAGEMENT STUDIES

ORGANIZATION STUDY AT AIR INDIA LTD

CANARA BANK SCHOOL OF MANAGEMENT STUDIES

ORGANIZATION STUDY AT AIR INDIA LTD

HISTORY OF INDIAN AVIATION INDUSTRY

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II. Industry from 1986-2003

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ORGANIZATION STUDY AT AIR INDIA LTD

Figure 4: Passenger traffic in Indian airports

Figure 5: Air traffic movement in Indian airports

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II. Jet Airways:

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ORGANIZATION STUDY AT AIR INDIA LTD

Market share of scheduled domestic airlines

Figure 6: market share of scheduled domestic airlines

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ORGANIZATION STUDY AT AIR INDIA LTD

CANARA BANK SCHOOL OF MANAGEMENT STUDIES

ORGANIZATION STUDY AT AIR INDIA LTD

Airports in India (Domestic, International, operational, Non-operational etc.)

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ORGANIZATION STUDY AT AIR INDIA LTD

ORGANIZATION STUDY AT AIR INDIA LTD

ORGANIZATION STUDY AT AIR INDIA LTD

ORGANIZATION STUDY AT AIR INDIA LTD

CANARA BANK SCHOOL OF MANAGEMENT STUDIES

ORGANIZATION STUDY AT AIR INDIA LTD

ORGANIZATION STUDY AT AIR INDIA LTD

CANARA BANK SCHOOL OF MANAGEMENT STUDIES

ORGANIZATION STUDY AT AIR INDIA LTD

ORGANIZATION STUDY AT AIR INDIA LTD

CANARA BANK SCHOOL OF MANAGEMENT STUDIES

ORGANIZATION STUDY AT AIR INDIA LTD

Air India Charters Limited (AICL)

Airline Allied Services Limited (AASL)

Hotel Corporation of India Limited (HCI)

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Air India Engineering Services Limited (AIESL)

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ORGANIZATION STUDY AT AIR INDIA LTD

CANARA BANK SCHOOL OF MANAGEMENT STUDIES

ORGANIZATION STUDY AT AIR INDIA LTD

Air India fleet (excl. subsidiaries) as of August 2012:

Active Stored On Order

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ORGANIZATION STUDY AT AIR INDIA LTD

London Heathrow Airport John F. Kennedy International Airport (New York)

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ORGANIZATION STUDY AT AIR INDIA LTD