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A Project Report On
INDIAN AIRLINESIn partial fulfillment of BBA 2007-2010
Submitted by : SUMIT PHOGAT BBA(GEN.)Roll No. :
University roll no. :
Submitted to : MS. POONAM CHAWLA(PROJECT GUIDE)
Maharaja Agrasen Institute of ManagementStudies
(Affilated to Guru Gobind Singh IndraprasthaUnivrsity)
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CERTIFICATE
It is to certify that Mr. SUMIT PHOGAT Studying in our institute ofmanagement studies was allotted the project on INDIAN
AIRLINES by Guru Gobind Singh University has successfullycompleted it under the guidance of Ms. POONAM CHAWLA(PROJECT GUIDE)
Ms. POONAM CHAWLA(PROJECT GUIDE)
Dr. N. K. Kakkar(Director MAIMS)
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ACKNOWLEDGEMENT
I take this opportunity to express my profound sense of gratitudeand respect to all those who helped me through out the duration ofthis project.
It gives me immense pleasure to acknowledge my indebteness andsense of gratitudeTo Ms. POONAM CHAWLA (Project guide) for the project undertaken.
I also immensely thank the other faculty members of the instituteunder who continous support and guidance I completed the project.
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DECLARATION
I here by declare that the project work titled INDIAN AIRLINESIs an authentic work carried out by me under the guidance of(Project guide) for the partial fulfillment of degree ofBACHELOR OF BUSINESS ADMINISTRATION
And this has not been submitted anywhere else for the award ofany other degree or diploma.
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EXECUTIVE SUMMARY
The current millennium has unfolded new business rules most thesignificant of them being that company has to constantly look intominds of the customer. Customer loyalty plays a significant roleand today securing that loyalty requires quality right price and ofcourse last but not the least i.e. creating awareness about theirservice. As a trainee, I was given knowledge about the way andstyle of their working, their routine and their environment. It was agreat experience in getting under such a reputed company, whichhas in it the ability to retain customer.
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INDEX
CHAPTER 1
Preface Objective
Research methodology
CHAPTER 2 Introduction
Company profile
Marketing strategy
CHAPTER 3 Analysis of data
CHAPTER 4 Limitations
Suggestion
Conclusion
BIBLIOGRAPHY
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PREFACE
I feel great pleasure in doing my project EFFECTIVENESS OF
VARIOUS PROMOTIONAL FARES OF INDIAN AIRLINES with Indian
Airlines. The whole hearted support of the executives of the Indian
Airlines has enabled me to complete this project.
This project is all about the Marketing initiatives taken by Indian
Airlines with a rapidly changing technological, social, economic,
political-legal and the trend towards globalization of business and
industry, emerging of various private airlines; effective marketing
management has become a very challenging job.
In this project I have analyzed the different promotional fares
implemented by Indian Airlines and have given feedback regarding their
effectiveness and whether they should be continued or discontinued on
different sectors.
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OBJECTIVE
To identify the services offered by INDIAN AIRLINE.
To study and analyze the customer perception andpreference about INDIAN AIRLINE.
Finally to draw the various conclusion and recommendationon the basis of study conducted.
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RESEARCH METHODOLOGY
Managers need information in order to introduce products and services
that create value in the mind of the customer. But the perception of
value is a subjective one, and what customers value this year may be
quite different from what they value next year. As such, the attributes
that create value cannot simply be deduced from common knowledge.
Rather, data (information) must be collected and analyzed. The goal of
Marketing Research (analysis) is to provide the facts and direction that
managers need to make their more important marketing decisions.
The analysis involves the following steps:
Define the problem.
Determine research design.
Identify data types and sources.
Determine sample plan and size.
Collect the data.
Analyze and interpret the data.
Prepare the research report.
For the purpose of study, data from the in-house survey conducted by
the marketing department (secondary data) has been used and also for
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coming out with the recommendation. It was also felt that mere
secondary data would not provide in-depth information for the analysis,
hence it was decided that interactive discussions with the managers and
the head of every department would help in an in-depth and true
understanding of challenges faced by the department.
The methodology adopted was to gather relevant information from the
appropriate department, correlate the information obtained and to
present the information in a logical and systematic manner.
AVIATION INDUSTRY
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INTRODUCTION
Though the Open Sky Policy was announced 11 years back, for all
practical purposes, the Indian aviation industry actually took off with the
entry of as many as 6 companies in the first half of 1991 when the state
run Indian Airlines was facing industrial strife.
After reporting an Rs.11 crore profit in 2001, Indian Airlines suddenly
saw its market share drop and its supremacy challenged. Pilots let the
airline in hordes to more lucrative jobs with the private operators, which
resulted in under utilization of its Boeing fleet. Passengers, too,
suddenly realized that there were airlines willing to offer that little extra
bit that means so much, and Indian Airlines suddenly saw its market
share drop to 53 per cent from its earlier unassailable position.
The growing disenchantment with the services (or lack of it) of IA and
the frequent agitation by its employers prompted the decision-markets
to usher in private air-taxi operators (ATOs). Nineteen others got no
objection certificates (NOC). By 1996, there were 12 operators in the
market, by their market share in domestic traffic was negligible.
By 1999, there were seven players who were operating with a
scheduled airlines while 22 others were fling as non-scheduled or ATO.
The scheduled airlines included EAST-WEST AIRLINES, MODI-LUFT,
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DAMANIA, JET AIRWAYS, NEPC and ARCHANA. Companies such as
EAST-WEST leased several 100 plus seater aircraft and developed a
large network in a short span. Jet Airways grew slowly and not only
outlived competition, but established itself as the largest private sector
player.
While the market share of private operators soared to 41% from 1996 to
1999 (eating into IAs share), the initial euphoria died out in 1997 when
the Air Corporation Act of 1953 was repealed and it became obligatory
for ATOs with three or more aircraft to become scheduled airlines and
operate according to certain guidelines (protocol). It became mandatory
for scheduled airlines to fly at least 10% of their capacity to the far flung
uneconomical areas such as north-east, Jammu and Kashmir and 50%
to non-trunk stations.
With this, came the realization that a whole lot of overheads associated
with the flying were involved and higher utilization of the leased aircraft
and better route planning was essential to survive. Obviously, when
there was a mismatch between the returns and the outgo, some of them
shut shop.
But, even before the guidelines were issued in 1997, DAMANIA, which
had created brand equity of its own as an elegant, passenger-friendly
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airline, buckled under pressure and was purchased by NEPC in 1996.
UB AIR and RAJ AIR followed it. By the first quarter of 2000, three more
airlines suspended their operations due to non-availability of aircraft,
EAST-WEST in May 1999, MODILUFT in November 1999, and NEPC in
March 2000.
THE RESOURCE OF DOMESTIC AIRLINE
They came, some faltered, most fell by the side, but while they were
there, they managed to shake Indian Airlines from its monopolistic
complacency, and prepared it to battle for its tort with the likes of Jet
Airways and Sahara Airways as and when they fly.
After a fairly long bout of uncertainty, domestic airlines are on the
upswing again. And as aviation experts projected, only the players who
understood the rules of the game, have survived and are prepared to
make a comeback to this glamorous but highly capital- intensive
industry.
Jet Airways is on a fleet expansion spree, while Sahara Airlines is
preparing for a face life that should really gear up the domestic market.
Indian Airlines, despite its failure to phase out older aircraft, is regaining
lost ground.
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Today, the Indian sky is left for Jet Airways, Sahara Airlines and Indian
Airlines to expand and grow
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INDIAN AIRLINES A PROFILE
Indian Airlines (IA) is the Indias largest government owned regional
airline systems in Asia, with a fleet of 62 aircrafts (i.e. Dornier D-228,
ATR-42, Boeing 737, wide bodied airbus A300s, one Fly-By-Wire Airbus
A320s). Indian Airlines became operational since its inception in the
year 1953 and celebrated its Golden Jubilee in the year 2003
completing its 50 years of transcendental service in air traveling.
Indian Airlines has been setting the standards for civil aviation in India
since its inception. It has many first to its credit, including the
introduction of the wide-bodied Airbus A300, Domestic shuttle service
and Walk-In Flights. Moving with time, Indian Airlines is one of the first
organizations in the country to establish a widespread computerized
network for reservations and ticketing.
Alliance Air is the fully owned subsidiary of Indian airlines. Indian
Airlines has total staff strength of approximately 19600 employees with
an annual turnover of more than Rs 4000 crores (1billion USD) including
that of Alliance Air. The passenger carriage, which was 0.5 million in
1954-55, has grown to 7.78 million in 1999-2000. Today Indian Airlines
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together with its subsidiary airlines carries a total of over 7.8 million
passengers annually, which includes 64 national and 16 international
destinations with 35000 seats daily?
Indian Airlines have been divided into four regions i.e. Eastern region,
Western region, Northern region and Southern region. The Indian
Airlines international network spans over Kuwait, Oman, UAE, Qatar
and Bahrain in west Asia, Thailand, Singapore, Yangon and Malaysia in
south-east Asia and Pakistan, Nepal, Bangladesh, Myanmar, Srilanka
and Maldives in the south Asian sub-continent.
Its unique orange & white logo emblazoned on the tails of all its aircraft
is perhaps the most widely recognized Indian brand symbol that has
over the years become synonymous with service, efficiency and
reliability. It has state-of-the-art facilities for all aspects of maintenance.
The pilots are trained at Hyderabad where the commanders and
captains are trained in all types of aircraft in the Indian Airlines fleet.
State-of-the-art full flight simulators are available for A300, A320 and
B737 aircrafts.
The Airlines online facility provides services like Passenger Reservation,
Ticketing, Message Switching and fare display. An interactive voice
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recording system for providing flight information is also integrated with
the reservation system.
Airline code:-
IC - Indian Airlines
CD - Alliance Air
Aircraft acquisition:-
A300 - Wide Bodied Airbus A300
A320 - Fly-By-Wire Airbus A320
737 - Boeing 737
ATR - ATR-42
228 - Dornier 228
154 - TU 154
62 - IL 62
Class:-
C - Business class
J - Executive class
Y - Economy class
Days:-
1 - Monday
2 - Tuesday
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3 - Wednesday
4 - Thursday
5 - Friday
6 - Saturday
7 - Sunday
FLEET STRENGTH
AIRCRAFT TYPE STRENGTH AVG LIFE(YRS)
A-300 4 20.5
A-320 41 8.7
B-737 11 18.8
D-228 2 14.6
ATR-42 4 -
NUMBER OF SEATS IN VARIOUS AIRCRAFT
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AIRCRAFT TYPE J Y TOTAL
CAPACITY
BOEING-B737 - 119 119
AIRBUS-A320 20 125/126 145/146
AIRBUS-A300B2
AIRBUS-A300B4
33
32
215
215
248
247
DORNIER-D228 - 19 19
ATR - 50 50
AIRCRAFT UTILIZATION
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TYPE OF
AIRCRAFT
REVENUE FLYING HOURS UTILIZATION PER
AIRCRAFT PER
ANNUM(HOURS)1999-00 2000-01 2001-02 1999-
00
2000-
01
2001-02
A-300 24886 24804 19629 2274 2400 2491
A-320 81680 84346 98042 2954 3048 3178
B-737 905 431 670 **** **** ****
**** B-737 has been given on lease to Alliance Air.
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REVENUE FOR INDIAN AIRLINES
Today nearly 80%of the customers are provided by the travel agents to
the Indian Airlines and these travel agents are 2000 in number spanning
the whole country. Indian Airlines provides 5% and 7% commission on
domestic and international fares respectively to the travel agents.
SWOT ANALYSIS OF INDIAN AIRLINES
STRENGTHS
Large fleet.
Experienced staff.
Dedicated departure terminal at Delhi.
Connectivity with the reservation centers and agents is good.
Adequate infrastructure and large network.
People are loyal towards the national carrier.
Government Backing.
Indian Airlines has a modern and complete in-house training
facility.
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WEAKNESSES
High overheads and huge workforce resulting in lower output.
Preconceived image of PSUs.
Attitude of the staff.
Ageing fleet.
Inaccessibility of the staff over phone.
Political/Bureaucratic interference.
On the spot decision making flexibility not there.
Ageing workforce (cabin crew).
Indian Airlines has its socio-economic responsibility of catering to
the inaccessibility areas at subsidized rate affecting operational
expenses.
Being a dedicated terminal all services rendered at the airport is
presumed by passengers to be done by Indian Airlines.
Job security too high.
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OPPORTUNITIES
Tourism industry is gaining momentum.
Induction of new aircrafts on lease.
Response to some of the promotional fares (schemes) is
encouraging.
Shelving of the privatization plans of Indian Airlines by the
Government of India.
Corporates are showing interest in Indian Airlines.
Weakening of the dollar rate in comparison to the rupee.
Economic scenario is showing an upturn.
THREATS
Perception of the better product in comparison to that of the
competitor.
Recent world events hitting the tourism industry badly.
Expectation of people from Indian Airlines is high, even some of
them are unrealistic.
Increase in the capacity of various airlines.
Falling market share of Indian Airlines to that of Jet Airways.
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MARKETING STRATEGY OF INDIAN AIRLINES
The product that Indian Airlines sells are SPACE it may be its seats or
cargo space. This product is highly perishable and costly. Airlines earn
revenue by selling this space. This means that higher the seats sold
more is the revenue generated. Thus if the plane goes in the air with
empty space, this means that much space has perished. Thus the life
cycle of the airlines product begins and ends with each flight.
The marketing concept of building an organization around the profitable
satisfaction of customer needs has helped firms to achieve success in
high-growth, moderately competitive markets. However, to be
successful in markets in which economic growth has leveled and in
which there exist many competitors who follow the marketing concept, a
well-developed marketing strategy is required. Such a strategy
considers a portfolio of products and takes into account the anticipated
moves of competitors in the market.
AFTERMATH
To rectify the melody that has been slowly but surely creeping, resulting
in crippling results and damaging reputation. Indian Airlines took resort
to the Turn Around Strategy which constitutes the following:
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TURN AROUND STRATEGY:
On 1st March 1997 Indian Airlines became a Public Limited Company.
Till now IA had only emphasized on distribution, with marketing as a
non-issue. Since the company was faced with increasing competition,
lack of resources and mounting losses, it had to formulate and
implement a Turn Around Strategy. To find its place in the sun again, IA
has unleashed an aggressive marketing & advertising exercise backed
by service up gradation & customer friendly overturns. The new plan
consisted, of the following:
1. HRD Initiatives
As the first step free and frank discussions with a cross section of the
employees were held. Top management undertook extensive tours of
all stations to communicate the details and vision behind all major
policy initiatives and to get their response to them. Focus on training
of personnel was enhanced to increase effectiveness. A greater
transparency was built into recruitment and transfer policies with a
view to boosting their trust and confidence. In interactions with
unions and Associations a firm but fair attitude was taken.
Productivity Lined Agreements, where the inflows exceed the
outflows despite the fact that market wages were being given, were
entered into.
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2. Increased Utilization of Aircraft
With a view to increasing aircraft utilization, pilots needed to be made
to put in more flying hours and steps had to be taken to increase the
number of Commanders. Productivity of Engineers also had to be
linked to the daily availability of aircraft.
i. Enhanced Productivity and Availability of Pilots
The agreement signed with ICPA in 1996 resulted in the
increase in monthly utilization of Pilots from 50 to 63 hour.
With the promotion of 80 Pilots into the executive cadre
monthly utilization went up further to 75 hours.
Certain rationalization and changes in training patterns of
Commanders, due to signing of a landmark agreement with
pilots Association resulted in increased out-turn of
Commanders.
ii. Increased Productivity of Engineers
Productivity of Engineers has also significantly increased as a
result of other productivity-linked agreement thereby
increasing daily availability of aircraft as follows:
A-300 7-8 aircraft per day from 4-5
A-320 25-26 aircraft per day from 20
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3. Increased International Operations
(a) Indian Airlines went in for increasing the number of destinations to
neighboring countries. In 1997 Indian Airlines operated 12
international stations, which went up to 17 stations in 1999. The new
stations added are Doha, Kuala Lumpur, Kuwait, Bahrain and
Yangon.
(b) On the domestic front IA is planning to start Shuttle type flights on
major metro routes like MumbaiBangalore, MumbaiChennai, and
Delhi-Bangalore. It has already started launching shuttles on the
heavy MumbaiDelhi routes.
4. Creation of Profit Centers
While on one hand, Indian Airlines size is strength, it is also a major
disadvantage when it comes to operating in a fast changing and
competitive environment. It is not possible to take decisions specific
to small groups of employees without reference to the 22003 strong
work forces. The organization is unable to be as nimble as it ought to
be in terms of decision making, customer service and employees
motivation. Consequently, an integral part of turn around strategy
was to hive off certain activities into separate profit centers, to make
them more focused, flexible and accountable. Also a more direct
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linkage between productivity and emoluments has been created,
thereby reducing problems of industrial relations.
The first of such profit centers was the state-of-the-art Jet Engine
Overhaul Shop at Delhi.
Similarly the Central Training Establishment at Hyderabad was also
converted into a Profit Centre. On conversion as Profit Centre the
earnings of CTE from outside party jobs after fully meeting the
requirement of Indian Airlines, increased from Rs. 30 lakhs in 1997-
95 to Rs. 390 lakhs in 1999-97.
Recently the Auxiliary Power Repair Unit at Calcutta, the Ground
Support Department and the Cargo Department has also been
declared a Profit Centre.
Indian Airlines has also set up a subsidiary airline, Alliance Air. This
airline has helped in increased utilization of the Boeing aircraft by
inducting Commanders from the open market and focusing on
regional routes. It has also enabled the Commanders in Indian
Airlines to be utilized more optimally on A-300 and A-320 fleet.
5. Marketing Initiatives
Indian Airlines took a number of economic initiatives and brought
about significant improvements in its product. Sustained and
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meaningful campaign was launched to disseminate information about
these improvements. The marketing initiatives taken were:
I. PRODUCT IMPROVEMENT
1999-00
EXTRA SEAT-PITCH:
Extra seat-pitch in B-737 and Economy Class of Airbus A-300.
WIDER SEATS:
Wider seats provided in Executive Class of Airbus A-320
aircraft.
CHOICE OF MEALS:
Introduction of a choice of meals, bread/fruit baskets, soups,
damask linen tablecloth and napkins, hot and cold towels.
FREQUENT FLIER PROGRAMME:
IA has further strengthened its frequent flyers programme
(FFP), by entering into a reciprocal arrangement with Air
France and launching Joint Promotions with American
Express, Hertz Rent a car and the Welcome group. It also
launched a major drive to enroll more members to its FFP
program, with lucky draws for a luxury car, for which
passengers who had flown at least five times between mid-
December 2000 and mid-March 2001, tried their luck.
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SENIOR CITIZEN DISCOUNT:
Persons who have attained the age of 65 years on the date of
travel land who are resident citizens of India are entitled to
50% discount on the normal rupee Adult Fare.
WAIVING OF CANCELLATION CHARGES:
2000-01
Indian Airlines has waived of cancellation charges, provided
the reservation is cancelled one hour before the scheduled
departure of the flight. There will be a nominal refund fee of Rs.
100/- only in case the ticket is refunded /reissued.
CHECK-IN PLUS:
Assistance for minors, elderly and handicapped passengers.
BAGGAGE PLUS:
Baggage Allowance on all domestic flights enhanced by 10
kilograms. Infants also allowed 10 kilograms of free Baggage
Allowance.
DIET SPECIAL:
Light, low fat, easily digestible recipes made by new cooking
methods and mediums, sugar, salt, and fat free diet meals and
mineral water.
MEAL SPECIAL:
Better presented meals with weekly changes.
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TRANSIT SPECIAL:
Special Transit Desks, through check-in of baggage and meals
during transit waiting time.
FESTIVAL FOODS:
Passengers were served special sweets on Diwali, Bengali
food on Durga Puja, Avadhi food on Holi and Plum Cake on
Xmas.
DIAL-A-CANCELLATION:
Passengers and Travel Agents can now effect cancellation on
telephone or through fax message.
REPORTING TIME:
Reporting Time reduced from 75 minutes to 60 minutes at all
the airports except Delhi, Srinagar, Leh and Jammu.
II. RESERVATION FACILITIES
To facilitate reservation between any two stations of Indian
Airlines network, the instant reservation facility has been
extended to a total number of 69 stations.
Of the 53 domestic stations where Indian Airlines flights are
being operated presently, 52 stations are equipped with
computerized reservation facility.
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All the 17 international stations, where Indian Airlines is
presently operating are equipped with CRT terminals.
Computerized reservation facilities extended to about 750
agents spread over 38 stations.
Indian Airlines and Air India jointly under National Marketing
Division (NMD) are distributing Systems Interface for Travel
Agents Reservations (SITAR), which is the state-of-the art
technology from SABRE.
6. Incentive Schemes
IA has realized that unless the distribution network is rejuvenated
with generous doses of incentives, the agents, who account for two-
thirds of the airline sales, will just not respond. The airline has
introduced a three per cent sector-linked incentive-commission,
which can be deducted by agents at source. Even the bank
guarantees were frozen at last years level for all the agents and not
raised to match over trading. The guarantees were raised in
proportion of increasing business, which invariably discourage
agents from plumping for more sales. The airlines set up an agency
help desk to focus on problems of the trade. High speed modems
are also being installed to facilitate faster transactions.
7. Price
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In the year 1999, IA started a make up strategy i.e. slash in price for
the make up of losses. It was followed up by many airlines as a quick
penetrating strategy to draw in big crowds.
The General Managers in the four regions have been authorized to
extend a 15% bulk discount to passenger groups depending on
market conditions; point-to-point fares have been rationalized (a
special discount of 9% is offered on 135 specific routes) and excess
baggage payments are accepted in credit cards.
8. Promotion through Frequent Flyer Programme (FFP)
To add more value to its FFP, IA is talking to both American Express
and Citibank to issue a co-branded card, which will offer a host of
benefits against ticket purchase and entertainment expenses. It is
also signing up a flying returns agreement with Citibank, which will
entitle users to redeem their credit card points against mileage points
and free tickets thereafter.
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9. Offer of Free Pagers by Mobilink
It has also tied up with Mobilink to offer free pagers to some 70,000
frequent flyers at six major metros. The pagers will enable the airline
to inform the passenger about the changes in schedule, flight delay
etc. While the pagers service will be free in the first year, in the
subsequent years, Mobilink will levy a nominal user fee. The pager
Company will thus acquire a large chunk of customers and sell
advertisements on the pager.
10. Customer Contact Programme
The airline is finally laying more emphasis on customer contact
programs. In order to design an ideal flight schedule, IA has hired
IMRB to meet a sample group of 10,000 frequent flyers at Delhi,
Mumbai, Chennai, and Calcutta. It is also roping in a direct marketing
agency to respond to passengers grievances.
11. Touchdown boards
The message to the passenger, obviously is, we care. To increase
customer awareness, the airline has put up touchdown boards at
the six major metros, to keep passengers informed about customer
relevant developments in the airline such as the monthly product
upgrade, value addition schemes, promotional efforts, lucky draws
etc. The airline has also launched advertisement cum media
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blitzkrieg to drive home its strengths: IAs schedule advantage, same
day return facility, multiple options, etc.
12. Advertisement Cum Media Blitzkrieg
Designed, developed and executed by Nexus Equity Advertising,
now known as Enterprise Nexus Communications after its merger
with Enterprise Advertising, the marketing programme is a multi-
media communication module. The package aims at establishing the
strengths of IA, reinforcing its leadership and overall improving its
image amongst business travelers, as the primary target. It includes
press ads, posters, picture postcards, calendars and the travel wise
consumer contact programme.
The first campaign in 1998 highlighted IAs tangible strengths. Using
an almost negative creative approach, through a confessional tone to
disarm the angry passengers, one of the ads said: We admit Indian
Airlines does not give you the same choice as others do, followed by
copy that read, Indeed, no other airline offers such a wide choice of
aircraft, and not just a choice of seats. Overall, this campaign
highlighted IAs fleet size, maintenance efficiency, infrastructure, leg
room, extra baggage allowance.
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The second campaign in the same year was a progression of the first
but it adopted an emotional approach with lines such as: I choose
my airline the same way I choose my doctor, on sheer experience.
A third campaign, still ongoing, attempts to now bring out consumer
benefits that arise from IAs strengths that were brought out in the
previous campaigns. While the visuals emphasis the reach and
spread of Indian Airlines, the tone is more assertive.
13. Cargo Handling
In the passenger segment, the IA cargo division an independent
profit centre now-has launched an all-out drive to garner a large
share of the business. Unlike the passenger segment, the cargo cell
still retains about 80% of the market. But competition is slowly
catching up.
Interestingly, the ad campaign launched by the cargo division seeks
to highlight the changing face of business. It underscores the vast
network, its exclusive tie-up with GATI for door-to-door express
service, a special arrangement to go global with Air France and an
attempt to touch every nook and corner of the country with the Indian
Posts and Telegraphs Department.
IA has learnt to be a lot more flexible in its dealings with cargo agents
now. It is also working at automation of all the cargo officers.
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Consolidation of assorted cargo with bulk rates is now being allowed,
and freight rates are being revised instead of sticking to published
tariffs. What was unthinkable till some years aback has now become
a distinct reality.
Through all its efforts, IA is gradually trying to shed its monolithic
image. And its communication exercise has; at least, given it a
clearer face as far as the consumer is concerned. But this public
sector organization will have to keep its bootstraps pulled up if it
wants to retain leadership in the market place. For, private airlines
are not exactly sitting back on their haunches.
CONSEQUENCES OF TURN AROUND STRATEGY:
1. Aircraft utilization increases -
A good average utilization of aircraft is 2600 hours per aircraft per
annum, which was down to a low of 1600 hours in 1997. Efforts
were made to increase aircraft utilization by increasing the
productivity of engineers, pilots and by increasing the number of
commanders. Aircraft utilization now well exceeds the desired
norm of 2600 hours per annum.
2. Productivity of pilots rises -
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With the implementation of the turnaround strategy, pilot
productivity rose substantially. In fact, the monthly average flying
increasing from 50 to 63 hours initially, and then to 75 hours.
3. Productivity of engineers grows -
The number of aircraft made available for operation per day
measures engineering productivity. The aircraft availability
improved significantly over the last three years. The availability of
A300s went up from a mere 4 aircraft per day in 1997 to 8 in 2000
and A320 from 20 in 1997 to 27 aircraft in 2000.
4. Creation of Commanders -
Indian Airlines had lost 166 pilots to private airlines. After the
revised training pattern, the number of new commanders added to
the fleet strength each year rose dramatically, from 20 new
commanders added in 1997-95 to 67 in 1999-97.
5. International operations -
After 1997 five new destinations were added- Doha, Kuala
Lumpur, Kuwait, Yangon and Bahrain. Also, fifteen new
international city links were added.
6. Employee morale -
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With increased training efforts and management-staff interaction, there
was a visible upsurge in morale and productivity among employees.
What is significant is that no man-days were lost in the last two years.
7. Creation of profit centers -
a. Establishment of Alliance Air
There was a dramatic increase in the utilization of B737, A320
and A300 aircraft with the hiring of new commanders and
pilots, which benefited both Alliance Air and Indian Airlines.
b. Jet Engine Overhaul Shop
As a result of the creation of separate profit centre, the
Overhaul Shop saves the company an amount of Rs. 2.85
crore in foreign exchange every year.
c. Central Training Establishment
Prior to its setting up as a profit centre, the annual revenue
was around Rs. 30 lakh. This increased dramatically, with the
revenue touching Rs. 390 lakh during 1999-97.
8. Passenger perception improves -
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From the least preferred airline in 1997, IA has now become the
most preferred airline.
Image tracking studies carried out from amongst the airline
passengers by the reputed market research agency IMRB, over
the last three years, show that Indian Airlines is now ahead of the
private airlines.
Other surveys carried out by reputed organizations such as MARG,
MODE and MDRA also show that Indian Airlines is the most preferred
carrier presently.
Since this is a service industry with an intangible product, how do
you market it ?
Marketing the tangible aspects associated with the intangible product
does it. The tangible aspects include price, promotion and place. To
distinguish our product from that of others we have to maneuver the
4Ps of marketing i.e. Product, Price, Promotion and Place (place of
distribution).
Since the product of all the airlines is the same, why does one airline
fare better than the other? This is because of the positioning of the
brand in the mind of the customer. This approach is needed because
consumers are bombarded with a continuous stream of advertising. The
consumers mind reacts to this high volume of advertising by accepting
only what is consistent with prior knowledge or experience.
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The easiest way of getting into someones mind is to be first. It is very
easy to remember who is first, and much more difficult to remember who
is second. Even if the second entrant offers a better product, the first
one more over has a large advantage that can make up for other
shortcomings.
In the eyes of the agents Jet Airways is the best placed in comparison to
that of Indian Airlines in the next place in the eyes of the customers.
They feel that same is the case in the eyes of the customers (this data is
based on the survey of 48 agents carried in Delhi, mostly South Delhi).
Indian Airlines was the first airline in the country but it is now positioned
at the second place.
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CHOICE OF AIRLINES
IC Indian Airlines
S2 Jet Airways
9W Sahara Airlines
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44
0
10
20
30
40
50
60
Indian Airlines Jet Airways Sahara Airlines
51
27
22
DOMESTIC AIRLINES
SFFECT OF ADVERTISEMENTE
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This shows that people are generally aware of Indian Airlines (as
compared to Sahara and Jet and actually travel by it also). The most
preferred feature of the advertisement happens to be presentation for
Indian Airlines. As regards Jet Airways people are moderately aware of
it and also travel by it. Most liked feature of the advertisement is the
message. Similarly in Sahara Airlines the feature most preferred is the
media.
This shows that people who are aware of the airline are not just verbally
aware but also prefer to travel by that airline. This depicts that the effect
of advertisement of is directly proportional to the uses to the airlines.
Besides the high percentage of Indian Airlines travelers can be
attributed to the fact that for the government officials it is mandatory to
travel by IA.
Hence the question arises that how IA position itself?
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Positioning of a service can be done either through promotional
schemes or through the level of service provided.
PROMOTIONAL SCHEMES-
Promotional decisions are those related to communicating and selling to
potential consumers. While coming out with the promotional schemes it
is worthwhile to note the profile of customers served.
PROMOTIONAL FARES-
Different types of promotional fares are introduced to attract more and
more passengers to travel in specific airlines to promote sales. With the
implementation of promotional fares the motive is to increase the
number of airline loyal passengers and of course revenue. Indian
Airlines follows dual fare policy for its domestic service. The two types of
fares are as follows:
1) USD FARE-
A. USD fare is applicable for all sales made abroad for domestic
travel within India.
B. USD fare is also applicable for all sales made in India for
domestic travel within India for following categories of
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passengers:
i. Foreign nationals.
ii. Indian nationals residing permanently outside India.
C. Unless and until specified otherwise, USD fare is applicable for
all sales made worldwide including India for domestic travel
within India against the following documents:
i. Sale against document of interlines patrons.
ii. Sale against IA international MCOs/PTAs.
iii. Sale against international credit cards and UATP card.
2) INR FARE-
INR fare is applicable for all sales in India for domestic
transportation wholly within India for the following category of
PAX:
A. Indian nationals permanently residing in India.
B. India, Nepal, Bhutanese, Tibetan refugees residing in India, Nepal
and Bhutan.
C. Foreign national studying in India and holding a resident permit.
D. Foreign nationals studying in India and who are otherwise eligible
for student discount under IA rules.
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RESERVATION-
The Computerized Reservation System at Delhi, a state-of-the-art
Computer Main Frame, is accessible to all major computerized
reservation systems of the world. This enables the valued IA
passengers to make reservation on any Indian Airlines flight for
any sector all over the network from a single location in its
booking office at any station. Besides, there are nearly 2000
approved travel agents all over India at the service of our
passengers.
Passengers can also make the reservation over telephone on
time limit basis and purchase the tickets before the expiry of the
indicated time limit.
While making the reservation the passengers need to indicate all
there contact numbers, including their residence, business and
mobile numbers, where they can be contacted at all points of their
itinerary. This helps IA to inform the passengers wherever they
are in case of any schedule change or delay to their flight.
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Passengers also need to give their meal preference at the time of
making reservations.
Also special assistance is offered to the passengers who require
special handling over and above the normal attention, like the
disabled, those on wheel chair, stretcher or unaccompanied
minors. Such requests for special attention may be made to the
airlines office while making reservations.
FARES-
IA domestic fares are quoted both in Indian Rupees (INR) as well
as US Dollars (USD). The INR fare consists of basic fare and two
governmental levied taxes, namely Inland Air Travel Tax (IATT)
and Passenger Service Fee (PSF). The INR fare is applicable to
resident Indians only while the dollar fare is applicable to foreign
nationals and non-resident Indians.
Besides, there are some special fares and discounts for senior
citizens, students, the armed forces personnel, war disabled
persons and many others.
Details of all concessions and special fares are available at all
Indian Airlines booking offices and travel agents.
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CANCELLATION CHARGES-
To allow flexibility to our passengers in their travel plan, we do not
levy any cancellation charge provided the cancellation is effected
at least one hour before the scheduled departure.
Rebooking and Refund charges may be applicable on a few
specified routes during peak season to avoid fictitious booking
and help availability of seats to bona fide passengers.
Although there are no cancellation charges, No-Show charges
are applicable if a confirmed reservation is not cancelled at least
one hour prior to departure. No refund except IATT/PSF is
permissible on a No-Show ticket.
Passengers can effect cancellation on phone or fax to our main
booking offices and present the ticket physically for cancellation
within Twenty-four hours.
Refund Administration Fee is levied while affecting the refund for
unutilized tickets. The details can be obtained from the Indian
Airlines offices and travel agents.
Passengers must keep their tickets in safe custody, as no refund
is permissible against lost tickets. However, for international travel
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where passport control is possible, duplicate tickets can be issued
after completion of certain formalities.
VALIDITY OF TICKETS-
IA domestic tickets, issued on normal fare, are valid for one year from
the date of issue. International tickets are valid for one year from the
date of travel on the first leg of journey. Validity of tickets issued on
concessional and special fares may be different as governed by the
rules applicable to that particular concession.
DIFFERENT TYPES OF PROMOTIONAL FARES-
Different types of promotional fares are introduced to attract more and
more customers to travel in a specific airline. The promotional fares on
which I had worked are as follows:
Promotional One -Way Fare (POW) - Promotional one-way-fare
is for travel introduced in one-way on a specific sector.
Eg: - Delhi-Mumbai sector.
Following table shows the number of passengers that traveled
in POW promotional fare scheme out of the total number of
passengers in the year 2003-2004 (April 2003March 2004) in
few sectors:
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Round Trip Promotional Fare/Return Fare (RTP) Round
trip promotional fare is for travel to & fro on a specific sector.
Eg: - Delhi-Mumbai-Delhi sector.
Following table shows the number of passengers that traveled in
RTP promotional fare scheme out of the total number of
passengers in the year 2003-2004 (April 2003March 2004) in
few sectors:
Flight Specific Fare (FS) Flight specific fare is introduced on
that particular flight only.
Eg: - The Flight Specific Fare on IC-801.
Following table shows the number of passengers that traveled in
FS promotional fare scheme out of the total number of
passengers in the year 2003-2004 (April 2003March 2004) in
few sectors:
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LIMITATIONS OF THE STUDY
Due to constraint of time, a larger sample size could not be
chosen.
The respondents may not have divulged their true feelings.
Marketing strategy of a company is indeed a closely guarded
secret especially in the face of stiff competition as in the case of
the airlines sector in India. Therefore, to extract information on
the marketing strategy was a difficult task.
Minor errors may have been introduced due to fatigue, etc.
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SUGGESTION BY THE PASSENGERS
Fare charges should be same for foreigners as for Indians.
Debit/Credit cards should be accepted for reservation.
There should be more transparency (clarity) in the announcement
of the flights.
To open separate counters for single baggage and last minute
departure.
Check-in time should be reduced.
Security checks need improvement. Personnel need to be more
humane.
Easy information should be available to passengers regarding
transit baggage.
More decent, polite and cheerful staff.
The baggage tags should have a solid glue system. The present
plastic tags are very easy to tamper with.
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RECOMMENDATION/SUGGESTION
The research study and the analysis of various aspects tapped lead to
the following recommendation:
141 should be outsourced to a call center to deal with the
enquiries. Non-availability of help lines has been the most
common complaint of agents and passengers. IVRS should be
provided for the agents/passengers waiting for their call to be
attended by the operator. Some of the government organizations
have successfully done outsourcing help lines.
With the oncoming of the Private Airlines on the country the
customer awareness and aspiration of quality of service has been
enhanced considerably. So Indian Airlines should emphasis on
providing more efficient services both on the ground and in the air
as done by Jet Airways to a large extent.
Dedicated counters should be made to handle last minute
reservation, preferably for reservations being done on the day of
the flight.
Ticket counters can be placed at major corporate houses which
have a substantial amount of travel budget: wherein all the
information about the schemes is available. These ticket counters
are to be maintained at the expense of Indian Airlines.
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There should be internal and external audits to look in to the
working of various departments.
An incentive scheme should be launched for the people at the
front desk of the agency such as the ticketing agents. The
ticketing agents should be provided with a unique identity number
that they would have to quote on the tickets. The points would
automatically credited to their account. On the accumulation of
certain number of points they will be given FOCs. This will also
help in checking false ticketing.
Apex-7 and Apex-21 fare (scheme) should be continued on
account of its popularity.
Scheme like Smart Apex fare scheme for business class
passengers can be introduced.
Flexibility in Smart Apex fare scheme should be increased.
All the promotional schemes and services should be extensively
advertised to bring awareness to make itself better known to the
potential customers. They should be advertised through e-mails,
corporate presentations and through road shows. Executive class
bonanza scheme should be started again.
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Holiday packages should be sold only through Indian Airlines
booking offices and not through agents, as there is every chance
of the agents offering parallel deals to the customers.
Indian Airlines should schedule more number of flights to and
from stations like Mumbai, Delhi, Chennai, and Kolkata as these
sectors account for high Pax load.
Indian Airlines can introduce late bird/night bird flights between
metros.
The check-in time should be minimal. Wherever there is likely to
be long cues more counters should be opened.
Indian Airlines as introduced by Sahara Airlines should adopt the
facility of valet services and it should be extended to all classes.
Tele reservation and computerized check-in procedure should be
made mandatory.
The process of ticketing and cancellation should be made more
easy, smooth and as flawless as possible as most of the
respondent are not happy with the present ticketing procedure.
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Delayed flight, which is a very painful experience for the travelers,
should be attended to as top priority because the main clientage
is business men and they are time bound.
Indian Airlines should acquire (induct) new aircraft to upgrade
product quality in order to build brand image and retain
passengers.
AASL should be given more autonomy so that it could conduct
some of the activities related to marketing at its own to add up
innovative schemes and generate in revenues.
Alliance Air authorities should be made in easy approach to the
passengers for the grievance handling and complaints.
The flight of Alliance Air should be made more attractive that can
be in the form of a booklet as it is of the Jet Airways.
It is necessary for Alliance Air that it should reconcile the sectors
and the frequency at which it is operating so that it could reduce
costs and earn more profit.
Alliance Air is required to add up more and more places, which
have the status of tourist places.
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Service innovations like automated flight schedules, over the
phones, provision for customizing meals, in-fight mail order
shopping etc. should be introduced to lure the passengers.
Indian Airlines needs to undertake aggressive marketing.
Alliance Air should consolidate its market share by further
improving its service standards and adding more routes to its
network
Indian Airlines should undertake customer satisfaction surveys.
IA should make provisions to add up more financial benefits for its
passengers.
International desk of Indian Airlines should be made more
accessible.
Flight status should be made available through SMS.
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CONCLUSION
The healthily competition of domestic airlines has set new trends in the
quality of service. Previously in the monopolistic environment of Indian
Airlines the quality and the desire to win over the constraints was totally
dismal. With the oncoming of Jet Airways and Sahara Airlines there is
sea change in the quality of service and the pride of the job.
Hence today it is a matter of great significance that the Indian Airlines
staff now cares about the passenger comfort and take pains to see that
the flight is on time. Indian Airlines so should try the high percentage
98% of on time service of Sahara Airlines is the hallmark of their quality
of service.
Advertisement has brought awareness among the people regarding
Indian Airlines (as compared to Sahara and Jet and actually travel by it
also). The most preferred feature of the advertisement happens to be
presentation for Indian Airlines. As regards Jet Airways people are
moderately aware of it and also travel by it. Most liked feature of the
advertisement is the message. Similarly in Sahara Airlines the feature
most preferred is the media.
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This shows that people who are aware of the airline are not just verbally
aware but also prefer to travel by that airline. This depicts that the effect
of advertisement of is directly proportional to the uses to the airlines.
Besides the high percentage of Indian Airlines travelers can be
attributed to the fact that for the government officials it is mandatory to
travel by IA.
Customer grievance and prompt redressal should also be rated as top
priority as this will not only provide the necessary input and the feedback
but also would go a long way in improving the image of Indian Airlines.
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BIBLIOGRAPHY/REFERENCES
www.indianairlines.com
www.indianairlines.net
www.indian-airlines.com
www.indian-airlines.nic.in
www.indianairlines.indiatimes.com
www.jetairways.com
www.airsahara.com
www.airliners.com
www.airsahara.net
http://www.indianairlines.com/http://www.indianairlines.net/http://www.indianairlines.net/http://www.indian-airlines.com/http://www.indian-airlines.nic.in/http://www.indianairlines.indiatimes.com/http://www.jetairways.com/http://www.airsahara.com/http://www.airliners.com/http://www.airsahara.net/http://www.airsahara.net/http://www.indianairlines.com/http://www.indianairlines.net/http://www.indian-airlines.com/http://www.indian-airlines.nic.in/http://www.indianairlines.indiatimes.com/http://www.jetairways.com/http://www.airsahara.com/http://www.airliners.com/http://www.airsahara.net/