Air India - Analysis Report

A KNOWLEDGEMENT

The making of any report calls for contribution and cooperation from many others, besides the

individual alone. It is the result of meticulous efforts put in the by many minds that contribute to

the final report formation. Several eminent people at National Aviation Company of India

Limited (NACIL) have made valuable contributions to this report through their inputs. I duly

acknowledge my gratitude to each one of them.

At last, I would like to acknowledge all those who helped, directly or indirectly, at

various areas in completing my project and related study and made my training a wonderful

experience.

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TABLE OF CONTENTS

S.No Particulars Page No.

1. Executive summary 3

2. Introduction to the topic 4-10

3. Introduction to Airlines Industry and company profile11-18

4. Benefits provided to employees 19-32

5. Productivity Linked Incentives 33

6. Comparison of different Airline companies with AIR INDIA

(NACIL)

34-36

7. IT section in AIR INDIA (NACIL) 37-39

8. Corporate Objectives. 40

9. Research Methodology. 41-43

10. Data Analysis 44-68

11. Findings and Analysis 69

12. Conclusion 70

13. Recommendations 71

14. Limitations 72

15. Bibliography. 73

16. Appendices 74-76

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EXECUTIVE SUMMARY

This Project aims to study: the strategies that AIR INDIA (NACIL) is implementing to retain its

employees, and to compare CRM strategies of NACIL with other Airlines Companies.

My study was confined to HR and Commercial Department of AIR INDIA. Under HR

department I was studying all policies that NACIL is implementing to retain its employees and

under Commercial department I studied CRM strategies related to customers. This study has

conducted to know the effectiveness of CRM strategies for internal as well as external customers

of AIR INDIA (NACIL).This study focuses on improvement in existing CRM strategies of the

company. It also aims to study the success of existing policies towards relationship building,

internal marketing, most preferred policy, satisfaction level of employees.

This project has started with study of the organization to have a fair idea about work

culture. I conducted a survey through questionnaire, interview and also got information from

collecting the secondary data available. A structured non-disguised, questionnaire was

formulated in order to gather primary information from the employees. The first approach to find

out the right information about different policies is through verbal talking to employees whether

that person is related to my area of study or not. Then after collecting all the information

employees further gone through to fill up the questionnaire.

In the present time, AIR INDIA (NACIL) is a very good employer as it has just 6%

attrition rate. Most of the employees are satisfied with the organization. But work culture of

NACIL should improve to overcome with so many hurdles that this company is facing now a

days.

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INTRODUCTION TO THE TOPIC

AIR TRAVEL INDUSTRY:

Aviation Industry in India is one of the fastest growing aviation industries in the world. With the

liberalization of the Indian aviation sector, aviation industry in India has undergone a rapid

transformation. From being primarily a government-owned industry, the Indian aviation industry

is now dominated by privately owned full service airlines and low cost carriers. Private airlines

account for around 75% share of the domestic aviation market. Earlier air travel was a privilege

only a few could afford, but today air travel has become much cheaper and can be afforded by a

large number of people.

The origin of Indian civil aviation industry can be traced back to 1912, when the first air flight

between Karachi and Delhi was started by the Indian State Air Services in collaboration with the

UK based Imperial Airways. It was an extension of London-Karachi flight of the Imperial

Airways. In 1932, JRD Tata founded Tata Airline, the first Indian airline. At the time of

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independence, nine air transport companies were carrying both air cargo and passengers. These

were Tata Airlines, Indian National Airways, Air service of India, Deccan Airways, Ambica

Airways, Bharat Airways, Orient Airways and Mistry Airways. After partition Orient Airways

shifted to Pakistan.

In early 1948, Government of India established a joint sector company, Air India International

Ltd in collaboration with Air India (earlier Tata Airline) with a capital of Rs 2 crore and a fleet

of three Lockheed constellation aircraft. The inaugural flight of Air India International Ltd took

off on June 8, 1948 on the Mumbai-London air route. The Government nationalized nine airline

companies vide the Air Corporations Act, 1953. Accordingly it established the Indian Airlines

Corporation (IAC) to cater to domestic air travel passengers and Air India International (AI) for

international air travel passengers. The assets of the existing airline companies were transferred

to these two corporations. This Act ensured that IAC and AI had a monopoly over the Indian

skies. A third government-owned airline, Vayudoot, which provided feeder services between

smaller cities, was merged with IAC in 1994. These government-owned airlines dominated

Indian aviation industry till the mid-1990s.

In April 1990, the Government adopted open-sky policy and allowed air taxi- operators to

operate flights from any airport, both on a charter and a non charter basis and to decide their own

flight schedules, cargo and passenger fares. In 1994, the Indian Government, as part of its open

sky policy, ended the monopoly of IA and AI in the air transport services by repealing the Air

Corporations Act of 1953 and replacing it with the Air Corporations (Transfer of Undertaking

and Repeal) Act, 1994. Private operators were allowed to provide air transport services. Foreign

direct investment (FDI) of up to 49 percent equity stake and NRI (Non Resident Indian)

investment of up to 100 percent equity stake were permitted through the automatic FDI route in

the domestic air transport services sector. However, no foreign airline could directly or

indirectly hold equity in a domestic airline company.

By 1995, several private airlines had ventured into the aviation business and accounted for more

than 10 percent of the domestic air traffic. These included Jet Airways Sahara, NEPC Airlines,

East West Airlines, ModiLuft Airlines, Jagsons Airlines, Continental Aviation, and Damania

Airways. But only Jet Airways and Sahara managed to survive the competition. Meanwhile,

Indian Airlines, which had dominated the Indian air travel industry, began to lose market share to

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Jet Airways and Sahara. Today, Indian aviation industry is dominated by private airlines and

these include low cost carriers such as Deccan Airlines, GoAir, SpiceJet etc, who have made air

travel affordable.

Airline industry in India is plagued with several problems. These include high aviation turbine

fuel (ATF) prices, rising labor costs and shortage of skilled labor, rapid fleet expansion, and

intense price competition among the players. But one of the major challenges facing Indian

aviation industry is infrastructure constraint. Airport infrastructure needs to be upgraded rapidly

if Indian aviation industry has to continue its success story. Some steps have been taken in this

direction. Two of India's largest airports-Mumbai and New Delhi-were privatized recently. Two

Greenfield airports are coming up at Bangalore and Hyderabad in southern India. Investments

are pouring into almost all aspects of the industry, including aircraft maintenance, pilot training

and air cargo services. The future prospects of Indian aviation sector look bright.

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CRM IN AVIATION

“CRM is a customer-focused business strategy designed to optimize profitability, revenue and

customer satisfaction."

Why should Airlines do CRM?

Anything else ?

50 60% of customers are not profitable and customers providing less than 20% of the profit

potential consume 60 80% of front office support

The cost of acquiring a new customer is 6 times the cost of selling to a current customer

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69% of customers leave because of poor service. Only 13% left because of product dissatisfaction

and 9% because of price.

The Aviation horizon in India is becoming increasingly competitive. Airlines need to stay more

customers focused and employ effective CRM regardless of whether they are PSUs, full-service

providers, Low-Cost Carriers (LCCs) or innovators.

Need for a Customer-focused Initiative

(i) Travel is becoming a ‘Commodity’

Increased economic activity has meant that more and more people are travelling for

business as well as leisure purposes. The situation today is such that travel, overseas

as well as domestic, has become so common and prevalent that it can be easily termed

a ‘commodity’.

(ii) Mass Marketing is ‘Dead’

The vast number of options and choices available to a Customer and the explosion of

information have meant that every customer is having individualized needs which are

unique and cannot be generalized. Today, every customer expects the Marketer to

cater to his / her own needs. Hence, the era of Mass Marketing is almost dead. The

need of hour is one-to-one marketing wherein every customer is taken care of for his /

her special needs.

(iii) Mass Marketing is the ‘Easy Bit’

The comforts which Marketers have enjoyed in the earlier times were mainly because

of the generalizations which were made while addressing customer needs. One

advertising message or campaign was thought to be sufficient for reaching the

masses, making it easier for the Marketers.

(iv) Its about ‘Revenue’ and ‘Competitive Edge’

The increasing demands of customers and the stakeholders has meant that costs as

well as prices have to be contained on one hand and on the other the revenues need to

be increased for gaining a sustainable competitive advantage over the competitors.

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360 Degree Customer view: Source – Magazine

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ABOUT “SIMPLIFYING THE BUSINESS” (StB)

In this rapidly changing world the biggest challenge an Industry face is to keep pace with the

increasing customer’s demands for services and at the same time achieving the targets of cost

reductions which are so much essential for revenue maximization.

The Aviation Industry has been both the driver as also the sector, which has been affected most

by the sweeping waves of globalization. Today, more than ever before, the passenger traffic is

touching new highs as business / leisure travel is rapidly increasing.

To face the challenges, more than anything else, the Air Transport Industry needs change.

Mounting losses, high oil prices and lower fares have forced Airlines to rethink current models

and re-engineer the business. Efficiency is the battle cry as air transport races to become a low

cost Industry. The challenge to find cost savings in the Industries complex process, whilst, at the

same time, enhancing convenience for the consumer.

As a result, in 2004 the CEOs of IATA’s member Airlines mandated its association to lead in

Industry wise programmes designed to ease the transport of passenger and freight and deliver $

6.5 billion in annual Industry savings.

It’s called “SIMPLIFYING THE BUSINESS”

‘Simplifying the Business’ is comprises of five projects that together form an end-

to-end simplified travel process : -

1. 100% Electronic Ticketing by the end of 2007 (ET)

2. Common use self-service kiosks for check-in (CUSS)

3. Bar-coded boarding passes (BCBP)

4. Radio frequency identification for baggage handling (RFID)

5. IATA e-freight – freeing cargo of paper by the end of 2010

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Out of the five I.T. initiative taken by IATA, Electronic Ticketing (ET) is the most critical it of

huge importance to passengers, will deliver US $ 3 billion in savings, and has a fast approaching

deadline. The ease of issuing tickets changing travel plans, making last minute travel decisions

and the elimination of lost tickets are compelling consumer benefits. E-Ticketing is the basis of

other passenger services such as common use self-service check in and the ability to print bar

coded boarding passes via the internet.

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INTRODUCTION TO AIRLINES INDUSTRY

AND COMPANY PROFILE

During the 1980s and 1990s, the airline industry underwent significant change. The industry,

which had been heavily regulated and controlled, was liberated fro m governmental oversight

and released to the vagaries of the marketplace in 1978. What followed was a period of evolution

and metamorphosis that changed the nature of flying forever. At the same time, serious safety

questions arose.

DEREGULATION:

When the firsts airlines appeared after World War I, fewer than six thousand passengers a year

traveled by air. By the 1930s, the Big four- Eastern Airlines, United Airlines, American Airlines,

and Trans World Airlines (TWA) - dominated commercial air transport. These companies had

garnered exclusives rights from the federal government to fly domestic airmail routes, and Pan

American (Pan AM) held the rights to international routes. The hold of these four airlines on

their lucrative contracts was virtually unchallenged until deregulation in 1978. Even after the

formation of the Civil Aeronautics Board (CAB) in 1938, formed to license new airlines, grant

new routes, approve mergers, and investigate accidents, the Big Four and Pan Am continued to

be guaranteed permanent rights to these routes. Infact, no new major scheduled airline was

licensed for the next four decades.

In October 1978, Congress passed the Airline Deregulation Act (49 U.S.C.A. § 334 et seq.),

ending the virtual monopoly held by the Big four and Pan Am. The government’s goal was to

promote competition within the industry. The act gave airlines essentially unrestricted rights to

enter new routes without CAB approval. The companies could also exit any market and raise and

lower fares at will.

The immediate effect of deregulation was a drop in fares an and increase in passengers. New cut-

rate, no-frills airlines, such as People Express Airlines and New York Air offered travelers the

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lowest fares ever seen in the industry. Forced to compete to fill their planes, the larger companies

lowered their prices as well. Then the oil-producing countries in the Middle East formed a cartel

and raised the price of jet fuel 88% in 1979 and an additional 23% in 1980. Combined with

tumbling fares and increased passenger loads, the higher cost of jet fuel caused airlines’ profits to

drop.

Labor strike also affected the industry in the early days following deregulation. In 1981, after

years of working under stressful conditions made worse by deregulation, the professional Air

traffic controllers Organization (PATCO) called a strike, demanding shorter working hours and

higher pay. The union expected support and cooperation from the Reagan administration because

of a sympathetic letter President Ronald Reagan had sent to PATCO when he was campaigning

for the presidency. In the letter, he pledged to whatever was necessary to meet PATCO’s needs

and ensure the public’s safety. But Reagan ordered the strikers to return to work within three

days or be fired. Most did not return. The Federal Aviation Administration (FAA) ordered all

carriers to temporarily reduce their number of flights by one-third. Newer and smaller carriers

found themselves increasingly unable to gain access to lucrative routes. Rebuilding the air traffic

controller force took years during which landing slots at 5he largest airports remained restricted

and small carriers unable to compete, simply abandoned their attempts to break into the larger

markets.

To some extent, competitive pricing actually had the opposite effect of what the deregulators

intended. When the small “upstart” companies offered extremely low fares, the larger companies

responded aggressively. For example, in 1983, People Express announced $99 round –trip fare

between Newark, New Jersey and Minneapolis-St. Paul. Northwest Airlines, which had always

dominated the Twin Cities market, undercut People by instituting a$95 fare for the same

destination and scheduling extra departures around People’s. As a result, people decided it could

not compete and withdrew from the market. Passengers enjoyed the benefit of lower fares, but

only for a short time before the competitive effect faded and high fares returned.

When deregulation brought competitive pricing, the large carriers began to realize that it was not

profitable for them to do business the way they had in the past. The first major change they made

was to abandon the practice of crisscrossing the continent with nonstop flights to many different

cities. Instead the major airlines scheduled most of their flights into and out of a central point of

hub, where passengers might need to change to different flight to complete their journey. One

airline controlled most of the reservation desks and gates at a particular hub- for instance. United

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in Chicago, Northwest in Minneapolis-St.Paul, America in Dallas–Fort worth, and Delta in

Atlanta. For this reason, and because passengers tend trod is like changing carriers in the middle

of a trip ,the dominant company in a hub had a tremendous advantage over the competition in

influencing what carrier a passenger would choose .By 1990, two-thirds of all domestic

passengers traveled though a hub city before arriving at their final destination .of those

passengers, eight out of ten remained on the same airline throughout their journey .By 1992 ,

there were at least twelve “fortress hubs” or airports where one airline controlled more than 60

percent of the traffic .Passengers who flew out of these hubs paid over 20 percent more than they

would have for a comparable trip out of an airport that was not a hub.

After deregulation, the air lines also came to realize that needed a more efficient way to book

reservation and issue tickets. It is difficult to imagine, in these days of highly sophisticated

computers and split-second communications, that until the late 1970s and early 1980s airline

schedules were contained in large printed volumes, reservations were taken over the telephone

and tailed manually at end of each day , and tickets were written by hand . to streamline this

process the large companies initially proposed a joint computer system , listings schedules and

fares .the justice department objected on the grounds that such a system would be

anticompetitive and would violate the Sherman Anti-Trust Act (15 U.S.C.A. § 1 et seq. [1890]).

Instead, each airline developed its own computer system and entered data in a manner that

unfairly biased travel agents ‘choices in favor of the carrier that owned the system. Though

skillful manipulation of the data, the airlines were able to put competitors at a disadvantage. For

example, the airline that owned the system might enter the data so that all its flights to a

particular destination appear on the screen before any flights of a competitor.

In a future attempt to win loyalty from passengers, the large airlines instituted frequent-flier

programs, which awarded free tickets to travelers after they logged a certain number of miles

flown with the company.

The combination of hubs, central computer reservation systems, and frequent-flier programs

made the major airlines almost invulnerable in large markets.

Deregulation also brought a period of financial upheaval and an epidemic of “merger fever”. A

number of companies ceased doing business between 1989 and 1992, and still other merged with

stronger, more aggressive companies. Among the companies that disappeared from the skies

were Eastern. Pan Piedmont and Midway Airlines. USAir and Northwest required cash

infusions though cooperative arrangements with foreign airlines. Even financially strong carriers

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such as United and American lay off employees and abandoned plans to p0urchase new aircraft,

which added to the woes of the depressed aerospace industry.

By 1993, the industry began to rebound. Continental Airlines and TWA emerged from

bankruptcy, and a few small carriers, such as Kiwi International, formed by former Eastern

Pilots, responded to the public’s demand for low fares and began to make incursions into the

established markets, although they generally shied away from directly challenging the giants.

Older carriers for the most part chose to stay with their hub-and-spoke systems, and several,

including Northwest, Continental, and TWA, gains concessions from their unions that helped

them emerge from apparently imminent financial ruin.

The mergers and buyouts of the 1980s were often accomplished in an atmosphere of hostility and

distrust. Charges of predatory pricing and other unfair business practices were leveled by one

carrier against another. During the 1980s, the Justice Department’s Antitrust Division made a

number of grand jury investigations into alleged anticompetitive activity by the major airlines,

but no indictments were handed down. However, the companies that survived did not emerge

unscathed. Many of the acquisitions were leveraged buyouts that left the reconstituted companies

heavily in debt. With profits insufficient to cover their enormous debt loads, the companies

frantically competed for business, engaging in fare wars that produced a dizzying array of

pricing plans with equally numerous and confusing restrictions. Some of the tactics were

questionable, but, again, not clearly illegal. In 1993, American Airlines was sued by Continental

and Northwest for alleged predatory pricing during a 1992 fare war. The jury took just over two

hours to return a verdict in favor of American.

By 1993, a creative new solution to the airlines’ financial woes began to emerge. Northwest

avoided bankruptcy when its unions agreed to wage concessions in return for part ownership of

the airline. Then, in1994 after seven years of negotiating, employees of United gained majority

control of their company in return for deep pay and benefits cuts. Secretary of Labor Robert B.

Reich commented that other financially troubled companies would undoubtedly follow suit:

“From here on in, it will be impossible for a board of directors to not consider employee

ownership as one potential business strategy”. However, dome industry analysts doubted that

employee ownership would be effective in the long run because of inherent conflicts between

labor and management, or between different labor groups. “It can’t work,” declared former

Chrysler chairman Lee A. Iacocca. “What do you think will happen when n it’s a choice between

employee benefits and capital investment?”

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Proponents of deregulation are confident that the changes accompanying it will result in a

stronger, more stable, and efficient industry, better reequipped than ever to serve the needs of the

flying public. Others maintain that at least some degree of regulation is needed to guarantee

safety and fair competitive practices.

SAFETY:

In troubling criticism of deregulation is that aggressive competition has forced airlines to cut

corners, resulting in safety lapses. In 1990, Eastern Airlines was handed a sixty-count federal

indictment charging it with shoddy and dishonest maintenance practices. The indictments came

after years of complaints by mechanics for the financially troubled airline who claimed that

pressures to cut costs led to maintenance shortcuts and falsification of maintenance records. In

January 1991, Eastern ceased operation.

Critics contend that Eastern was hardly alone in its cavalier approach to safety. They charge that

the FAA is understaffed and poorly managed and that money shortages have caused all the

airlines to relax safety standards. They point not only to increased pressured on the labor force

but also to companies’ reluctance to replace their aging fleets, the congestion of airspace caused

by increased air travel, crowded hub airports that create security risks ,and overworked and

sometimes poorly trained air traffic controllers. Yet, statistically, passengers are no more likely

to die in a plane crash since deregulation than they were before it. Still, critics maintain that,

despite the airlines’ and government’s efforts to assure the traveling public to the contrary, air

safety is in need of substantial improvements.

Many critics feel that at least part of the problem lies in the dual role of the FAA. Charged

simultaneously with promoting the economic health of the aviation industry and fostering safety,

the agency is often at odds with itself. In addition, the FAA’s budget was cut and the number of

inspectors reduced in the 1980’s, the same period which the number of passengers multiplied and

the number of air traffic controllers was reduced. Furthermore, unions, which stand to benefit

from the increased scrutiny and higher standards imposed by the FAA continue to be major

instigators foe a change. However, even neutral commentators have suggested that it is time to

impose some degree pf regulation in the form of stronger FAA oversight, on the industry. In fact,

the FAA has been accused of suffering from a “tombstone mentality” that caused the agency to

delay acting on safety concerns until negative publicity generated by a crash forces the issue.

Even after safety measures are recommended by the National Transportation Safety Board

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(NTSB), the agency charged with investigating accidents, the FA has been criticized for not

always following through.

Aging aircraft became a major concern during the late 1980s and early l1990s. In 1988, an Aloha

Airgroup Boeing 737-200, purchased in 1969, lost the top of its fuselage while flying at twenty-

four thousand feet. A flight attendant was immediately sucked out of the plane and plunged to

her death. The plane made a harrowing emergency landing, but not before sixty-five passengers

suffered injuries, some serious. Congress responded in 1991 by passing the Aging Aircraft

Safety Act (49 App.>S>C>A 1421 note), which requires airlines to demonstrate that their older

planes are airworthy. Critics claim that enforcement of the law has been lax and that it ignores

other compelling reasons to replace aging aircraft, such as the availability of newer fire –

retardant seat and of updated seats designed to be more resistant to the impact of a crash.

Concerns over airline safety became even more acute in the early 1990s with a series of fatal

crashes. The Boeing Company, a major producer of aircraft predicts that the number of jet

crashes worldwide could double by the year 2010 if accident rates of the early1990s continue.

Such a projection strikes fear into the hearts of the flying public. However, according to David

R. Hinson, the federal aviation administrator, flight safety is not a simplistic science that lends

itself to easy solutions.” Flight safety experts point out that all and flight attendants, most airlines

now prohibit smoking on all domestic flights and on many international flights as well. Air

quality was again questioned in 1993 when it was revealed that, as a cost saving measure, many

airlines were circulating fresh air into their aircraft less frequently than they had in the past. This

led to complaints by passengers and crew of headaches, nausea, and the transmission of

respiratory illnesses. Although the FAA conceded that circulating more fresh air would be

beneficial, it backed off from requiring airlines to do so because of the cost involved.

The Safety of babies and toddlers on airplanes was investigated after it was shown that a number

of them suffered injuries, some serious or fatal, during incidents that did not injure their parents.

Unlike adults and their luggage, children under age two are not required to be secured on an

airplane but rather may be held on an adult’s lap. These “lap babies” are often ripped from the

adult’s grasp during turbulence or crashes. In 1994, Representatives Jolene unsoeld, D-wash.,

and Jim Ross Lightfoot, R-Iowa, introduced a bill that would have required the use of child

safety restraints on commercial flights .however, the measure, which was supported by the

Association of flight attendants. NTSB, Air Transport Association, Aviation Consumer Action

Project, and Air Line Pilots Association, was opposed by the FAA and eventually defeated. An

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FAA spokesperson, testify in opposition to the bill, said the FAA’s research indicated that if all

children who needed them were placed in child safety seats, the airlines would save

approximately one life over a ten –year period, and the children’s families would save about $2.5

billion. A study conducted at Harvard Medical School estimated that one infant a year could be

saved through the use of safety seats. The sponsors of the bill vowed to continue to press for

more stringent safety standards for babies.

Safety concerns will continue to plague the airline industry, even though the FAA assures the

flying public that, statistically, at least, flying a major airline in the United States is far safer than

driving on an interstate highway. Questions persist about the FAA’s effectiveness in overseeing

air safety. And financially strapped airlines, which posted $12.8 billion in losses from 1990 to

1994, must make difficult risk-benefit analyses when contemplating new safety measures.

Some critics such as Ralph Nader, who initially supported deregulation, are now calling for

limited government intervention to ensure safety. However, experts warn that the U.S airlines

system. Which is already extremely safe, probably can never be completely without risk.

According to Stuart Matthews , president of the flight Safety Foundation,” if the public

absolutely demands that flying be totally safe, you are going to have to ban flying.” Given the

taking a calculated risk and not flying at all, Americans, who take their lives into their hands

each time they drive, will probably continue to trust the statistics and take their chances. What

form the industry will assume when the deregulation dust finally settles remains an open

question.

ABOUT INDIAN AIRLINES:

HISTORY:

Indian Airlines was constituted as a corporation under Air Corporation Act, August 1953.It is

wholly owned corporation of the government of India and is a product of nationalization of the

existing private airlines operating scheduled air services within India and between India and

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Burma, Nepal, Ceylon, Pakistan and Afghanistan. The Airlines, which merged and integrated to

form Indian Airlines, were:

Airways (India) Limited.

Air India (operating domestic service only)

Air services of India Limited

Deccan Airways Limited

Himalayan Airways Limited

Bharat Airways Limited

Indian National Airways

Kalinga Airways Limited

Before 1953, i.e., before these Airlines merged to form Indian Airlines, there were no set 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 resulted in almost all

the Airlines did not have enough money to maintain the Aircrafts. They were presented an

excellent example of unhealthy competition. Ultimately the Govt. took over by passing the Air

Corporation Act and Indian Airlines come into being. The affairs of the corporation are conducted

by a board of Directors.

Indian Airlines is one of the public sectors corporations in India. A statutory corporation like

Indian Airlines is formed with definite objectives in th interest of the public through based on pre-

set principles.

OBJECTVE FUNCTIONS OF INDIAN AIRLINES:

It shall be the function of the corporation to provide safe, efficient, and adequate, economical and

properly co-ordinate air transport services whether domestic or international or both.

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Corporation shall so exercise their power as to secure that air transport service 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 Act provides for the constitution of a Board of directors, which may

exercise all such power and do all such acts and things as may be exercised or done by the

corporation under this act. The Board of Directors shall consist of a chairman cum Managing

Director to be appointed by the Central government and not less than eight and not more than

fourteen other Directors to be appointed by the Central government.

Indian Airlines is a public utility service under the Industrial Disputes Act 1947 has to work in the

interests of the public. In view of this, the corporation is accountable to the public through the

Govt. and parliament for its activities. This 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.

The credit of launching the first real effective internal air services in India goes to Tata sons who

from 15 October 1932 began operating air mail services between Karachi and madras once a week

with a single engine aircraft. Indian National airways established in December 1934 an air service

between Karachi and Lahore linking with imperial airways service at Karachi. In 1934 Tata sons

doubled its weekly frequency on the Karachi-madras route and a weekly service between Bombay

and Trivandrum with a halt at Goa and Cannannore in Kerela. In 1937 a bi weekly service was

operated between Bombay and Delhi via Indore, Bhopal, and Gwallior. India national airways

launched their venture by establishing an air link from Calcutta to Dhaka and Rangoon. A third

company, air services of India came into existence in 1937-38.

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In 1960, the logo for Indian airlines was selected which was based on golden section of ancient

Greeks. “A” had been italicized to suggest speed and the truncation of first stroke indicates

movement while the second emphasized on reliability.

The forward surging of the symbol was intended to show the “looking ahead” characteristic and

the orange colour gave vibrancy and purity.

The Logo has now been changed and the “Wheel of konark” which is replica of the sun now

symbolizes Indian Airlines.

Amalgamation of Air India Limited and Indian Airlines Limited with National Aviation

Company of India Limited:

The Government of India, on 1 March 2007, approved the merger of Air India and Indian

Airlines. Consequent to the above, a new Company viz National Aviation Company of India

Limited (NACIL) was incorporated under the Companies Act, 1956 on 30 March 2007 with its

Registered Office at Airlines House, 113 Gurudwara Rakabganj Road, New Delhi.

It has been decided that post merger, the new entity will be known as “Air India” while

“Maharaja” will be retained as its mascot. The logo of the new airline will be a red coloured

flying swan with the “Konark Chakra” in orange placed inside it. The flying swan has been

morphed from Air India’s characteristic logo “The Centaur” whereas the “Konark Chakra” was

reminiscent of Indian’s logo. The Corporate Office of NACIL will be at Mumbai

This new AIR INDIA is………

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……here in international and domestic market with this new image and logo.

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BENEFITS TO EMPLOYEES

National Aviation of India Limited provides benefits to its employees under two categories:

I) STATUARY BENEFITS:

a) Workmen Compensation Act, 1923 :

In case of a temporary or permanent injury, caused to an

employee while in service, the organization has to provide the compensation to the employee.

b) Provident Fund Act, 1925 :

This benefit is given to the employee after retirement from the

organization.

c) Wages Act,1936 :

Earlier wages were not paid on time. According to this act, the wages and

salaries will be paid on fixed time and all the deductions dine would be told to the employees.

d) Industrial dispute Act,1947 :

According to this act, a committee known as works

committee is formed which deals with the welfare of the employees at the grass root level. The

members of this committee are 50% from the employer’s side and 50% from the employee’s

side.

e) Employees State Insurance Act, 1948:

23

According to this act, if the employee or his family

members are sick then the company looks after their health i.e., most of the money is given by

NACIL.

f) Factory Act, 1948:

This act takes care of the service conditions, work environment etc. given to

the employees. It also keeps a check on the working hours and action is taken whenever the

regulations are violated.

g) Air Corporation Act, 1953:

A new enactment was made in 1953 where there was a provision for

problems regarding labor relations. Here 50% participants are employer’s side and 50% from

employee’s side.

h) Provident Fund Miscellaneous Act, 1953:

In the previous provident fund act, there was no

provision for drawing money before retirement. According to modified act, if the money is

refundable, six times of the provident fund salary can be withdrawn which can be recovered in 3

years in 36 installments.

i) Payment of Gratuity Act,1972 :

NACIL can pay a maximum of 3.5 lakhs as gratuity. This is

statutory and deviation is possible.

II) NON STATUTORY BENEFITS:

24

a) Scholarships :

These are provided to the wards of the employees. It basically starts from class

II till the post graduation level e.g. MBA, Engineering etc. The amount of scholarship given to

the employees for their children is on yearly basis which is shown in the table below:

Particulars Amount (in RS.)

Class II - Class IV 125

Class V – Class VIII 250

Class IX – Class XII 375

For Graduates 500

For Diploma Holders 625

For Engineering/MBA etc. 750

b) Air passage :

This Non-Statutory welfare facility is entitled for free and discounted passage to

travel. It is given to three types of staff:

1. For Permanent staff:

It starts after the completion of 1 year. Air passage for the permanent

staff is shown in the table below:

Years for service Free Air Tickets Discount (95%) Discount (85%)

1 – 5 2 - 3

5 – 7 2 1 2

7 – 10 2 2 1

10 – 20 2 3 -

20 – 25 2 4 -

25

25 & Above 2 5 -

2. For Retired staff:

Retired employees with minimum 15 years of service are eligible for this

Air passage benefit. This non statuary benefit is shown in the table below:

Years for service Free Air tickets Discount (95%)

15 – 20 1 2

20 -25 1 3

25 & above 2 4

Retired Employees are also given this benefit:

Passage for SOL (Staff On Leave)

This passage is for the employees and his family.

Passage for SOD (Staff On Duty)

SOD is granted additional passage for the purpose of any official

work.

3. For Decease Employees :

26

If any employee dies while service then, he will get Air Passage benefits half of

what he was actually getting while working.

If any employee dies after retirement then, he will get Air passage benefits half of

what he was actually getting after retirement.

For deceases employees, Air Passage benefits will be given only to employee’s spouse

or children

Note:

Family is inclusive of spouse& children

Spouse- Husband/ wife

Children- Daughter/Son/Daughter-in-law/Son-in-law.

Passage year for the 2 years can be combined.

Passage year starts from 1st August – 31st July.

Food facilities are included in the passage.

c) Housing Colonies:

NACIL provides Housing facilities to their employees on the basis of

their grades and as per their seniority level which is shown in the table below:

Designations Grades Type of flat No. of houses

Peons/helper ½ Flat A1 200

Office Assistants

/Senior office

assistant

3/6

7/8

A 288

Superintendent 9 B 48

27

Officers 9A-15 C 88

Directors 15 & above D 22

Procedure of giving the Housing Facilities:

A notification or a form is distributed to all the employees according to their grades.

Note:

For the employees who came under grades 1 to 9:-

Employees for this grade will get Type of flat A/B as shown in the above

table.

For the employees who came under grade 9A:-

Employees for this grade get the House facility on the basis of their Joining

date for the particular post.

For the employees who are having their grades 15 &above:-

Type of Flat D is given to them.

CRITERIA FOR THE OUT OF TURN ALLOTMENT:

Requesting applications

Authority is approved by Executive Director

For Retired Employees:

After three months of retirement, employees have to vacate their houses. But if due to some

reasons, they are not able to vacate their homes, then, some amount of rent is deducted from their

money as per the market rates. But after some point of time, letter A is given to them in advance

for vacating their homes. But if they are still not ready to vacate their homes then Letter B is given

28

to them. And after some point of time Letter C is given to them. If an employee is still not ready

then strict action against them is taken.

d) Holiday homes :

Holiday homes have been established at a number of hill resorts and places

of tourist interest. Staff is required to pay the nominal rent for the accommodation. Holiday Home

is providing in 4 different regions at different stations which is shown in the table below:

REGIONS STATIONS

Northern Region Nanital and Dharamshala

Eastern Region Gangtok

Southern Region Kodai Kanal

Western Region Goa

NOTE:

Holiday Homes are given for the particular year only.

Facilities for the Kitchen are included.

In winters, Heater facilities are limited if an employee uses the facilities given beyond the

limits then certain amount is charged from them according to the rules and regulations of

NACIL.

AVAILABILITY FOR THE ROOMS:

Particulars No. of Rooms

29

For Staff 1

For Officers (19 A) 2

Deductions/Charges for the Rooms:

Grades Amount per day (in Rs.)

½ 25

3-9 35

9A-19 75

Maximum 5 days stay is given for Dharamshala

Maximum 3 days stay is given for other stations.

e) Medical Facilities :

Employees are provided free medical facilities, both ambulatory and

hospitalization. Fully equipped medical clinics are functioning at all important work places at

base stations manned by competent Medical officers. The employees’ families are provided

medical facilities under Contributory Scheme on payment of nominal contribution.

f) Loans :

Basically three types of loans were given to the employees. But now this facility is not

given to the employees since 2003-2004 onwards.

Housing Loans :

Employees are eligible for grant of housing loan subject to availability to availability of funds

after completion of 5years of service. Maximum housing loan can be granted up to Rs. 3 lakhs.

Vehicle Loans :

30

Loans are granted to employees for the purchase of cars, scooters and

cycles, subject to the availability of funds. Vehicle loan limits are as under:

Vehicle Amount (in Rs.)

New car 75,000/-

Old car 50,000/-

New Scooter/ Motor cycle 15,000/-

Old scooter/ Old Motor cycle 6,000/-

Cycle 600/-

Miscellaneous Loan :

Employees are also granted miscellaneous loans for meeting

various contingencies up to a maximum of Rs. 15,000/-

g) Group Insurance scheme:

On the death of an employee while in service, his family is paid the

group insurance, quantum of which depends on the pay drawn by the employee at the time of his

demise. This is a non- contributory scheme. The insurance amount varies from Rs. 15,000/- to Rs.

1, 50,000/-

h) Long service mementos:

Employees on completion of 25 years of satisfactory service are awarded

long service mementos in recognition of their service.

i) Festival Advance:

Festival advance is admissible to all employees on one occasion in calendar

year on Holi/Id-ul-fitr/Dusshera/X-mas festivals. Employees with less than six years of service can

31

avail festival advance only after they furnish a surety of another employee of NACIL who has put

at least six years in service in NACIL. The advance payable is Rs. 3,000/- and Rs. 4,000/-

depending upon the employee’s basic pay and is recovered in 10 monthly interest free installments.

j) Financial assistance to Employees pursuing higher Studies :

Employees who wish to pursue higher

studies are granted financial assistance subject to a maximum of two courses in the entire service

of the employee. Employees are reimbursed tuition fee, admission fee, examination fee and an

amount up to Rs. 300/- for the purchase of books.

k) Cooperative Thrift & Credit society/ Fair price shop/ Death benefit society :

The company grants various facilities, to

the above societies, formed by the employees from time to time.

l) Employees working at the airports at Delhi, Mumbai, and Kolkata are provided

free/subsidized transport from various rallying points.

m) Retirement gifts :

A gift of worth Rs.3000/- is given to the employees at the time of their retirement only

after the completion of their 25 years of satisfactory service.

n) Community centers:

NACIL has its own community centers at IA colony (Vasant vihar). It provides

community center facilities not only to the employees but also to their relatives and family

members at the nominal charges mentioned below:

Total charges for employee’s own family is Rs. 5250/- per day and for the other relations is Rs.

14000/- per day shown in the table below:

32

For employee’s own family:

Rent Rs. 1250

Electricity charges Rs. 1000

Water charges Rs. 500

Security (refundable) Rs. 2500

Total Amount Rs. 5250/-

For employee’s other relations:

Rent 5000

Electricity charges 1000

Water charges 500

Security ( Refundable) 7500

Total amount 14000/-

If an employee want community centre for 2 days or more than 2 days then he has to pay the

charges doubled for what he was actually paying for one day in both the above cases. But the

security amount remains the same.

A care taker is appointed for the proper supervision of the occasions. After the completion of the

auspicious occasion, an employee needs a NOC i.e. No objection certificate from the welfare

associations in order to prove that he has not done any harm during the time of get together.

o) Types of leaves given to the employees:

Casual leave : An employee is eligible for Casual leave to the extent of 10 days in a

financial year either for the private affairs or on grounds of sickness. This leave

cannot be not be accumulated. Normally not more than 3days casual leave is granted

at a time in two consecutive months. Casual leave can be combined with

33

extraordinary leave i.e. leave without pay and allowances. Casual leave cannot be

combining with any other kind of leave except when an employee who has exhausted

the full period of sick leave due to him requires more leave on grounds of sickness he

can be granted privilege/casual leave in continuation of sick leave.

Privilege Leave : An employee is eligible for 30 days privilege leave for every 11

months of service. This leave is accumulated upto 300 days. The leave account of an

employee is written up in the retrospect only once for each period of 11 months service

by adding 30 days to the opening balance as on first day of the period and deducting there

from total leave availed of during the period. Reckoning of leave on pro rata basis is

permissible during the currency of period of 11 months service if the balance at the

beginning of the period is less than the individual’s leave requirement. Leave on pro rata

basis is calculated at the rate of one day for every 11 days of service; fraction of a day is

ignored. The carry over of leave thus worked out and is restricted only to 3oo days and

the balance of leave, if any, will be lapse unless the employee has made application for

the grant of leave and the same was refused before the expiry of 11 months period. In

such cases the employee may be authorized to carry forward to the next leave period the

full amount of leave assessed above provided the number of days of privilege leave

carries over by him, and refused in writing owing to extengencies of corporation work.

An employee is allowed to encash Privilege leave in accordance with

the following conditions:

i) The encashment of Privilege Leave is allowed at the option of an employee.

ii) The maximum number of days for which leave can be enchased half of the

privilege leave lying at the credit of an employee on the date of encashment

reduced by one years entitlement to be retained at the credit of the employee.

iii) Encashment of Privilege Leave shall be allowed only once in a financial year.

iv) No encashment of Privilege leave is permissible to an employee during the

period of suspension from service

v) The period of Privilege leave permitted to be encashed is not reckoned for the

purpose of earning privilege leave or any kind of leave.

34

vi) The benefits of encashment is not admissible to:

a) Employees on contract

b) Temporary employees

c) Apprentices and training

d) Employees appointed for specific period/project.

e) Employees who resign or whose services are terminated on

disciplinary grounds.

f) Employees on deputation.

A temporary employee although he earns his privilege leave from the date of his appointment, is

eligible to avail of the leave only after he has completed 1 year’s service.

For the purpose of determining privilege leave entitlement, period of absence on the following

types of leave is count as service:

a) Casual leave

b) Compensatory leave i.e. day off in lieu of attending work on a normal ‘off’ day.

c) Sick Leave

d) Quarantine Leave

e) Special leave granted by the Managing Director to count towards service

f) Accident and disability leave on full day.

g) Special leave for injuries caused during sporting activities.

Sick leave :

An Employee is eligible for sick leave of 20 days on half pay, which may

be commuted at 10 days on full pay for each calendar year. Sick leave may be accumulated upto

120 days with full pay for and may be availed of half pay for double the period i.e. upto 240 days.

In case of permanent employee who have completed 1 year of services, it

is permissible to grant the full period of sick leave i.e. 20 days on half pay or 10 days on full pay,

at any time during the year. Temporary Employees with less than a years service is eligible for

grant of sick leave on prorate basis.

35

Sick leave for period exceeding two days is supported by medical certificate from either the

Medical officer of the corporation or a medical practitioner (Allopathic) duly approved by

corporation

Special Sick leave :

An employee suffering from:

a) Tuberculosis

b) Leprosy

c) Cancer

d) Organic heart disease requiring hospitalization and / or prolonged rest in bed.

e) Paralysis of vascular, infective or degenerative origin affecting one or more limbs ( but

not including paralysis like Ball’s palsy); or

f) Significant mental illness treated in government mental hospital ( in such cases a

certificate from the hospital superintendent or any other Competent authority of a

Govt. Mental hospital empowered to issue such certificate shall be accepted by the

corporation subject to the approval of the same by the Medical Officer of the

Corporation.

g) On the recommendation of the Medical Officer of the Corporation, Special Sick Leaves

may also be granted in cases where the employee is suffering from the following

diseases or ailments or injury requiring hospitalization or prolonged rest in bed.

i) Renal (Kidney failure)

ii) Hepatic (liver failure)

iii) Chronic Corpulmonale

iv) Empyma theracis

v) Collagen diseases:

Systemiculus reythemetosus

Polar teritis nodose

Progressive systemic disease

Ploymycsitis

Rheumatoid arthritis

36

Jomyelinating disease

Injuries to important internal organs

Complication of fractures requiring prolonged hospitalization or rest in bed.

Significant diseases of the nervous system.

Special sick leave on half basics pay may be granted on prorata basis for a fraction of a year4’s

service e.g. an employee with one and a half year’s service is eligible for 45 days Special Sick

Leave.

Accident and disability leave :

A) An employee sustaining an injury caused by an accident arising out of and in

the course of his employment or by his illness incurred:

1) during the courses and in consequence of the due performance of the duties assigned to

him.

2) in the performance of any particular duty which the effect of increasing his liability of

illness beyond the ordinary risk of attending the normal duties assigned to him; may on

production of a medical certificate in the prescribed form be granted accident and disability

leave upto a maximum of 120 days.

B) During the period of leave granted under sub regulation (A) the employee is entitled to

his full pay; provided that an employee who is unable to resume duty after the expiry

of the leave regulation, may be granted, at the discretion of the Managing Director, an

extension of such leave on dull pay for a period not exceeding 274 days, if a medical

board constituted by the corporation for the purpose, recommends such extension.

The grant of this leave is subject to the condition that the accident or illness is not due to

the employees’ negligence or default and that the employee obeys all instructions given by

the approved Medical Authority as to treatment during the period of absence.

Study Leave :

37

An employee may be granted study leave by the Managing director at his

discretion on the merits of each case on such terms and conditions, as he may deem

necessary.

Quarantine Leave :

An employee may, on a quarantine certificate be issued by a medical authority

approved by the Managing Director, be granted leave of absence from duty for a period not

exceeding 30 days. Quarantine leave is to be granted in cases of cholera, small pox, plague,

diphtheria, typhus fever, cerebrospinal meniflities and measles. Quarantine leave is not

admissible in cases in which an employee himself is suffering from an infectious disease.

In such cases the employee is given the normal casual, sick, privilege leave at his

credit.

Maternity Leave :

A female employee is eligible for grant of Maternity Leave on full pay for a

period, which may extend upto 135 days.

Paternity Leave :

A male employee is eligible for grant of Paternity Leave on full pay for a period of

15 days during the confinement of his wife.

Extraordinary Leave :

In exceptional circumstances to be recorded by sanctioning authority and only

when other leaves are not admissible under these regulations, a permanent employee or a

temporary employee who has completed one year’s continuous service may be granted

Extraordinary Leaves i.e. Leave without pay and allowances , the period of which shall not

exceed 90 days at a time. This leave is granted at the rate of 30 days for every completed

year of service. The period of this leave shall, however not 270 days in the entire period of

service exceed. However, Managing director may on compassionate grounds permit any

part or whole of such leave to be treated as leave with pay debitable to the employee’s

future leave account. A temporary employee with less than one year’s service is eligible for

grant of extraordinary leave under the above circumstances upto a maximum of 15 days.

Any Employee suffering from:

38

Tuberculosis

Leprosy

Cancer

Organic heart disease requiring hospitalization and / or prolonged rest in bed.

Paralysis of vascular, infective or degenerative origin affecting one or more limbs

( but not including paralysis like Ball’s palsy); or

Significant mental illness treated in government mental hospital ( in such cases a

certificate from the hospital superintendent or any other Competent authority of a

Govt. Mental hospital empowered to issue such certificate shall be accepted by the

corporation subject to the approval of the same by the Medical Officer of the

Corporation.

On the recommendation of the Medical Officer of the Corporation, Special Sick

Leaves may also be granted in cases where the employee is suffering from the

following diseases or ailments or injury requiring hospitalization or prolonged rest

in bed.

Renal (Kidney failure)

Hepatic (liver failure)

Chronic Corpulmonale

Empyma theracis

Collagen diseases:

Systemiculus reythemetosus

Polar teritis nodose

Progressive systemic disease

Ploymycsitis

Rheumatoid arthritis

Jomyelinating disease

Injuries to important internal organs

Complication of fractures requiring prolonged hospitalization or rest in bed.

Significant diseases of the nervous system.

39

Any other major illness or injury requiring hospitalization continuously for a period

of 3 months or more provided such hospitalization has the approval of the Medical

Officer of the corporation.

PRODUCTIVITY LINKED INCENTIVE

PLI is provided for the performance of main revenue generation factors, these are:

Number of customers travel during a time period.

Number of flies.

On the basis of performance of these factors, a part of revenue is provided to its employees.

According to PLI:

Employees of same level will get same level of incentives.

It is based on service quality, timeliness and achievement of task within predetermined

time.

Main purposes of PLI are:

To maintain discipline

To avoid strike, walk-outs and other grievances.

To avoid unrest conditions

PLI varies year by year, and has different criteria for different for different categories of

employees.

In relation to PLI settlement, a memorandum of settlement forms time to time and also some

agreements have been done periodically (around once in 3 years).These agreements consist all

40

terms and conditions along with amount has to be paid for employees for that period. Parties

signature and witness signature get putted at the end of the agreement.

These agreements have been formed with eight different unions under INDUSTRIAL

DISPUTES ACT 1947.

COMPARESION OF DIFFERENT AIRLINE COMPANIES WITH AIR INDIA (JET AIRWAYS,JETLITE,KINGFISHER

WITH AIR INDIA)

S.NO. FACTORS AIR INDIA JET AIRWAYS

1 DISCOUNTS:

INDIVIDUAL

TRAVELERS Armed force concession Senior citizen concession

Blind person discount Youth Fare

Senior citizen discount

Cancer patient discount

Student concession

National Sports person

Arjuna awardees

Companion free scheme

CORPORATE Corporate Super saver

41

HOUSES

2 SCHEMES: Super saver scheme Visit India Fares:

Discover India-7 days pass Unlimited Travel with our 3 fare plans

Discover India A week filled with wonder, for just USD 375

India Wonder Fair A two-week journey of discovery for only USD 750

Spot Fair Three weeks of enchantment for only USD 1,000

ABN AMRO Bank Debit

Card Jet kids

Amex Cobrand Card Jet Value Pass

Flight Specific Fares

Companion Free Scheme

Bid and Fly

3

IN-FLIGHT

SHOPPING: Sky Bazaar

4 CHECK Ins: E-check in is available

5 DINNING:

a variety of special foods

are available on demand a variety of special foods are available on demand

6

IN-FLIGHT

ENTERTAINMENT: a variety of music, Special JetScreen

1st class:Personal

Entertainment Appliances music, movies, sports and much more.

Audio Vedio on

Demand,in few aircraft e-magazine

Y class:Personal

Entertainment device

Inbound theatre

Outbound Theatre

7

DIFFERENT CLASS

OF SEATES: F, C/J, Y Classes F, C/J, Y Classes

8

LOYALTY

PROGRAMMES:

Friquent Flier

Programmed Jet Privilege Scheme

42

9 CUSTOMIZATION:

customization facility is

available customization facility is available

S.NO. FACTORS AIR INDIA KINGFISHER

1 DISCOUNTS:

INDIVIDUAL

TRAVELERS Armed force concession Group Travel

Blind person discount

Senior citizen discount

Cancer patient discount

Student concession

National Sports person

Arjuna awardees

Companion free scheme

CORPORATE

HOUSES Corporate Super saver Corporate Travel

2 SCHEMES: Super saver scheme Companion offer

Discover India-7 days pass

Discover India

India Wonder Fair

Spot Fair

ABN AMRO Bank Debit Card

Amex Cobrand Card

Flight Specific Fares

Companion Free Scheme

Bid and Fly

3

IN-FLIGHT

SHOPPING: Sky Bazaar Air boutique

4 CHECK Ins: E-check in is available

43

5 DINNING:

a variety of special foods are available on

demand a variety of special foods are available on demand

6

IN-FLIGHT

ENTERTAINMENT: a variety of music,

1st class:Personal Entertainment Appliances music, movies, sports and much more.

Audio Vedio on Demand,in few aircraft

Y class:Personal Entertainment device

Inbound theatre

Outbound Theatre

7

DIFFERENT

CLASS OF

SEATES: F, C/J, Y Classes

8

LOYALTY

PROGRAMMES: Friquent Flier Programmed

9 CUSTOMIZATION: customization facility is available

44

IT SECTION IN AIR INDIA

Air India has a mainframe computer to store all information whether it is related to Domestic or

international market. This IBM ES9000 system works on DB2 and gather information related to

number of passenger travelled, free baggage, excess baggage, cargo, mail, departure time, delay,

cancellations etc. from every corner of the world. These data are entered by commercial

department in on-line mode through a mask generated on daily basis. The system automatically

generates messages to the stations which fail to report data. The information thus collected for

previous day is processed in IT on daily bases and made available to the user by means of a user

friendly Query system for retrieval, reference and extraction of various pre-formatted reports

based on a wide range of options. This MIS system provides support for DDR( Daily Departure

Report) and DFIC (Delayed flight information system). The user departments are Commercial,

Finance, Planning and engineering. It provides information for following queries:

Seat factor information

Load factor information

Capacity utilization

Flights delayed and cancellation

On time performance

Revenue Pax Travelled

Flight uplifted

45

Daily, monthly and annual reports are also generated by the system. The database is available for

previous 13 months.

DATA SOURCES:

Commercial department

On-line data capture based on fill-in mask in PSS system on daily basis.

Off-line data (missing data) on weekly basis.

On-line flight schedule down loaded on daily basis.

Master data maintained in system and updated as and when suggested by concerned

department.

Delay codes provided by engineering department.

Rate cargo, mail, excess baggage provided by commercial department.

A/c validation table provided by commercial department.

Flight sector distance provided by Commercial Department.

Flight sector Distance provided by Planning department.

A hard copy of reports on monthly basis is send to user departments.

ON-LINE BOOKING SYSTEM:

ISP

46

IBM ES9000

MAINFRAME

VHI SERVER

DBP SERVER

IBE

IBEE

LOAD BALANCE

WEBSITE WEBSITE

When a customer access to the website of AIR INDIA, through ISP he gets connected to IBE.

There are two ISP and two IBE in the system to reduce redundancy. This IBE then connects to

VHI Server. This VHI server has already stored data that a customer can access. On the other

hand there is a DBP server and it contains customer data such as booking details, fairs, ticket

printing. Data in DBP server is variable and changes according to customers but VHI server data

does not change according to customers.

LIMITED ACCESS TO MAINFRAME:

47

RESOURCE ACCESS CONTROL FACILITY

This system represents access control to mainframe database. To access Mainframe database

user must contain user-id and password.

This mainframe has 3740 server and then a SNA firewall to protect its data.

48

DBP DBP VHI VHI

3740

3740

SNA SNA

IBM ES9000

MAINFRAME

CORPORATE OBJECTIVES

To meet the demand for reliable, economic and efficient transport services through high standards

of service customers and passengers.

To maximize the essential and strategic communications within India in times of national

emergencies and to be reliable second line defense.

To maximize passenger satisfaction by improving passenger/cargo services and amenities.

To enhance their period by securing a reasonable return in capital, consistent with Social

Objectives.

To foster international tourism in India and contribute to national balance of payment.

To stimulate domestic tourism and internal trade in order to broaden the Indian Air market.

To participate in the development of national aircraft and ancillary industries.

To promote good image of public sector in consonance with national aspirations.

49

RESEARCH METHODOLOGY

Research Methodology is a way to systematically solve the research problems. It has understood

as a science of studying how research is being done scientifically. In it we study the various steps

that are generally adopted by a researcher in studying his research problem along with the logic

behind them. It is necessary for the researcher to know not only he research method/techniques

but also the methodology.

As we know that for the achievement of any goal, a proper methodology should be adopted.In

the same manner for the success of a project, it is necessary to have a clear methodology.

Therefore, in the research methodology following terms are included:-

Research Design

Data at a Glance

Data Collection

RESEARCH DESIGN:

A Research design is purely and simply the framework or plan for the guide’s collection and

analyzing of data.

50

Research design is a systematic way to achieve the desired objective in a right manner. It is a

blue print used to guide the future course of actions. It may be worthwhile to mention here that a

research design is nothing more than the framework for the study.

The Research Design decisions happen to be in respect of:

What is the study about?

What is the study being made?

What will the study are carried out?

What type of data is required?

Were can the required data be found?

How will that data be analyzed?

In what style the report is prepared.

TYPES OF RESEARCH DESIGN:

Exploratory Research Design:

All marketing research projects must start with exploratory research

design. This is the preliminary phase and absolute in order to obtain a proper definition of

problem at hand. The Exploratory study is particularly helpful in breaking broad and vague

problems in to smaller, more precise sub problem statements, helpful in the form of

hypothesis for future research.

Descriptive Research Design:

One simply describes something such as demographic characteristics of

customers who use the products. The descriptive study is typically concerns determining

frequency with which something acquires. This study is typically guided by initial

hypothesis.

Experimental Research Design:

51

It is defined as a process where event requires in a setting at the

discretion of the experimental and controls are used to identically of the sources in subject’s

response.

DATA AT A GLANCE:

Primary Data

Secondary Data

DATA COLLECTION:

Observation Method

Experimentation Method

Survey Method

RESEARCH METHODOLOY USED

RESEARCH PROBLEM:

“To study the strategies that AIR INDIA (NACIL) is implementing to retain its employees and to

compare CRM strategies of AIR INDIA (NACIL) with other Airlines Companies.

OBJECTIVES:

To study retention strategies related to Employees.

52

To study satisfaction level of employees towards retention strategies.

To study CRM strategies those have been implementing for customers.

To find out the effectiveness of those CRM stratégies.

To study CRM strategies of other Airlines companies.

To suggest best suitable CRM strategies after carefully analyzing its policies.

To suggest areas in which NACIL needs to improve in terms of customer services.

SAMPLE SIZE:

Fifty respondents.

SAMPLE AREA:

HR and Commercial Department, AIR INDIA (NACIL), Delhi.

SAMPLE UNIT:

Existing employees of NACIL, Delhi.

SAMPLE TECHNIQUE:

Simple Random Sampling with modification to biased responses.

RESEARCH DESIGN:

Exploratory and Descriptive.

DATA COLLECTION:

PRIMARY DATA:

Through Questionnaires

Through Direct Interviews

SECONDRY DATA:

http://www.airindia.in

http://www.flyingreturns.co.in

http://www.google.com

Company agreements & reports

53

http://www.google.com/

http://www.flyingreturns.co.in/

http://www.airindia.in/

Company brochures, Statements & Circulars.

DATA ANALYSIS FOR EMPLOYEE’S RESPONCES:

1. Frequencies:

Statistics

From how long are you with NACIL?

N Valid 50

Missing 0

From how long are you with NACIL?

Frequency Percent Valid Percent

Cumulative

Percent

Valid Less than two yeares 2 4.0 4.0 4.0

Two to Six years 3 6.0 6.0 10.0

Six to twelve years 7 14.0 14.0 24.0

More than Twelve years 38 76.0 76.0 100.0

Total 50 100.0 100.0

54

More than Twelve years

Six to twelve years

Two to Six years

Less than two yeares

From how long are youwith NACIL?

2. Frequencies:

Statistics

Are you satisfied with Welfare policies and PLI scheme of NACIL?

N Valid 50

Missing 0

Mean 1.3600

Are you satisfied with Welfare policies and PLI scheme of NACIL?


Cumulative

Percent

Valid YES 32 64.0 64.0 64.0

NO 18 36.0 36.0 100.0

Total 50 100.0 100.0

55

NO

YES

Are you satisfied withWelfare policies and

PLI scheme of NACIL?

3. Frequencies:

Statistics

are you dssatisfied with less leaves?

N Valid 50

Missing 0

Mean 2.0000



Cumulative

Percent

Valid no 50 100.0 100.0 100.0

56

no


4. Frequencies:

Statistics

are you dssatisfied with more working houres?

N Valid 50

Missing 0

Mean 2.0000



Cumulative

Percent

Valid no 50 100.0 100.0 100.0

57

no


5. Frequencies:

Statistics

are you dssatisfied with less remuniration?

N Valid 50

Missing 0

Mean 1.8800

are you dssatisfied with less remuneration?


Cumulative

Percent

Valid yes 6 12.0 12.0 12.0

no 44 88.0 88.0 100.0

Total 50 100.0 100.0

58

no

yes

are you dssatisfied with less remuniration?

6. Frequencies:

Statistics

are you dssatisfied with lack of personal touch?

N Valid 50

Missing 0

Mean 1.8400



Cumulative

Percent

Valid yes 8 16.0 16.0 16.0

no 42 84.0 84.0 100.0

Total 50 100.0 100.0

59

no

yes


7. Frequencies:

Statistics

are you dssatisfied with working environment?

N Valid 50

Missing 0

Mean 1.8000



Cumulative

Percent

Valid yes 10 20.0 20.0 20.0

no 40 80.0 80.0 100.0

Total 50 100.0 100.0

60

no

yes


8. Frequencies:

Statistics

Up to what extent are you satisfied retention programs(PLI & Welfare)?

N Valid 49

Missing 1

Mean 3.0000



Cumulative

Percent

Valid Dissatisfied 8 16.0 16.3 16.3

Somewhat Satisfied 33 66.0 67.3 83.7

Highly Satisfied 8 16.0 16.3 100.0

61

Total 49 98.0 100.0

Missing System 1 2.0

Total 50 100.0

Missing

Highly Satisfied

Somewhat Satisfied

Dissatisfied


9. Frequencies:

Statistics

Do your suggeestions and complaints get attention?

N Valid 50

Missing 0

Mean 2.5400


Frequency Percent Valid PercentCumulative

62

Percent

Valid Never 9 18.0 18.0 18.0

Sometimes 14 28.0 28.0 46.0

Frequently 18 36.0 36.0 82.0

Always 9 18.0 18.0 100.0

Total 50 100.0 100.0

Always

Frequently

Sometimes

Never


10. Frequencies:

Statistics

Scholarship

N Valid 45

Missing 5

Mean 2.2667

Scholarship

63


Cumulative

Percent

Valid Poor 14 28.0 31.1 31.1

Fair 10 20.0 22.2 53.3

Good 16 32.0 35.6 88.9

Excellent 5 10.0 11.1 100.0

Total 45 90.0 100.0


Total 50 100.0

Missing

Excellent

Good

Fair

Poor

Scholarship

11. Frequencies:

Statistics

Air passage

N Valid 49

Missing 1

Mean 3.0204

Air passage

64


Cumulative

Percent

Valid Poor 4 8.0 8.2 8.2

Not bad 7 14.0 14.3 22.4

Good 22 44.0 44.9 67.3

Excellent 16 32.0 32.7 100.0

Total 49 98.0 100.0


Total 50 100.0

Missing

Excellent

Good

Not bad

Poor

Air passage

12. Frequencies:

Statistics

Housing Colonies

N Valid 48

Missing 2

65

Mean 2.7708

Housing Colonies


Cumulative

Percent

Valid Poor 6 12.0 12.5 12.5

Fair 9 18.0 18.8 31.3

Good 23 46.0 47.9 79.2

Excellent 10 20.0 20.8 100.0

Total 48 96.0 100.0


Total 50 100.0

Missing

Excellent

Good

Fair

Poor

Housing Colonies

13. Frequencies:

Statistics

Holiday Homes

66

N Valid 49

Missing 1

Mean 2.6939

Holiday Homes


Cumulative

Percent

Valid Poor 5 10.0 10.2 10.2

Fair 12 24.0 24.5 34.7

Good 25 50.0 51.0 85.7

Excellent 7 14.0 14.3 100.0

Total 49 98.0 100.0


Total 50 100.0

Missing

Excellent

Good

Fair

Poor

Holiday Homes

14.Frequencies:

67

Statistics

Medical Facilities

N Valid 50

Missing 0

Mean 3.2600

Medical Facilities


Cumulative

Percent

Valid Poor 2 4.0 4.0 4.0

Fair 4 8.0 8.0 12.0

Good 23 46.0 46.0 58.0

Excellent 21 42.0 42.0 100.0

Total 50 100.0 100.0

Excellent

Good

Fair

Poor

Medical Facilities

15.Frequencies:

68

Statistics

Group Insurance

N Valid 45

Missing 5

Mean 2.2667

Group Insurance


Cumulative

Percent

Valid Poor 11 22.0 24.4 24.4

Fair 14 28.0 31.1 55.6

Good 17 34.0 37.8 93.3

Excellent 3 6.0 6.7 100.0

Total 45 90.0 100.0


Total 50 100.0

69

Missing

Excellent

Good

Fair

Poor

Group Insurance

16.Frequencies:

Statistics

Long Service Mementos

N Valid 50

Missing 0

Mean 2.3800



Cumulative

Percent

Valid Poor 7 14.0 14.0 14.0

fair 19 38.0 38.0 52.0

Good 22 44.0 44.0 96.0

Excellent 2 4.0 4.0 100.0

Total 50 100.0 100.0

70

Excellent

Good

fair

Poor


17.Frequencies:

Statistics

Financial Assistance for higher Studies

N Valid 50

Missing 0

Mean 2.7200



Cumulative

Percent

Valid Poor 2 4.0 4.0 4.0

fair 17 34.0 34.0 38.0

Good 24 48.0 48.0 86.0

Excellent 7 14.0 14.0 100.0

71

Total 50 100.0 100.0

Excellent

Good

fair

Poor


18.Frequencies:

Statistics

Fastival Advance

N Valid 50

Missing 0

Mean 2.6000

72

Fastival Advance


Cumulative

Percent

Valid Poor 8 16.0 16.0 16.0

fair 11 22.0 22.0 38.0

Good 24 48.0 48.0 86.0

Excellent 7 14.0 14.0 100.0

Total 50 100.0 100.0

Excellent

Good

fair

Poor

Fastival Advance

19.Frequencies:

Statistics

Facilities provided after death

N Valid 48

Missing 2

Mean 2.7917

73



Cumulative

Percent

Valid Poor 3 6.0 6.3 6.3

fair 9 18.0 18.8 25.0

Good 31 62.0 64.6 89.6

Excellent 5 10.0 10.4 100.0

Total 48 96.0 100.0


Total 50 100.0

Missing

Excellent

Good

fair

Poor


20.Frequencies:

74

Statistics

Retierment gifts

N Valid 50

Missing 0

Mean 2.4200

Retierment gifts


Cumulative

Percent

Valid Poor 6 12.0 12.0 12.0

fair 20 40.0 40.0 52.0

Good 21 42.0 42.0 94.0

Excellent 3 6.0 6.0 100.0

Total 50 100.0 100.0

Excellent

Good

fair

Poor

Retierment gifts

21.Frequencies:

75

Statistics

Community center

N Valid 48

Missing 2

Mean 2.5417

Community center


Cumulative

Percent

Valid Poor 4 8.0 8.3 8.3

fair 19 38.0 39.6 47.9

Good 20 40.0 41.7 89.6

Excellent 5 10.0 10.4 100.0

Total 48 96.0 100.0


Total 50 100.0

76

Missing

Excellent

Good

fair

Poor

Community center

22.Frequencies:

Statistics

Different type of leaves

N Valid 50

Missing 0

Mean 3.0800



Cumulative

Percent

Valid fair 6 12.0 12.0 12.0

Good 34 68.0 68.0 80.0

Excellent 10 20.0 20.0 100.0

77

Total 50 100.0 100.0

Excellent

Good

fair


23.Freque

ncies:

Statistics

Productivity Link Incentives

N Valid 50

Missing 0

Mean 2.6000



Cumulative

Percent

Valid Poor 5 10.0 10.0 10.0

fair 16 32.0 32.0 42.0

Good 23 46.0 46.0 88.0

78

Excellent 6 12.0 12.0 100.0

Total 50 100.0 100.0

Excellent

Good

fair

Poor


24.Frequencies:

Statistics

Age of the respondents

N Valid 50

Missing 0

Mean 3.1800



Cumulative

Percent

Valid 18 to 25 1 2.0 2.0 2.0

25 to 35 7 14.0 14.0 16.0

35 to 45 24 48.0 48.0 64.0

79

45 and above 18 36.0 36.0 100.0

Total 50 100.0 100.0

45 and above

35 to 45

25 to 35

18 to 25


25.Frequencies:

Statistics

Designation

N Valid 50

Missing 0

Mean 1.8000

Designation


Cumulative

Percent

80

Valid Top level 10 20.0 20.0 20.0

Middle level 40 80.0 80.0 100.0

Total 50 100.0 100.0

Middle level

Top level

Designation

81

FINDINGS AND ANALYSIS

HYPOTHESIS TESTING:

Less attention on complaints and suggestions, less will the level of satisfaction.

Correlations:

Do your

suggestions

and

complaints

get attention?

Up to what extent are you satisfied

retention programs(PLI &

Welfare)?

Do your

suggeestions and

complaints get

attention?

Pearson

Correlation1 .515(**)

82

Sig. (2-tailed) .000

N 50 49

Up to what extent

are you satisfied

retention

programs(PLI &

Welfare)?

Pearson

Correlation

.515(**) 1

Sig. (2-tailed) .000

N 49 49

Correlation at .01 level of significance.

This hypothesis says that P is less than .01 so analysis is true because if P is greater than level of

significance, null hypothesis cannot be rejected. So in the given case alternate hypothesis cannot

be rejected.

CONCLUSION

Aviation Industry in India is one of the fastest growing aviation industries in the world. With the

liberalization of the Indian aviation sector, aviation industry in India has undergone a rapid

transformation. In this era where people want to get more and more facilities, AIR INDIA is here

with its full carrier airline services. AIR INDIA is providing all possible services and policies for

all its customers and employees. But still the market share of this company is going down day by

83

day. In the first quarter of this year market share of Air India was 14.7%. On the other hand

many private airline companies who learned, how to make business in the field of aviation, from

Air India have more market share. Such as, Kingfisher and Jet airways, they come just few years

back in the market but having higher market share and market value than this company. In the

first quarter of this year, market share of Jet Airways was 22.7% which is much more than the

share of Air India.

After carefully analyzing this company I came to know the pros and corns of it and I want to

point it out that first Air India should modify its work culture. Air India has all resources

available with it but still they are not being utilized optimally.

In terms of employees’ satisfaction, 64% respondents are satisfied, the region behind it can be

job security. But as I moved further I came to know that 66% are somewhat satisfied but not

fully. But among dissatisfied employees 16% are dissatisfied due to lack of personal touch, 20%

are dissatisfied due to working hours and no one was dissatisfied with leaves and working hours.

When I asked about attention towards complaints and suggestion 36% said frequently and 18%

said never.18% among them responded that their complaints and suggestions always get

attention and 28% said sometimes.

35% find Scholarship as a good policy, 44% find Air passage as a good policy, 47% find

Housing colonies as a good policy, Holiday homes were rated as good by 51% respondents, 42%

and 47% find Medical facility as excellent and good respectively, 375 find Group Insurance

good.

84

RECOMMONDATIONS

As most of the employees find Retirement gifts poor, so I want to suggest modifying it. Group

Insurance and community centre should also be communicated among employees because I find

that most of the employees are unaware with it.

Thus what I want to suggest that Air India should market all those facilities which are being

provided by the company to its employees. In this way employees will realize what their

company is giving to them and they will feel a sense of responsibility towards it.

I don’t find as such any big problem with this company except lack of motivation. So company

should work in this direction.

One thing for policy makers that they should assign task to employees with a deadline connected

with PLI.

I want to suggest something to Commercial department related to the scheme of corporate

houses. Currently for different corporate houses we have a discount scheme that we revise on

yearly basis. Every year new agreements form with new terms and conditions and rate of

discount, depending on the bargaining power of business house and company. We treat every

customer in a same manner whether it is with us from past one year or 15 years. We should

change the way of treating different customers, especially those who have been given a huge

profit from last so many years. For this we can have something like BEST CUSTOMER OF

THE YEAR or may be of three years. To give them honor we can display something about them

in our in-flight magazine, this will be a both way beneficial decision.

Same award treatment we can do with employees to motivate them.

85

LIMITATION

Every research study has certain limitations. These could be due to sample size, sampling

techniques, time available, money etc. this study has also certain limitations. The following are

worth mentioning:-

1. As the subject under study involves large population size so generalizations can’t be

made.

2. Due to time and financial constrains the study is restricted to Northern region.

3. Sometimes respondents give altogether biased answers in responding to the different

questions.

4. Lack of time

5. Lack of financial resources

Still every effort has been employed in order to reduce the impact of these limitations.

86

BIBLIOGRAPHY

BOOKS:

Kothari C.R., Research Methodology

New Age International (P) Ltd., 2005

Malhotra N.K., Marketing Research

Prentice Hall, Pearson Education, 2007

Kotler & Keller, Marketing Management

A South Asian Perspective, 2007

Gupta S.P., Business Statistics

Sultan Chand & Sons, 2005

MAGAZINES:

SWAGAT, in flight magazine of AIR INDIA.

June 2008.

XPRESSIONS, in flight magazine of Jetlite.

May 2008

Namaskaar, in flight magazine of AIR INDIA.

WEBSITES:

http://www.airindia.in

http://www.flyingreturns.co.in

87

http://www.flyingreturns.co.in/

http://www.airindia.in/

http://www.google.com

APPENDICES

QUESTIONNAIRE

Note: I am a summer trainee under NACIL, Delhi, and this survey is the part of my study. I

will be highly grateful if you would answer the following questions. Please tick across

preferred option.

1. From how long are you with NACIL?

Less than Two years

Two to Six Years

Six to Twelve Years

More than Twelve Years

2. Are you satisfied with welfare policies and PLI scheme of NACIL?

Yes

88

http://www.google.com/

No

(If no then move to Q NO.3, if yes then move to Q NO.4)

3. What is the reason of dissatisfaction?

Less leaves

More working hours

Less remuneration

Lack of personal touch

4. Up to what extent are you satisfied with these programs?

Highly dissatisfied

Dissatisfied

Somewhat satisfied

Highly satisfied

5. Do your suggestions and complaints get attention?

Always

Frequently

Sometimes

Never

6. Please, rate them according to your preference:

Policies Excellent Good Fair Poor

89

Scholarships

Air Passage

Housing Colonies

Holiday Homes

Medical Facilities

Group insurance

scheme

Long Service

Mementos

Financial

Assistance for

higher studies

Festival Advance

Death Benefit

society

Retirement Gifts

Community

centers

Different type of

leaves

Productivity Link

Incentives

7. Any Suggestion (s)?

90

Personal Details:

Designation:

Age:

18 to 25

25 to 35

35 to 45

45 and above

THANKS FOR YOUR COOPERATION.

91

Air India - Analysis Report

Documents

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