THE MERGER OF AIR INDIA & INDIAN AIRLINES:

A COUNTER INTUITIVE OUTCOME

A Presentation by Team AC2:

Ankit Kumar Baranwal
Ashish Gyanchandani
Charu Pandey
Natesh Bhardwaj
Surya Bakshi

THE CASE

Scope of the Merger

Profits

Edge over Competition

Fleet Size

REASONS LEADING TO MERGER

Increased Competition
Increasing Operating Cost

EXPECTED OUTCOME

Profitability
Economies
of Scale
Volume
Discount

Employee
Expertise

ACTUAL OUTCOME
Losses
HR Mismanagement
Employee
dissatisfaction
Higher
Competition

Customer
dissatisfaction

AREAS OVERLOOKED

Work
culture/Timings

Organisation
Structure/Seniority
Roles

Employees
Oppositions

Fleet Size and

Operating Styles

CAUSAL LOOP DIAGRAM

I. T.
+ Intergration

+
+
H. R.
Merger +
Merger
Merger
+
+
+ Effectiveness +Fleets Integration
I. T.+
+
Effectiveness
Need
for
+
Merger
+ from Merger
Effectiveness
Synergy
Employee
Synergy
from
Integration
+
+
Consultancy
+
Categories
+ of
Effectiveness
+
Merger
Synergy
from
Requirement
+
Effectiveness
Merger
+
+
Fleets
Convenience
to
H.
R.
Leadership
Synergy from
Categories of
Employees Fleets
Fleet
Merger
Synergy
from
Merger
Convenience
to
Customers
Integration
Crisis
+
Synergy
from
Fleets Effectiveness
Merger
Requirements
+
+
+
Disparity
in
H.R.
Merger
Customers
+
Merger
for
Economies
of
+Need
policies
Hiring
+
Action
Variation
in
Skill
Need for
Scale
Need for
+ Set of Pilots
+
+
Consultancy
- +
+
Consultancy
Customer
B
+
Variation in Skill
Instability
+
+
Disparity
in
H.
R.
B
Hiring
Satisfaction+
Volume
forfor
+Need
Set of Pilots
Need
Need
for
B B Discount
Policies
- +
Fleets
Loss
Consultancy
Customer
Consultancy
Consultancy
+
R
Need for
+
Satisfaction
Satisfaction
of
+
+
Better
+
+
+++
+
Better
Differential
Action
Operating
Employeee
fleet-crewTicket
Ratio
Differential fleet-crew
Need for
+
Ratio of Salary
Payment
Cost
Advantages to
Payment of Salary
Booking
+
Action Competitors
Need for
+
Operating
+for
+
Need
Need
for
Economies
- of
Satisfaction of Action
Loss Cost
+
Action
Market+Share
Action +
-Ticket
Fuel Price Strikes
+
Scale
Employees
and
Employees
Employees
Delay
+ and/or
+ +
Loss
Delay
and/or
+
+
+
+
Loss Booking
Revenue Revenue
Dissatisfaction
Labour Unrest
Dissatisfaction
- Volume
Cancellation
Cancellation Loss Loss
Strikes
- &Strike & Labour +
+
Revenue
Discount
Fuel Price - + - Labour Unrest +
Unrest +
+

QUESTIONS
THANK YOU

REFERENCES
o

http://www.peoplematters.in/article/2012/06/03/c-suite/flights-of-fantasy-ai-ia-merger/1823

http://businesstoday.intoday.in/story/air-india-indian-airlines-merger-makes-for-great-casestudy/1/185157.html

http://www.slideshare.net/vivekmhatre2/38155834-airindiaindianairlinesmerger

http://businesstoday.intoday.in/story/air-india-indian-airlines-merger-makes-for-great-casestudy/1/185157.html

http://www.hindustantimes.com/business-news/sectorsaviation/air-india-indian-airlines-merger-

complete/article1-244289.aspx
o

http://articles.economictimes.indiatimes.com/2012-08-19/news/33273003_1_seniority-listsdharmadhikari-committee-career-progression

http://www.rediff.com/money/2006/mar/24guest1.htm

https://in.finance.yahoo.com/news/anatomy-of-a-failed-ai--indian-airlines-merger-.html

http://www.studymode.com/essays/Amalgamation-Of-Air-India-Limited-And-471759.html