INTRODUCTION AIR INDIA Air India is Indias national Airline.

Air Indias history can be traced to October 15, 1932. On this day J.R.D. Tata, the father of Civil Aviation in India and founder of Air India, took off from Drigh Road Airport, Karachi, in a tiny, light single-engine de Havilland Puss Moth on his flight to Mumbai via Ahmedabad. Air India was earlier known as Tata Airlines. At the time of its commencement, Tata Airlines consisted of one Puss Moth, one Leopard Moth, one palm-thatched shed, one whole time pilot, one part-time engineer, and two apprentice-mechanics. Tata Airlines was converted into a Public Company under the name of Air India in August 1946. On March 8, 1948, Air India International Limited was formed to start Air Indias international operations. On June 8, 1948, Air India started its international services with a weekly flight from Mumbai to London via Cairo and Geneva with a Lockheed Constellation financial aircraft. condition In of early 1950s due to the deteriorating various airlines,

Government decided to nationalize air transport. On August 1, 1953 two autonomous corporations were created. Indian Airlines was formed with merger of eight domestic airlines to operate domestic services, while Air India International was established to operate the overseas services. The word 'International' was dropped in 1962. With effect from March 1, 1994, the airline has been functioning as Air India Limited. Air India's worldwide network today covers 44 destinations by operating services with

its own aircraft and through code-shared flights. Important destinations covered by Air India are Bangkok, Hong Kong, Jakarta, Kuala Lumpur, Osaka, Singapore, Tokyo, Seoul, Dar-esSalam, Nairobi, Frankfurt, London, Paris, Birmingham, Abu Dhabi, Al Ain, Bahrain, Dammam, Doha, Dubai, Jeddah, Muscat, Riyadh, Kuwait, Los Angeles, Chicago, Newark, New York, and Toronto. Air Indias fleet consists of 38 aircrafts. These include 12 Boeing 747400, 1 Boeing 747-400 COMBI, 2 Boeing 747-300 COMBI, 19 Airbus 310-300, and 4 Boeing 777-200 Incorporation Established in 1953 under Air Corporations Act Became Public Limited Company in 1994 Registered Office: New Delhi Head Office: Mumbai Authorized Capital: Rs 500.00 Crores Paid-up Capital: Rs 153.84 Crores

INDIAN AIRLINES

The erstwhile Indian Airlines Limited or currently

known as Indian, was Indias first state owned domestic airline. Indian Airlines was set up under the aegis of federal Union Ministry of Civil Aviation and based in New Delhi. Its main bases were the international airports in Chennai, Mumbai, Kolkata and New Delhi. It has now been merged with Air India for corporate purposes, though for now, continues to issue its own tickets. .Indian Airlines came into being with the enactment of the Air Corporations Act, 1953. It was renamed "Indian" on December 7, 2005. Indian Airlines started its operations from 1st August, 1953, with a fleet of 99 aircraft and was the outcome of the merger of seven former independent airlines, namely Deccan Airways, Airways-India, Bharat Airways, Himalayan Aviation, Kalinga Air Lines, Indian National Airways and Air Services of India. The year 1964 saw the Indian Airlines moving into the jet era with the introduction of Caravelle aircraft into its fleet followed by Boeing 737-200 in the early 1970. Along with its wholly owned subsidiary Alliance Air, it flies a fleet of 70 aircraft including Airbus A300, Airbus A320, Airbus A319, Boeing 737, Dornier Do-228, ATR-4, Airbus A319, A320 & A321. Along with Indian cities, it flies to many foreign destinations which include Kuwait, Singapore, Oman, UAE, Qatar, Bahrain, Thailand, Singapore, Malaysia, and Myanmar besides Pakistan, Afghanistan, Nepal, Bangladesh, Sri Lanka and Maldives.

Indian Airlines Flight free run over the Indian skies ended with the entry of private carriers after the liberalization of the Indian economy in the early 1990's when many private airlines like Jet Airways, Air Sahara, East-West Airlines and ModiLuft entered the fray. The entry of low-cost airlines like Air Deccan, Kingfisher Airlines and Spice Jet has revolutionized the Indian aviation scenario. Indian has been a pioneer in the aviation scene in India. It was the first airline in India to introduce the wide-bodied A300 aircraft on the domestic network, the flyby-wire A320, walk in flights and easy fares. It flies to 76 destinations - 58 within India and 18 abroad. It has a total employee strength of around 19,300 employees along with Alliance Air and carries over 7.5 million passengers annually, along with Alliance Air. The main base of the Indian airlines are Chatrapati Shivaji International Airport, Mumbai; Indira Gandhi International Airport, Delhi; Netaji Subhash Chandra Bose International Airport, Kolkata; Chennai International Airport, Chennai. After being granted permission from the Government of India, on 15 July 2007, Indian Airlines and Air India merged and started to operate as a single entity. Post-merger the new airline will be renamed as Air India. This new airline is also a member of the Star Alliance, the largest airline alliance. The government allowed the formation of a few new limited service airlines in the 1970s: Air Works India, Huns Air, and Golden sun Aviation. None of them had long life spans. Around 1979, IAC dropped the word "Corporation" from its name. Britain's Financial Times described Indian Airlines as the world's third largest domestic carrier in the mid-1980s. With business growing at better than ten percent a year, it was increasing its capacity as part of a plan to merge Indian Airlines with Air-India, the state's international carrier, two leading young industrialists were appointed to chair the boards of the two companies in autumn 1986. Neither these plans nor the new chairmen lasted very long. In 1987, Indian Airlines carried 10 million passengers and earned a profit of Rs630 million ($48 million). However,

the quality of its service was facing criticism, to be heightened by the coming entry of new carriers into the market.

SHARE CAPITAL 2.1.1 As per the latest audited accounts on March 31, 2006 the capital structure of the Transferor Companies is as under: A. Transferor Company No 1 AIR INDIA AUTHORIZED SHARE CAPITAL AMOUNT 42, 56, 36,820 Equity Shares of Rs. 10 each Rs. 425, 66, 38,200/- 74, 36,318 Redeemable Preference Shares Rs. 100 each Rs. 74, 36, 31,800/- Total Rs. 500, 00, 00,000/- ISSUED, SUBSCRIBED & PAID-UP SHARE CAPITAL AMOUNT 15, 38, 36,427 Equity shares of Rs. 10 each fully paid Rs. 153, 83, 64,270/-5 | P a ge

As on April 1, 2007 the Authorized Capital, the Issued, Subscribed and Paid up Share Capital of AI remains the same. B. Transferor Company No 2 INDIAN AIRLINES AUTHORIZED SHARE CAPITAL AMOUNT 94, 99, 58,200 Equity Shares of Rs. 10 each Rs. 949, 95, 82,000/- 50, 04,180 Redeemable Preference Shares Rs.100 each Rs. 50, 04, 18,000/- Total Rs. 1000, 00, 00,000/ISSUED, SUBSCRIBED&PAID-UP SHARE CAPITALAMOUNT 43, 21, 36,489 Equity shares of Rs. 10 each fully paid Rs. 432, 13, 64,890/- As on April 1, 2007 the Authorized Capital, the Issued Subscribed and Paid up Share Capital of IA remains the same As on April 1, 2007 the capital structure of the Transferee Company is as under:

Mutual Distrust and strong unions The distrust between the two sides of Air India and Indian Airlines is almost palpable. For sure, many jobs will become redundant when functions are unified. Many of those appointed are from Indian Airlines, fuelling resentment among Air India employees. Integration has become a tightrope walk for the management. Strong opposition from unions against managements cost-cutting decisions through their salaries have led to strikes by the employees/ Increased Competition The flux at the top has led to delays in decision-making at a time when demand for air travel has dropped around 8-10% over the last year and competition has heated up in the sector. The national carriers domestic market share has been under pressure ever since budget carriers and new private airlines took wing. Air Indias domestic market share dropped from 19.8% in August 2007, when the merger took place, to 13.9% in January 2008 before rising to 17.2% in February 2009. Lower load factor Though the overall operating performance has been steady, Air India passenger load factor of 63.2%, which was the companys record, lags the industry average of 75% in 2006-07.The load factor difference is even greater when compared to other low fares carriers such as Air Deccan. The companys load factor is decreasing year by year, in 2005- 06 load factor is 66.2% which is more than present load factor. Air India load factor is likely to be low because of the much higher frequency operated on each route. Lower load factor could decrease the companys margines. Indian Airlines

In an earnest attempt to pave way for the emergence of a single entity as India's National Flag carrier, Indian Airlines and Air India, India's premier airlines were merged to form Air India to provide an integrated international and domestic footprint, for the advantage of travelers. This Indian Airlines and Air India merger has brought seamless integration of

domestic and international flights, allowing passengers to check in for their international flight from any domestic point in India. Indian Airlines, in its new avtar of Air India can be identified with its key color as orange and a contemporary graphic representation of a flying swan with the Konark Chakra placed inside it, the imagery depicting traditional Indian hospitality and service. Indian Airlines or the new Air India has an improved frequent flier programs Indian Airlines Sector Air India connects 146 international and domestic destinations around the world, including 12 gateways in India with Air India Express, which is a fully-owned subsidiary of Air India. Some destinations are through code share. With the commencement of the merger, all sectors covered by the erstwhile Indian Airlines are now covered by Air India. AI has a network that spans from Asia to America covering Gulf, Africa and Europe. In all, it covers 89 destinations ? 49 within India and 40 abroad. AI flies to various destinations in India, which include important cities like Delhi, Bangalore, Mumbai, Kolkata, Lucknow, Hyderabad, Pune, and Chennai along with regional destinations like Ahmedabad, Gorakhpur, Allahabad, Bhubaneshwar, Ranchi and others. For cheap airfares and great deals on international and domestic air tickets, including popular. Indian Airlines Fleet Air India, together, has a fleet of more than 200 aircrafts, which includes 3 wide bodied airbus A300s, 47 fly-by-wire airbus A320s, 3 Airbus A319s, 11

Boeing 737s, 2 Dornier Do-228 aircraft, 4 ATR-42 and others. Air India has placed orders for 67 new aircrafts, which includes 4 Boeing 777-200LR's, 12 Boeing 777-300LR's, 27 Boeing 787-8's, 15 A321 Airbuses and 9 A319 Airbuses. The new fleet has brought in a product and service level, that is the best in class, which includes in-flight entertainment, better seats and enhanced inflight service. A combined schedule enables better connectivity to the largest international airline in India as well as improved service to various domestic points in India. Indian Airlines Baggage Rules According to Indian Airlines baggage policy, luggage of different weights are permissible for different classes Economy (20 kgs), Executive Class (30 kgs) and First Class (40 kgs). Linear luggage dimensions for checked shouldnt exceed more than 158 cms. Indian airlines cabin baggage policy restricts the cabin baggage size to 115 cms and its weight to 8 kgs. Also, it must be noted that infants travelling on an Indian airlines flight are allowed 10 kgs of baggage. However they aren't entitled to a seat. Indian Airlines Flight Tickets at lowest Airfares! Book Cheap Indian Airlines Air Travel Ticket at MakeMyTrip India. Find Indian Airways flight schedules and airline status online. 'Air India merger on paper only' By: Bipin Kumar Date: 2012Singh 02-01

Place: Delhi

Sources within aviation ministry react to Justice Dharmadhikari's report that mentions five years after Air India and Indian Airlines were merged into a single entity, both airlines continue to function separately with few steps being taken to form a single unit Justice DM Dharmadhikari, with his threemember panel, submitted their report on the integration of the Air India employees with erstwhile Indian Airline employees to Civil Aviation minister Ajit Singh yesterday, five years after the two airlines were merged with each other.

Fresh Findings: (Retired) Justice Dharmadhikari presents the report on Air India HR issues to the Union Minister for Civil Aviation Ajit Singh, in New Delhi yesterday.

According to top sources inside the civil aviation ministry, the 100-page report has mentioned that since 2007 when the two state-run airlines merged, the two have not functioned as a single entity. The findings reflected that five years on, no concrete steps have been taken towards staff integration or for operations. "Justice DM Dharmadhikari, submitted his report on Tuesday. On the basis of its findings it has made some serious recommendations on various aspects including staff integration in the country's national carrier. The report has categorically asked Air India management to focus on staff integration on the basis of recommendations made," said a ministry official on condition of anonymity. Sources inside Air India too agree with the findings of the report stating that both the airlines function as two different entities. "The merger is only on paper not in operation. On the

ground despite being merged, the airline functions as two different entities. In fact, the pilots from the Indian Pilots Guild (IPG) that operate Air India flights continue to operate on the Boeing aircraft while Indian Airline pilots from the Indian Commercial Pilots Association (ICPA) operate on the Airbus fleet. Not a single pilot has been changed and it's the same story with cabin crewmembers and personnel from other departments. Moreover, Air India staff work for five days whereas Indian Airlines staff members work for six days," said a source. When MiD DAY contacted Justice Dharmadhikari, he refused to comment. "I am busy with something, I cannot talk now," he said. While Civil Aviation Minister Ajit Singh said, "We've received the report. We'll study the recommendations and do whatever that needs to be done." Expertspeak Captain Mohan Ranganathan, a former Air India pilot and aviation expert said, "I believe that no concrete step was taken by the management to

address the problems including staff integration, which further increased the problem. The mismanagement increased after the merger and the people who were responsible for the entire mess were never held accountable." Captain D S Mathur former MD of Air India said, "First of all there was no need to do it as both airlines were owned by the government. Instead they should have made it a holding company bringing the two airlines under the same umbrella where the two airlines would have operated with two different tasks." Air India (AI) has sustained huge losses in the last three years and is getting crushed under aRs. 40,000 crore debt. Staff indiscipline, mismanagement and ministerial malfeasance have all done in an airline. It was one of the best aviation companies in the world even after nationalization. Today, however, indiscipline is rife and has manifested itself as poor on-time performance (65.5% against industry average of 85%) and the highest cancellation rate (2.9% against industry average of 1.2%) for domestic flights. Mismanagement was quite apparent when the airline went in for expansion of its fleet even as it did not have money to pay its staff, resorting to Marie Antoinettes eating the cake option. The staff unions claim that

AI was stripped of profitable routes and convenient timings of its flights to favour private airlines, by ministerial mandate, does look genuine and needs further investigation. Thus, AIs pathetic performance highlights the axiom that running business is not the business of government. Graphics by Jayachandran/Mint Recent data (2010) shows that both AI and Jet Airways had comparable revenues of about Rs. 10,000 crore. Both had around 100 aircraft. But Jet had a operating loss of Rs.550 crore. while AI had a operating loss of Rs. 3,000 crore. Jet has around 13,000 employees, and spends Rs. 1,300 crore on them, while AI has 29,630 employees and spends Rs.3,400 crore on them. Salaries as reported by industry source for a cabin crew member in Jet average Rs. 30,000 a month; for AI it is Rs. 40,000 a month. Jet spends Rs. 3,200 crore on fuel while AI, for the same revenue, spends Rs. 5,000 crore. AI has been engaging a plethora of consultants: Booz Allen Hamilton to suggest cost-cutting; three other foreign firms for operational restructuring and a Texas-based technology company Sabre Holdings Corp. to help redraw its flight network and save on fuel costs. It appointed SBI Capital Markets for financial

restructuring and Deloitte Consulting to advise on macro issues and review restructuring. With such heavy reliance on consultants, the internal management, down from the CMD (a bureaucrat, not an airline professional) was weak. Bringing outside professionalsas chief operating officer and chief of trainingat high salaries, but under a bureaucrat CMD, also did not help, and AIs losses continued to grow. The merger of AI with domestic carrier Indian Airlines (IA) incidentally the better of the twowas, probably, a mistake in retrospect. In September 2006, Accenture was hired, and it suggested a merger on the ground that consolidation can help companies increase efficiency and scale and serve customers more effectively. It added that the key to realizing these advantages, however, is planning for pre- and post-merger activities and integration. That the pay disparity between the higher-paid AI and the lower-paid IA staff should have been smoothed out seems to have escaped the attention of both consultants and the company, though Accenture seems to have covered itself with a caveat in this direction. AIs unpunctuality record has taken a toll on its business class flyers with business folks, with fixed meeting schedules, deserting it in droves and opting for other punctual airlines. The low-cost airline IndiGo boasts the best punctuality ratings; and it is one of the few profitable ones. Interestingly, Singapore Airlines, also a national carrier, has a premium even over many other private

international airlines because of its punctuality, cleanliness and efficiency of service. Of course AI, too, charges rates higher than competitors, but that is because it is insensitive to its demand since it is a spoilt child of the government, which funds its inefficiency. AI reciprocates the favour by delaying departures for government VIPs and reserving seats in the first row of business and economy class for pass-holding politicians, much to the chagrin of paying customers. For an international airline, its Web booking portal is awful, its use of the entertainment system indifferent, its frequent flyer programme management highly flawed with a number of mistakes and irrationalities and its customer sensitivity poor. From online ticket booking to seat allotments (some are always reserved for a politician and other influential persons) to seniority (age)-based assignment of on-flight service personnel on luxury routes, AI continues to lag its private sector counterparts. Having said these, it must be said that once in the air, it is really one of the most loveable airlines. Its food is good, leg space is better and in-flight service quite hospitable. It has lower than the average number of complaints; IndiGo and GoAir have significantly higher number of complaints. Its pilots are safe and achieve smooth landing.

What is the remedy? Immediately, sell its real estate property in prime locations and raise money. Next, professionalize the management and bring in private sector business practices, including removing job security.