Primer for Recovery Idea Air India

Madan Menon

Background There is a whole generation of Indians who have never flown on Air India

Was the biggest airline in India with over 60% market share – latest reports down to 5th position at 13.2%

Load factor only 78.1% compared to 89.4% of Indigo a LCC

Negative publicity – thus forcing passengers to choose other airlines

Highest rate of flight cancellations

Negative brand image

Objective of this primer Thoughts on improving the following:

Load factor Brand image Financial health

Way Forward Increased load factor needs to be done in conjunction with a marketing campaign to

improve brand efficiency

Bring back the Maharaja – the symbol of Air India

Consider bringing back Indian Airlines as a Brand

Indian Airlines – Domestic only (no near international destinations)

Air India – All international

Only separate brands – reporting structure remains the same as a single entity

“Indian Airlines – Fly India!”

Way Forward - Aircraft Leasing of Aircraft Out-

Air India to wet lease out Aircraft and Dry lease in New aircraft Reason- with an aging fleet – maintenance will be high and in turn high downtime.

With a newer leased fleet- lower maintenance costs and faster turn around times – prime examples of new LCCs

Retire old generation aircrafts and free cash tied with aircraft Have single supplier / single engine supplier – for interchangeability of staff, spares

and maintenance

Way Forward - Aircraft Short haul – Airbus A320 / 319 Medium haul – A330 / B757 Long haul – A340 / B777 Ultra Long haul – A380 (Del – LAX ) / Del - JFK

Create the regional sector airlines and use regional jets Ex: Embrarer RJ145 – regional jet – for sectors such as Mumbai Pune, Delhi

Gwalior, Itanagar – Imphal etc. Ideal work for shuttle services.

Way forwardMRO

More than 500 Airbus aircraft sold in India + Malaysia – available talent pool idea to setup Airbus MRO

Opportunity in maintenance given inherent expertise available

Low cost structure still in place.

Multiple MRO facilities in Tier 2 + Tier 3 cities for lower labor wages / parking fees and hanger charges

International Hub Strategic location of India can provide Asian hub for America based Airlines

to reach China, Singapore, Seoul etc

European stop over for aircrafts flying from far east to west Asia / eastern Europe.

Air India can provide ideal connectivity for these airlines

Way forwardFormation of new companies:

Formation of ground handling unit Can be used to outsource work from other airlines – make it a profit center and not cost center Formation of catering and aircraft cleaning service- non core business again – can be made as a profit

center rather than cost center – an ideal shared services model Spares and Aircraft leasing India pvt ltd

Keep MRO within organization- highly profitable as it is high quality work

Purchase of Pawan Hans – fits into strategic business model. Can offer seamless connectivity between any part of India

Creation of Air India Cargo Services – retrofit old aircraft to function as cargo aircraft. Allows for reuse of old aircraft and increase revenue streams

Way ForwardBudget Carrier

Make Indian Airlines the LCC arm of Air India – Eliminate food for flights of less than 2 hrs. Serve complementary soft drinks and snacks. Food for purchase only - Cost saving measure. Pass on cost savings to customers.

Why As it was mentioned in the first slide, there is a whole generation in this

country who have never flown on the erstwhile Indian Airlines – an Airline that pulls your heart strings and brings back fond memories.

Bringing back the Maharaja will be a resurgence of faith in the Indian story – one which shows that no matter what – we will survive and succeed

There is no dearth of talent – with some of the best flight crew and ground crew – Air India has all the ingredients to be the best and it is well on its way to do so

Thank you