SUBMITTED BY :CHARU JAGWANIDIVYA JAINPAYAL AGARWALPALAK MANDHYAN HARSH PAREKHDIVYA LOHIYARITIKA YADAVMANALI KANTHARIA

ContentsINTRODUCTION OF AIR INDIA4VISION5MISSION5ORGANISATIONAL STRUCTURE7MARKET SHARE OF AIR INDIA8MARKET REPUTATION8On-Board Service9Network9Price9Catering9Entertainment10Ground Service and baggage10Premium Classes & Lounges10Economy Class10Frequent Flyer Programme11Corporate Culture11Safety11Air India - Rating11CONTRIBUTION TO GDP:12SWOT ANALYSIS12Strengths in the SWOT analysis of Air India12Weaknesses in the SWOT analysis of Air India13Opportunities in the SWOT analysis of Air India13Threats in the SWOT analysis of Air India14CORPORATE SOCIAL Responsibility (CSR)15Environment protection16Environment management system16EU-ETS17Encouragement/assistance to small scale industrial units18CASES OF AIR INDIA19AIR INDIA DREAMLINER GROUNDED FOR 9 MONTHS, WITH 400 PARTS MISSING19AIR INDIA ENGINEERS THREATEN TO DRAG MANAGEMENT TO COURT19Air India grounds 125 overweight cabin crew20FLIERS AND REVENUE INCREASE AS AIR INDIA JOINS STAR ALLIANCE21FUTURE MARKETING STRATEGIES23Air India, Others Plan Direct Flights To Top Global Destinations23Air India May Add 4-5 New European Destinations, Opt For Bigger Aircraft24Air India Chalks Out Two-Pronged Strategy To Up Share In Domestic Skies26CONCLUSION AND RECOMMENDATION29REFERENCES30

INTRODUCTION OF AIR INDIAAir Indiais theflag carrierairline ofIndiaowned byAir India Limited(AIL), aGovernment of Indiaenterprise. It is the third largest airline in India (afterIndigoandJet Airways) in domestic market share, and operates a fleet ofAirbusandBoeingaircraft serving various domestic and international airports. It is headquartered at theIndian Airlines HouseinNew Delhi. Air India has two major domestic hubs atIndira Gandhi International Airport andChhatrapati Shivaji International Airport, and secondary hubs atNetaji Subhas Chandra Bose International Airport, KolkataandChennai International Airport. The airline formerly operated a hub atFrankfurt Airportwhich was terminated on account of high costs.However, another international hub is being planned at theDubai International Airport. Air India was once the largest operator in theIndian subcontinentwith a market share of over 60%.Indifferent financial performance and service, labor trouble pushed it to fourth place in India, behind low cost carriers likeIndigo,Spicejet, and its full service rivalJet Airways. Between September 2007 and May 2011, Air India's domestic market share declined from 19.2% to 14%, primarily because of stiff competition from private Indian carriers. However, after financial restructuring and enforcement of strict rules and regulations, the airlines showed signs of turning around. In March 2013, the airlines posted its first positiveEBITDAafter almost 6 years. The airlines bolstered its financial and physical performance with a 44 per cent slash in its operating losses in 2013-14 and an almost 20 per cent growth in its operating revenue since the previous financial year.As of January 2014, Air India is the third largest carrier in India, afterIndiGoandJet Airwayswith a market share of just above 19%.The airline was invited to be a part of theStar Alliancein 2007.Air India completed the merger withIndian Airlinesand some part of the agreed upgrades in its service and membership systems by 2011. In August 2011, Air India's invitation to joinStar Alliancewas suspended as a result of its failure to meet the minimum standards for the membership.However, in October 2011, talks between the airline and Star Alliance resumed. On 13 December 2013,Star Allianceannounced that Air India and the alliance have resumed the integration process and the airline became the 27th member ofStar Allianceon 11 July 2014.

VISION To be the leader in Indian aviation and Indias Ambassador to the world. MISSIONLeadershipCustomer Provide safe, reliable and on-time services Deliver the highest quality of service around the world Be the epitome of Indian hospitality Processes Continuously improve standards of safety and efficiency Operate and maintain a young and modern fleet Provide the best and most efficient network Create economic value People To be the employer of choice Build a highly motivated and professional team Maintain highest degree of transparency and ethics Be a responsible corporate citizen Indias Ambassador Be Indias flag carrier in spirit and action Provide seamless travel within India and the world Connect Indians worldwide Values Zeal to excel and zest for change Integrity and fairness in all matters Respect for dignity and potential of individuals Strict adherence to commitments Ensure speed of response Foster learning, creativity and team-work Loyalty and pride in the Company

ORGANISATIONAL STRUCTURE

MARKET SHARE OF AIR INDIAAir India was once the largest operator in theIndian subcontinentwith a market share of over 60%.[7]Indifferent financial performance and service, labor trouble pushed it to fourth place in India, behind low cost carriers likeIndiGo,SpiceJet, and its full service rivalJet Airways. Between September 2007 and May 2011, Air India's domestic market share declined from 19.2% to 14%, primarily because of stiff competition from private Indian carriers.However, after financial restructuring and enforcement of strict rules and regulations, the airlines showed signs of turning around. In March 2013, the airlines posted its first positive EBITDAafter almost 6 years.The airlines bolstered its financial and physical performance with a 44 per cent slash in its operating losses in 2013-14 and an almost 20 per cent growth in its operating revenue since the previous financial year.As of January 2014, Air India is the third largest carrier in India, after IndiGoandJet Airwayswith a market share of just above 19%.In 2015 the market share of Air India with respect to the other domestic flights is as follows: MARKET REPUTATIONThe market reputation field has evolved from the marriage of the fields ofreputationmanagement and brandmarketing. In the socially connected world of the new millennium a brand'sreputationis vetted online nearly in real-time by consumers leaving online reviews and citing experiences on social media websites.

Market reputation of Air-India in context with the different catergories related to air-lines industry:On-Board ServiceAir India was once a by-word for poor service. Not only were aircraft interiors filthy but staff were rude, lazy and typically invisible. International flights even carried rats and cockroaches on board. Service has improved immensely and passengers can now expect reasonable standards. Premium passengers are treated better than others but some staff still have a superiority complex over passengers. Crews are colourfully attired in an unmistakably Indian uniform.NetworkAir India has a comprehensive point to point domestic network and also flies to a large number of international destinations especially to the Persian Gulf region. Air India has lost a considerable amount of business to its superior Indian competitors; Kingfisher Airlines and Jet Airways and have withdrawn from many routes.PriceWhatever price Air India is charging it is difficult to be convinced buying a ticket on them is a value for money proposition. Air India is never the best airline on any route. On domestic legs no-frills competitors are cheaper and quality airlines are better. To the Gulf region almost any other airline is better than Air India, providing far superior service and on long distance international legs Air India are beaten for value and service by competitors.

CateringPremium passengers get excited when staff actually deliver the drink theyve requested made correctly. As for their meals, they are poorly presented and of a very average quality. Economy passengers do get fed, but the Indian style meals are sloppily presented and not very exciting. However as Air India meals are prepared by different catering companies around the world they do vary and some are quite satisfactory. Passengers are extremely unlikely to get Delhi belly from Air India cuisine. Surprisingly even Maharajah (Business)Class get plastic cutlery.EntertainmentNewer larger aircraft typically on longer legs have the latest in-flight entertainment systems with individual seat back screens playing a wide selection of current Hollywood and Bollywood movies together with plenty of audio channels. Older aircraft will have the single large screens at the front, but these are progressively being updated with individual entertainment units. Smaller aircraft on short legs will have nothing but the in-flight magazine. Staff is unapologetic if the entertainment is broken.Ground Service and baggageIn general ground service at Indian airports is superior to that provided at most American, Australian and European airports. Security is better, staff is more abundant and queues are shorter. Baggage is well handled and transfers are completed efficiently. Indian check-in staff are quite pleasant, well-educated and multi-lingual.Premium Classes & LoungesAir India has lifted its game with the arrival of Kingfisher Airlines and Jet Airways and it seems most of their premium passengers have flocked to the newer, better carriers. Air India simply cannot compete with these more sophisticated airlines together with the infinitely superior service to be found on the likes of Singapore Airlines, Emirates and Etihad. The only thing that Air India can offer premium passengers is a cheaper ticket price. Interiors are OK, service is alright and meals are not too bad. It is simply impossible to WOW over anything. As for Air Indias five Maharajah Lounges; they are quite nice with a distinctive Indian flavour about them, nice colours but are surpassed by more luxurious airlines.Economy ClassPaying a little bit extra will typically buy Economy passengers a far nicer experience on a better airline. Within Indias competitive domestic market there are plenty of better airlines, and on shorter routes Indias Railways remain highly competitive and efficient. The busy India Gulf sectors are well served by several quality airlines which not only provide good prices but more comfort. If tourists wish to begin their Indian holiday at the city of departure then Air India promises to deliver. Economy passengers can expect a basic onboard experience and a crowded flight that will touch down in India with floors littered with rubbish and toilets overflowing with filthy water and stinking like a sewer. Long distance Air India flights for Economy passengers can be unpleasant.Frequent Flyer ProgrammeWith Air India admitted to Star Alliance there seems no point in being a member of their frequent flyer programme as other airline membership cards will earn points on their airline. Air Indias loyalty scheme is called Flying Returns and in keeping with most other frequent flyer programmes points are almost worthless and members need to do a considerable amount of flying before any benefits will accrue.Corporate CultureIn the past Air India can lay claim to being one of the most corrupt airlines in aviation. Managers accepted bribes from passengers to take excess baggage. Bribes were made to accept extra passengers who were on-loaded as infants and senior management knew, tolerated and participated in all manner of bribe taking, corruption and nepotism. The airline has lifted its game, however many of these culprits are still working in aviation and Air India has never exorcised itself of these demons. Management remain incompetent, dishonest and boastful of their own and the airlines abilities. Most staff are too grateful for their job to do anything about it. Airbus and Boeing ought to see the colour of Air Indias money before the airline takes delivery for equipment. They are notoriously difficult to get money out of.SafetyAir India has had approximately 10 fatal accidents; its worst a terrorist bomb in 1984. The airline has an unenviable safety and maintenance record but has recently improved its performance from sub-standard to satisfactory. Terrorist related security at Indias airports is so excellent passengers will realise how pathetic American measures are in comparison, but baggage remains the weak link. Air Indias engineering facilities have an ISO9002 rating which is meant to mean it meets international standards. But corruption in the airline raises concerns over aircraft spare parts and accuracy of record keeping concerning aircraft checking.

Air India - RatingA terrible reputation it earned through delivering consistently inferior service at an average price.CATEGORIESRATINGS

Food & Beverages 3/5

Inflight Entertainment2/5

Seat Comfort4/5

Staff Service3/5

Value for Money3/5

AVERAGE RATE6/10

CONTRIBUTION TO GDP:Air India contributed .0096% out of the total share in GDP in the last financial year of the country.

SWOT ANALYSISStrengths in the SWOT analysis of Air IndiaAir India has been the largest air carrier in India in terms of traffic volume and company assets.It owns the most updated fleet and competent repairs and maintenance expertise.Its information systems are advanced and compatible with its operation and service.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.Has financial backing of the Government

Weaknesses in the SWOT analysis of Air India

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.Low profitability and utilization of capacity. Growing Competitor base and entry of Low-Cost Carriers (LCCs)The airlines high-cost structure and the compulsions of being a public sector unit are the reasons and it had been making a loss and shall continue to make losses for some more quarters.

Opportunities in the SWOT analysis of Air India

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.Worldwide deregulations make the skies more accessible; the route agreement is easier to be achieved. The number of foreign visitors and investors to India is increasing rapidly.Complementary industry like tourism will increase demand for airline service. The Civil Aviation Ministrys strong regulation and protection provides opportunities for consolidation and optimization.Customers are getting wealthier, tend to be less price-conscious and prefer to choose quality service over cost. Best time for introducing LCCs

Threats in the SWOT analysis of Air India

Air India faces imminent aggressive competition from world leading airlines and price wars triggered by domestic players.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

CORPORATE SOCIAL Responsibility (CSR) Corporate social responsibility (CSR, also called corporate conscience, corporate citizenship or responsible business) is a form of corporate self-regulation integrated into a business model. CSR policy functions as a self-regulatory mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards and national or international norms. With some models, a firm's implementation of CSR goes beyond compliance and engages in "actions that appear to further some social good, beyond the interests of the firm and that which is required by law." CSR aims to embrace responsibility for corporate actions and to encourage a positive impact on the environment and stakeholders including consumers, employees, investors, communities, and others.Air India Company has taken up several projects for CSR involving Environment, Education, and Sports. The Department of Quality Management System has been entrusted with the task of handling the CSR activities carried out by the Company. The Company is in the process of signing MoU with Tata Institute of Social Sciences (TISS) for working on the project of CSR in Andaman & Nicobar Islands.

Environment protection Environment management system Various initiative were introduced for reducing Carbon Dioxide emission through initiating changes in policies and procedures across operation, Engineering ground handling,etc., initiating tree plantation and commencement of document management system to reduce use of paper in office. Air India has, up to 57,381,004 Kgs in 2008-09 fuel saved and the saving went to 76,939,253 kgs in 2010 and the figure raised more in 2015. Also in march 2012, reduced carbon emission to the tune of 66,79,27,566 kgs and in 2015 The state-run airline could add at least 20 fuel-efficient planes by leasing, or swapping existing orders with plane makers. All efforts are being continued to make Air India the Green Airline in India. EU-ETS Various procedures were adopted in operational areas, which helped the company reduce carbon emissions. The European Union Trading Scheme (ETS) has mandated for the aviation industry that all flights with origin or destination in the European Union would have to be necessarily covered by the scheme. Air India submitted the ETS required plans for the annual emission and tone kilometer monitoring in August 2009 and from then company is associated with ETS.Air India has successfully cleared the EU-ETS audit and verification process, which was conducted by M/s. Bureau Veritas from 22 March to 25 March 2011. The verification report and data was submitted to the Environment agency of UK on 31 march 2011. In line with the directive issues by the ministry of civil Aviation, Government of India, Air India decided not to participate in EU-ETS and forward the correspondence on EU-ETS directly to the Ministry. Environment Agency has also been advised accordingly. However, the tools and methodology of EU-ETS have been adopted by Air India to ensure that the carbon Di-oxide emission is monitored regularly. Quarterly reports for environment Management has been initiated which are being sent to all stations to obtain feedback on all energy consumption. Summarized Energy report is submitted to DGCA.

Encouragement/assistance to small scale industrial unitsIn accordance with the government guidelines issued from time to time, the company continued to support the SSI units/social welfare/Charitable organizations. The procurement from SSI unit during the year amounted to approximately Rs. 54.86 million and the selective sourcing/procurement from social/charitable organization amounted Rs. 1.21 million.Air India Distributed study Material to differently abled and under privileged children.Noble cause: In commemoration of the fourth anniversary, Air India SATS Airport Services Private Limited (AISATS) Thiruvananthapuram (TRV) organization voluntary Corporate Social Responsibility (CSR) program which aims to promote education, including special education and employment enhancing vocational skills among differently-abled and underprivileged education among the differently- abled children of the Government School for the Visually Impaired, Vazhuthacaud and the children of Our Lady of Fatima Orphanage, Thumba. AISATS TRV employees actively volunteer to engage in community service that reflects the companys vision to be socially responsible and one that believes in empowering children for a brighter future. The event was held at Our Lady of Fatima Convent at Thumba, Thiruvananthapuram. The day started with AISATS TRV employees organizing recreational activities for the children followed by a series of entertainment programs. The children too performed entertainment programs with much enthusiasm, making the day more memorable. AISATS TRV also contributed study materials and educational support items to the orphanage students and technology devices specially designed to help the learning process for the visually impaired students. AISATS is committed towards making a meaningful contribution to our society. We are mindful of the support that we have received from the Thiruvananthapuram community and we will continue to associate ourselves with such noble causes in the future.

CASES OF AIR INDIA

AIR INDIA DREAMLINER GROUNDED FOR 9 MONTHS, WITH 400 PARTS MISSINGAir India has kept an aircraft from its prized Dreamliner fleet grounded since Januaryof this year.The aircraft that costs aroundRs 1,400 crore has been grounded as it has around 400 parts missing. There have been problems related to the supply of spare partsand Boeing has still not been able to deliver the necessary fittings, claims the report.The airline currently has 21 dreamliners in its fleet. However, this is not the first time an Air India Dreamliner has been grounded.In April 2014, Air Indias Boeing 787-8 Dreamliner VT-ANIwas grounded for what the airline termed reliability improvement retrofit (modification).AnotherAir India Dreamliner had to be grounded in Hong Kong (HK) in July 2014after the aircraft (VT-ANK) sprang an oil leak.The Dreamliner boasts a state-of the-art in-flight entertainment system, flat-bed recline, reading lamps, large LCD screens and enhanced gaseous filtration system that mitigatesdizziness and headaches inside the aircraft.

AIR INDIA ENGINEERS THREATEN TO DRAG MANAGEMENT TO COURTA section of Air India Engineers have threatened to take the airline management to court if it does not reverse its decision to absorb 50 odd Air India Express (AIE) engineers into subsidiary AIESL on the ground that the move would adversely impact their career prospects.

Air India Engineering Services Ltd (AIESL) currently has 900 aircraft maintenance engineers (AME) with 500 of them from erstwhile Indian Airlines (narrow-body fleet) and the rest from Air India (wide-body fleet).The protesting AMEs is from erstwhile Indian Airlines, sources said.On the other hand, Air India Express has a total of around 105 engineers. Of these 55 are of Air India Express itself and the remaining 50 on deputation from Air India."AI management has issued transfer letters to all 55 AMEs of Air India Express, placing their services with the AIESL from September. We are opposed to these transfers as it would have a direct bearing on our career progression," Air India engineering sources told PTI.They claimed engineers coming from Air India Express, who have been getting early promotions, would get seniority upon transfer thereby adversely affecting the career prospects of AI engineers.Air India had hived off its engineering and cargo businesses into two separate subsidiaries-- AIESL and Air India Transport Services Limited (AITSL)--in 2013.

"The absorption of these engineers from AIE into the AIESL would further block our promotion avenues. Hence we are > protesting the decision and would soon move Mumbai High Court seeking a stay," they said.These engineers were initially hired on a temporary basis on the condition that their services will be regularized only after five years and that too depending on the performance. "But throwing rules to the wind their services were made permanent after a year," sources said.Air India grounds 125 overweight cabin crewAir India has identified 125 staffers, most of whom are airhostesses, as unfit to function as cabin crew members because they have been found to be overweight. These staffers will now be assigned ground duty or asked to take voluntary retirement. The national carrier officials said that the staffers are being grounded because they failed to maintain the weight requirements prescribed by aviation regulator Directorate General of Civil Aviation (DGCA). Last year, at least 600 cabin crew staffers in Air India were found to be overweight as per the DGCA standards, and were given a chance to shed the extra kilos. The DGCA guidelines say that overweight staffers should not be allowed to continue as flight steward or airhostess as it hampers flight safety. "Of these 600 cabin staffers, around 125, including airhostesses, have failed to maintain the required weight standards. Now we have no option but to take them off from flying duties permanently," an Air India official said. The airline has 3,500 cabin crew staff, of whom 2,200 are permanent employees and the rest are on contract.

In June, Air India faced a severe crew shortage and decided to get those who were grounded for being overweight back on flights for the next three months. "The airline is expected to complete the hiring and training of new crew members by the end of this month. We have decided to ask the 125 to either work as ground staff or take voluntary retirement," a senior Air India official said. As per the DGCA regulations issued in May last year, a body mass index (BMI) of 18-25 is normal for male cabin crew members, while for a female crew member, it is recommended to be 18-22. A BMI of 25-29.9 for male crew members is considered overweight, and 30 and above is obese, while for females BMI of 22-27 is overweight and 27 and above is classified as obese.

Based on periodic medical reports, the cabin crew would have to be categorised by designated doctors as 'fit', 'temporarily unfit', and 'permanent unfit', according to the guidelines. A cabin crew member found overweight is termed as temporarily unfit and given three months' time to reduce weight.

A cabin crew member can continue with flying duty for up to 19 months with the temporarily unfit tag, but if he/she fails to reduce weight to meet the required BMI during this period, he/she will be deemed permanently unfit and grounded - like these 125 have been found to be.

The All India Cabin Crew Association had declared the DGCA rules as illegal, saying there was no provision for the aviation regulator to issue medical guidelines for cabin crew in both the Aircraft Rules 1937 and Aircraft Act of 1934. "Rule 39B and 39C of the Aircraft Rules only prescribe medical tests for flight crew who are licensed. Cabin crew have not been issued with a license number despite DGCA saying it would in 2010. First they brought in medical rules without applying thought. Now they want to bypass the same rules," said the crew members.

FLIERS AND REVENUE INCREASE AS AIR INDIA JOINS STAR ALLIANCEJoining the Star Alliance, a global group of 28 international carriers, has paid rich dividends to flag carrier Air India (AI) as passenger transfers from group members have more than doubled and revenues from such transfers witnessed more than two-fold increase.A transfer happens in case a passenger is going to a location AI does not service. AI will take the passenger to a location nearest to the destination from where a different airline will ferry the passenger. The revenue is shared between the two airlines. Established in 1997, Star Alliance is the biggest of the three global airline alliances with the other two being SkyTeam and oneworld. AI completed a year in the alliance on July 11. AI is the first Indian carrier to be inducted into Star Alliance. AI was originally accepted as a future member of Star Alliance in December 2007, but the integration process was halted in July 2011. Joining Star Alliance has allowed AI passengers to use Stars facilities such as airport lounges, fly on a network of around 20,000 daily flights to over a thousand airports in over 190 countries, and redeem air miles on airlines such as Lufthansa and Singapore Airlines, said aviation expert Rajji Rai.The revenues and transfers should increase substantially as we are in advanced talks with at least 14 foreign airlines for code share agreements. A majority of these belong to Star, said an AI official.

Code-share is a ticket-selling agreement between two airlines whereby one airline can market and sell the flights of another airline and provide seamless travel to multiple destinations where it doesnt fly.At a time when Gulf carriers have managed to corner the biggest pie of the Indian international market around 40% of all international traffic from the country is West Asian bound many international carriers want code-shares with AI.

FUTURE MARKETING STRATEGIES

Air India, Others Plan Direct Flights To Top Global DestinationsThese are some of the hottest international destinations and 2.42 million people visit these from India every year. But passengers flying to these 15 - San Francisco, Los Angeles,Milan-Malpensa, Washington-Dulles, Vancouver, Boston, Rome-Fiumicino, Jakarta, Seattle, Lagos, Manila, Tel Aviv, Brisbane, Auckland and Barcelona - are forced to take transitflightsfrom other international hubs in the absence of direct flights from the country.That is set to change soon, with state-ownedAir India(armed with its Dreamliners) and some other leading international airlines negotiating with Delhi International Airport Ltd (DIAL) to operate direct flights to seven of these destinations - Milan-Malpensa, Rome-Fiumicino, Jakarta, Lagos, Manila, Tel Aviv and Barcelona - and cash in on the large untapped market.

So far, flyers from India to the US' western coast, Europe, Africa, Southeast Asia and Australia have to transit via other international hubs. According to Centre for Asia-Pacific Aviation (Capa), close to 40 per cent of India's international traffic reaches its final destination via an intermediate offshore airport - almost half of the traffic takes transit flights from West Asian hubs.

The top among these destinations is the US' western coast (San Francisco, Los Angeles and Seattle), which accounts for a little over 33 per cent of India's international flyers. Every day, as many as 1,100 people from India travel to these places, taking transit flights from Dubai, London, Singapore, Amsterdam or Hong Kong.

Among other places, close to 200,000 passengers fly from Indian cities to Milan every year. The plan is to connect Malpensa in Milan and Delhi with a direct Air India Dreamliner flight. Some other top cities being considered for direct connectivity from Delhi are Flumicino and Jakarta, where 146,000 and 138,700 passengers, respectively, fly from India every year. Besides, talks are also on for Air India flights to the Spanish cities of Barcelona and Madrid.DIAL, which runs the Delhi airport, is also in discussions with other airlines to operate direct flights to Lagos, Manila (Malindo Air could start a direct flight) and Tel Aviv. Besides, Cairo, where an average 103 people travel from India every day, may also get a direct link.

Kiran Jain, head of airline marketing & route development at DIAL, says: "There is a sizeable traffic on these routes. But passengers have to transit via other hubs as there are no direct flights to these centers from Delhi. On routes where direct flights are launched, the number of passengers typically increases 25-30 per cent over the initial estimated traffic, as passengers from other nearby areas also get to avail of better travel options."

The move to directly connect Delhi with these seven destinations is also expected to help the airport increase its share of transit traffic.Dial expects transit passengers to account for more than a quarter of its total traffic by 2015-16, compared with 17.8 per cent estimated by the close of this financial year.Air India May Add 4-5 New European Destinations, Opt For Bigger AircraftAir India may start flying to four or five new destinations in Europe and is also looking at thepossibility of getting six Boeing 787-900 aircraft which are more spacious than the current B 787-800 in its fleet.A source said today that the idea of clubbing two destinations in a country while launching flights was a bad one and needs to be corrected. Air India launched operations to Sydney and Melbourne in Australia, Rome and Milan in Italy and to Moscow in 2013-14 with disastrous results.So the Australian operations are being restructured wherein three flights a week would fly to Sydney and four to Melbourne or vice-versa. Similarly, the operations to Italy are being restructured where instead of every flight doing both Rome and Milan, one will be thrice weekly and the other four times a week. The flights to Moscow are already down to two a week till at least July, when Air India feels aircraft loads may rise again, from four a week earlier.This source said there is now a move to launch four or five new destinations in Europe to expand Air India's international footprint. He said these were discussed by the airline's board of directors and some changes were sought. But no final decision has been taken till now. This development comes even as Air India is mulling whether to take the more spacious Boeing 787-900 aircraft instead of the 787-800 aircraft which are already on order. The B 787-900 aircraft can seat more people and are capable of flying beyond 9 hours. Air India had ordered 27 Dreamliners of which 19 have been delivered, 20th is expected next month. Any changes in aircraft can be made only for the remaining six which will get delivered later.In reply to a question in Rajya Sabha this week, Minister of State for Civil Aviation Mahesh Sharma said Air India has constituted an inter departmental committee for evaluating this option to exercise the model substitution rights on merit.A senior captain with the airline said that there has been some talk of replacing the last batch of six Dreamliners already on order with the 787-900 configurations but again, no final decision has been taken on the matter. He said if the airline does decide to substitute the Dreamliners with more spacious aircraft, it could mean significant fuel savings on ultra-long haul routes to the US as the older fuel guzzlers would be replaced.So why does Air India want to expand international operations, which anyway bleed it dry? It is the longest serving legacy Indian carrier flying to marquee destinations abroad but its domestic operations are earning far better. At least the latest numbers say so. The airline deployed just a fourth of its capacity on domestic routes in 10 months of last fiscal between April and January, but these flights generated 40% of its total revenues. In fact, a domestic yield (which means revenue per passenger) were much higher at over Rs 6 when international yields languished at around Rs 3.50.Instead of mindless overseas expansion, the airline needs to consolidate its grip on the domestic market if it wants to survive the onslaught of competing airlines like indigo (already a formidable force on domestic routes), Jet (which is strengthening domestic operations) and new airline Vistara.

The Delhi-Moscow service was not even meeting its variable costs - this means flights on this sector were not meeting even their fuel costs! The Moscow route was opened in July last year, marked resumption of services by AI after 15 years. So the halving of frequencies, from four flights a week to just two a week, shows poor planning and ground work before launching this flight.Then, Air India has also withdrawn a flight on the Delhi-Dhaka route because this flight was not meeting even cash costs.

According to the latest data available with us: 3 in 4 flights on the Air India network were destined for foreign shores between April and January last fiscal but they brought in less than two-thirds of the airline's revenues. During the 10 months under review, the airline lost close to Rs 500 crore on the Ahmedabad-Mumbai-Newark connection alone. Another about Rs 200 crore was lost on the Delhi-Sydney-Melbourne flight. The Ahmedabad-Mumbai-London flight, which is obviously flying a busy route, raked in losses of over Rs 250 crore. Another flight to London, the Amritsar-Delhi-London one, made losses of well over Rs 200 crore. In fact, 39 international flights brought in over 70% of the operational loss in 2014-15.It is interesting to note that the Dholakia Committee, which recommended that flights which are unable to meet their variable costs be either axed or restructured, found that this single step will get Air India maximum annual cost savings of Rs 580 crore each year.

Air India Chalks Out Two-Pronged Strategy To Up Share In Domestic SkiesState-ownedAir Indiawhich is set to face increased competition from full service carriers Jet and soon to be launched Vistara in the coming months, has chalked out a dual-pronged strategy to increase its market share in domestic skies.Air India will deploy 787 Dreamliners to draw in corporate travellers on domestic routes. Meanwhile, the 19 787 Dreamliners will be deployed for corporate travellers and A320s would be used for economy passengerss the airline is in the process of leasing would be utilised to add more capacity and services for economy class passengers.Air India ChairmanRohit Nandansaid: "We are looking at utilising the 787s more optimally by deploying them more on domestic routes. There are many airlines which use A380s for 2-3 hour flights now (it is meant to be used for long-haul flights of eight hours). World over the economics of operating an aircraft is important. If you use larger aircraft on short-haul routes, the engine wears off faster. As long as that is factored in while working out the route economics and you make money, its fine. Our route economics analysis takes into account the expenses incurred in maintenance of engines."The airline currently operates the 787s only on two domestic routes from Delhi to Bangalore and Kolkata. AI's 787s have 256 seats each, 18 of the business class and 238 economy seats. The deployment of 787s on domestic routes would help the airline to improve yields.According to industry estimates, business class seats typically account for 8-10% of the total domestic airline capacity but contribute 15-20% of its revenue. The average business class fare is three to six times that of an economy seat. In other words, it means 18 business class seats would give you the same revenue as at least 54 economy passengers. That obviously increases the average yield per passenger. This makes it a lucrative business proposition if leveraged effectively.Nandan, however, clarified the airline in not looking at deploying the Dreamliners on domestic routes in response to competition, "We are not responding to competition we have been thinking of this for some time. The 787 on domestic routes will be a game changer and will appeal to corporate clientele. We will charge the same as others in business class and offer a better product. It will offer better service and this is our USP", he informed. While Vistara is going to operate A320s on domestic routes, Jet Airways operates Boeing 737s.Additionally, Air India is also in the process of leasing 19 A320s to increase capacity for economy travel. "We will also intensify the use of A320s to other destinations. We have a whole network ready to be exploited. We could not do so earlier because of insufficient aircraft", added Nandan.The 19 A320s being leased will replace a similar number of older aircraft the airline has in its fleet. However, the new aircraft to be flown in all-economy configuration will offer more capacity of 180 seats. The aircraft being phased out currently offer between 144 and 168 seats.Nandan further said that the airline's prestige and acceptability has improved over the last three years and particularly after induction into Star Alliance. Currently, only five per cent of the airline's passengers come from the government sector. "The market has accepted us. Travellers are satisfied with us. We get only five per cent of our passengers from the government now, 95 per cent of our customers opt to fly with us voluntarily", he said.Air India currently has 62 Airbus family aircraft (mix of a319s, A320s and a321s), used on domestic routes and some short haul routes. AI's domestic market share has fallen from 19.8% in January to 16.2% in August and the airline has not made additions to its fleet. It also has a shortage of AirbusA320commanders.At present Air India flies 16 Boeing 787s and flies these to Europe, Japan, Singapore and Dubai. It also uses them on two domestic routes, Delhi-Kolkata and Delhi-Bangalore. It has 27 Boeing 787s on order and is expecting three additional planes till March 2015. It is expected to use these to ply on other metro routes.It has had some success and the 787s have helped it generate cash profits on some hitherto loss-making European routes. However, the planes have also been plagued by snags and glitches, leading to their frequent grounding and operational delays. Also, the airline has not been able to get desired loads on its new 787 routes, to Australia, Rome-Milan and Moscow

CONCLUSION AND RECOMMENDATION

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