Indian airlines

COMPANY PROFILE
THE LOGO

While creating a logo the team considered several

options- the national flag, birds, animals and colors.
Before zeroing in on the wheel from the structure at
Konark at Orrisa which signifies motion and represents
the image perfectly.

It has changed its name Indian as Indian is such a generic

name. It represents 100 crore people, their emotions,
their movies everything.

The wheel in the Konark temple, it was an inspiration for

the new logo is a 12ft large bulky monolithic structure.

Looking beneath structure

IAL becoming Indian is such big news that the coverage it

generated left all paid advertising in the dust. As a logo
and name change is just a part of the story more
important is the overall image of the airline. The new look
has to seep into visible part of the airline- from the
tickets, the counter, the color of the floor inside the
aircraft, to the uniforms and the standard of service.
Indian Airlines Limited

Indian Airlines have been constantly innovating and upgrading its

fleet and today is one of the largest domestic airlines in the world
with the fleet of 55 aircrafts including A320s A319s A300s and
Boeing 737s.

Indian Airlines operates 220 flights everyday carrying near about

30,000 passengers on its network. It connects 63 domestic and 19
international stations like Singapore, Kuala Lumpur, Bangkok,
Katmandu, Kuwait, Sharjah and Muscat etc.

The airlines have grown from strength to strength by keeping an

excellent track record of manpower and infrastructure
development. Its internationally recognized pilots training
academy, the Central Training Establishment (CTE) at
Hyderabad is totally self-sufficient in training pilots, engineers,
cabin crew and other personnel. In addition to this Indian Airlines
is self sufficient in aircraft maintenance’s to keep its aircraft in top
flying condition.

FLEET POSITION

The fleet position of the company as on 31st march 2006, is as

under:-

Aircraft Type
Number of Aircraft

A-300
3

A-320 47*

A-319 3**
B-737 11***

DO-228 2

* Including 17 leased aircraft.

** All three aircrafts are leased.

*** Operated by Alliance Air, which is IA’s wholly owned

subsidiary.

Before 1953, i.e. before these airlines merged to form Indian

Airlines there was no set of rules and standards of operations of
the airlines. The operations mainly were competition oriented and
the result of which was that every airlines wanted to be the
cheapest one. Thus, all most all the airlines did not have enough
money to maintain the aircraft’s. They presented an excellent
example of unhealthy competition. Ultimately the Govt. took over
by passing the Air Corporation Act and Indian Airlines came into
being. The Board of Director’s conduct the affairs of the
corporation.

Indian Airlines is one of the public sector corporations in India. A

statutory corporation like Indian Airlines is formed with definite
objectives in the interest of the public though based on pre-set
principles. The objective functions of Indian Airlines are as follows:
 • It shall be the function of the corporation to provide safe,
efficient, adequate, economical and properly co-ordinate air
transport services whether Domestic or International or both.
• Corporation shall so exercise their power as to secure that
air transport services are developed to the best advantage
and in particular so exercise their power as to secure that
the services are provided at reasonable charges.

The opening up of the skies in 1992-93 thrust Indian Airlines into

a new environment of competition and gave rise to greater
expectations of the passengers. Indian Airlines has faced the
competition with aplomb, catering to enhanced passengers needs
with various product upgrades and marketing initiatives. And at
the same time, it has continued to fulfill its social obligations. The
airlines have augmented its fleet of aircraft by leasing 5 Boeing
737 and 2 A-320 aircraft. Plans are also underway to purchase
new aircraft and thereby strive to establish itself as a technology
and market driven organization.

Indian Airlines operates a complement of 58 aircraft: 30 A-320s,

11 A-300s, 11 Boeing-737 and 3 Dornier-0228s.
Mumbai is the major maintenance base for A-300 aircraft Avionics
(Aviation Electronics) shops at ATEC (Automatic Test Equipment
Complex) take care of repair and certification of all computers on
board. Accessories overhaul division meets the needs of wheels,
brakes and hydraulic is known does a complete overhaul of A-300
engine, only detail parts are sent abroad for repair.

Delhi is the major maintenance base for A-320 and Boeing-737

aircraft. The “A” checks for A-320 is carried out primarily in
Hyderabad and if need arises also in Delhi. “C” checks, 5 years
and 9 years are carried in Delhi too.

Boeing-737 4C/7C checks are carried out in Delhi. Delhi and

Kolkata both have facility to carryout ‘A’, ‘B’ and ‘C” checks on
Boeing-737 aircraft but this job is primarily carried out at Kolkata.
Well equipped Avionics overhaul shops at Delhi aid in-house
repair to majority of A320 and Boeing-737 components.

Jet engines overhaul centers a multi-millionaire dollar enterprise

undertakes repairs to both V2500 AI engines of A-320 as well as
JT8D-9A & JT8D-17A engines of Boeing-737 aircrafts. Engines are
dismantled. Parts replaced and state of art test house. Only some
modules and blades are sent abroad for refurbishment.
A full-fledge APU repair center at Kolkata takes the entire work of
APU’s from all three aircrafts. Six major stations namely Delhi,
Mumbai, Kolkata, Hyderabad, Chennai and Bangalore also
extended night halt facilities for all three types of Jet aircrafts.

Indian Airlines is a Public utility under the Industrial Dispute Act

1947, has to work in the interest of public. In the view of this, the
corporation is accountable to public through the government and
parliament for its activities. The control is two-fold:

• To see that corporation does not deviate from its objectives.

• To have financial control because the funds of the
corporation are derived from public funds.
Objectives

• To meet the demand for reliable, economic and efficient

transport service through high standards of service
customers and passengers.

• To maximize the essential and strategic communication

within India in times of national emergencies and to be
reliable second line of defense.
• To increase passenger satisfaction by improving
passenger/cargo and amenities.

• To enhance the contribution of national economy during the

5 year plan period by securing the reasonable return on
capital consistent with the social objectives.

• To foster international tourism to India and to improve

balance of payments.

• To stimulate domestic tourism and tourism internal trade bi

air in order to develop air mindedness and broaden the
Indian market.

• To share in the promotion of the social, cultural and

emotional integration of India and to participate in the
process redressing regional imbalances.

• To encourage self expression and participate in the activities

of the company by all employees and to encourage their
legitimate aspirations for growth and self development.
 • To participate in the development of national aircraft and
ancillary industry.

SWOT Analysis

For a country of continental size like India, a strong, reliable and

efficient Civil Aviation Sector goes a long way in promoting and
sustaining tourism. Indian Airlines being a leader in this industry
cannot operate in a vacuum. It needs to keep its eyes and ears
open to survive in the liberalized economy of our country, which
has paved a way for any private airlines to operate along with it.
The internal and external environments contain various strengths,
weaknesses, opportunities and threats which need to be identified
well in an advance to take care of various situations that may
arise from time to mime. We shall now try to focus on the above
mentioned factors in context with present scenario one by one.

Strengths

Infrastructural Support: The most notable strength of

Indian Airlines Limited is its vast infrastructural support built over
five decades. This has helped it reduce its costs and at the same
time increase its efficiencies. The most notable among its
infrastructure are the Central Training Establishment (CTE) and
Jet Engine Overhaul Complex (JEOC).

Fleet’s Strength: Indian Airlines Limited is one of the largest

domestic airlines in the world and is equipped with modern fleet
of Airbus A-300, A-320, Dornier, ATR-42 and Boeing 737 Aircraft.
As compared to the fleet of Indian Airlines Limited, the total fleet
of all private airlines combined together is smaller than that of
Indian Airlines Limited. This clearly shows the superiority of Indian
Airlines Limited over this factor.

Vast computerized Network: Each of the 55 domestic

stations of Indian Airlines Limited is linked over a computerized
network, which provides instant reservations and up to date
information of each station instantly. This is no doubt a great
achievement, which proves that Indian Airliner Limited has
realized its potential.

Largest Network: Indian Airlines Limited Over the last 50

years, Indian Airlines has built up a reliable and stable schedule
that links 75 destinations - 57 within India and 20 abroad. From
the gateway cities of Delhi in the north, Mumbai in west, Kolkata
in the East and Chennai in the South, the passenger can take off
in an Indian Airlines Limited is within easy reach. In comparison of
this each private airlines operate it maximum of 30 Destinations,
which is no ways near the 75 Destinations, which is no ways near
the destinations provided by.

Most Modern Fleet: Indian Airlines Limited has been

regularly updating its fleet. Having started Vikings and Dakotas it
now has Airbus A-320s, the modern aircrafts having a technology
of fly by wire and is now in the process of phasing out Boeing 737
aircrafts.

Maintenance Facilities: In aviation industry, maintenance

plays a vital role. It is the backbone of an organization and no
organization can survive unless and until it has good maintenance
facilities. Indian Airlines Limited has understood this very well and
has maintenance facilities in Delhi, Hyderabad and Kolkata. The
engineers are well qualified and hold a reputation of being one of
the best in the aviation industry. Private airlines are quite
dependent upon their foreign collaborations or the Indian Airlines
to maintain their aircrafts, which is a costly affair.

Highly modernized Central Training Establishment

(CTE, Hyderabad): CTE was established as a profit center by
Indian Airlines. It provides training in all aspects of Airlines
Management both for personnel of Indian Airlines as well as to
representatives of other airlines as per DGCA, IATA, and ICAO. It
has been regarded as the best training facility in India and is
responsible for providing expert training facilities to Air India, Blue
Dart, Alliance Air. Air Sahara, Sri Lankan Airlines etc.

Weaknesses

Lack of personalized and customer friendly

services: This is one of the major findings of our study. Almost
all passengers feel that Indian Airlines Limited staff needs to be
more customers friendly and professional in its approach. In
services industry, it is the kind of services that one provides
matters and leaves its impression in the mind of passengers. It
infact is a measure of quality of the product. Indian Airlines
Limited needs to take immediate steps in this regard to change
the public opinion.
Overstaffing: As mentioned earlier the total staff strength of
Indian Airlines Limited is 18715 as on date. On the average
19300-19500 people travel on Indian Airlines Limited on its 112
flights daily. It records three hundred departures per day
(including Alliance Air). This means that there is roughly about
one staff recruited against every passenger traveling. This is no
doubt a bad sign. Indian Airlines Limited has understood this
weakness now and hence has not made any major recruitment for
last few years. Moreover, there are around two thousand
employees retiring within next two years which will trim work
force automatically.

Under Utilization of Capacity: Indian Airlines Limited sells

space, which is highly perishable. This is because idle capacity
would imply opportunity lost. Capacity means the total number of
seats offered by Indian Airlines Limited daily to its passengers. It
has been observed that Indian Airlines Limited offers around
32000 seats daily where as on average 19300 seats are utilized
meaning an average seat factor of about 60%. It is imperative to
improve upon the situation before it is too late. More marketing
efforts are required to attract larger passenger.
Opportunities

Growth of Aviation Industry: The recession in the West,

the Gulf Wars, Surat Outbreak and Kargil War have slowed tourist
growth and consequently affected the Indian Airlines Limited
revenues. However, these were transient setbacks as has been
proven by recovery of global tourist activity. Aviation industry is
growing at the rate of 10% per year. This is no doubt a good sign.
And Indian Airlines Limited must exploit this opportunity and take
maximum benefits out of it.

Operating on International Routes: Earlier Indian

Airlines Limited was not allowed to operate on international
sectors, as Air India took care of it. With the liberalization of
Indian economy, Government of India gave Indian Airlines Limited
a green signal to operate in the international routes. It is always
economical to operate on long routes and it is only by this
attraction Indian Airlines Limited has branched out to operate on
17 international sectors.
Profits after a long time: Indian Airlines Limited had been
running in red from the year 1989-90 to 1996-97 for a number of
reasons. It started earning profit in 1997-98. It earned a profit of
Rs. 47.27 crore in 1997-98, Rs. 14.17 crore in 1998-99 and Rs.
51.42 crore in 1999-00. But after that it again started making
losses with a loss of Rs. 159.14 crore in 2000-01. It remained in
red in 2001-02 with a loss of Rs.246.75 crore followed by a loss of
Rs. 196.56 crore in 2002-03. Then it came in black once again in
2003-04 with a net profit of Rs. 44.17 crore.

Creation of profit centers: Due to its size Indian Airlines

Limited is unable to be as nimble as it ought to be in term of
decision making, customer service and employee motivation.
Consequently, an integral part of its strategy was to hype off
certain activities into separate profit centers, to make them more
focused, flexible and accountable. It was with this in mind that
Indian Airlines Limited created the following profit centers:

• Central Training Establishment

• Jet Engine Overhaul Complex
• Alliance Air
• Ground support
• Cargo
• Auxiliary Power Unit
• Engineering
The profit centers have already made useful contribution in the
improved performance of Indian Airlines Limited.

Other Opportunities: the company stands to benefit from a

variety of other opportunities due to its inherent strengths and
emerging market trends. Some of these advantages are listed
below:

• Good domestic market growth potential in the event of

upturns in the domestic market
• Synergy between domestic and international operations
• Modern engineering infrastructure and highly skilled
manpower
• Revenue potential from handling services rendered to other
airlines

Threats

Competition Itself: Ever since the inception of Indian Airlines

Limited it had never tasted competition, as it was a protected
monopoly. When the private airlines entered this field there was a
panic in Indian Airlines Limited, instead of thinking of ways to
tackle, it stated condemning the Govt. Policy and thought it as
threat to it existence. It is only recently that it has realized that
Private Airlines were here to stay.

Instability in the Polices of India: For the last 4 of 5

Years there has been a great uncertainty in the polities of India.
Since majority of Indian Airlines Limited polices requires the
approval of Govt. hence an uncertainty in the political circle
hinders the decision making of Indian Airlines Limited. Every Govt.
has its own perception about aviation industry resulting in the
change in the policies under short intervals. This not only results
in the low moral of the management but also makes it indecisive
which is not good for an organization.
 Sales Channels
Indian Airlines